Molex: Driving Change

Driving Change

When Charles Koch went away to college, one of the things he wanted most was a car. That was something his father, Fred Koch, insisted Charles didn’t need.

Without telling Fred, Charles managed to scrape together enough cash to buy “a used Oldsmobile. I think I paid maybe $200 for it. None of the tires matched and they were all worn out. When I drove it home from Boston, my father was angry and horrified.” Even so, Fred relented a bit, saying, “I don’t want the kid to kill himself,” and bought him a new set of tires.

The car that Charles Koch drove in the 1950s was primitive compared to the cars we take for granted today. It had no backup camera, fuel-injected engine, satellite radio, collision avoidance system, air bags, rain-sensing windshield, Wi-Fi video screens in the backseat or onboard navigation. It’s true that most automobiles still have four tires and a steering wheel, but technological advances have changed almost everything else about the vehicles we drive.

Several Koch companies have a well-established presence in various aspects of automotive technology, such as carpet fibers, air bags and nylon engine compartment components from INVISTA, innovative fuel options from FHR, and chrome-plated plastic trim and grilles by Guardian’s SRG Global. But the Koch company with the strongest ties to the future of the automotive industry — especially after acquiring Laird’s Connected Vehicle Solutions division last year — is Molex.

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A Data Center on Wheels

“The automotive industry is going through lots of transformation,” says Joe Nelligan, CEO of Molex, “especially in the area of Advanced Driver Assistance Systems, or ADAS.” These are the life-saving technologies that generate collision warnings and lane departure alerts. “These electronic vehicle components can reduce human error, which greatly enhances safety,” Nelligan said. “They also help pave the way toward AD, or autonomous driving. We expect the growth in ADAS/AD technology to continue and accelerate for years to come.”

For Molex, the emphasis is on technology. “Cars have essentially become a data center on wheels,” Nelligan said. “Car dealers can now upgrade vehicles with a flash drive. In the future it will happen over the air, just like the doctor who can remotely adjust your pacemaker without ever having you visit the clinic.” To make all that possible, a typical ADAS/AD application requires a vast array of complex components and solutions, including electronic control units to process data, sensors to perceive external data and software algorithms to synthesize the vehicle’s environment in real time.

What makes development of that technology even more challenging is the fact it must be capable of integrating with whatever new technology or application may be right around the corner.

Destructing ourselves

Nelligan notes that when Molex was acquired by Koch in late 2013, “we had some first-generation automotive technology, including a plug-in for phones that we made for a major car company. But Charles Koch really challenged us to think bigger. Instead of just being a manufacturer making incremental improvements in our commodity products, he wanted us to really develop our innovation capability. He asked us to think about how we can create more value for customers while also capturing more value for the company.”

Molex learned the importance of pushing transformative innovation the hard way. Not long after it won the auto account, a competitor stepped in with newer and better plug-ins. Molex promptly lost the account. “We should have destructed our technology ourselves — that is, made it obsolete by coming up with something better,” Nelligan admits, “but someone did it to us. We got serious about advancing our automotive technology and created a multi-chip module that combines charging and a connection capability in a single device. It helped us win back the account. We’re also doing some important work on gateways for one of the world’s largest auto manufacturers.”

Smart Car Diagram Molex Connected Mobility

Cars have become data centers on wheels.

Shining bright in Vegas

“There was a lot of buzz at the Consumer Electronics Show in Vegas last year about next-generation vehicles and what they can do for security and safety,” Nelligan said. “One of the biggest challenges to making these technologies practical is the ability to handle all the bandwidth requirements. That’s a game-changer. As autonomous features are added to a vehicle, they are consuming more and more data at higher and higher speeds.

“If you want to live up to our Vision, you can’t just meet today’s data demands, you’ve got to anticipate those of the future. Autonomous vehicles are going to require a lot of sensor data on top of the 4k video streaming to the back seat, synced to audio and video. Our display at CES allowed Molex to showcase our leadership in that area.”

Molex was the first company to develop an end-to-end automotive ethernet network capable of handling 10 GB per second of data flow. “Our end-to-end solution system is the connector, the cables, gateway modules, media modules, everything involved including software,” Nelligan explained. “We developed all of it. Our system has full-function capability for future-state vehicles. This is the future of connected mobility.”

It’s important to note, however, that Molex is not tackling these challenges alone. It is building partnerships with a wide variety of companies to make things happen. This is in keeping with Koch’s mental model of preferred partners.

Mutual benefit

“We’ve been at the forefront of electronic innovation for decades,” Nelligan said, “but what we’re doing now is creating a new — and potentially enormous — cycle of mutual benefit that dwarfs anything we’ve done before.
Our acquisition of Laird CVS, combined with our development of a 10 GB gateway, has really catapulted us into an entirely new realm.

Car Antenna made by Laird CVS, part of molex

Look familiar? This popular car antenna is made by Laird CVS, which is now part of Molex.

“What’s especially exciting about all of this is seeing the contributions from employees who are really being given a chance to flex their entrepreneurial muscles and ‘show their stuff,’ so to speak. It has been enormously rewarding for them to see their innovations propel the company in a new way.”

Nelligan also points to what he calls “a whole new ecosystem of partners,” helping Molex create a seamless new technology environment for vehicles. That creativity is benefiting several other Koch companies.

“Our network sensor capability has tremendous potential for Georgia-Pacific and Flint Hills Resources. We’re already working with GP on asset health issues, and with FHR on using sensor data. If we weren’t a part of Koch, what business would be willing to take down part of their plant to test our ideas?

“Believe me, this is a two-way street where everyone is better off. That’s a great example of mutual benefit.”

It’s all about Vision

“At Molex, our work in automotive technology is not the only thing that’s new or different,” Nelligan said. “We’re also developing our capabilities for medical devices — especially drug-delivery devices. Both of these industries, automotive and medical, have become increasingly important for us. 

“Regardless of what industry we’re supporting, we’re not only rethinking our approach, we’re enthusiastically partnering with others as needed to close gaps so we can all create much higher value for our customers and ourselves. 

“What’s interesting to me is that Koch is doing this at a societal level. We’re not only operating great companies, we’re trying to eliminate barriers and division in communities so we can help bring people together in new and better ways.

“When Koch acquired us almost six years ago,” Nelligan said, “no one on our team could have possibly anticipated all the great changes we’ve seen. It has been quite a transformation, with the certainty of more to come. But it all began with having the right Vision and then applying the right capabilities.”

Steve Case and Jason Illian

Steve Case (right) during a presentation in Wichita in March. Jason Illian (left) of Koch Distruptive Technologies moderated the event.

The Third Wave

Molex is a good example of not only Koch’s mental models of mutual benefit and working with a broad array of preferred partners, but also a good illustration of what America Online founder Steve Case calls, “The Third Wave.”

During a March visit to Koch’s headquarters in Wichita, Case summarized his bestselling book, “The Third Wave,” by explaining the history of the Internet. Case believes the first wave, which dates back to the 1980s, required building the infrastructure for the Internet — a task that required a great deal of cooperation and partnership between various businesses, entrepreneurs and innovators. 

The second wave, in the early 2000s, saw the advent of important new players who used software to leverage the Internet once it had been established. These companies, including Google, Amazon and Facebook, didn’t need partnerships the way their predecessors in the first wave did. 

Now, Case says, we’ve entered the early stages of a third wave, where technology-based disruptions are reshaping entire industries such as health care, education and automotive production. This wave is less about software tools and more about the realities of daily life, including the so-called Internet of Things. “It’s not so much about technology as it is people and culture,” Case said. This third wave requires “policy, partnership and perseverance.”

“That partnership aspect Case is talking about is especially important to us now,” said Molex CEO Joe Nelligan.“Thanks to our new Vision, we’re also intent on pursuing solutions where we’re truly advantaged and truly make a difference.”

Quotation Mark

The companies that really succeed in the long run are the ones that are open to experimentation.

Steve Case, Chairman and CEO of Revolution and co-founder of America Online (AOL)