Phil Biggs covers the automotive industry for NewsTalk 1340 WJRW
July 23, 2013 – 8:30 am ET
DETROIT, Mich. – These days most companies have plenty of creativity and plenty of new technology at their disposal. What they lack in part are the savvy managers who are able to take necessary risks and who have the will to convert ideas into realizable commercial success. The other key ingredient is navigating through the internal and external traplines, and avoiding people and groups who want to “keep things the same.”
This is what innovation is all about. Building the right innovation team and determining who will be the contributors. It is critical that the team is comprised of insiders as well as a blend of outsiders, and that they are organized to succeed. Also critical is how much time they can devote to the breakthrough project and, according to Chris Trimble of the Harvard Business Review, how they’ll balance “the delicate and conflict-rich partnership between innovation and the business’s ongoing operations.”
In many instances the team will launch a disciplined experiment, rapidly test assumptions, work through complex applied design theories, and ultimately reach conclusions to enable a product or service to enter the market and, hopefully, achieve commercial success. Other key outcomes are acquiring and sharing new streams of knowledge, and incorporating a measurement tool that demonstrates progress and achievement of goals.
What are the pitfalls that the innovation team faces? First, most innovation projects have a bias for insiders. In many ways, that’s natural. It’s more comfortable too, because it’s easier to work with known faces than unknown. But it’s crucial to hire outside people so that the team receives a unique point of view during the innovation start-up process. Second, the team must avoid existing “job descriptions” and performance metrics and instead assess their progress based on new measurement techniques – which will require immediate out-of-the box thinking. Finally, take bits and pieces of existing culture that’s relevant to the project and apply them, but be prepared to create a new identity and alternative culture that fits the direction of the project.
Today nowhere is innovation more urgently introduced and adopted than the auto space. In terms of bringing new product applications to market as well as the creation of joint ventures in the form of R&D alliances, we are seeing innovation take place boldly to stimulate new thinking while controlling costs. Earlier this month General Motors announced they were launching a joint venture with Honda to explore hydrogen fuel cell powertrain options and will develop a common vehicle platform together. As Automotive News noted, “…their partnership will cut development costs, partly by consolidating their supplier bases for fuel cell components. And they will work to expand refueling infrastructure, considered the biggest barrier to widespread consumer adoption.”
What we’re seeing throughout the industry today is much more than the sizzle of new trends or simply idea generation for the sake of it. We’re seeing fresh ways to link consumer needs to radically different methods of evaluating, selecting, prototyping and commercializing new concepts, which are transforming traditional areas of planning, engineering, and applied design. The GM-Honda partnership, along with Ford-Daimler-Nissan and many other alliances now in place, signals an acceptance of innovation as a new way of life. And, it brings a fundamental change in how the industry views its competition, solves problems, and creates new products within the context of new mobility.
The Tesla effect is changing the global automotive business. More than just an innovation initiative, Tesla Motors is an entire company that lives and breathes innovation…top to bottom. As more and more disruptive OEMs and organic suppliers enter the auto space, innovation becomes embedded in the way automakers do business. Thus, Tesla is changing the innovation landscape, as last week General Motors CEO Dan Akerson assigned a team to “study Tesla Motors and determine whether the upstart electric vehicle maker poses a threat to the 104-year-old automaker’s business,” according to Automotive News. GM Vice Chairman Steve Girsky told Bloomberg, “History is littered with big companies that ignored innovation that was coming their way because you didn’t know where you could be disrupted,” he said, adding that “paying attention to Tesla is a change for GM.”
Like many American businesses, GM must now see its global future differently as they look at new opportunities and new threats on the horizon. And Tesla Motors’ innovative approach to car-building has caused the Tesla effect, which forces more disruptive change and a systemic shift in the way innovation is happening in the automotive industry.
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