BMW on innovation

Germany’s BMW has established itself as one of the leading innovators of the Automotive Industry.
In 2004, the group received Germany’s “most innovative company,” presented with the prestigious Best Innovator Award 2004.

“The BMW Group, as one of the world’s most innovative companies, shows that Germany still leads the global field as a centre of innovation,” says German Federal Minister Wolfgang Clement, who is patron of the award.

The cornerstone of the BMW Group’s success is its strategic focus on developing customer-friendly innovations, coupled with an approach to innovations management that is unique within the motor industry.

“Leading innovations are the best form of copy protection for our products and a guarantor of the global success of BMW, MINI and Rolls-Royce,” says Professor Burkhard Göschel, BMW Board Member responsible for Development and Purchasing. “Innovations ‘made in Germany’ are still setting standards.”
The judges of the Best Innovator Award selected the BMW Group in recognition of its innovative products such as Active Steering, but also for “making professional innovative processes a key strategic and cultural constituent of every area of the company”. In 2002, the BMW Group was the first European company to receive the Outstanding Corporate Innovator (OCI) Award in the USA.

Göschel outlines his company’s approach to innovation:
“The following principle applies: if a company knows what it stands for, it can also develop and implement a clear strategy. I consider that one important requirement for this is for a company to know its own strengths. It is necessary to give up the idea that a company can do everything equally well. On the contrary: it seems more likely that a company that tries to do everything equally well will be unable to make full use of its strengths. The BMW Group knows what are its strengths. In concrete terms, this means that we know what we do best: we are best at the “Premium” level.

We are always most successful when we offer our customers products distinguished by:
• a substantial emotional impact
• uncompromising engineering
• innovative technology
• and the very highest quality.

“This is exactly what we are aiming for with our Premium Brands strategy: with our three BMW, MINI and Rolls Royce brands, we are the only large automobile manufacturer to operate exclusively in the premium segments of the market and we only work in areas where we are able to bring these strengths to play and be better than the competition. This focus is an advantage that should not be underestimated. One of the most important aspects of our Premium brands strategy is the great importance of innovation and new development for our customers. Innovation and systematic alignment towards it therefore shape our entire company. They are not, in any way, confined to new products and components, however, since they relate to all aspects of entrepreneurial activity, including processes. In order to further develop our Premium products, we depend on the capacity for innovation of all our divisions. In addition to Development, the Production, Sales & Marketing and Human Resources divisions are also systematically involved in innovation management.”

Turning to the question of maintaining an innovation lead, Göschel says the results achieved by a company in the past are only of limited importance. “Of course it is possible to develop from current products. Nevertheless, even success over many years in the past is no guarantee for the future. The results to be expected in future are the most important thing. The innovativeness of a company therefore always depends on future business development (which is not yet known), potential, expected figures or, in other words, specific ideas about future prospects. The BMW Group sees its future path clearly before it and knows where it is going. In order to systematically expand our capacity for innovation, we have focused on providing answers to four key questions that will enable us to measure our future innovativeness:

• Do we have an innovation strategy and innovation goals that are closely linked to our corporate strategy?
• Are there innovation processes and structures to support our innovations from the original idea to embodiment in the product?
• Do we use our own resources efficiently and involve our cooperation partners intelligently?
• Do we have a climate and culture of innovation that promotes and rewards courage and creativity?
“I would like to explain this in more detail taking ‘innovation processes’ as an example: The cliché of the genius inventor who carries out his research alone, in his workshop, has long been out of date in the automobile industry. It has been replaced by complex processes. The key to the successful realisation of new ideas in the automobile industry is therefore control of the innovation process, in which the best inventions are promoted and efficiently embodied in series production. The BMW Group follows a process of innovation management that is unique in the sector, in which all innovations are handled in an established process from the original idea to the creation of a vehicle.

This means that innovation is no longer driven on the basis of specific technologies or components. Instead, we have defined multi-technology functional areas that are oriented around added value for customers and provide optimal support for our brands (such as “driving experience” or “lightness of construction”). We use this conceptual ‘search grid’ to filter the 1,000+ projects that are feasible each year in order to focus on the 100 or so topics that we consider to be the most promising because they best match our brands, and the wishes and needs of our customers.

“On their own, however, processes are no replacement for ideas, since the process does not think of anything for itself. So where do we get our ideas from? Fundamental innovation in particular needs something that is difficult for conventional management methods to capture, that is to say: courage, creativity, freedom and enthusiasm for new things. A large amount of freedom for employees and a stimulating environment are therefore important parts of our innovation management. We have implemented this strategy by, for example, introducing a high level of flexibility for working hours (over 300 different working time arrangements) and by allowing space to work on ‘submarine projects’, about which even I am not informed.”

BMW employees in a worldwide network – including suppliers, universities and research establishments – identify forward-looking innovations. The crucial factor is the focus on ideas not only from the world of motoring but also from other areas such as the electronics or software sectors. In a world first for the motoring industry, this stage implements the Virtual Innovation Agency (VIA): at www.bmwgroup.com/via Even small and medium-sized companies can submit innovative ideas and suggestions to the BMW Group. These are examined and, if suitable, are taken further in consultation with the “inventor”. The second stage is “innovation control”, when the innovations are analysed for their suitability for vehicles and developed up to a certain level. “Innovation transfer”, finally, ensures that the selected innovations are channelled into volume production and thus a concrete product.

“Our extensive networks are an important source for our wealth of ideas. On the one hand, we, as the BMW Group, are represented by research, technology and design offices in the major markets of Japan and the USA. Many trends in the automobile and other industries are created there. Our local offices absorb, collect and evaluate these ideas and regularly exchange their analyses with their colleagues at the Munich Research and Innovation Center. On the other hand, we also understand networks to include specific contacts with external partners (such as suppliers, universities, research institutes and high-tech companies) in order to systematically add to our know-how. The development of active steering, which we developed to the series production stage together with ZF Friedrichshafen, is an example of this joint process based on partnership,” says Göschel.