General Motors (GM) got a shout-out last week from the Patent Board, which just ranked GM as the number one global auto innovator. (You can see the scorecard on the Patent Board's home page.) That might sound surprising given GM's recent near-death experience -- and that's because the Patent Board pretty much only measures the issuance and scope of a company's patents, which actually have relatively little to do with how innovative it actually is.
So set that aside. What really matters is that GM's strategic application of innovation is starting to pick up again now that it's passed through the valley of the shadow of death. The introduction of the Chevy Volt electric-vehicle is a prime example. The creation of an in-house venture capital arm to proactively nurture entrepreneurial auto technology is another. This is innovation investment that could yield major returns.
Innovate, edit, apply
Here's the announcement from GM's media site:
The [Patent Board] analyzes intellectual property performance across 17 industries and determines the leader in each sector based on measurements that include the number of patents, impact on the industry, and technology and science strength. GM also ranked first in the automotive/transportation sector in the previous scorecard, published in January.GM has been awarded thousands of patents over the 100-plus years it's been in business, so no one should be shocked that it's actually, you know, always trying to think of new ways to gain a competitive advantage. But there's a lesson here: R&D can be utterly frantic, but if managers fail to relentlessly apply the ideas with the greatest potential, innovation becomes innovation for innovation's sake -- i.e., worthless.
"We focus on inventions that make our vehicles more sustainable," said Alan Taub, GM's vice president of R&D. "Our engineers are developing advanced technologies that increase fuel efficiency and ensure safety while maintaining the excitement of personal mobility."
Its own form of complacency
There's no more powerful concept in business right now than innovation. In his State of the Union speech, President Obama referenced the term repeatedly. "Innovate or die" has become a management mantra. Companies have taken this to mean that if their leaders and employees aren't innovating every minute of every day, they'll be left behind.
Of late, the focus has shifted to "disruptive" innovation, with the fear that successful, mature businesses -- or even relatively young ones, in the tech industry -- are just one killer innovation away from being wiped off the map. Unfortunately, the drive to innovate under that kind of frantic pressure breeds a form of complacency that's just as bad as luxuriating in past victories.
Managed innovation beats innovation proliferation
GM actually stands as a good example of what I'll call "managed" innovation. The company has spent a century relentlessly improving the automobile as a means of transportation. That's right -- Toyota (TM) and its Lexus brand didn't invent "the relentless pursuit of perfection"! They may have perfected the pursuit, but making cars better -- if not always much safer or radically more efficient -- has always been an overarching goal of carmakers.
That said, GM has typically sought to market innovation that can matter -- to consumers and to the company. The General is often dinged for failing to get hybrids on the road before Toyota rolled out the Prius, but when hybrid tech was first seriously explored in the late 1970s and '80s, the innovation still looked experimental. Consumers could do better buying a reliable, inexpensive, fuel-efficient Japanese car.
The green tipping point
It took a much greater international environmental awareness to push hybrids over a tipping point two decades later. But GM made the right strategic call in the 1980s. It also made the right business decision when, through marketing innovation, it discovered it could sell SUVs to people who once might have considered station wagons for family transport.
By the same token, when the global oil market grew much more volatile in the 2000s, GM failed to understand that the flipside of greenlighting strategically managed innovation at the right time is not mothballing the innovation when its run its course. Case in point: GM hung on to Hummer -- a rolling, controversial piece of bold advertising -- until bankruptcy struck.
So there it is. In the auto industry, not innovating is not an option. But innovating without applying cold, hard strategic vision can convince a carmaker that it's moving forward when it's really just letting engineers call the shots. The "car guys" can often be right about what's needed and what will sell. But not as often as is popularly imagined.
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