“The real challenge is to efficiently translate the simple product message into internal targets for the development process.”

Markus Noelle, Technology Planning Manager at Ford

Innovation Management at Ford

Innoboard: Mr. Noelle, as Technology Planning Manager at Ford, you are working at the forefront in developing new product features for volume vehicles. Why is systematic innovation management so critical to success?

Markus Noelle: The automotive industry generally operates in an extremely competitive environment; the basic expectations of customers are very high and everyone has an opinion on “Cars”. There probably isn’t another product, where so many engineering hours have been invested. At the same time premium carmakers are expanding their portfolios towards the core area of the volume manufacturers and volume manufacturers are trying to offer products with premium quality. The challenge for manufacturers is even greater as Korean manufacturers have caught up quickly and Chinese manufacturers have the ability to develop globally competitive products. An important opportunity to positively set your company apart from the competition is to introduce ‘customer relevant’ innovations. Systematic innovation management is not only helpful but necessary in order to maintain this distinction and – just as importantly – to be able to deliver continuously.

Automobile manufactures are increasingly moving closer together in many product features. How can a company rise above the competition even more significantly?

Clear positioning of the product makes it understandable and relevant to the customer.  The real challenge is to efficiently translate the simple product message into internal targets for the development process.  We want ‘something different’ for the customer, in addition to what he or she expects from a Ford; something that surprises time and again with clever and useful features. To do this, we have established ourselves as leaders in the following fields – or as we call the columns – “Green”, “Safe”, “Clever” and “Quality”. These abstract specifications are translated into many hundreds of projects carried out by the Research and Advanced Engineering and prioritized in terms of quality and scope to support the overall goals.  The timing of a possible introduction of the necessary resources undoubtedly plays an important role. In these processes, technology planning is critical as we work together, taking into account the competitive situation.  The marketing department aims to bring out significant innovations first – at best across the whole industry but at minimum in the volume segments.  Examples of technology leadership in the segment were shown at the product launch of the new Focus;  security assistance systems  (“Security” column), the introduction of the 1.0L Ecoboost engine  (“Green” column), and the introduction of the panoramic sliding door on the new B-Max and infotainment system “Sync” (“Clever” column).

Ford always wants to be ‘one step ahead’  This is only possible by  continuous improvement of the efficiency and productivity of R & D. Where does Ford go from here?

The main points that I would like to mention in this context are:

  • Joint product vision: Our claim to technological leadership
  • Compulsory resource usage
  • Global Organization
  • Strategic innovation areas
  • IT

The claim to technological leadership is explicitly communicated internally and externally. It is important in every area of the organization that there is no doubt which direction to take. The global nature of all activities plays an important role. This is achieved by a unique distribution of tasks across all research and development centres, avoiding shadow-or double-engineering in the complex global structure. The role of IT is important here to provide efficient communication tools to make 24 hour global exchange of data and information possible. Furthermore, during the last ten years we have set up new strategical functions which serve as an innovation catalyst, innovation broker and communicator. These functions are performed by technology planning, between the research and development, marketing and finance departments which select the projects that will be valued by the customers, will be technically achievable and which will positively affect our business.

How important are business model innovations for you, in view of current electric mobility?

Huge. And why? It’s all linked to connectivity features in the car which may have little, or nothing at all, to do with the primary feature, transport. At this point, the overall system performance is no longer in our hands, but considerably dependant on third parties.  It is here to provide the infrastructure for recharging the batteries and transmission and processing of data.  This results in totally new alliances that are necessary to develop robust solutions from partners and industries that have not previously worked together. In processing data and developing new services, capablilites are required which are not yet available, or at least are not available from the manufacturers.  In addition, the function and status of a car is changing. Intelligent Mobility is more important than the possession of a car but that doesn’t necessarily mean the best mobility solution is available for every situtation. Many manufacturers have begun to worry about mobility solutions (software) beside the pure selling of the hardware (car). Is there a possible analogy here with the communication market?  A strict separation of hardware (mobile phone) and software (network operators) has remained there although a change would require less investment than for mobility. In any case, these limited mobility solutions are the first step. Diverse conditions in terms of traffic and infrastructure in the regions mean there will be very different solutions. It will be exciting to see how it develops and what the involvement of the carmaker will be. We are examining the various options and are sure to come up with solutions that go beyond the sale and financing of cars.

Mr. Noelle, Ford has worked to develop innovative products over the years in order to develop efficiently and globally. What strategies and processes were influential? And to what extent has Ford succeeded? 

The broad answer to your question is ‘One Ford’.  ‘One Ford’ is a small roadmap of what our goals are and what related practices are important. All employees have the same global vision – and what is very important – an unchanged vision since Mr. Mulally came to Ford. So, for six years the company has been operating globally. All R and D responsibilities are global. Thus the development centre in Cologne is responsible for all B and C-cars globally, be it the Focus, which sells in all markets, or vehicles which are only available in certain markets such as South America or Asia.  Likewise, employees in England are globally responsible for all small diesel and petrol engines. All functional areas are similarly divided – this is guaranteed to optimize the efficiency of  resources. How far has Ford come? I certainly can’t judge all aspects, but all the essential functions have been organized like this for several years.

Ford wants to be perceived more and more as a technology company. Where do you see the greatest need for action at Ford?

In fact, Mr. Mulally has expressed the intention to not only offer technology products, but to perform as a technology company. Participation at trade fairs such as CeBIT, ifa or BMC, new marketing strategies, including the use of new media, media events such as the beginning of September in Amsterdam and of course the products themselves, back up this claim. The above-mentioned  technologies, such as the 1.0 Ecoboost, active safety equipment and sync show that we are making good progress on the product front.  All manufacturers are making great efforts in these areas – a permanent discontination is a challenge we would gladly accept. We really need to make sure of the following aspects:

  • the tightening of NCAP protocol over the next few years, and in-depth technical upgrading of the vehicle fleet needs to be cushioned using intelligent cost management.
  • the influence of the consumer electronics industry: we have to learn what is really relevant to the customer and how we can keep the vehicle on its relevant use cycle.
  • we need to make sure that the types of technical innovations are easy to use and produce a rounded and valued experience for our customers in and with the vehicle.

Currently car manufacturers rely on detecting external innovation impulses  early and converting them into product features. How strong really is the Not-Invented-Here syndrome in Ford?

Essentially and I think, fortunately, this phenomenon, doesn’t play a large, systematic or institutionalized role. I have never personally experienced that reservations were expressed just because a person or a department were not the authors of an new idea. We value discussion of the proposal content, not the source. Eternal proposals and those generated internally are treated the same. Communication with our stakeholders and gaining their support for the implementation of a project are the real issues we need to address to successfully implement ideas.  Possible restraints are, in my experience, mainly caused by limited resources. As this is no surprise, we have made technology planning appealing to everyone and budget for such cases.

ILI CONSULTING thanks Mr. Noelle for this great interview.