Where innovation is not happening

Tom Dougherty, CEO – Stealing Share

20 April 2009

Innovation in the auto industry: Why it’s not happening

Automakers like GM are announcing a “reinvention” of all aspects of its business as the model of the auto industry, as we all well know, is failing today – and making many of us angry enough about it to protest any bailout dollars for the industry.

This is a step in the right direction as GM, at least, seems to understand that making brands vital again is more than just about marketing. Part of being a successful brand includes operational and structural changes to it can live up to its brand promise.

Makes sense, right? Don’t be shocked if it results in…nothing.

Historically, the automotive industry’s idea of innovation has been superficial at best. They copycat each other and find themselves right back where they started. If something new does come out, the rest of the manufacturers follow the lead instead of understanding why consumers first sought out that “innovation.”

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Remember the craze over the behemoth SUVs? Once Ford introduced the Explorer, everyone else followed with their own same, nearly exact models. What they didn’t look into was why consumers (at that time) wanted the Explorer and continue the innovation. (Imagine where the car industry would be if they understood consumers wanted instead of copycating: a family car that could fit the family – and looked masculine. The anti-Mini Van as it were.) A true innovator would have taken the values inherent in those desires and moved the industry forward into something new. It’s the new thing that capitalizes on the values consumers are seeking that become the blockbusters.

Instead, automakers just copy each other without questioning what is taking place in the market. So, how are we to believe GM when it says it is “reinventing.” Riiiiight.

The problem is that the industry has a lack of leadership. The manufacturers constantly tout that they provide consumers with what they want, but they don’t really delve all that deeply into what consumers want. They just look at what is selling at the moment and bank everything on it (which is why the big three became so reliant on the SUV market).

True innovation is always about being in touch with what consumers really want, what are they looking for when they buy a certain kind of product. (Right now, it be that they are just settling, if they’ve decided to buy at all.)

Being the flawed humans that we are, we often do not know what we want until we see it. Because of that, industries must be smarter and look a little deeper to answer that question for us, instead of just making tiny movements and presenting a copy of what is already out there in the hope we’ll settle for it.

The manufacturers are trying to develop more hybird and electric cars, but even the market leaders – such as Toyota’s Prius – aren’t selling. Consumers are only concerned with green when the green is in their wallet. A Prius is expensive and all its innovation is under the hood. When all is said and done, it’s just a car with better gas mileage. (So, what is Toyota banking on for the future? Another model of Prius.)

If GM wants to compete, it must lead. It needs to develop vision that digs into the values consumers are looking for and not just mimic back what is currently selling. Copying what sells is why we have a zillion reality TV shows on the airways right now, most of them bad and failing. Networks have simply copied the reality TV model and haven’t given two hoots about viewers really want (authenticity, possibly) to create something that would attract even more ratings.

For all the automakers, they must remember that claims of innovation are not in copying the original, but instead in the innovative thinking that created the first entry. Considering the industry’s history, however, I’m not very optimistic.

See more posts in the following related categories: Automakers automobiles GM Prius Toyota

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