How BMW became one of the world's innovation champions

Article Post Image

It could be a scene from a James Bond movie. But make no mistake, the new BMW-7 series advert, which features catwalk models, futuristic cityscapes and a luxury marina, is a paean to innovation – and not the world’s favourite spy. [i] That’s not to say that the new 7-series would not look out of place in a Bond movie. While most manufacturers offer a wide range of intelligent services and apps, including Internet or Real Time Traffic Information, BMW’s new 7-Series is fitted with a state-of-the-art Gesture Control system, which allows driver to zoom into maps and answer phone calls with a wave of the hand.[ii] Another impressive feature is BMW’s newly developed Display Key, which enables the driver to park the car in the tightest of spaces without actually being in the vehicle.

BMW innovation strategy | Rowan Gibson
BMW 7 Series - Sky Lounge Commercial Ad, 2015 | image source: YouTube

The ad, which showcases these new technologies is only a minute long and contains just seven sentences of voice-over. However, it powerfully communicates BMW’s position as one of the world’s great innovators. “At BMW we believe the best way to predict the future is to create it,” concludes the narrator. Perhaps this last line illustrates exactly why BMW is such a successful innovator. It’s all about how the company sets out to create the future. In my new book, ‘The 4 Lenses of Innovation’, I identify four key business perspectives that are prerequisites if a company is going to truly realise innovation and growth, and BMW exemplifies all four of them.  

Challenging Orthodoxies

First, is the ability to ‘Challenge Orthodoxies’ – the tendency to question and overturn common assumptions inside an industry about how things are ‘supposed’ to be done. BMW has shown repeatedly that its teams are willing to challenge even the most deeply entrenched beliefs and industry practices, and to explore new and perhaps highly unconventional answers.  

Harnessing Trends

The second perspective - or innovation ‘lens’ – is called ‘Harnessing Trends’. BMW has demonstrated that it is very good at spotting patterns of change that could substantially change the rules of the game. One of which, of course, is the recent move toward electric vehicles – an area where BMW responded with its characteristic ‘supercar’ approach, rather than with small, environmentally-conscious vehicles like Toyota’s Prius.  

Leveraging Resources

The third lens is the capacity for ‘Leveraging Resources’ in new and exciting ways. BMW thinks of itself as a portfolio of skills and assets that can always be stretched into new innovative growth opportunities, rather than pigeonholing itself with a particular product or brand offering for specific markets. Mini is a great example of taking such a broader perspective. This lens is also about looking beyond your own resources by partnering with other companies who can add new competencies and assets that enhance your own capabilities. A couple of years back, for example, BMW teamed up with Dainese, the Italian manufacturer of protective wear for motorcycling, mountain biking and downhill skiing, to design a motorcycle suit with integrated airbags. bmw innovation  

Understanding Needs

The fourth lens – ‘Understanding Needs’ – is almost the ‘Holy Grail’ of innovation. It’s really about learning to live inside the customer’s skin, empathizing with unarticulated feelings and identifying unmet needs. BMW tries to put itself in the driving seat in order to feel the customer’s ‘pain points’ and to design solutions from the customer backward – all with the goal of creating the ultimate driving experience, or what the company refers to as ‘the joy of driving’. This also means matching new technological possibilities, as they become available, to unmet customer needs. The state-of-the-art features mentioned above – BMW’s Gesture Control system and its Display Key for automated parking – are excellent examples.  

BMW: An Innovation Giant

If you’re still doubting the fact that BMW is an innovation giant, then take a look at the Boston Consulting Group’s (BCG) latest innovation league table. There are now four established Original Equipment Manufacturers (OEM) ranked in the top 10 companies in BCG's latest global innovation study, and seven are ranked in the top 50. And BMW? BCG ranks the Munich-based automaker as the seventh most innovative company on the planet, and the third most innovative car manufacturer in the world (Only Toyota and Tesla rank higher).[iii]  

BMW: Investing in its future

So how has BMW become such a trailblazer for invention, and what exactly is it doing that sets it apart from its rivals? BMW Group recognises that breaking new ground comes at a cost. Indeed it knows that it cannot be achieved without a world-class Research & Development operation. According to the ‘Innovation Leaders’ website, BMW currently spends around 2,300 Euro per car to ensure that innovation remains at the heart of everything it does.[iv]  

BMW: A history of Invention

Let me also dispel the myth that championing innovation is something fairly new for BMW. It isn’t. BMW has been at the forefront of invention since it was founded in 1916 [v] and has always believed in implementing leading-edge technology to enhance the driving experience for its customers. For example, the company was one of the pioneers of electric vehicle development. In 1972, nearly 30 years before Tesla was founded, BMW first realised the dream of electrification when it introduced its 1602e model.[vi] In being one of the first car manufacturers to develop a fully functioning electric vehicle, BMW has forged a reputation in the automotive industry for harnessing new trends – the second lens of innovation. BMW innovation  

BMW: Fostering a culture of electrification

Over 40 years later, BMW is now spearheading an even more exciting development – the creation of an infrastructure for electric vehicles in major cities around the world. Its innovative ‘DriveNow’ car sharing model scheme has been trialled in London, and launched in the USA, as well as Germany. The scheme, which uses the all-electric BMWi3, borrows the simple effectiveness of London’s BorisBike system, in that it enables the user to pick up and park cars in any on-street parking bay. It is hoped that this ingenius initiative, which also ties in to each city’s public transport network, will reduce traffic, cut emissions in cities and make an environmental contribution towards a better quality of life. But BMW wants to go further. In Copenhagen, a fleet of 400 electric vehicles criss-cross the length and breadth of the city. But the big difference is that the navigation device fitted to each car is interconnected with Copenhagen’s public transport system, which is narrowing the gap between private and public transport. [vii] Dr. Bernhard Blättel, head of BMW Group mobility services says of the landmark scheme: “Here in Copenhagen we are now already witnessing mobility of the future. It is on-demand technology, interconnected, quiet and electric.” [vii] In leveraging its resources in this way, BMW has transformed its innovative brand from one that sells cars to one that is helping to lay the future foundations for electrification in European and American cities – again, another great example of the third lens of innovation; leveraging resources in new ways.  

BMW: Pioneers of Next Generation innovation

Electrification infrastructure aside, as we enter a new era of automotive innovation, car makers are desperately trying to take advantage of the latest technological advancements such as using 3D-printing to manufacture new vehicles. But 3D printing is nothing new for BMW. The company has been at the forefront of additive manufacturing for just over 25 years. Take the BMW Group’s Research and Innovation Center, for example. Its Munich team works on close to 25,000 prototype requests each year, and produces some 100,000 parts at its Rapid Technology Centre. Depending on the size of the component, 3D printing ensures that sample parts can be ready in just a few days.[viii] BMW is even using 3D Printing to physically strengthen the thumbs of its car-plant workers. The 3D-printed apparel acts like support bracket and minimises strain. It also helps workers fit components into vehicles much more easily. BMW innovation  

Innovation: It’s what the consumer wants

But why does BMW invest so much time, money and resources into innovation? For me, the answer’s very simple. It’s because in a very competitive sales market, innovation or a lack of it, is often the difference between a consumer buying a car and leaving the car showroom empty handed. A recent BCG report, for example, says that 60 per cent of US car buyers cite innovation as an important consideration when purchasing a new vehicle. And in my opinion, innovation in the automotive industry will continue to flourish because:

  • Consumers value new technology.
  • Telematic services, in–car entertainment systems and safety features are vitally important factors for drivers to consider when buying a new car.
  • With fossil fuels in decline, a need for greater fuel efficiency will drive innovation.[ix]

BMW innovation  

BMW: Embracing the Telematics revolution

Take telematics for example. Most new cars, including BMW vehicles, these days have some sort of navigation system installed directly in the vehicle, and most are fitted with state-of-the-art in-car entertainment systems. And the more technology in a car, the greater the level of innovation that is needed. Boston Consulting Group reveals that a standard vehicle uses more microprocessors and software code than a fighter jet.[x] BMW innovation  

Innovative lightweight materials

With vehicles striving for greater efficiency, BMW is investing in lightweight materials such as aluminium and carbon fibre. Take the BMW 13 for example. The vast majority of the vehicle has been constructed from carbon fibre, which is one quarter the weight of steel and five times stronger. Carbon-fibre is now being introduced throughout the BMW range. But it’s not a simple process. Carbon fibre frames cannot be transferred from one car to another.  Each piece has to be adapted and tested for each different model of car. The engineers who build the BMW range with this lightweight material are not just innovators; they are modern-day alchemists. BMW innovation Take the new BMW 7-Series for example. It’s a full 40kg lighter than its predecessor, and to ensure that the materials can withstand a crash, they are put through a rigorous testing procedure. Engineers established that carbon-fibre would weaken in temperatures exceeding 90 °C but if it’s exposed to extreme temperatures, then it would simply break. Therefore, the materials were exposed to extreme temperatures ranging from 50 °C to -50 °C in state-of-the-art climate chambers to determine their extent of their rigidity.  [xi] The average customer who walks into a showroom probably wouldn’t think to ask the salesperson what the body of the car is made of. But, nevertheless, BMW has spent millions of Euros testing and producing the innovative carbon fibre frames. This is the innovation that you don’t see. It’s also an example of BMW understanding the needs of its customers - the fourth lens of innovation I described earlier. The carbon fibre bodywork addresses what I call an ‘unvoiced need’. BMW has sought to reduce the amount of steel and aluminium framing as part of a wider plan to increase fuel efficiency in its vehicles. Stay tuned for my next post, where I’ll reveal the key inventions that have made Tesla Motors one of the world's most innovative companies.  Executive Masterclass | Innovation Excellence at Tesla - Rowan Gibson

Sources

[i] BMW 7-Series UK advert
https://www.youtube.com/watch?v=TvZS_s5krwk
[ii] https://www.press.bmwgroup.com/united-kingdom/showTextTopic.html?left_menu_item=node__5236
[iii] The Boston Consulting Group: The Most Innovative Companies 2014: Breaking through is hard to do
https://www.bcgperspectives.com/Images/Most_Innovative_Companies_2014_Oct_2014_tcm80-174313.pdf
[iv] Innovation Leaders article
http://innovationleaders.org/bmw_company_profile.html
[v] BMW Group History page
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/unternehmen/historie/meilensteine/meilensteine.html
[vi] http://www.motorauthority.com/news/1097329_1972-bmw-1602e-bmws-first-electric-car-detailed-in-new-video
[vii] https://de.drive-now.com/en/#!/carsharing/copenhagen, and -
[vii] BMW Group Press Group Global
https://www.press.bmwgroup.com/global/pressDetail.html?title=four-hundred-bmw-i3-for-interconnected-mobility-in-copenhagen-bmw-i-supports-the-improvement-of-life&outputChannelId=6&id=T0230104EN&left_menu_item=node__8601
[viii] http://www.theguardian.com/technology/2014/jul/04/bmw-3d-prints-new-thumbs-for-factory-workers
[ix] BCG: Accelerating innovation: New Changes for Automakers, January 2014
http://www.bcg.de/documents/file153102.pdf
[x] BCG: Accelerating innovation: New Changes for Automakers, January 2014
http://www.bcg.de/documents/file153102.pdf
[xi] Automotive Testing Technology International magazine, November 2015 edition

Photographs

All photographs sourced from BMW official website with permission of UK press office.
Article Share Image Share this article on your TLN® Profile
Share this article TLN Linkedin Post TLN Twitter Post TLN Facebook Post