BMW gets intimate
Take a look at the tricycle on the left; that is what an unbalanced innovation strategy looks like. Product leadership, customer intimacy, and operational excellence must be, if not equally important, at least reasonably balanced, which brings me to BMW. For years, Bayerische Motoren Werke AG have been known for making excellent cars. They claim to make “the ultimate driving machine” and you can tell that they mean it, sometimes going to extremes to get there. For example take BMW’s Center for Aluminum Excellence in Landshut, Germany. If the name sounds like the punch line of a bad joke about Germans rest assured it isn't. It is a dead-serious R&D center staffed by some very sharp materials engineers and other experts.
BMW have a proud tradition of product leadership and the way they approach aluminium is a good example. Steel is the main metal used in auto-construction all over the world. But steel is heavy whereas aluminium is much lighter. All things being equal, a lighter car is faster, nimbler, and better in so many ways than a heavy one. But aluminium is a fiddly thing. It's difficult to mold, difficult to weld, and it is not nearly as rigid as steel. So unless you really know what you're doing it is easy to end up with a light and ugly car that is all bendy and wobbly. That might be ok if you're building a pathetic little economy-box, but it will simply not do if what you're trying to make is a high-performance, street-legal vehicle. What to do? If you’re BMW, you build the ultimate research center where you force aluminium to give up its secrets so you may be able to use the wretched metal extensively.
In my previous article (link) we discussed the notion that value disciplines apply neatly to innovation strategy and that concentrating too much on product leadership is likely to be short- sighted. So why the hell am I writing now about BMW's product leadership in material science? For laughs and giggles really, because now they've gone and put the same effort they put into learning about aluminium in getting closer to their customers.
It is very difficult for car manufacturers to be close to their customers. In real terms, manufacturers do not actually sell the cars they make to customers; that’s the dealer’s job. They don’t maintain the cars either, that’s also the dealer’s (or the mechanic’s) job. So in order to gain any amount of customer intimacy car manufacturers have to jump through a long series of loops. This puts car makers in a difficult position that makes them over-reliant on product development and operational efficiency to create value.
And now BMW has had enough of that and are trying to make your car the largest connected device you own, and that connection will be first and foremost to BMW itself. In a recent TechCrunch article, Dieter May, BMW’s VP of Digital Products and Services describes a near future where the experience inside a Beemer is designed and nurtured by the company. In simple terms, BMW is not willing to cede the design of the in-car experience to Google, Apple, or Spotify.
This makes sense. Creating a more direct link between car designer and car user will no doubt benefit both of them. But can a car’s operating system displace the intimacy that users have with their smartphones? Unlikely. And unnecessary. As close as we are to our smartphones, our experience with them is limited to a relatively small screen, while in comparison we are literally surrounded by our cars when we are in them. There is literally lots of space there for BMW to make their mark.
True, there will be some competition between the smartphone and the car in terms of customer intimacy but I don’t see it as a winner-take-all race. The car experience can improve without denigrating what we do with our phones. Car makers, following BMW’s lead, can improve the balance in their value disciplines. That will be a welcome change.