Innovation: The Struggle of What Is Possible and What Is Practical

Innovation is the sexy stuff of industry. It is always the work which everyone wants to be a part of. It is the place where people can be granted free reign to imagine, to create, and to try something new. It can also be the most frustrating, disappointing, and costly activity. Many large companies, as well as startups, fail because of this frustration: the constant tension between what is practical and what is possible.

It feels like this tension is even more present in today’s world as the pace and application of technological solutions continues to rapidly accelerate. I have been working in the automotive industry for nearly 20 years; the last few of which involve the topic of vehicle connectivity. Often times I will receive a phone call or email which begins with, “Matt…I have an idea that I think connectivity can accomplish. What do you think?”

What do I think? Well the ideas are usually good. The ideas are usually something which I would like to do. However at some point in the exploration process we encounter the “innovation tug-of-war” where only the solutions which are practical seem to win.

Can I offer evidence of this? Yes. First let’s consider automated manual transmissions. They have existed for many years. There is nothing which is that remarkable about the technology and certainly operating a commercial vehicle with an AMT is much easier. So why did it take so long for them to become mainstream? The market can offer many excuses; drivers do not like them, they cost more, they could potentially introduce new mechanical failures, they could affect resale value. Since our launch of the DT12 AMT, none of these fears have materialized. I believe the real reason it took so long was that while AMTs were possible, they were not practical until other elements of innovation developed.

Another example would be the commercial vehicle recently revealed by a company looking to deliver commercial vehicles that run on fuel cell technology. The application of turbine powered vehicles has existed for decades. They exist in the history of the Indianapolis 500. Fuel cell technology has also existed for decades. Automotive manufacturers such as Toyota, Honda, Daimler, General Motors, Hyundai and others have been working to develop this technology which is relatively simple to apply to vehicles. However, both turbine power and fuel cell has been impractical for many reasons, so these technologies continue to lose in the innovation tug of war.

Compounding this tension is the paradigm that vehicle development cycles, especially heavy duty vehicles, are quite long. Our market volumes are relatively low which means the industry must spread development costs over much smaller populations. Additionally, the expected life span of commercial vehicles is possibly 10 times longer than that of mobile device technology. Therefore, if I have a smaller population with a relatively long life span, then the pull of innovation must be very compelling in order to survive.

So where do we find the solution? Consider how innovation within the commercial vehicles has existed. First it always provides some financial benefit to our customers. Our vehicles generate both revenue and cost for them. To the extent that revenues can be maximized through uptime and cost minimized through fuel economy and reliability, product developments which can measurably improve customer revenues or costs will come to market quickly. In the case of AMTs, fuel economy and driver fatigue are measureable benefits which helped improve revenues and reduce costs. Once this was proven, the compelling force overcame the innovation tension and the technology became widely adopted. At the same time AMTs also became practical (maybe even almost foolish) if ignored, because advancements in powertrain controller logic and information about terrain information became so mature and accessible that AMTs were required to fully capitalize on the benefits. Stated differently, manual transmissions became impractical for much of the market because they could no longer deliver on practical needs.

Innovation is sexy, but in business, it must also be practical and of service to the customer. Ultimately, this is what determines which innovative visions become reality and which are left to our imaginations.