Monday, February 2, 2015

Inside the Box may be where the money is

Sometimes, and most forthrightly so, innovation is best exemplified in how we think and how we solve problems, rather than just in what products we develop.  So reference an old article from the Wall Street Journal:  Chrysler's New Bosses Provide Lessons In Merging High Style With Lower Costs, by Jeffrey Ball (January 4th 2002), which commented on a few days later.

(image credit)

January 9th 2002 notes on leadership, business and economics 

In short, Dieter Zetsche and Wolfgang Bernard have restored Chrysler’s driving, innovative spirit, while laying out such emphases as cost and process efficiency and strong attention to the market: What Zetsche calls “disciplined pizzazz.” 

As Chrysler worked to sustain is success in the late 1990s, it “invested lavishly to stay ahead.” It worked hard to re-invent itself. For example, in 1999, Robert Eaton boasted that the new version of the Grand Cherokee has so few components in common with its predecessor that these shared parts could fit into a bag. 

This approach was certainly evident in several Dodge advertisements: “We’ve changed everything again.” And “Different” was its tagline. I really liked the TV commercials because of the innovative way they crafted images around being different. For example, in a boardroom of people, the camera pans at the level of their legs and shoes. While most had the typical professional, business attire, one individual wore red and white gym shoes. I also really like these commercials and tagline, but I, too, like being different, re-inventing myself, doing something I hadn’t done before (e.g., which I worked to do as a professor in teaching subsequent classes of the same courses). 

However, this approach led to Chrysler’s business struggle in the late 1990s. 

Enter stage right: Zetsche, with a different perspective and emphasis: Create a core that different models shared. In effect, the ‘shell’ (my word) varied from model to model, but these models were essentially the same vehicle. This has been key to Chrysler’s rigorous new-product development. This approach allows the company to achieve dual objectives: “trim development costs while increasing the variety of models in Chrysler showrooms.” 

It seems to me that Zetsche has certainly directed a return to business fundamentals---and, apparently unexpectedly, has worked to re-instill in Chrysler its former “brash American style.” So… after a marketing brainstorm, they decided to begin with the Jeep, the one that the company virtually invented in 1984 and the one that now is expected to bring in the additional 300,000 annual sales. More specifically, they focused on a low-end model that they would direct to “Millennials” (auto buyers under 22 years of age). 

The notes from this meeting found its way to a Jeep engineer, Rick Kukucka. Without much of a marketing budget, he and his team hung at teenage venues such as chat rooms and sandwich shops. As it is often with me, an idea popped into Kukucka’s mind in the middle of the night: As part of his team’s tinkering with the design etc., he thought the low-end Jeep should have a smooth floor, thus taking out the carpeting. Not only would this be more hip to a generation that prefers bare-wood floors to wall-to-wall pile, but also it would save costs. The cost savings obviously can make this Jeep affordable for the Millennials.

You see, innovation never exists in a nirvana of limitless time and funding.  It exists in the exigencies and the constraints of the business world.  How well CEOs acknowledge this reality is a hallmark of what James Collins calls great leadership

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