The Role of Innovation at a Global Level: The Case of Continental AG

At the Grenoble Innovation Fair, the first keynote speaker was Reiner Hoeger, Director Engineering Governance and head of innovation at Continental Automotive GmbH (Continental AG). Reiner gave a very bright talk on his vision of innovation at Continental AG. His talk entitled “The Role of Innovation in a Global Environment” showed the challenges faced by his industry in particular, and others industries in general in the context of globalization, as well as how they overcome these challenges thanks innovation by killing!

About Continental AG

Continental AG is a worldwide leading German manufacturer of tires, brake systems, vehicle stability control systems, engine injection systems, tachographs and other parts for the automotive and transport industries (more information on Wikipedia).

Continental AG has a 26 billion euros turnover. It is currently structured in six divisions: Chassis & Safety, Powertrain, Interior, Passenger car & Light Truck Tires, Commercial Vehicle Tires and ContiTech

Their vision of automotive:

we want to offer every one a comfortable and safe ride.

Reiner said to be extremely proud to be the innovation manager of the company.

Challenges faced by the automotive industry

The automotive industry faces a number of challenges.

Safety

The main concern of Continental AG is safety. Even if there has been significant improvement over the last decades in terms of safety, there are still too many serious injuries and roadkills in the world. This is true in western countries and even more is emerging and fast growing countries. This is the main issue for Continental AG: they want to bring safety to every one!

Sustainability

Another important topic is that of sustainability. All industries must reduce their carbon footprint. In the car industry, this challenge is source of inspiration and innovation as they need to reduce the fossil fuel consumption.

Face market growth

More clients is a challenge! With the rise of emerging markets in Asia (India and China), the automotive market faces another challenge as they need to significantly increase their production facilities.

Reiner took the following comparison: “we managed to innovate in Europe for the large American market, now the challenge is even larger, with Asia!”.

Globalisation of expertise

Good education is not the monopoly of western countries anymore!

“Good education is not the monopoly of western countries anymore” says Reiner – and he is true! This is a serious challenge! Competitive advantages related to knowledge and knowhow between western countries and Asia will vanish and in addition, they have the BIG numbers!!

Other competitors: Google, Microsoft and Apple

As Google, Microsoft, Apple and others enter the car, the automotive industry faces yet another challenge: the development of a new car goes from 5 to 10 years, while new iphones are released every year. The problem: you cannot plug your iphone in your brand new car as the time scales are so different.

Reiner summarize the various challenges like this: “there is place for every body, but you need to be open and innovate also with services and business models”.

Challenges are sources of innovations at Continental AG

Reiner explained that all these challenges are sources of innovation and he gave 3 pieces of advice:

You need to be prepared

Reiner started with a citation Louis Pasteur:

Dans les champs de l’observation le hasard ne favorise que les esprits préparés!

(“in the fields of observation chance favors only the prepared mind” – Lecture, University of Lille, 7 December 1854)

The bottom line is that you need to sharpen your mind and your knowhow to be able to detect that an invention (internal or external) can become an innovation (see our articles on serendipity and innovation).

Leverage your portfollio

Ask yourself the right questions: what is my technology and knowhow portfolio?

How do you innovate from this point?

First you need to generate new ideas. We do that through internal… and external ideation. Continental AG does scouting, open innovation, uses social networks etc.

Second, once you have ideas, you need a real time process to assess them to choose the best suited ones. You also need to make sure than no good idea is lost. To do that, Continental AG has created a number of   “innovation managers” to followup, assess and select ideas.

Examples of innovations

Kill to innovate!

Reiner concluded his talk with the three following points:

  • They are not alone in the automotive industry;
  • Globalization is faced by the whole industry;
  • There is only one way out : innovation! And to innovate, you have to try many thinks and kill them when they don’t work, as well as leveraging external expertise and resources.

Grenoble Innovation Fair, 20th October 2011

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4 thoughts on “The Role of Innovation at a Global Level: The Case of Continental AG

  • Saturday October 22nd, 2011 at 10:09 AM
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    Very interesting article. Mr.Hoeger was practical in saying that ” there is place for every body, but you need to be open and innovate also with services and business models”.

  • Tuesday October 25th, 2011 at 02:42 PM
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    Comment to Sathya:
    You are absolutely right, that was may claim: You have to be open for new products, services and very important business models.

  • Thursday November 24th, 2011 at 09:51 AM
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    In the new era, Organizations that are open to collaborate and to co-create are more likely to succeed in the markets they operate. For many organizations this calls for a major cultural shift. Though not all Open Innovation(OI) efforts are successful, by adopting OI processes there is a better chance. Reiner’s article bears testimony to this fact.

  • Sunday July 28th, 2013 at 02:04 PM
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    Innovation is the major key factor for success in the future.
    We are the future of Motion.

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