Adapting GM Research To a New Corporate Strategy

Abstract

OVERVIEW:The business climate has changed tremendously for North American automobile manufacturers. Until the late 1970s, there was little foreign competition. Manufacturers could benefit by large economies of scale, and there was little incentive for radical innovation within the business. Today, manufacturers from all over the world compete in the United States. Customers have more than 600 vehicle options to choose from, and the intense competition has kept prices competitive and margins thin. Such changes have forced manufacturers to innovate as they never have before. In 1998, GM embarked on a corporate strategy of innovation and growth. As a result, GM Research transformed itself from a lab that had been working primarily to support an existing production system, to a lab focused on business innovation. The target was to put 30 percent of the lab's resources on exploratory projects, but projects that could create wealth for the company. Changes required by the new emphasis included establishment of metrics at the lab level, increased research partnering with universities, and initiation of research programs with key suppliers and automotive alliance partners. Lessons learned: move fast, communicate well, keep some seasoned researchers involved, and make sure the company's top leaders support, if not demand, the new R&D focus.