VIEWPOINT | HARNESSING THE POWER OF INNOVATION

When Cooper Standard streamlined its approach to developing next-generation products, its goal was to establish a new process that zeros in on game-changer ideas, identifies those with a solid business

case and can bring them to market readiness in less than two years. The effort also has established a strong corporate culture of innovation at Cooper Standard, which uses high-tech materials to make products for automotive sealing, fuel and brake delivery, and fluid transfer systems.

Lyle Otrema, vice president of innovation and advanced product strategy, headed Cooper Standard's restructuring effort and manages the resulting Innovation System launched by the company in August 2012. He describes the process and results.

What prompted the company to restructure its R&D activities?

Our products begin at the molecular level, so basic material research is part of our DNA. But our R&D effort was embedded in our product development teams. The same people who were focused on day-to-day production issues also were expected to develop our next-generation products and materials.

We realized we were focusing 70% or more of our "research" time on everyday issues rather than future products. We had an unwieldy 77 research projects under way or on the books, but most were about incremental changes or a minor materials adjustment. It was difficult to identify the true game-changers in the mix, determine if they were truly marketable and give the winners the development support they deserved.

How did you begin the restructuring process?

We studied other companies with successful track records for technical innovation. We quickly recognized that we needed to separate real innovation R&D from product development. We also needed a formal procedure with which to identify truly innovate ideas and a "fast to fail, fast to win" strategy to select concepts that could be turned into saleable products.

We also revisited that list of 77 projects and realized the majority were not really true R&D projects. Most belonged with our regional product development teams. That enabled us to concentrate our R&D on seven true skip-generation ideas.

What structure did you put in place to guide the process?

First we set up an independent Innovation Team, which is headquartered at our technology center in Auburn Hills, Mich. There are only about 10 members in this R&D group. We want them to work on ideas that are radical and perhaps disruptive. The ideas that aren't different enough probably belong in product development.

Naturally the members of our Innovation Team are very knowledgeable about the technical aspects of our products. But they were selected because they're also out-of-the-box thinkers. At the same time, the team needed someone who could develop a business case for these new ideas.

Next, we created a Global Technology Council to identify worthwhile projects. The council consists of our regional technology chiefs and the top business and materials heads from the new R&D team. I chair the group, and we report directly to the company's chief operating officer.

How do you find ideas to develop?

The council collects application forms from employees that include a description of an idea and describe its value proposition for the company and our customers. We use a scoring system not to determine what will work but to decide whether the idea belongs with our Innovation Team or with product developers in one of our regions.

The regions follow a companywide product development system. Ideas that are assigned to our Innovation Team go through a different process. It's not enough for them to create an academically interesting technical solution. It needs to be something that can be converted into an actual product. We also want results that can be used by more than one customer. This ensures a longer life for the product and helps us recover our development costs.

The Innovation Team follows a four-step process. First it does basic technical and market research to determine if the physics are possible. We also estimate about how much time and money it will take to complete the development process. If the idea passes this step, it moves into a more rigorous evaluation that includes figuring out actual costs.

The third step is to determine what type of product will result. This is where we make a physical prototype, which often makes or breaks the idea. By now we have done some basic validation work. The final step, the last 10%, is complete validation to prove the product can meet customer specifications. Once a new idea completes this step, it gets turned over to the regions, who finalize it and take it to market.

How well is the process working?

Everyone has been astounded by how quickly things move through the system. You don't need a big bureaucratic group if everything is focused. We are a manufacturing firm, so we're not just trying to create a technology to license, although that doesn't mean we won't find products and applications outside our current product lines. We're focused on precedent-setting products, and are very energized.

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