What used to be a simple relationship between customer and manufacturer is becoming a web of relationships that stretch around the world.
Corporations can no longer afford to ignore the insights of talented local people, and are reaching out to incorporate both technological as well as market insights. For many companies, this is a big change from the traditional top-down culture that made them so successful in the past. Building a new way to do business can be an unexpectedly fast process, as Eaton Corporation found out.
Eaton’s history of innovation has been based on working with clients to find solutions and then develop products that work with their clients’ production and manufacturing facilities. Innovating advanced technologies such as fuel emission control, automatic self-cleaning water filters, hydraulics for aerospace, and utility scale grid protection has driven the company for decades.
While this has worked well, Eaton was finding that their traditional, US-focused innovation wasn’t meeting the opportunities in a global economy. There was no effective connectivity between the corporate parent in the United States and the local divisions to exchange meaningful information. Innovation leadership came from afar, without connecting to the customers whose needs were rapidly evolving, or to local talent where new ideas, technologies and products could be developed. The United States was directing talented people worldwide, without understanding the markets in which they were operating. This insight lead to the new initiatives under Eaton’s CTO, Ram Ramakrishnan. He brought in Chris Roche, in the newly created position of VP of Research and Technology. Mr. Roche’s task is to promote a massive culture shift that will enable Eaton to remain a Fortune 500 company into the future.
“There’s nothing wrong with protecting your core business,” he said, “but how do you change the game with that? If you want to innovate, you have to change the climate and then change the culture.”
At the center of their innovation is joining the long-term view – the megatrends that will be driving the economy for decades – with local expertise. “If innovation is the business of the business, then an innovation center is hubris,” he said. “We did not take advantage of eco-systems locally.”
Megatrends
As a company that develops large, long term solutions in critical industries, Eaton understands the megatrends that will drive the economy for the next decades, not what is ‘hot’ today. Unlike the technology space, where first-to-market, market supremacy and the latest features dominate, Eaton’s clients are looking for innovation that is safe, reliable and efficient. The opportunities are outlined at the right. Mr. Roche further identified demand that will be dependent on needed carbon reduction:
Light weight fabrication
Lower emissions & fuel efficiency standards
Products that are ‘green’:created with cleaner processes; recylced, reused or fewer materials
The Integrated Engineering Centers
Getting divisions of their company outside of the US to take large risks is the challenge, according to Mr. Roche. To do this, his division is fostering a new worldwide culture by combining innovation leadership development with standardized metrics and tools to measure ecosystem attributes, values and markets. They are incorporating some of the thinking of Professor Jeff DeGraff’s “Competing Value Methodology,” which got its name from his use of competing teams to find a solution to the same or similar problems, and then synthesizing the results. Finding those local, commercially viable technologies is where the boots-on-the-ground approach really pays off.
“You have to market yourself,” he said. “You have to tell people why you are there, and that you’re committed to support your local communities.”
As an example, Asia Pacific was not delivering in their area. A few years ago, Eaton started partnering with China and Taiwan. By collaborating with 8 top Chinese Universities, they now have 1,200 Engineers in 2 GRT (Global Research and Technology) Center campuses and 4 R&D Centers.
“We’ve gone from zero to sixty in two years,” Mr. Roche added. “This is not an ivory tower association. We need to be sure we are connecting with key stakeholders to understand their technology road map, strategies and markets.” Through their scholarships, and relationships with universities and interns, they have invaluable connections and information on customers like government projects and start-ups. When they opened the new lab, 15 major Chinese press agencies attended. They wanted to know if Eaton was really collaborating as opposed to maintaining control. “They didn’t think a foreign corporation would do that.”
Technology Exploration > Pre-Launch > Pro-Launch
Another unique feature that has evolved from Eaton’s change in innovation focus is an emphasis on Pro-launch, or the marketing and support after delivery, which can be critically important to a client that is integrating a new product. Eaton can provide that support through their newly empowered local innovation centers. Because they have been part of product development, they have a deep understanding of the technology, as well as the challenges in local markets. Commenting on the effects of the program throughout Eaton, Mr Roche concluded,
“We have a hundred and three thousand employees. We needed to show that we have a process, that innovation is valuable.”
“We’ve gone from zero to sixty in two years,” Mr. Roche added. “This is not an ivory tower association. We need to be sure we are connecting with key stakeholders to understand their technology road map, strategies and markets.” Through their scholarships, and relationships with universities and interns, they have invaluable connections and information on customers like government projects and start-ups. When they opened the new lab, 15 major Chinese press agencies attended. They wanted to know if Eaton was really collaborating as opposed to maintaining control. “They didn’t think a foreign corporation would do that.”
