From the early days of Henry Ford to Toyota’s TPS system, the automotive industry has brought a vast number of innovations that have worked their way into the mainstream business world. Many of those innovations are deeply ingrained into business culture. Many people are unaware of how their day-to-day job has roots in the auto industry. The 8-hour workday and 40-hour workweek that many companies still religiously cling to were actually first instituted by Henry Ford to achieve maximum productivity in his factory.
There is no doubt that the auto industry has been a global leader in innovation, but the challenges that faced 20th-century automakers are vastly different from those facing 21st-century leaders. In the 20th century, auto manufacturers were tasked with the challenge of producing enough cars to meet demand and then with making them affordable for the average citizen. In the 21st century, production methods have advanced to the point where meeting demand is no longer a challenge, but that doesn’t mean that innovation is no longer necessary.
With a global auto industry, where it is just as easy to buy a German or Korean car as an American one, the biggest challenge in the 21st century is for manufacturers to set themselves apart from the competition. With so many different products and options to choose from, consumers can afford to be picky. They want cars that are cutting-edge and ahead of the rest of the competition.
So how do car companies set themselves ahead? For starters, they can develop innovative new features and experiences that are other companies are lacking. This will only happen if car companies “think outside of the box.” Trying to keep up with their competition is no help whatsoever. Instead, they need to integrate new, unique ideas.
The future should be the number one priority of the automobile industry. Every decision and every new product should be future facing. Why keep creating old products that nobody wants? There is no sense in developing the old along with the new.
Another part of staying future-focused involves budgeting for growth. In fact, leaders should expect to spend 30% of their total R&D budget on new technologies.
For auto manufacturers to survive in the 21st century, they will need to be innovative, forward-thinking, and hyper-focused on the needs of their customers. If they fail in any of these areas, they will be left behind in the dust.