Innovation in the automotive sector - there's room for more.

Our very first Innovation Insiders Index rated UK big businesses on their effectiveness at innovation, as assessed by industry insiders. It also offered a snapshot of how different industries performed against our six principles of innovation, identifying distinctive sector approaches. Today, we’re taking a look at the automotive industry.

What’s driving automotive today?
The Index indicated that big automotive players are focusing their use of innovation on the pursuit of luxury. For companies like Jaguar Land Rover and Rolls Royce, the top priorities are customer experience and refining their expertise heritage, while they reinvent themselves as global luxury brands.

They’re relying heavily on internally-driven characteristics: in terms of our innovation principles, these are Capabilities and Competitive advantage. They’re successfully leveraging their huge experience and expertise as well as their companies’ scale. But the Index also highlighted the relatively low willingness of this sector to collaborate with other businesses and embrace cross-industry ideas.

What’s facing them on their journey?
Consumers no longer see cars merely as a mode of transport: they expect an entertainment and communication space that supports their busy lifestyles and keeps them connected. At the same time, both our demand for cars and the way we buy them is changing. With increased urban living (60% of us are expected to live in towns by 2030) the vehicle types wanted is evolving, while consumers expect a seamless experience through pre-sale, sale and post-sales via the channel they choose, rather than uniformly queuing up to be served at the showroom.

Challenges and opportunities
We believe that embracing collaboration with the technology sector – an industry that’s more than keeping up with changing trends – could hold the key for automotive. But will this relatively lumbering sector (cars can take years to reach the market) need to adapt its business model to accommodate the rapid and agile style of tech?

Automotive brands must get creative about incorporating tech into vehicles. Offering subscriptions, regular upgrades or in-car streaming systems could help cars keep up with the outside world. And allowing cars to become part of the growing Internet of Things could encourage consumer take-up of such paid services. Plus there’s the telematics factor: collecting and using data from in-car sensors and GPS systems. It’s already starting to take off, with EU regulations requiring new cars to have eCall technology by 2018 (which alerts emergency services to serious accidents) and BMW offering a similar private service. The RAC and some insurers are using telematics to encourage better driving behaviour…and there are plenty more potential applications.

We’ve already mentioned that this sector got low scores for collaboration in the Index: you can see this in how car brands are still developing bespoke systems in isolation, like SYNC, Ford’s communication and entertainment system. By the time such systems get out on the road, they’re already behind the times. And it swims against the current of the tech market, where smartphones are being used as connected displays, for services from home heating to security cameras.

Forming cross-industry partnerships could transform this approach: Apple are already working on a car iOS: Carplay offers seamless music, calls and navigation. Or in a more concrete example of customer service, dealerships could offer added value by teaming up with tech gurus and style consultants to fully integrate your car purchase into your lifestyle and allow you to fulfil all your related needs at one touchpoint.

Our take on automotive
We believe that any move the automotive industry makes towards its high-tech future should be directed at fulfilling consumer needs. And it’s more than likely that car brands will need a co-driver for this journey – most likely a mobile or tech company.

Download the full Index to see more of our commentary on how the automotive industry’s using innovation today. Tell us what you think – how else can automotive brands innovate and meet consumer demands? Join the conversation on Twitter: #innovatebig #6principles


The 2015 Innovation Insider Index sheds light on financial services

Our Index shows FinTech taking the lead

As a consultancy with an inherent interest in big business innovation, we think it’s important to find out which UK companies are doing it right. While many pay public lip service to the importance of innovation, there are those who don’t value it as much as they say…

That’s why we created the first survey that takes the temperature of big business innovation from the inside: the Innovation Insider Index. We asked around 20,000 influential professionals in the UK to rate their own companies against our six principles of innovation. They gave us a Top 30 of this country’s big business innovators, with representation from a wide range of sectors, including automotive, retail, energy, tech and financial services.

FinTech: outpacing the rest of its sector

The Index also looks at how businesses from different industries tend to behave. One of the more complex was the financial services industry: overall, the challenges and changes of recent years mean that around 80% of this sector’s investment is focused on regulatory compliance. But there’s one specialist area that bucks this trend – FinTech.

Insiders from this field gave several high scores to their companies in this sector. So what makes them different? To start with, we see businesses led by individuals with a clear innovation agenda and bold leadership. Barclays and Aegon are two players with coherent, digitally-led visions for the future.

Aegon had the vision to move from a traditional, broker-mediated insurance model by creating Retiready, an intuitive, mobile-enabled, direct-to-customer pension and ISA sales tool. They did this by focusing on what their customers thought and needed.

Meanwhile, Barclays has been generating a range of innovative new products and services; one of the latest is bPay, a contactless payment wristband that brings a cashless lifestyle one step closer.

These advances are in the context of a step-change in payment networks, partly driven by the entry of tech giants like Apple (their contactless Apple Pay system is reported to be launching this month) and game-changing services like Bitcoin.

Our advice to established financial services organisations

As one of the sectors that have seen the most disruption in the past few years, traditional financial services companies now need to zero in on how to differentiate themselves. Being a big institution and focusing on regulatory compliance, while essential, is no longer enough. You must be ambitious and find effective ways to engage with a digitally native generation.

But you don’t have to take on everything in-house – collaboration is key. There’s a reason this is one of our six principles of innovation: sharing and learning lets you validate and refine your new ideas quickly, especially through early prototyping. This maximises your user experience input; excellent and insightful UX design can really bring new projects to life.

Get more details in the 2015 Index

You can download the full report to discover our Top 30 innovators, commentary on the results, and some of their reactions and insights. Find it at www.mginnovationindex.com. Check if your company made the Top 30, and let us know your thoughts – does your business embody the six principles? Join the conversation on Twitter: #innovatebig #6principles