What do companies like Apple, BMW, Airbus, Starbucks, Samsung, Bayer, Tesla and Facebook have in common? What sets them apart from their competition? Each of them is recognized as an innovation leader. They do not accept the status quo, they are constantly thinking disruptively and they always are looking for ways to improve. These companies have changed our lives. They have innovation in their DNA.
Notice that I did not include the names of any aluminum companies in this list. What shift within the industry would be necessary to make that happen? Beyond the business value of innovation, think about what a recognition like this would mean to your company and its stakeholders. It’s priceless.
Ultimately, successful innovation will determine the winners in our industry.
What does innovation really mean?
There’s no doubt that innovation has become a much used, and perhaps overused phrase, in business. But, what does innovation really mean?
The term dates back to the mid-16th century and from Latin innovat, meaning renewed, altered. And a dictionary definition tells us it means to make changes in something established, especially by introducing new methods, ideas or products. Innovation began taking root as a term associated with science and industry in the nineteenth century, matching the forward march of the Industrial Revolution.
Regardless, innovation means different things to different people. We recently asked researchers at Novelis to think about what innovation means to them. We heard words like revolutionary, amazing and inspiring. One employee said it meant delivering superior solutions to customers while another said it was creating something that has never been done before. A third employees said that at its core, innovation is creativity and practicality rolled into the same coil. From my perspective, innovation is a focus on differentiated products and services that deliver higher profits.
What can we learn from others?
The modern aluminum industry started in 1886 with the invention of the Hall–Héroult process, independently and almost simultaneously, by Charles Martin Hall and Paul Héroult. There have been a number of noteworthy innovations since then, including heat treatable alloys, direct chill casting, the two-piece beverage can and the aluminum-intensive vehicle. There are certainly other significant developments, as well. These innovations propelled growth for our industry over more than 100 years.
However, we need to look outside our industry for some important perspective. In 28 years, Apple revolutionized not just an industry, but how we live our lives. It changed the way music is distributed through its iPod, how media is consumed through its iPad and placed the power of computing in our pockets. Apple has gone from a start-up computer company to the largest publicly traded corporation in the world by market capitalization and the most valuable brand in the world as ranked by Interbrand.
Amazon started 20 years ago as a bookseller. Now, you can buy just about anything through Amazon, which is now the largest Internet retailer in the U.S. It brought the world the Kindle and popularized electronic books and now produces its own original streaming content.
Finally, in just 10 short years Tesla has developed and commercialized electric vehicles that are good looking and exciting to drive with people waiting months to buy them for as much as $120,000. Last year, in the spirit of the open source movement, the company’s CEO announced it would not initiate patent lawsuits against anyone who, in good faith, wants to use its technology.
What would the aluminum industry look like today if it innovated in a wholly new way, like these companies have done? As we can learn from these examples, highly innovative companies think differently, take big bets, move quickly and are not afraid to fail or be different.
The Novelis innovation journey
Our innovation journey at Novelis started in earnest five years ago. We were at a crossroads, and our executive leadership asked us a very simple question. Did we want to maintain the status quo and pursue the safe path or take a bold, yet uncertain approach, and become a disruptive innovator? Our team chose the second path. This was the defining moment for our team.
Since that time, there have been four key areas that we believe have advanced our vision of becoming the technology leader in our industry: executive support, people, organization and management systems.
Clearly, we began with the support and vision of our executive leadership. When we began our journey, our primary R&D center had limited collaboration with the rest of the organization and minimal contact with senior leaders. We made the bold, risky and expensive move to relocate our R&D headquarters to Atlanta. We built a brand new global research and technology center just 30 minutes from our global headquarters. This state-of-the-art center is the critical focal point for all R&D within the company, focused on world class solutions for the company’s can, automotive and specialty customers. It is also the central point for all of Novelis’ technical activities worldwide including engineering, manufacturing excellence and metallurgy. The creation of this center was a defining step in our innovation journey.
Additional executive support came in the form of a significant budget increase and the focused attention from our executive leadership, which has clearly defined expectations for our innovation efforts — technology leadership will define Novelis’ future success.
The single most important element of our innovation strategy is our focus on people. We knew the move of our global R&D operations was bold and risky. Indeed, we lost the majority of our researchers — only 10 percent of our staff relocated to the new center. We lost a lot of knowledge and talented staff. However, this did provide us the opportunity to adjust the organization and hire new team members. We have a new team that’s diverse in many ways — nationality, experience level, work background and more. There is a new excitement in this highly motivated team. This is the group that will drive innovation moving forward.
Previously, the technical organization at Novelis reported to two different executives, creating a fragmented and siloed effort. To address this, a Chief Technical Officer position was created to integrate the separate groups within one organization. With our new center, all of these functions are now also housed under one roof. As a result, the collaboration between the groups has increased exponentially. In R&D, we created global technology director roles for can, automotive, specialties and recycling and created stronger connections with the commercial side of the business to ensure our strategy is aligned with the market.
Researchers are not always the best program/project managers. To help ensure projects are prioritized, resourced and tracked effectively, the team defined a new management system. We manage projects in four areas including exploratory, disruptive, company critical and recycling. This system has been a key enabler in realizing innovations like the launch of stronger alloys for automotive applications, developing the latest in pre-treatment technologies for automotive and opening the world’s largest and most technologically sophisticated recycling center.
All of these changes may seem simple, but the results have been remarkable.
What does this mean to you?
Our innovation journey has not been smooth and we have made mistakes. But, it is incredibly exciting. Time will tell if we join the likes of Apple, Tesla and Amazon. To be successful in its innovation efforts, an organization requires executive support, funding and clear direction. It demands risk-taking and an environment that allows for failures — but you must fail quickly and move on. It’s worth it, because in the end, innovation accelerates growth and is a key differentiator in the marketplace.
Does your company have what it takes?
This article originally ran in the March/April issue of Aluminium International Today.