Swamy Kotagiri, Magna International’s Chief Technology Officer, will discuss how to foster an innovative organizational culture during a Leadership Summit roundtable, April 4 at the SAE WCX17 in Detroit. He spoke recently with Automotive Engineering on this topic at Magna’s Troy, MI, offices during the company's annual Innovation Awards activity.
Accepting the potential for failure seems inherent in an innovative culture, correct?
The acceptance for risk changes depending on what stages of R&D you are in. The rigor and discipline come after I have to spend a significant sum of money to make a prototype; that’s where I approach the threshold between low risk and higher risk. In my general terminology, 70-80% of it is more a step approach of what we know very well—optimizing the product in some way. The other 20-30% is disrupting something that exists today or making a quantum jump. I’d say we currently have three or four projects like that in corporate.
How do you choose between keeping innovation in house or partnering with an outsider—or maybe acquiring a start-up to do it?
There are various models we consider. One is, we can go to a research institute or university which is known in that field. We work with them on a defined package which usually is proving out the fundamental science. If we get past that phase, usually we bring it back in [to Magna] because then it’s application development.
Then there are certain technologies—semiconductors, optical imagers, radars, ultrasonics, even some materials—whose primary applications lie somewhere besides Automotive. In these it’s more of an alliance—we have to make such platforms applicable to Automotive regarding functional safety and reliability aspects that are usually far more stringent. This gives our partner a chance to enter a market and can offer us a chance to be first to market overall.
For example, certain materials can sense temperature—can I use them in a seat fabric? 3D printing has made a lot of things possible in tooling, making it extremely efficient to make a part which we couldn’t make before. We don’t have to own a piece of such enablers because we own the product and its functionality. I think these relationships are no longer a choice, but a ‘must’.
Do decisions to "go outside” keep you up at night?
It keeps me interested! But we believe the start-up ‘ecosystem’ is extremely agile and it gives an opportunity to get a group of really talented people to work in a system that is not driven by a large organization. That’s the key. So if we believe there is a technology that we need to drive, we’ll work with them [start-up] but we don’t necessarily need to own all of it. They bring the idea and fundamental science behind it, but they don’t have the automotive specification of what’s required five years from now. They don’t have to go through the ‘churn,’ come up with a prototype and hit a 2019 production target. A lot of start-ups can’t think that way. But they don’t have to waste two years of time working on an assumption, either.
It’s been really useful to work with start-ups—some are investments, some are partnerships, some are alliances and some are ‘scaled’ versions which over time become part of Magna. And we realize sometimes we don’t want to constrain them and make their technology exclusive to Magna.
Is Magna a disruptive-technology company?
We have processes and products—hydroforming, seat foams, the Stow n’ Go seating concept—that have been game-changers and first-to-market in automotive. The most important thing for us is to keep an open mind about what could happen in the next 5 to 10 years. There are disruptions that will come not only in product—some could also be business models about how mobility will be defined. We have to understand it and be ready to participate in it. Filling a need before anybody else does is, to me, being disruptive.