The clockspeed dilemma – Gary Silberg, Head of Automotive, KPMG in the US
The clockspeed dilemma
The major issue for automakers will be to solve the clockspeed dilemma. Significantly different clockspeeds exist between the innovation and product development cycles of car hardware, ICT hardware components and ICT software. Solving the clockspeed dilemma will mean a giant leap for automakers. They are currently unequipped with the necessary organizational processes, teams and innovational culture to synchronize their own clockspeed with the faster clockspeed of innovative ICT players, such as those from Silicon Valley.
Changes in consumer behavior and in the competitive balance are accelerating the pace of innovation in the auto industry. The sexy dynamic experience is not simply for smartphones. An accelerated pace of innovation is occurring at different rates in the key areas of mobility-on-demand, autonomous vehicles and connectivity. Consumers expect a safe, reliable, fault-tolerant car and the new sense of good they feel when their tablets or smartphones upgrade during the ownership cycle. There are different clockspeeds for those expectations and the auto industry must work within them all.
Speed of innovation in the auto industry in the last century included mass production and automatic transmissions and now we’ve added sensors, cameras, radar and lidar remote sensing technology. It’s clear executives understand the speed of change is not slowing.
Customers are increasingly demanding Six Sigma quality in their car, together with innovation, flexibility and availability. The auto industry ignores their demands and the need for varied clockspeeds within the production and service process at their peril.