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Innovation: finding new ideas and knowing when to kill them off

“To innovate, you need to know when to kill an idea off to keep only the best,” said Jean Marc Finot, VP, Research, Innovation and Advanced Engineering at PSA Peugeot Citroën  at the #meetPSAexperts of 9 April dedicated to multi-sensory design for cars.  This remark raises a number of questions: what makes an idea good from an innovation standpoint? Why give priority to implementation of one idea rather than another? What are the selection criteria, the constraints to be taken into account? Anne Laliron, head of Innovation Strategy, took the time to explain the selection process applied by PSA Peugeot Citroën in the field of innovation.

To find new ideas, it’s important to stay in touch with the outside world

Before it emerges, an innovation is simply an idea. And before you can analyse and develop it, you need to find it! In the automotive industry, ideas can come from a variety of sources:  inside the company (engineers, technicians, designers, marketers, buyers, etc.), or from the outside: suppliers, partners or start-ups. PSA Peugeot Citroën has decided to place the emphasis on Open Innovation: “we work with OpenLabs in France and many other countries. We also organise open competitions and publish a list of our needs on line. Being open to the outside world is essential in order  to pick up weak signals and find new ideas, which are not necessarily linked to the automotive industry”.
To sell vehicles, international vehicle manufacturers need to take account of the cultures and lifestyles of their customers in all the markets where they are present. To identify these needs, PSA Peugeot Citroën is conducting prospective studies on the main social trends and analysing the automotive market and competition through entities set up around the world to identify current and future needs on all its markets.
The innovation teams rely on “user cases”. This type of study lets them identify typical customers and analyse their behaviour and needs. As a result, they can establish which innovations will be useful for customers, depending on their lifestyle and mobility experience, and also identify new possibilities for innovation.  The idea and the need therefore go hand in hand: a major market trend may generate a new customer need that will make it necessary to identify the innovations and technologies able to address this need. Or the other way round: an idea developed and produced may provide a service that becomes essential to customers.
The field of innovation is therefore vast for the automotive industry: “For vehicle manufacturers, the potential scope of innovation encompass all aspects of the vehicle, including the associated services or industrial resources used. Whether we’re talking about lighting, interior trim, engines, electronic architecture or assembly tooling in production plants… innovation can be applied to anything.”

Our selection criteria? Some are imposed from the outside, others are selected by the vehicle manufacturers

Once we have identified ideas for innovation, we need to analyse them in order to decide which to select and which to drop. 
One of the first selection criteria in the innovation process concerns legislation. The automotive industry is subject to stringent regulations. From 2021, cars sold in the EU must emit no more than 95g of CO2 per km on average compared with 160g today. This type of legislation has structural importance in the innovation process of vehicle manufacturers. They have no choice but to develop even more efficient technologies in order to reach this figure. 
As part of their strategy, vehicle manufacturers also set out guidelines for making decisions in the field of innovation. “If we have a good idea for an innovation, an idea that is feasible and potentially profitable but that is not part of our core business and does not fit in with Group strategy, then it will not be given priority.” At PSA Peugeot Citroën, our priorities for innovation are always based on our strategy: “we have announced our ambition to develop autonomous driving apps for 2020 so, in view of our strategy, it is only logical to focus part of our efforts on innovations linked to these services”.

Naturally, other constraints must also be taken into consideration, such as what Anne calls “must haves”: these are innovations that customers expect to find in the vehicles of their choice (based on the brand, range, price, etc.). These must-haves are so important that their absence may deter customers from buying. In contrast, priority will not be given to innovations that are advantageous from a technical standpoint but that provide no added value. They will be dropped from the process.
The principle of profitability is therefore decisive: before starting to develop an innovation, the team analyses its benefits and calculates the famous ROI (Return On Investment). Will the spending allocated to the research, development and production of this innovation generate financial profitability, with real benefits for the customer that can be expressed in the selling price? Will it enable the Group to set itself apart from the competition with an offering that is unique and/or that contributes to the brand image in a positive way? If the ROI is deemed insufficient, priority will be given to another more “profitable” innovation.
The innovation strategy contributes to showcasing the Brands. Differentiation is fundamental, not only with respect to the competition but also between Group brands: “within the Group, innovations may be shared by the brands but used differently.” Moreover, a patented innovation remains secret for 18 months and is protected for a maximum of 20 years. “This enables us to showcase our technologies and set ourselves apart from the competition.” 
Further, PSA Peugeot Citroën is France’s leading patent filer for the seventh consecutive year. As soon as a technical solution is found for turning the idea for an innovation into a reality, the Group seeks to protect it through industrial property rights, including patents, drawings and models or trademarks. In the case of the Magic Wash technology (windscreen washer fluid sprayed by nozzles on the wiper), the Group filed several patents as well as a trademark.

Anne explains that with some technologies, PSA Peugeot Citroën protects its competitive edge through a practice known as carpet bombing: this involves protecting all the innovations developed in relation to a product or service that is going to be important in the future. For example, filing patents for all the technologies linked to connected cars or autonomous cars in order to make sure that the systems developed by the Group cannot be found on our competitors’ cars.

How do you manage innovation in a Group with three brands?

The innovations developed by the PSA Peugeot Citroën Group benefit all three brands. However, with three types of brand DNA as different as those of DS, Citroën and Peugeot, how is it possible to use the same innovations? “Innovations are developed by the Group so it is only natural to make them available to all our brands. However, the way in which they are implemented, interpreted and presented will be different. They are cross-cutting but at the same time they need to reinforce the DNA of each brand.” For example, a series of sensors based on the same technology, could be used on a Peugeot vehicle or DS vehicle but in a different way. The structure used for the seat frame may be the same but the shape of the seat, its support, style, materials and feel will differ according to the segment and brand.
Nevertheless, not all innovations are destined to find their way onto Group vehicles. Along with the selection process, which decides which innovation will be used in which car and in which way, “other innovations are unique and specific to a brand. They are developed in accordance with its DNA and help to set it apart.” Examples of dedicated innovations include the Airbumps on the Citroën C4 Cactus, the 3D-effect rear lights on the DS3, and the head-up display and small steering wheel on the Peugeot 208 and 308.

I would like to thank Anne Laliron for taking us behind the scenes of the innovation process at PSA Peugeot Citroën. Feel free to post comments with your questions!

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