Daimler created Lab1886 to develop new business models and put them to work. Susanne Hahn, director business innovation at the German premium car group, has headed the think tank since March 2016. She recently spoke with automotiveIT about agile processes, the lab’s independence and new technologies such as artificial intelligence and blockchain.
Ms. Hahn, Daimler renamed its “Business Innovation” group “Lab1886.” Why was that?
Over the course of the digital transformation, we considered how we can reshape our think tank so we can be even more successful during the changes. In the process, a structure and strategy emerged that we implemented within a year. With the new name, we are revitalizing a cultural element, namely the pioneering spirit of our founding fathers Gottlieb Daimler and Carl Benz. We want to motivate our employees to think entrepreneurially.
What does the strategy actually look like? Is there a global initiative behind it?
We work with independent companies worldwide. We currently have incubators in Beijing, Silicon Valley, Berlin and Stuttgart. Lab1886 has the goal of not just piloting and carrying out ideas that emerge from its own team but ideally those advanced by any employee. That’s one path.The other leads us to the startup world. In the end, we want to capitalize on external inputs and collaborate in the right areas. The goal behind the strategy is clear: We want to execute ideas on an accelerated basis and put innovations on the road even more quickly than we have.
Please explain the steps involved in your business innovation processes?
We use a three-pronged approach: ideation, incubation and commercialization.There are weekly sequences for these three steps in which the relevant teams quickly decide whether and how a project should be continued. That brings speed into play.
So mainly scrum boards and stand-up meetings?
To put it very simply, yes.
Does your work require some persuasion in the business units?
Yes, that was true in the beginning. But that has changed a great deal in just one year. We now have good standing within the company, and we have more than enough work in our pipeline. There are now 25 high-potential projects in the incubator that have already been given approvals for investment and budgets. There will be more. To answer your question in another way: I think the secret is to include the stakeholders, to invite them to actively cooperate. We directly involve the employees and the respective decision-makers in the process. This makes them part of the whole – and that changes attitudes.
What specific projects are on the way?
The issues are primarily technical since actual business models are mostly based on a specific technology. One example would be Ask Mercedes, an operating guide that uses augmented reality and can be called up with a mobile phone. The Mercedes Me Flexperience is another. This is a subscription portal for the entire Mercedes fleet.We developed this innovation in very close cooperation with sales. But we are definitely considering totally new business models, for example, with Volocopter in the new flying taxi segment.
Do you think there is a rule of thumb for how many startups succeed in the end and how many ideas make it into series production?
This varies a great deal. In the startup world, perhaps 5 to 10 percent make it at the very early stage, if that many. In the funding phase, the rate is certainly higher.I can give you an internal example: In a company competition, with employees serving as the jury, we just selected the top 15 participants from a field of about 1,000 submitted ideas. They in turn had to pitch against each other. Three of them immediately continued on. So there is already a tough selection process at work here – even at our company.
On another topic: Artificial intelligence and blockchain are the hot trends right now. In your view, how fully will the two technologies penetrate the auto industry?
These buzzwords have been around for a while. Artificial intelligence, in particular, will bring massive changes to the industry. It is an extremely high-performance tool that we already use in many areas. Consider autonomous driving – AI is virtually accelerating this technology. We are already using artificial intelligence elsewhere in our vehicles. For example, in our new A-Class, which is equipped with the Mercedes-Benz User Experience MBUX. Here you clearly see an interaction: the networking of car and driver. It is a little like the American “Knight Rider”series from the 1980s. We actually now have that technology in cars. And that’s just the beginning. We are going to see still other dimensions – and even closer connections between the driver and the vehicle.
Interview by Ralf Bretting and Hilmar Dunker
(Editor’s note: A longer version of this interview will be published in the summer issue of automotiveIT International magazine in June 2018. For a complimentary subscription, please go to: www.automotiveIT.com/subscribe)