Bosch’s Head of Research Thomas Kropf on the Unfair Advantage Size Gives a Company’s Innovation Speed

Innovation Diaries: Dealing with an Uncertain Future

In the midst of these crazy times, most industries still haven’t gotten their shit together. However, a few bright minds managed to understand the paradigm shift, act accordingly and reap the rewards. So, Catharina van Delden and I talked to some of them! Join us on our learning journey over the next few weeks to see how completely unrelated industries deal very differently with the same challenges we all share – and let’s become better together!

@Thomas Kropf is Bosch’s Head of Corporate Research. Originally wanting to become a professor, he worked for half a year as a software engineer in Silicon Valley. This made him realize he wanted to have a more visible impact with his work – ideally combining his academic expertise with the product innovation power of an industrial global player. Thus, he chose Bosch – and has been working with the company for 20 years now. Since 2018, he is shaping the work of Bosch’s innovative research and advanced development crew.

Bosch is a German multinational engineering and technology company headquartered in Gerlingen, Germany. The company was founded by Robert Bosch in Stuttgart in 1886. Their Corporate Research consists of about 1.700 researchers working on topics and technologies such as sustainability, hydrogen applications, driver assistance systems, simulations, and software technology. An additional part of corporate research is the Bosch Center for Artificial intelligence, as well as the Bosch grow platform, an incubator enabling inside-out start-up innovations.

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Thomas, as we speak the news of Patagonia Founder Yvon Chouinard is making headlines, donating his company shares to fight climate change. Not everybody knows that due to Robert Bosch’s testament from 1937, Bosch is a foundation – all profits are used to “do good”. How does this affect the way the company approaches innovation?

I personally decided to work for Bosch not because of the most competitive salary, but because of their attitude towards business: As a foundation, long-term thinking is at the very core of our company culture, and this is especially true when it comes to our innovation strategy. Not many large companies – we have more than 400.000 employees – allocate this many resources to overarching research as we do. Analysts don’t like conglomerates like Bosch, which is why research (and therefore innovation) typically is focused on single business areas. Our corporate research focuses on and is a service for the entire group, developing technologies that can be used and adapted in different contexts. We work cross-divisionally: we look at how technologies can be applied in different contexts. Take computer vision technology for example – it can be used in our driver assistance systems as well as in security cameras.

We take our slogan “invented for life” very seriously – it’s not just a cute sticker you put on a laptop, but it guides our daily work. We interpret it in two ways at Bosch Research, where we have recently derived the company slogan to our research mission statement: “We innovate for life”. On the one hand, we obviously are proud of Bosch’s product quality and contribute to making them long-lasting, unlike those machines that are built to break down after a certain period. And on the other hand, we strive for our products to tangibly contribute to improving the quality of people’s lives, such as higher safety, higher comfort, or even with contributions to people’s health. To make that possible we understand that innovation is only successful when results from our research actually hit the market.

For example, we knew from scientific papers that there is a high risk of pandemics resulting in a need for diagnosis of infections. Therefore, we developed a very small PCR device called Vivalytic, to detect various infectious diseases. When the corona pandemic hit us we could then together with partners swiftly provide a SARS-CoV-2 PCR test with results within roughly half an hour.

This is impressive. is impressive. However, there must be such a massive amount of research – how do you distill which topics are relevant for your business (such as testing technologies during a pandemic)?

Well, we do have a twofold mission within Bosch Research: “Jump farther and deliver more”. We support Bosch’s business units to innovate their current products. The other part of our mission is to look farther into the future within the fields of research we cover. And to find out, which technologies, disruptive products, and new markets Bosch should/could in the future concentrate on. This is what we did with Vivalytic. To do so, we cooperate with about 100 well-known educational institutions worldwide, such as the Carnegie Mellon University in Pittsburgh, the University of Stuttgart, and the Tsinghua University in Beijing. This allows us to access an outstanding amount of cutting-edge research. Also, we monitor our suppliers and exciting topics they’re working on to be able to team up with them.

To identify the research relevant to us, we have two strategies; I would call them the human way and the AI way. The pure human way consists of our researchers focusing on research in tandem with our academic partners. Additionally, we started using AI to understand the biggest trends in research publications by using semantics. The magic truly happens also at the intersection of combining the data-driven approach of artificial intelligence with the codified knowledge of classical science. This is what we call hybrid models.

So, even though you are a research organization you focus on customers’ needs?

Everything we do is driven by user experience, by real customer pains and needs that we want to solve. If you lose sight of this, you create solutions in search of a problem. So, for example, being an automotive supplier, our customer is the car manufacturer. But, although about 60 percent of our business is B2B, we learned that we need to understand and be in contact with the actual driver of the car to develop our own innovations, like sensors and entire driver assistance functions.

A common belief is that a truly innovative team needs to be small and agile – hence the glorification of start-ups and their innovation capabilities. A large corporation like Bosch would be assumed to be “too heavy and large” for fast-paced innovation. Listening to you, however, you seem to be proving the opposite: By being able to develop new core technologies and deploy them in different contexts, you can be very fast in your overall innovation process. How can you make size an advantage in innovation processes?

I would say neither of them is the full truth.

In a big company it is important to shield innovation to avoid the “Innovator’s dilemma” – only focusing on making a short-term profit. That’s why corporate research is organized separately, working highly interdisciplinary and cross-divisionally.

I would go so far as call our corporate research an unfair competitive advantage due to the synergies between divisions and products. And, taking manufacturing as an example, as part of our 440 Bosch locations worldwide, about 240 of them are manufacturing sites, so an idea can move from our Industry 4.0 research labs in Renningen, directly to one of the Bosch production sites for the prototype testing phase – before scaling it to hundreds of Bosch plants and then also to the external market.

Furthermore, we can work on one new technology like computer vision mentioned above and add value in various business units like automotive, robotics, and building technologies. Yet, this process does not happen by itself; it needs to be orchestrated and yes, this is where agility in smaller teams does come to play.

How does our current state of the world with various paradigm shifts change how you at Bosch innovate?

We are facing a combination of various challenges: Global warming, change in mobility and decoupling in politics, just to mention a few of them. But: Times of change were always the times of the biggest innovations. Incremental improvements will not bring the necessary innovation for the necessary transformation, we really need to speed up large-scale innovations.

Digitalization will play a critical role in this: During the pandemic, the IT department ramped up our digital infrastructure within weeks, which is no trivial task for a company of 400,000 people – and then even helped other companies. We learned that, for example, digital town hall meetings work significantly better than physical ones, as people digitally raise their voices more easily.

And we have been digital visionaries early on when we founded our Bosch Center for Artificial Intelligence already in 2017. By now the BCAI has already made a positive earnings contribution of around 300 million euros and we’ve already trained 20.000 managers in AI methods. Our most recent push for more digitalization happened earlier this year when we reached the milestone of 100 % of Bosch electronic products being networkable.

What role does company culture play in your innovation process?

The reason the best researchers want to work with us is that we continuously strive for excellence. From quantum sensors to autonomous driving to hydrogen electrolysis – our research work is at the scientific forefront. Bosch Research contributes to around one-quarter of the patent applications of our company.

And this is only possible if you push decisions to the lowest possible level. We need to avoid the so-called HIPPO syndrome (Highest Paid Person’s Opinion) at all costs and instead give our researchers the time to shine, given that they’re the experts. Furthermore, we believe in the principle of subsidiarity: Giving decisions back to the lowest possible level. So, it’s all about respect for performance, quality, and excellence. According to our mission “deliver more and jump farther” these are the core values behind it: transparency, common sense, accountability and courage, autonomy, listening to the experts’ voice, and diverse teams.

Another value we focus on is openness: We collaborate not only with universities but with startups and suppliers. The half-life of knowledge is increasingly declining, so nowadays it’s all about networks – you are only fast enough if you collaborate with others.

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Tl;dr for the lazy

  1. The only certainty is uncertainty: many people think one day all the crises are over and we’ll go back to the way it’s been before, but we must accept that we’re now operating in a mode of constant change.
  2. Our management styles must change drastically – it’s all about how much time you allocate for innovation and how you enable collaboration.
  3. We need to focus on data, to improve our machine learning; we need to learn to optimize products without changing the hardware but by pushing new software.
  4. Reusability is a huge part of sustainability: Can I reuse, can I recycle? We as a society cannot continue to dig out materials, use them, and when broken just throw them away into a landfill.
  5. We need to understand that our local actions have a global impact.

 

Original Post on LinkedIn.