The clockspeed dilemma



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Uncertainty abounds

As the pace of connectivity innovation grows faster and more diverse, the 

winners become more unpredictable. Just who will the major forces in 

connectivity be? Who will increase in influence or disrupt? The traditional 

tech giants are playing in this space, but their innovations may not come to 

dominate. Powerful players in the connectivity space could arise anywhere, 

from those advancing facial recognition software to those involved in cognitive 

computing: 



 



Big players have big plans for the space, which will certainly impact 

consumer expectations for connectivity. Apple’s Carplay will allow a number 

of apps to be used in the car, from Siri to iTunes, while Google’s Android 

Auto will provide a similar assortment of apps, messaging, music, and voice-

activated commands.



 



Explosive growth in digitized information, dramatic development in facial 

and voice recognition capability, exciting progress in quantum computing—-

these are signs of tremendous technological advances that may mean Apple 

and Google will not be the ones who dominate. 

A final prediction: The end of an era

As a result of this changing competitive landscape, we fully believe that in 

10 years, many of the major automakers will no longer be around, at least not 

as independent companies. Those who survive must be able to meet the faster 

clockspeeds of the Sexy Dynamic Experience while staying true to the pace 

necessary for producing a Robust Industrial Machine.

The clockspeed dilemma      25

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853




How to solve the 

clockspeed dilemma

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 

Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853



So what should an automaker do? How does it 

innovate facing the clockspeed dilemma? 

This will be hard. Yet innovating successfully will be the difference between winners and losers in the 

evolving industry. 

We believe the solution requires two essential and related steps: 



Step 1: Facing the obstacles to 

change

Step 2: Aligning the organization 

for fast‑paced innovation 

The power of a solution lies in its details…

SPEED 

LIMIT 

100

The clockspeed dilemma      27

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853



Most traditional automotive players nod in recognition of 

multiple challenges but have not fully come to terms with 

their effect on the ability to innovate. They understand 

completely that fast-paced innovation can be disruptive, 

and they understandably struggle to balance it with core 

businesses they must not change. And yet there are 

other cultural and institutional obstacles—many of them 

core strengths in the past—that impede innovation in the 

current ecosystem:

Securing new talent

The industry is losing the war for 

young talent at the same time its 

knowledge base is shrinking as older 

talent retires. For many reasons

traditional automotive companies 

aren’t places where the most talented 

millennials dream of working. 



Rewarding failure

Innovation is high risk and requires 

failure—something that true innovators 

expect and celebrate—but the industry 

tends to reward well executed, low-

risk change.



Investing in risk

Innovation means making financial 

commitments according to compelling 

investment theses. The traditional 

industry makes business decisions 

based on carefully calculated ROI. As 

a business decision, it would have 

turned aside Uber.



Thinking disruptively

The traditional industry often finds 

it difficult to embrace truly powerful 

innovation, refusing to examine it 

where the industry has been most 

successful. That’s different from the 

courage Apple showed to intentionally 

disrupt the iPod with the iPhone, 

producing a phenomenal result.

Partnering to innovate

With a heritage of engineering 

success, the industry instinctively 

prefers to build from within, cutting 

themselves off from the ideas 

of outsiders and the dynamism 

partnerships bring.

Building global awareness of 

innovation

The industry needs to capitalize on 

innovation anywhere, which means 

it needs better awareness of new 

centers of innovation everywhere from 

Tel Aviv to Berlin and from New York to 

Silicon Valley. 

Facing the obstacles

28

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 



Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853




A framework for innovation

There is a means of addressing these challenges and achieving faster-paced innovation. First, 

however, a simple truth: There’s no single answer to innovating successfully, no one-size-fits-all 

solution. No expert—no business professor, successful entrepreneur, author, or consultant—offers a 

prescription that works for every company and every situation. The most successful innovators today 

take different approaches. And successful innovators from the past don’t offer an enduring lesson for 

all circumstances and all companies.

Of course, we have seen and believe in patterns and common elements to some solutions, but 

successful innovation fits the individual company and its culture. It must be customized. It must 

be bespoke.

The clockspeed dilemma      29

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853




Building a bespoke innovation engine

Solutions for consumers’ unmet needs can be explored based 

on establishing unmet need theses for experimentation

Products

Channels

Customers

Strategies

Technologies

Proprietary insights

Experiments

Unmet Need 

Theses

External ecosystem trends



Auto Venture 

Capital

Traditional 

Tier 1s

Global 

Regulators

Universities  

and Research 

Labs

Technology 

Start-ups

Potential 

Nontraditional

OEMs

High Tech 

Entrants

Venture 

Capital

Traditional 

OEMs 

Sensing ideas 

around customer 

unmet needs...

…and to

market-changing 

innovation

…leads to

development

of fact-based

theses…

New

customer

experiences

Stage 1


Stage 2

Stage 3


New

business

models

New vehicle

systems &

technologies

30

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 



Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853




A bespoke solution works like an innovation engine with a three-stage assembly line: sensing 

unmet needs of the consumer from a profound awareness of the auto ecosystem and a leveraging 

of the proprietary insights of the company, intensively investigating potential innovations from 

these insights; and creating market-changing innovations that are appropriate to the culture of the 

company. It’s a complex process that we can only sketch here, but the result of it is that a company 

can institutionalize faster innovation paces.



Sensing consumer unmet needs: 

Awareness of the ecosystem and 

proprietary insights

Successful, faster-paced innovation is 

built out of the capacity to anticipate 

the unmet needs of consumers. Most 

businesses can sense the current 

needs; it’s the unmet needs that 

are more difficult to see. The ability 

to discover unmet needs develops 

only when a company is finely tuned 

to what is happening in the auto 

ecosystem—in as broad and careful a 

way possible—and when it leverages 

its own proprietary insights.

Developing innovations: From 

unmet need theses to experiments

In the second stage, the innovation 

engine carefully evaluates the unmet 

needs it senses and creates a select 

number of unmet needs theses. An 

unmet need thesis is the result of 

intensive investigation: The engine 

makes certain that a promising unmet 

need is absolutely the result of clear, 

fact-based proprietary insights and 

a clear sense of the ecosystem. It 

then rigorously evaluates what it 

senses and chooses what has the 

best potential. 

Just as important, the engine does 

not settle on a single unmet need 

thesis but multiple ones—unmet 

needs theses. It never places all its 

bets in one area of consumer unmet 

needs alone. 

The engine pursues the potential of 

each unmet need thesis fiercely. There 

is no fear of failure. It explores the 

thesis in multiple internal and external 

experiments, and it evaluates the 

results of each experiment quickly, 

thoroughly, and dynamically:

 



Every experiment provides data that 

might lead to a new thesis about an 

unmet need and a new experiment 

in how the company might innovate 

around it. There are no simple 

successes or failures. 

 



An experiment that doesn’t work 



is quickly ended—ruthlessly, some 

might say. But its results have 

valuable information leading to 

new ideas, and it may also have 

successful elements that are 

culled and combined with other 

experiments. 

 



Successful or failed experiments 

may lead to still greater success 

when synthesized with other ideas. 

Leading to market‑changing 

innovations specific to the company

In turn this leads to market-changing 

innovations. The innovation engine 

can produce changes in many forms, 

including innovations in consumer 

experience, technologies or vehicle 

systems, and business models. All 

fit the company, which the lens of 

proprietary insights and the testing of 

investment theses ensure.



Stage 1

Stage 2

Stage 3

Solving the clockspeed dilemma: Integration

With this new capacity for fast innovation in place, one last and important step remains. The multiple 

clockspeeds of faster innovation must then connect with the larger organization of the company. 

They must be integrated with existing processes that connect the company with its customers. It is 

a simple, elegant, and individual solution to solving the clockspeed dilemma, but it is still hard to do.

The clockspeed dilemma      31

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853



Conclusion

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 

Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853




We’re riding a wave of fantastic innovation that’s going 

to be still more fantastic and happen faster and faster. It 

may seem daunting, but the traditional auto companies 

can institutionalize a faster-paced innovation capacity to go 

with their current one, as the innovation engine suggests. 

If they do and if they integrate their innovations with their 

larger organizations, they will be able to meet the variety 

of clockspeeds that this new normal asks of them. They’ll 

embrace the relativity of time. It is an exciting, powerful 

era. The right approach will lead a company toward a 

powerful future, a winner. 

Who will be among the next 

generation of leading companies?

What new business models 

will emerge?

How bold will your company be?



Setting the pace

The clockspeed dilemma      33

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of i

ndependent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.

A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853



KPMG Automotive practice

In case you missed them, you can download our previous papers related to the future of the 

automotive industry.

Self‑driving cars: The next revolution

August 2012 

For the past hundred years, innovation within the automotive sector has brought major but 

mostly evolutionary technological advances. Now, the industry is on the cusp of revolutionary 

change with the advent of autonomous or “self-driving” vehicles. KPMG LLP and the Center 

for Automotive Research (CAR) joins forces in examining the forces of change, the current 

and emerging technologies, the path to bring these innovations to market, the likelihood 

that they will achieve wide adoption from consumers, and their potential impact on the 

automotive ecosystem.

Self‑driving cars: Are we ready?

October 2013

Gaze out at the automotive horizon and you can almost see a new era coming into focus: the age 

of self-driving cars. Ultimately, the shape of the automotive future will depend on consumers—

their needs, preferences, fears—and their pocketbooks. Will they trust these new vehicles? 

What will future car buyers care about? If we build self-driving cars, will they come? KPMG 

seeks to answer these questions through the lens of real consumers who provide us with their 

unique perspective on the self-driving market. 



Me, my car, my life

November 2014

Not since the first automotive revolution has there been such stunning innovation in the industry. 

The convergence of consumer and automotive technologies and the rise of mobility services 

are transforming the automotive industry and the way we live our lives. How will the automotive 

industry adapt to this new world? How is technology reshaping the automotive ecosystem – and 

how will these industries work together? What will customers of the future expect from this 

collaboration – and be willing to pay for?

34

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 



Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853




Authors

Gary Silberg



National Automotive Industry Leader

gsilberg@kpmg.com

Thomas Mayor

Principal, Industrial Manufacturing Strategy 

Practice Leader

tmayor@kpmg.com

Todd Dubner

Principal, Strategy

tdubner@kpmg.com

Jono Anderson

Principal, Strategy

jonoanderson@kpmg.com

Leila Shin

Director, Strategy

lshin@kpmg.com

The clockspeed dilemma      35

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853




Thank you

The authors would like to thank Amitai Bin-Nun, 

Mike Corley, Laurent Des Places, Bill Lakenan, 

Mitch Manassa, Joseph Schneider, Huu-Hoi Tran, and 

other KPMG colleagues for their contributions. 

They would also like to acknowledge James Mendelsohn 

for his writing, Rod Hernandez, Sarah Milsow-Guenther, 

and Deb Scartozzi for their contributions to the 

design and production, and Charles Garbowski for his 

moderation of the focus groups. 

36

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 



Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853




The clockspeed dilemma      37

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853




© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 

Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 



trademarks or trademarks of KPMG International. NDPPS 404853

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Document Outline

  • Structure Bookmarks
    • A message from Gary Silberg
    • Key changes: Big opportunities
    • Consumers want one trillion miles of more mobility
    • Competitors are innovating at Sexy Dynamic clockspeed
    • Facing the obstacles
    • A framework for innovation
    • Building a bespoke innovation engine
    • KPMG Automotive practice
    • Authors
    • Thank you

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