The clockspeed dilemma

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

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Customer expectations and the rise of 

multiple clockspeeds

The first step in solving the clockspeed dilemma is to understand the different clockspeeds 

that innovation and customer demand create. Of course innovations drive changes in consumer 

expectations, but we believe the newest consumer expectations will soon require innovation at 

multiple speeds. In fact they already do. 

Consumers expect as a given that a car provides increasingly better fuel economy, increasingly safer 

experience on the road, and increasingly better-looking cars.

At the same time, consumers are being led toward new expectations—new kinds of unmet needs—

by the most disruptive innovators, many from outside the traditional auto ecosystem. When Uber 

shows them they can have a car available to them on demand, when and where they want it; 

when the iPhone teaches them they can have a beautiful, stylish piece of equipment that satisfies 

their desires for music, the Internet and phone service in one device, they learn of something they 

“always wanted.” Now, courtesy of disruptive innovations, they demand it.

Most recently, consumers have learned to expect a new kind of satisfaction from their cars--a “new 

sense of good.” It’s the kind of good they feel when their tablets or smartphones upgrade during 

the ownership cycle; the kind of good they experience with customer service that is high-touch and 

rewarding; and the same kind of good they associate with dazzling new technology.

The Robust Industrial Machine and the Sexy Dynamic Experience

Because consumers expect both a safe, reliable, fault-tolerant car and a new sense of good, they 

bring on the extraordinarily different clockspeeds car companies must now satisfy. 

The more familiar expectations require innovations intended for scaled metal bending and assembly, 

geared toward what we call the “Robust Industrial Machine.” The Robust Industrial Machine requires 

a 5–7 year clockspeed for powertrains, vehicle platforms, and other essential mechanical elements to 

provide a reasonable return on investment.

The clockspeed dilemma      7

© 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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The power of the Sexy 

Dynamic Experience should 

not be underestimated; 

sexy can kill robust

The other expectations respond to a new competitive 

landscape, where technology innovation and payback 

periods are more like those found with consumer 

electronics, software, and communications. Those 

expectations drive not one but multiple clockspeeds for 

innovation that are faster than the traditional one—and 

we predict they will get far, far faster because of the 

accelerating pace of technology innovation. The speedier 

paces of innovation come out of consumer demand 

for what we call the “sexy, dynamic experience”. The 

characteristics of the Sexy Dynamic Experience are already 

familiar ones in the market:

 

–

Products repeatedly evolve and improve after purchase.

 

–

Products are flexible, able to create environments or 

experience that is configurable with a consumer’s tastes 

or usage situation. This desire for flexibility goes way 

beyond station pre-sets. Imagine a sedate, well-damped, 

autonomous rolling office by day that transforms into a 

responsive, raging drift machine by night.

 

–

New enhancements are reverse compatible. 

They not only improve performance but work with 

earlier platforms.

The power of the Sexy Dynamic Experience to drive 

innovation and to change markets should not be 

underestimated: sexy can kill robust. In 2006, both Nokia 

and Blackberry competed as Robust Industrial Machines. 

They offered as their chief selling points superior battery 

life, slim size, excellent call quality and strong security. 

Along came the iPhone. Viewed according to the 

dimensions by which Nokia and Blackberry competed, the 

iPhone was nowhere near as strong. It didn’t matter. The 

iPhone offered apps and content—music and video. It was 

cool, configurable, and regularly updated. It blew away the 

competition. The Robust Industrial Machine lost out to the 

Sexy Dynamic Experience of a phone that was no longer a 

phone, radically re-drawing the nature of competition. 

Image provided courtesy of Peugeot

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© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member f

irm of the KPMG network of independent member firms affiliated with KPMG International 

Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed i

n 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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