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
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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
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
8
© 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