J Ferron, director of judging for the PACE Awards, says companies should create a culture that listens for new ideas from anyone in the organization. And those ideas, once identified, should be put on a fast track.
"Successful innovators sustain a strong sense of market urgency while always retaining a critical mass of engineering talent," Ferron says.
Many companies underestimate the difficulties of bringing innovations to market. Studies show that only 20 percent of commercialized innovations are at least minimally profitable, and that only 10 percent have acceptable margins, Ferron says.
He says success often depends on whether a supplier has a so-called torchbearer, whose job is to seek innovations, shepherd them through development and discuss them with key potential customers at automakers.
Management must grant the torchbearer wide-ranging access -- often outside traditional lines of authority -- to engineers, marketers and top management, he says.
"Idea generation and commercialization have to be connected by an individual who can navigate processes and market needs with discipline and customer insight," he says.
PACE judges, an independent jury of volunteer experts, have front-row seats to observe trends in the auto industry.
Ferron says the judges have noticed that:
- Suppliers who cultivate innovation have higher profit margins and greater market penetration.
- Innovation communities of companies, experts and universities can tap deeper pools of talent than solo competitors can.
- Ties between automakers and their traditional suppliers are weakening as digital connections create more opportunities for broad-based communication.
Eligible for the PACE Awards are all suppliers that contribute products, processes, material or services directly to the manufacture and sale of cars or trucks.
Award finalists will be announced Oct. 12 at the SAE Global Leadership Conference. Awards are granted in three areas: products, manufacturing processes and information technology-enabled changes.
Judges will visit finalists' sites to assess innovations' market impact, technological achievement and effect on the company and its customers.
PACE stands for Premier Automotive Suppliers' Contribution to Excellence. In addition to the PACE Awards, the judges grant awards to automakers for top-notch collaboration with suppliers.
Winners will be announced at a ceremony kicking off SAE Week in Detroit on April 7, 2014.