Strategic Industry-University Partnerships

Success-Factors from Innovative Companies

Lars Frølund, Max Riedel

• Publisher: Academic Press
• Year: 2018
• ISBN:
  9780128110010
• Topic: Betriebswirtschaft
• Subtopic: Unternehmensentwicklung

Strategic Industry-University Partnerships: Success-Factors from Innovative Companies unveils insights of experts from leading companies on managing partnerships with universities. Industry-university partnerships have proved vital to innovation, and although these partnerships can be challenging, careful choices and wise management around five success-factors leads to a systematic approach that unlocks value for both parties. University assessments of these partnerships have been widely described, but industry perspectives are less well understood. This volume captures observations of leading international corporations without omitting university views. It can serve all partners in alliances as a guide to strengthening their organizations.

• Unveils insights of experts from BMW, DuPont, Ferrovial, IBM, Novo Nordisk, Rolls-Royce, Schlumberger, and Siemens
• Presents the key challenges of university-industry collaboration and how world-leading companies tackle them
• Describes the success-factors for working with universities, such as selecting focus areas, university partners and collaboration formats in a systematic way and having the right organizational support and evaluation criteria

Chapter 1

Overlapping Broad Innovation Horizons With Business Relevance

How BMW Group Defines Topics for Strategic Collaborations

Nicole Eichmeier and Mirjam Storim, BMW Group, Munich, Germany

Abstract

For automotive manufacturers, innovation is key, and cooperation between industry and universities is gaining importance and momentum as a result. The following article outlines how to ensure the ideal fit between university–industry cooperation projects and a company’s strategic and R&D needs. Taking the BMW Group as an example, it outlines the process of determining topics and scope, and establishing essential criteria for sustainable partnership structures.

Keywords

Strategic collaborations; business relevance; R&D needs; strategic relevance; research clusters

BMW Facts and Figures (Fiscal Year 2017)

Company name:	BMW Group
Headquarters in:	Munich, Germany
Annual revenue:	EUR 98.7 billion
Number of (R&D) employees:	~130,000 (~14,000)
R&D budget:	EUR 6.1 billion
Average number of University R&D collaborations p.a.:	>250
Industry branch(es):	Automotive products and services
	Product examples: passenger vehicles, services as DriveNow, financial services

For automotive manufacturers, innovation is key—and cooperation between industry and universities is gaining importance and momentum as a result. The following article outlines how to ensure the ideal fit between university–industry cooperation projects and a company’s strategic and R&D needs. Taking the BMW Group as an example, it outlines the process of determining topics and scope, and establishing essential criteria for sustainable partnership structures.

1.1 University Relations at the BMW Group—An Introduction

Unique mobility experiences by the BMW Group have been inspiring people around the world for the last 100 years. Throughout its history, the company has reinvented itself time and again, shaping change both within the automotive industry and in mobility more widely with pioneering, new technologies. Today, the BMW Group is setting standards with its new corporate strategy, NUMBER ONE > NEXT. Launched in 2016, the BMW Group’s centenary year, NUMBER ONE > NEXT represents a roadmap into a new era that will see us transform and redefine not only individual mobility but also the entire automotive sector for good.

In its mission to deliver unique customer experiences, our company builds on innovative technologies, digitalization and sustainability, and embraces the opportunities that emerge as our industry is transformed. As different industry sectors meld, their mutual influence is increasing, with digitalization, for example, giving rise to disruptive technologies and services that are putting established R&D and traditional innovation management to the test.

Against this backdrop, the BMW Group is set to develop its technological expertise over the coming years and decades to enable it to enhance interactions between individuals, vehicles and services, and drive progress in sustainable mobility. The approach we are taking comprises six strategic strands: brands and design, products, technologies, customer experience and services, digitalization, and profitability. At first sight, these solutions seem simple, no more than a list of familiar terms. But an automobile is one of the most complex products in mass production. A single vehicle requires more than 10,000 parts and components to be invented, designed, produced, and assembled to create a final product that befits the brand in every respect. All this is done in close cooperation both within the broad matrix organization that is the BMW Group and beyond it, with the thousands of suppliers who are our partners worldwide. For this to work, a functional networking environment and capability are crucial. Our approach to networking infrastructures is reflected in the architecture of our Research and Innovation Center in Munich, called the FIZ. Built in the 1980s, the FIZ has a honeycomb layout with short distances between engineers, designers, and production experts. This supports faster, more intensive communications between the different departments.

To this day, the FIZ continues to serve as a model for our stringently focused, holistic approach to R&D—but at our company, we also understand that disruptive trends in the wider world require action as well. For this reason, we operate a network of R&D scouting locations around the world, in Mountain View, Woodcliff Lake, Beijing, Shanghai, Tokyo, and elsewhere. And, for this reason as well, we like working with universities, all over the world.

A particular characteristic of our R&D work is that it is based on our belief that research and development happens not only in our R&D departments but also across many other disciplines and divisions of the company. Our marketing team, for example, requires an in-depth understanding of our customers, which in turn requires a detailed knowledge of social media—we will point that out in one of our project descriptions later. This knowledge must be based not only on current phenomena but also on trends that will shape the future and that form the basis for the BMW Group’s own work in the research and development of new digital channels, applications, and interfaces. Another example from a completely different field is the use of simulations in business management. Simulations are widely used to solve complex, real-world problems by virtual means but have not yet been used to develop business models. In the 1990s, we used engineering simulations as the basis for its model initiative. Today, in the digital age, business simulations are enabling smarter, faster business decisions—something we are working on intensively.

Overall, demand at the BMW Group for a broader based approach to R&D that encompasses every discipline has grown over the last few years, especially since the launch of Strategy Number ONE in 2007. At that time, we faced the challenge of evolving from an automobile manufacturer to the leading provider of premium mobility products and services. This transition resulted in the first ever premium electric vehicles: the BMW i3 and i8. It also gave rise to our initial concepts for mobility services, which now form a portfolio that includes the car-sharing program “DriveNow” and “ParkNow,” an app that helps urban drivers to find parking spaces in crowded cities. Both of these services come in response to societal changes, urbanization, and new customer requirements around the world. Since 2016, the shift that was commenced under Strategy Number ONE has been continued under Strategy NUMBER ONE > NEXT. Today, mobility is about more than merely vehicles: we now operate in the services market—an entirely different business from that of manufactured products and the kind of seismic shift that requires a well-prepared R&D division.

Tackling the day-to-day challenges of innovation takes a variety of perspectives and skills—and it is a well-known fact that we have them. But which role do universities play in this context? Well, collaborations with universities allow it to learn from others continuously, and to keep an open mind as it forges new pathways into the future. So when it comes to generating innovations over the longer term, solid university contacts are highly constructive.

University collaborations have a long tradition at BMW Group and are highly diverse, ranging from joint research and collaboration projects to research contracts and cooperation projects that foster the skills of younger people. Our company has hundreds of university contacts that have grown from former projects, personal contacts, and partnerships in specific areas. University–industry collaborations have frequently been described as informal in nature and decentralized in structure. Increasingly, however, companies are adopting a more strategic approach to them (see Perkmann et al., 2011: How should firms evaluate success in university–industry alliances, p. 203). We have done so with considerable success, and we now operate a three-tier system that identifies three types of university–industry cooperation projects.

At the top of the hierarchy are our strategic partnerships, which have a special status within BMW Group. Why did we decide to put strategic university partnerships at the top of its cooperation hierarchy? When Strategy Number ONE was implemented in 2007, it became clear that a top-down focus on new, less well-known topics was needed. A review of university contacts at the time concluded that most R&D cooperation projects were based on long-standing contacts in Germany. A solid network of university contacts is constructive, of course, but did not appear to be the best approach to advance the BMW Group’s transition from an automobile manufacturer to the leading provider of premium mobility products and services. We recognized that the simple fact of leaving the comfort zone of well-known ideas and university partners might be a value in and of itself. Further on, to give a simple example out of strategy: if you identify next urban mobility in megacities as one central business field in the future, you have to reach out for university partners in megacities—which are not necessarily in Germany, but instead in Singapore or China, for example. To better prepare for the future, we had to identify additional strategic partners of international renown with an established reputation in relevant fields of research and, with respect to the story of megacities as an example, in strategically relevant parts of the world.

How do we organize these partnerships and make them run? Each of the strategic partnerships is jointly coordinated by a dedicated mentor at our Munich headquarter and a contact based locally near the university. The willingness and interest to shape a successful cooperation, passion for innovation, and a good internal and external network are the success factors for mentors and local contacts. Together, they provide transparency over the skills and opportunities offered by the university and act as the main point of contact to the BMW Group. Strategic partners are closely involved with the BMW Group management members in our University Strategy Circle, a committee of several heads of specialist divisions (e.g., head of production, R&D, and marketing innovation) from across the relevant areas of the company. The University Strategy Circle monitors ongoing cooperation projects, especially with strategic partners, and is focusing on R&D projects but also future talent management activities and education policy. The circle meets two times a year to discuss and determine which future research topics will form part of the joint R&D projects. The process is controlled and coordinated by an independent function that evaluates and balances the different objectives. A typical meeting meant for selecting future research topics is organized like an elevator pitch as we know it from innovation management or accelerator ecosystems. The coordinator of the research cluster—we will explain in the next chapter, what this is—gives a short presentation on his ideas, connects them with the company’s overall strategy, and argues why this project should be done with his preferred strategic university partner. Not an easy job as the audience is completely mixed in roles, mind-set, background, and responsibilities, and the coordinator has to deal with lots of questions out of his “home” department with its specific and well-known mentality and rules. On the one hand, this has been practiced within automotive companies over years, as the car has always been one of the most complex mass production products of the world and has always required alignment across different functions. But on the other hand, this requires the openness for interorganizational learning, as we talk about visionary projects for the future, beyond the product named “car” as we know it today.

To reflect the importance of this type of specific partnership and facilitate cooperation projects for both sides, the BMW Group and its strategic university partners negotiate a framework contract or master agreement. Then, a special purchasing system ensures that projects are launched swiftly and directly; rather than the usual bidding process with at least three possible suppliers, the key factor underlying innovation partnerships is compatibility and shared interests. Where projects fulfill the exact criteria outlined in Section 1.2, additional financing may also be provided.

In conclusion, it is understood that the best university partner must be selected on a case-by-case basis, depending on its suitability for the project, program, or initiative in question. This brings us back to our original question of which topics are best handled in university partnerships, or, in other words, when and on what topics do we cooperate with universities rather than other partners, such as engineering service providers or suppliers?

1.2 The Importance of Defining Research Clusters and Identifying Subject Areas

Relevance is key in business, and based on this simple fact, one can say that every topic handled in cooperation with a strategic partner university has to show its clear connection with strategically relevant questions and research fields. Considering when and why universities are the preferred option for handling certain topics, let us begin by outlining briefly the BMW Group’s system of research clusters as the starting points for detailed research topics.

As an organization, the BMW Group is structured as a series of product or market-related functions and departments that approach a single topic from a variety of angles. Mobility, for instance, is the focus of various departments whose approaches differ according to their remit. In the interests of university partnerships, however, topics such as these must be viewed holistically, with clearly defined project content and targets, and results being shared. Our functional setup was clearly not compatible with such a view, and an alternative system was therefore needed that would allow us to combine the different disciplines successfully into our projects and communications with universities. For this reason, we developed what we call “research clusters.”

These clusters are aligned with the CEO’s corporate stra...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• List of Contributors
• About the Authors
• Foreword
• Acknowledgements
• Introduction
• Chapter 1. Overlapping Broad Innovation Horizons With Business Relevance: How BMW Group Defines Topics for Strategic Collaborations
• Chapter 2. DuPont’s Global Collaboratory: Selecting University Partners Globally and How Does Industry Track University Relations for Success
• Chapter 3. Successful Pharmaceutical Innovation: How Novo Nordisk Matches Academic Collaboration Models to Business Objectives
• Chapter 4. Building Global Innovation Ecosystems though Public Private Partnerships: How IBM has Leveraged Academic Collaboration for 70+ Years
• Chapter 5. Rolls-Royce University Technology Centres: Relationships Matter
• Chapter 6. Siemens’ Centers of Knowledge Interchange: Managing Strategic Partnerships via Intermediaries
• Chapter 7. The New Criteria for Measuring the Success of Industry–University Relations: Insights from Schlumberger
• Chapter 8. Evaluating Solid Long-Term University–Industry Collaborations: Lessons Learnt From Ferrovial’s Strategic Cooperations
• Chapter 9. Recommendations and Outlook
• Index