This great interview is with Jim Fish. Jim is the Chief Innovation Officer at Bosch North America. Jim received his undergrad degree at Michigan Technological University and his MBA at University of Michigan. He also has a number of patents to his name and was named Bosch inventor of the year in 2014.
Bosch is large. In 2015 Bosch North America had revenues of around $14 billion. As many of you know Bosch sells and manufactures a variety of products from power tools to gasoline systems to battery systems.
They’re in the middle of the connected car space and the IoT space.
I asked Jim to come on the show because I’m curious what he and Bosch are up to. I’m also curious to hear how he thinks about innovations and executes on it.
Here are some other things we talk about:
-Jim talks about the emotional side of innovation. Important stuff that often isn’t talked about.
-How do you determine if a technology should get additional funding?
-What technology are you especially excited about?
-How do you focus your time at Bosch?
-How did you become chief innovation officer at Bosch?
David Kruse: Hey everyone. Welcome to another episode of Flyover Labs. Today we are lucky enough to have Jim Fish with us. And Jim is the Chief Innovation Officer at Bosch, North America. He received his undergrad Degree at Michigan Technological University and his MBA at the University at Michigan and he also has a number of patents to his name and was named Bosch Inventory of the Year in 2014. So Bosch is large. In 2015 Bosch North America had revenues around $14 billion and as many of you know, Bosch sells and manufactures a variety of products from power tools to gasoline systems to battery systems. So they are in the middle of the connected car space and the ILT space and somehow Jim has to figure out how to innovate through all this. And so I asked him on the show, so I’m curious how he thinks about innovation and how he executes on it. So Jim, thanks for joining us today.
Jim Fish: Yeah, thank you. Thanks for having me. Always happy to talk about it, always happy to help increase the numbers of dents in the universe that we can all make. Right now when you talk about that broad, very broad question, I tend to think of it as an adapt full process. So Bosch has an R&D work force. For examples, Bosch spends $300 million per year on corporate research and development. And then it’s spending just over 10% of its global revenues, which is 70 billion Euros a year on the product engineering research and development. But the central piece is at 300 million. So in some environments like inner power, out power, you might have one culture that can allow innovation to flourish and in another it might be quite a different path for it, quite different objectives. As you can imagine power tools may have a different culture than a business that would concerned within industrial drives that’s primarily a business to business mechanical type business. We also have a business as part of our group that is called Software Innovations and that is a service center to provide cutting edge software capabilities to the different business units that may not have grown that capability yet themselves, so I think it depends on where you are. In the company it’s how you innovate, but I think the most important thing is to evaluate the objects of your business and then really carefully evaluate the leadership and their own openness to the topics. And by openness I don’t mean they say they want innovation, because I never found a leader that says ‘no, we don’t want it,’ but it’s in their policy and the leadership behavior around that. So you know do they tend to be supportive of ‘explore if you will’ type business, that is the creation of new business platforms. Are there more of an operations focus where its – and we have to type down our SG&A. So the innovation that would be possible in different environments is quite different depending on where that business finds itself.
David Kruse: And how – I mean Bosch has so many different areas and obviously a huge amount of research. How do you figure out where to spend your time and focus and across all that?
Jim Fish: Well, you know I think innovation has a number of different tenders, there is the cultural piece, there is the creative piece, but I kind of do it around just a few pillars that I kind of call like a manifesto if you will. So there is the manifesto that says these are the areas in which I’ll spend my time and it is essentially embrace new technologies. So the activities that do that and to put myself in front of those new technologies and that’s spending time in Silicon Valley, spending time in the hot beds of say Salt Lake City or Berlin or even Shanghai where some business model stuff is really exciting and happening. And then the next one goes to educate and inform. So bring that knowledge into the organizations, help them understand. So it’s what’s called share and move on. So share what you have learnt and then move on and continue to spread and pollinate that and look for the application of those technologies. And the next one is change processes and environment. So a process can be the bane of innovative activity, because in one aspect the focus of process is to drive variation out of an organization, and our whole focus of creating more innovative content into a business is to drive variance into an organization. Although there are many, many ways to innovate, the only clear common denominator with innovation is diversity of thought. So that change process of the environment has to do with you know you kind of you product the output that’s a very much a manifestation of the place in which you worked. And then next is encourage experimentation. Now try to figure out what too small the matter means, so that you can get it too big to fail. So you want to always figure out what level of activity kind of flies beneath the radar, so that it can be, ‘hey, that’s really too small to matter. Let him do it.’ Something interesting might come out for your business that might be $5,000; it might be $50,000; it might be $500,000 depends on your scale, but figure that out and then encourage that type of activity. Encourage people to work off the side of their desk, encourage people to do things on their own for the learning opportunity, for the career opportunity in the future that that may represent and defend those people. And frankly celebrate those that don’t work out. So remove that barrier to trying things by removing the fear of that failure and encourage that failure to be celebrated. And then the last one of course, focus on growth. So it’s not – it is business at the end of the day and without that solid profitable revenue stream there would be no innovative activity. So really focused on the growth runways of the business, so those five.
David Kruse: Well, that’s well put and I think we could have a podcast on just each one of those, but we won’t. But I’m curious, do you have an example of a technology or product that was in one of the labs and then how that came all the out through actually being commercialized and put into the market and I’m kind of curious about your role. Like do you just kind encourage or can you shoot down projects and how do you play?
Jim Fish: You know that’s a great question. I mean at the end of the day we have divisions and business units and they manage their expenses and then there is a regional function, right. So let’s call it RBNA, Robert Bosch North America. So that is kind of like the country manager. So there is multiple divisions that are going to approach a common customer. So if you say we have a division that does chassis control, we have a division that does automotive electronics, if there is a giant bid on a common customer you have you know a regional based team and that’s kind of you know the central function for the region when you have a large company. And so my directing it, we are encouraging things. An example of something that came from the labs and that you’d probably be pretty familiar with is Bosch’s world leading position in MEMS or Micro Elector Mechanical Sensors. These are devices that help electronic devices figure out which way is up. They are able to figure out that you have been climbing stairs. They are able to figure out that you have been walked. They are able to figure out which way is magnetic north. They are able to figure out temperature, humidity and they are all very, very small. A 3 millimeters square would be a really, really big one. So these very, very tiny ultra think devices get put into electronics that you probably have within two feet of your right hand right now and Bosch is shipping in excess of 2 billion of these devices a year currently into the consumer electronics market.
David Kruse: And didn’t those – I mean I’ve read about some of those sensors and that they have come down in price quite a bit. I mean how long has Bosch been selling those for, do you know what the pricing is?
Jim Fish: The business itself has been commercial for right around a decade. So it’s not a long term legacy business and you know it’s truly a global approach and Bosch also has a unique program and that the CEO is active and kind of been participating in the scientific areas in which Bosch would investigate. So our CEO, his name is Volkmar Denner. He is a PhD in Science, in Physics I believe and he is very active in suggesting and even funding exploration activities in some of these areas. So being all in the world of ITO we have a large portfolio of both commercial stuff that’s like the MEMS devices and a huge portfolio of research work at which we are deeply involved with the leading research institutes of the world. In North America here we have our Palo Alto facility that’s joined at the hip with Stanford University. In fact we even use their chip foundry for development work on MEMS. We have a team in Pittsburg that’s closely aligned with Carnegie Mellon and all of the leading topics that they have form robotics to image processing to machine learning. We also have a small team that’s aligned with MIT up in Boston. So we deeply align with leading institutes around the world and then we have this team in North America that’s kind of positioned as the leading edge thinking, because you know obviously Palo Alto, a lot of really great ideas continue to just gush forth out of that geography and it’s critical that we have presence and position there and continue to do research there.
David Kruse: And so how do you know when you develop the Palo Alto or you get reports about what’s going on. Like how do you know the continued funding, like a certain technology? Like how do you know it has market appeal and it has value?
Jim Fish: That’s a great question. I call that – now there has been a book called the Innovation Dilemma and that has to do with companies that are too focused on their current customers and when they see an innovation they say, ‘well, our customs aren’t interested in that or they would be buying it already.’ It’s what I call the Inventors Dilemma. I’m actually authoring a book right now that’s going by the work in title called a Spark Ignition and this is probably chapter six or seven. That’s kind of where I am right now and it saying this inventors dilemma is obviously sailing fast as what everybody encourages you to do when you are innovating, because its known that if you could get something that begins to be funded, roughly 30% of the time this would have lasting impact in your business. So you have to figure out. You don’t want those 30% are unless you begin to try to some of them. So how do you know when to fail fast versus everybody knows the value of persistence in bringing innovation to the market. So that Inventor’s Dilemma as I call it and I explore the topic of fail fast versus persist, how do you know that and there is an informal framework that I use to suggest this and it has to do with how tightly aligned is it with your existing business? What is the market development and anticipation and you know you do kind of like a variant of sort of four to five forces analysis, but this is still art and I can’t say that this is – as you follow this framework and these rules and these metrics that you will make better decisions, right. It still ends up being very much in heart and that I would say that the companies that are best at this are those that are mature and continuing to bring innovation about themselves. So it’s always an arm wrestling match and there is always internal decent and there is a pinion and emotion that goes into these and inventors, I have many patents myself as you mentioned. They view these as and I’m not kidding, they are children, and when your children are put to the axe, it’s devastating, because you become very much wed to these. So you have to have the ability to kind of place that aside, but that is a real emotion and it’s an area of the business – one of the many areas of the business that emotion does in fact come into play.
David Kruse: Interesting.
Jim Fish: It’s a great example. Google recently announced that they are stopping bringing to market this user configurable Smartphone. So you would be like a subsystem kind of based Smartphone and the product manager for that publically stated it’s unfortunate that we didn’t have the courage to bring this across the finish line. So even in a very innovation mature company like Google, they continue to struggle with these variations.
David Kruse: Yeah, yeah I never thought about or heard about the kind of emotional side. Well, it makes sense and that’s why in your role you mention that you help encourage, because that is a big part. You don’t want those scientists to leave because they are probably talent and so that’s interesting, yeah. It’s a big part of it. So do you have an example, you were talking about how to understand which ideas might be a good ones to continue. An example of a project that you can share, maybe you can’t share any of it that Bosch thought was very promising and you had to shut down because it’s a – and in hindsight were there indicators or was it more just you had to keep going until you…
Jim Fish: Yeah, there is an effort that was shut down in one of the business units and it was for IT that I had and we were developing a reality around this IT. And I would say that when business leadership shifted they had a very different disposition towards innovative topics. They had a different disposition towards the timeframe that they viewed the business. So I think that’s when innovation topics underway are at greatest risk is when you do have a shift in leadership. I always say that there’s businesses that are in four possible stages and they have different environments, and they require different leadership styles. This first one is the business that would be not profitable or negative profit, and the situation you are in there is restructured, divest, shut down, you know chapter 11 bankruptcy, clearly no time for innovative topics. Special leadership is really needed to do these things. It’s a very tough situation for everybody. You are likely to have less people working there an touching base than you do today, it’s kind of thing that’s very fast paced, but it’s all about fixing the size of the business, and its sustainable at all. The next one is a low profit business that maybe has been disrupted, maybe they became too reliant on their legacy core, maybe compliances, maybe some leadership missteps, but it’s been a more sudden recent decline and to avoid becoming a loss business or a negative business, they are desperate. They are willing to try new things, they willing to be bold. They are willing to disrupt themselves because they feel themselves already being disrupted. This is an environment that warmly welcomes innovation and is a great place to be. It’s a high stress place to be, but a great place to be, because they are desperate. The third one is that business that’s struggling on profitability, but it’s been kind of a slow decline and this is the business that is more I call the operational excellence situation. By tightening the screws and refining and continuous improvement, they seek to return to their past glories if you will. Seek to return their status, their profitability. Typically not open to innovation, because the people that are managing these processes are a very short term operation focused people. And then the last of the business is one that’s a healthy profitable business using 10% operating profit or greater and they are – you can split that into just two classes. One that maybe it’s in a large corporate holding structure and they view it as a cash cow, at which point innovation becomes difficult, or they view it as a spring board to grow. The high profit business that can grow and have a very valuable core competence and they are looking to further create, further value streams with that core competence that’s also very exciting place to be. We see Google doing this today, a very high profit core. They seek to create additional value streams with the profit that that core throws off. So that’s kind of where is the business and what is the risk of something getting shut down. You got to see if there is a leadership change. It’s kind of what type of business are you in?
David Kruse: Yeah, that makes sense. That’s a good answer, okay. And before we get too far, I want to ask a more of a couple of personal, more on the personal side, but not too personal, don’t worry. But I was curious; you know how did you become Chief Innovation Officer? What was your path and what made you kind of the candidate?
Jim Fish: You know I have always been a very bold individual, even when I worked at Ford you know. I left Ford and I thought at the time I left Ford it was because it wasn’t enough action oriented, but I’ve since learnt that it more around the culture of a large process focused organization. Because I uphold process and I saw a big picture and I wanted to make bold strategic moves, take good chunks of the market rather than incremental chunks and in an incremental organization that Ford was in the late 90s, that really you know my part my personality was more like you know, was really felt trapped in a cage. Here is your book, here is a 173 page test plan, now go execute it over the next two years and this is your life. And that there, some people are great at that and others are not. If you look at Mike Myers great stride. I am an ENTJ, but my J is fairly weak and my N is very, very strong and that pulls me into the creative dimension where you know its people are wired to be quality guys, people are wired to be creative people, people are wired to be catholic priests and people are wired to be Wall Street bankers and in each of those cases there are diametric opposite on the personality realm that it sort of brings or other similar modes. I mean the opposite of a priest where he views his legacy and society and betterment of the whole and the community, whereas a Wall Street banker doesn’t care about any value, he wants quarterly profit and nothing but. And then the exact opposite of say the highly creative biotech founder is that manufacturing process engineer at a large standing company for example, right. So I’m kind of in the creative dimension and it’s kind of something I’ve always done and I got involved in working with software and became fascinated with the things that software could do, especially for some automotive mechanics and bringing them technology that helps them do their job faster and I really got attached to the vision of you know – and I also worked in the market group and I felt like you know what we did allowed the same mechanic to go home early, allowed to go home and watch his sons baseball game and have dinner with his family, because we helped him to get it done faster and we can enable this though technology and I became just absolutely obsessed with these technicians and improving their life by our efforts. And we had this call, this meeting that we filed tons of IT around it and it was a lot of very disruptive stuff in the realm of software that we did and you know then it became, ‘hey, this guys really thinks about things differently, takes a different approach and lives three years in the further.’ And so that made me a really good fit to, this is the kind of guys that although he struggles to come to the office every day and deal with us and when we make him fill spread sheets out, he is something we need more of. So I mean the Bosch, the Bosch is credit they recognize. They do need that diversity of thought. They realized that not everybody can enjoy filling out their spreadsheets and taking their online training and you know all this other large company stuff that’s so distasteful to people aren’t a big fans of the process. And they recognized the need to spread a little of that diverse thinking in terms of real solutions for the customers.
David Kruse: Well, and that vision is just, especially in today’s world it’s just a key part. And I talked to different venture capitalist and like you know a good founder in one that can, had good operations and can see the market, like what’s going on now or the amazing one that can see what’s going on in seven years or five years or three years. To be able to do that is not an easy skill and yeah.
Jim Fish: Yeah you know, if real the Steve Jobs biography and I heard all these stories about how difficult he could be work with and he would fire people at the drop of a hat. He would yell and scream; he’s very obstinate about things and if you read his book and you’re from the creative dimension, the thing I took out of it was he felt he had to act like that, because he know he was right and to spend time convincing you was a loss of competitive advantage. Time is a competitive weapon. He viewed time as a competitive weapon and he was giving time up convincing you that he was right. So he became very impatient with that process. If you didn’t get him he would start yelling. So that was kind of my take on his behavior from that perspective.
David Kruse: That makes sense. And I’m curious, how do you deal with kind of the uncertainties. Like you mention when you’re at Ford, you can go out and give a 173 page manual. The engineers say you know execute this testing plan over the next two years, like if they do that they get their salary and everyone is happy. Like it’s a pretty clear, relatively clear kind of path to success. Whereas you as Chief Innovation Officer, it doesn’t seem nearly as clear as defined and so, have you always, since there was a lot of uncertainly have you always felt comfortable around that uncertainly a little bit.
Jim Fish: Yeah, absolutely and again it goes to the way you are wired and I also, I kind of, I know what activities are my ‘flow,’ I say what is your flow, what is something you can do for hours and hours and hours and time just compresses. To place yourself in that flow in the professional environment, you know some people their flow is writing code, they can write code and six hours has gone. Oh my God! I skipped lunch. Its three in the afternoon I have been writing code. You know they are likely to be amazing at it. For me its learning a new technology or seeing it demonstrated or talking to a researcher, because I become just engrossed with what they working on and I’m just looking for how can that provide value to somebody. And then the activity just grows form that, right. And so I get to Silicon Valley or to our other research labs and meet with small DCs and small startup companies and see what they are working on and just pursue those activities to drive those in. There is no process for necessarily how you do this.
David Kruse: Interesting, and so what did – in 2014 you got awarded the Bosch Inventor of the Year, is that correct?
Jim Fish: Yes.
David Kruse: And what was that for, what did you invent?
Jim Fish: Of course the way they awarded patent at Bosch is they score it. So is it easy to copy? Is it easy to verify that the IP has been infringed on? I suppose. What is the potential commercial value? How big is the audience of this? And in this case it was social networking patent that had to do with people working on vehicles that are seeing similar things. So let’s say you have your car and the check engine light comes on and let’s say there is a certain code on it, and that’s recoded because the computer would see that car and let’s say two weeks from now somebody else sees that exact same circumstance, would it not be useful if those two people could actually connect with each other to share maybe how much did that cost or where did you go to get it fixed or what was actually wrong with it? Was it serious? Can you drive with it? So chances are that person that happened two weeks ago is also more educated on it and they could help somebody else in the future. So it would work with technicians, it could work between consumers. So with automotive technician there is almost discreet that they are proud of their craft and their knowledge and they are willing to help each other in this community. Say there is 800,000 people in the United States that repair vehicles for a living and if they are proud of what they do and it is a community and they have a lot of mutual respect for each other and they will help each other out and they don’t expect anything else from it; much like on Yelp. I mean, why do people post restaurant reviews on Yelp? They don’t benefit from that. They are helping other people and don’t expect anything in return. So that concept being used to help technicians fix vehicles is kind of what that patent is about.
David Kruse: Interesting, okay, that’s a good idea. And then I also saw a video on you talking about the connected car program. I’m curious, can you share a little bit more about that?
Jim Fish: I’m not sure what video you saw.
David Kruse: Well, do you have – I think it was a way to allow the consumers to easily service their car.
Jim Fish: Yeah, yeah. You know Bosch has several approaches to helping people with their – they would the mobility experience if you want to think about the future a little bit. The connected car can be as simple a DI wire. He was going to repair his vehicle and helping him figure out what’s wrong with his car and it could be as sophisticated as a father who’s daughter is at college and he wants to see if she is taking care of her vehicle or not. And the OEMs currently offer very limited solutions for this, so the Bosch product here is something that you can buy and plug it into your vehicle and you can tell what your vehicle is doing remotely. It’s very closely related to the solutions that you see insurance companies offer, like the progressive snap short for example that you plug into your car. That is not a Bosch product, but it’s very closely related to that. You will plug it into your car and you can understand what your car is doing. In this case your insurance company is watching what your car is doing. They got a little cell phone chip in there. They can remotely see what’s going on with your car. So Bosch has a very similar product. The business is centered in Europe and mostly the technology is developed in Europe, but it is something that we offer to the market place today.
David Kruse: Interesting. And what type of – if you can share technologies, especially right now.
Jim Fish: Yeah, I think, with that I have no hesitation on this one. I think machine learning, I think there is a lot of high probability about it and there is a lot of doubters, because machine learning has started and stopped and started and stopped again twice. And most of the limitations were due to processing, memory and bandwidth issues and now that the processing power is unbelievable. In fact the new chip on the iPhone 7 they say is more powerful than the Mac chip from three years ago. So your new cell phone now has more power. If your Mac is three years old, your new iPhone 7, it has a more powerful processer in it from a single threaded core. So this allows machine learning to really accomplish amazing things and for businesses considering how can machine learning help me? You should say the hypothesis of machine learning is anything that a human can do without emotion, it can be done by machine. So there is a lot of stuff that requires emotion, so difficult. So from taste of food to judging art, to creating art, to wiring things, very difficult from a machine to do, because this requires emotion, but not emotion based task, the decision making, the judging, inspection, these type of things even IT processes reading manuals and being experts. These are areas that machine learning can be deployed in and I am emotionally all in on machine learning topics.
David Kruse: Nice, well put. And do you have an example of where Bosch implemented machine learning?
Jim Fish: I think machine learning is in its sense, it’s what I consider – you know Bosch is working on a lot of things that are years, and even being appropriate to bring to a business unit. Still robotics is still a very expensive things and for many business units I would say it’s really not ready to begin to consider. Machine learning is at the point where we are just beginning to explore its uses and learn more about it. Machine learning also, so if would consider something that could hear a sound right and its sometimes important to identify a sound. So you might think that training machines to hear things might also be really interesting.
David Kruse: Interesting. Yes, okay, and we are almost out of time here unfortunately, but I was also, we got a couple of more minutes. I was also curious, who’s on your team as part of the relationship?
Jim Fish: Yeah, you know I work half between what’s called our automotive aftermarket and then half between our regional business and so I work with the diagnostics team. So still interacting with the data bus on the vehicle and still an active part of my role. Also the marketing team, especially in North America, and on the product management team. So it’s, we are still struggling with our maturity to say this is a dedicated position with a dedicated team to be honest. But that’s our past inventory.
David Kruse: Interesting. You have such an interesting, you have such a, well I think fun job. I’m sure it’s not all fun, but man you get to see a lot of stuff. But that like you said, down the road a bit, that’s what’s so exciting about it. And one of my last questions was, you know how many – I don’t know, this is kind of a tough question to answer. But I was trying to get a feel for, you see a lots of good ideas in the lab. How many of those ideas you think actually make it to the market? You know is it 5%, is it 10%. I mean do you have any.
Jim Fish: Well I mean there is a difference between ideas and technology. I mean there is thousands of ideas and may be hundreds of technologies, right. So I would like to say that every technology eventually is going to make it. The only question is the timeframe. I mean it wouldn’t be worked on as the nanotechnology is sort of here right. Other things Bosch is working on fuel cells, but I think IO planet Fuel cells was a great example. I mean we actually had fuel cells working on the first Apollo moon shot right. So fuel cells, but are they commercially viable? No. Will they ever be – I would say for the last 40 years people have said four or five out you know. So sometimes there is some kind of technical hurdle that can’t be breached and in this case of the fuel cells it’s the temperature of the stats and the expense it takes to handle those temperatures. You know our super conductors is another one at super cold temperatures you can do it. So eventually they all make it, it’s the ideas and I would say the benchmark for ideas is when you begin spending money on it, I would class it as an idea and I would say 30% of the time you want that to be commercialized. And that doesn’t mean it makes money, but its commercialized, has value and there is a market for it. There may be other issues with it 30% of the time. If you are less than that you are probably not filtering your ideas aggressively enough if you are higher than that, you are not reaching far enough.
David Kruse: Interesting, 30% okay. And last question, are you guys – do you guys partner with external companies. I know you mentioned you talked to startups sometimes.
Jim Fish: Oh! Yeah ,yeah. Bosch also has a venture capital arm that helps bring new thought as well. you know I would say that Bosch has, I don’t know if it’s a German kind of the ownership of the company or it’s the manufacturing bend of Bosch, but they really preferred and developed competence themselves, whereas other smaller entities you know really don’t have the pockets to do that and they will freely partner. The business units are much more assertive at partnering than the corporate portion of Bosch.
David Kruse: Okay, got you. Well, I think that just about does it unfortunately. Jim, definitely I appreciate your time and sharing all your knowledge and thoughts with us. We are quite lucky to hear and learn from you today. So I appreciate it.
Jim Fish: No problem, I had a good time as well.
David Kruse: Great. Well, and wish you the best of luck at the Bosch and have fun checking all the new technologies and I appreciate everyone listening to another episode of Flyover Labs and we’ll see you next time and once again thanks Jim, I appreciate it.
Jim Fish: Sure, sure.
David Kruse: All right.
Jim Fish: Talk to you soon. Bye-bye.