Norbert Majerus
July 06, 2017

EXCLUSIVE VIDEO: Leveraging Lean for Market Growth - Goodyear Tire & Rubber

Watch Norbert's presentation session, 'Lean Driven Innovation', here, courtesy of the Business Transformation & Operational Excellence World Summit (BTOES18).

Leveraging Lean Principles for Market Growth

Industrial growth has two key components: grow the market and/or grow your share within a market.

For established companies like The Goodyear Tire & Rubber Company, market growth depends on population growth and expansions in developing countries. We, like most global companies, are doing a good job of developing market-growth opportunities.


Leveraging Lean Principles for R&D

When it comes to growing share in an existing market, there are two ways to go about it: become more efficient and offer more affordable products, or offer new and innovative products. Many industry leaders understand that lean can help companies improve efficiency, and have applied it to manufacturing environments for decades. But few realize that by moving lean thinking up the value stream, into innovation creation, they can generate benefits even greater than those experienced in manufacturing.

Unfortunately, most companies that have tried lean in R&D have used the principles to reduce product-development cost to become more efficient. That can work, but the return is neglible because the cost of R&D is relatively small compared to other business costs. The secret is to apply lean to the processes that R&D establishes and influences, which help the company create revenue (see R&D Cost vs. Profitability Influence).


R&D Cost vs. Profitability Influence[1]

Leveraging Lean for Market Growth

Red portion of vertical bars = cost savings via lean efficiency improvements
Shadows = lean improvement impact on corporate profitability


3 Ways to help R&D add value with Lean Thinking

Understanding this fundamental factor is important, but how do lean principles help R&D create more value for the customer and more revenue and profit for the company?

#1 Understand your customer

First, you must train your engineers to observe the customer, identify their needs, and develop technical solutions to eliminate sources of customer dissatisfaction. For example, customers don’t want to sit at the side of the road with a flat, so run-flat tires were developed.

#2 Align the value stream

The best idea is useless if nobody buys the product or if the product cannot be manufactured at the right cost. The secret is to develop product and all associated processes concurrently — with marketing, manufacturing, sales, and engineering all working on their pieces at the same time.

#3 Speed up innovation

Leverage lean principles to make the innovation creation process faster. Speed to market has a lot of commercial advantages, but a company’s ability to develop fast and to learn faster than the competition constitutes a huge competitive advantage in the long run. Lean tools for speed are plentiful — concurrent development, single-piece flow, late start, fast project management, and managing projects in small increments are just a few of those we have used successfully. Rapidly building, testing, learning, and having a potentially shippable product ready after every development cycle has become a very popular method in the IT world (where it is called a “scrum”), and is gradually being adopted by many service companies and even the manufacturing industry.


Why does Lean Thinking in R&D Fail?

Although some companies, like Goodyear, have had great success with lean thinking in R&D, the success rate across the industry has not been as good. One reason for inadequate returns is that companies failed to realize that changes like this require the full engagement of their own people. At Goodyear this was done by educating and empowering engineers with lean principles, and by showing respect for people — people’s talent is used to design superior products and to improve the processes by which products are developed. Since the debut of lean R&D at Goodyear in 2005, results have affected the entire company:

  • Safety/quality indicators improved to all-time best.
  • On-time delivery of projects to customers increased from <20% to 95%.
  • Product development cycle time was reduced by 75%.
  • R&D throughput increased by a factor of 3X.
  • Employee engagement has improved. 

Goodyear is a leader in lean-driven innovation and product development, and has shared our learning through many channels, including conferences, articles, and a book (Lean-Driven Innovation[2]). We are not afraid to reveal the secrets of lean in R&D because it takes persistence, patience, and leadership support to work. Does that sound like your company?


Click here to watch Norbert's full Videoed Presentation, 'Lean-Driven Innovation'

 Lean Driven Innovation: Leading an End to End Business Transformation

[1] Norbert Majerus, Lean-Driven Innovation: Powering Product Development at The Goodyear Tire & Rubber Company, CRC Press, Boca Raton, FL, 2015.

[2] Ibid.

Download the most comprehensive OpEx Resport in the Industry

The Largest Leadership-Level Business Transformation & Operational Excellence Event

The Business Transformation & Operational Excellence Industry Awards

Welcome to BTOES Insights, the content portal for Business Transformation & Operational Excellence opinions, reports & news.


Submit an Article

Become a Regular Contributor

AWARD 2019-1
Copy of Copy of btoes19
Subscribe to Business Transformation & Operational Excellence Insights Now
Copy of Copy of btoes19 (1)

Featured Content

  • Best Achievement of Operational Excellence in Technology & Communications: IBM
  • Best Achievement of Operational Excellence in Oil & Gas, Power & Utilities: Black & Veatch
  • Best Achievement in Cultural Transformation to deliver a high performing Operational Excellence culture: NextEra Energy
Operational Excellence Frameworks and Learning Resources, Customer Experience, Digital Transformation and more introductions
  • Intelligent BPM Systems: Impact & Opportunity
  • Surviving_the_IT_Talent_deficit.png
  • Six Sigma's Best Kept Secret: Motorola & The Malcolm Baldrige Awards
  • The Value-Switch for Digitalization Initiatives: Business Process Management
  • Process of Process Management: Strategy Execution in a Digital World

Popular Tags

Operational Excellence Business Transformation Business Improvement Process Management Business Excellence Process Optimization Leadership process excellence Process Improvement Continuous Improvement Premium Execution Excellence Change Management Lean Enterprise Enterprise Excellence Lean Six Sigma Organizational Excellence BTOES18 Lean Capability Excellence Culture Transformation Healthcare and Medical Devices Changing & Improving Company Culture Digital Transformation Execution & Sustaining OpEx Projects New Technologies end-to-end Business Transformation Agile Lack of/Need for Resources Adapting to Business Trends Changing Customer Demands Failure to Innovate Integrating CI Methodologies Lack of/Need for Skilled Workers Lack of/Need for Support from Employees Leadership Understanding & Buy-In Maintaining key Priorities Relationships Between Departments Culture BTOES HEALTH BTOES Video Presentations Customer Experience Technology Process Automation Strategy Execution Innovation Manufacturing Lean Manufacturing BPM Agility Systems Engineering Process Design Report Exclusive Awards BTOES Presentation Slides thought leaders Insurance Robotic Process Automation Healthcare Professional Services Banking and Capital Markets White Paper BTOES19 Consumer Products & Retail Operational Excellence Model Project Management value creation Customer Experience Excellence Data Analytics data management innovation execution digital operations Automotive and Transportation Interview Operational Excellence Example Artificial Intelligence business expansion revenue growth Data Digital Frameworks Primary Measure of succes Workplace Analytics transformation journey BTOES17 Business Growth Kaizen Lean Culture Learning organization NPS Net Promoter Score Oil and Gas Pharmaceuticals & Life Sciences Pharmaceuticals and Life Sciences Six Sigma Telecommunications business process automation investment banking Announcement BTOES18 Award Winners BTOES18 Awards Client Feedback Strategy Communication Communications Denial Management Education HealthcareTechnologies Hoshin Planning Hospitality & Construction Human Centered Design Infographic Innovation in Healthcare Integrated Decision Approach Integrated Decision Making Jidoka Learning Resource Oil & Gas Recruitment Supply Chain Management Team Text Mining The FAST lane eHealth master text analytics virtual resource management