Chuck Grindstaff, CEO of Siemens PLM, recently greeted his North and South American customers at Siemens PLM Connection 2016 in Orlando, FL, with a dire message. Adapt or die. He cited the winds of change that are blowing through our world—smart products, streams of data and other ground shifts he has observed. I pictured a smart mammal addressing dinosaurs. The almost 2,000 attendees, however, seemed to be calmly munching on their breakfast. Did they even hear him?
Maybe he needed a better way to get their attention. How about a beheading?
We were told the tale of the chessboard—a version with a Chinese emperor and grains of rice. The emperor wanted to reward the inventor of chess for a game that brought great delight. The inventor, a humble man, asked for a single grain of rice on the first day, then asked that it be doubled each day for each square on the chessboard.
Using powers of two, the 20th square of the chessboard would account for a billion grains. With many more squares and not enough rice, the emperor chose to exercise his executive power to bring the story to a swift conclusion. He cut off the inventor’s head. The trend in the beginning wasn't really noticeable, but, in the second half of the chessboard, things changed dramatically.
The point of the story is that the technology driving digital transformation is in the second half of the chessboard, and manufacturers will need to adapt to survive.
Lesson Learned from Successful Companies
Grindstaff rose to the head of Siemens PLM six years ago from the CTO office—plenty of time to study businesses that have been successful, such as Apple and Uber.
Today’s smart watches are examples of radical change. Where once a Swiss watch was a mechanical marvel, the most modern of watches comprise 12 million lines of code. A watch designer was once most skilled in mechanical design—but mechanical design alone. Life for mechanical engineers and designers has gotten a lot more complicated.
Grindstaff also sees digital transformation having a big impact on the automotive industry and how innovation can be monetized in the future. Siemens PLM's biggest customer is “Big Auto.” Not only is mechanical design relegated to second fiddle after electronics, but we must also worry about the entire production of vehicles.There are companies, like Uber, creating shared mobility digital business models.
“With the automobile going from 10 percent to 40 percent utilization, we’ll eventually need less cars,” noted Grindstaff.
“Auto manufacturers are looking at new digital business models that will monetize the operational phase of the vehicles,” added Siemens. “As a result, they are developing partnerships to deliver a shared mobility business model by taking advantage of delivery and utilization. These kinds of changes are happening in all industries. Technology is changing exponentially and the way innovation is monetized is going to change.”
Will this mean fewer seats of NX and Teamcenter, Siemens’ flagship products?
Adapting to Change
Smart-car companies like GM, a Siemens customer, have invested half a billion dollars in Lyft, Uber's main competitor. They feel the winds of change, said Grindstaff. They want to be part of it.Another example of successful adaptation to changing conditions is Lego. What kid hasn't grown up snapping those little bricks together? But even Lego is reinventing itself. Those little plastic bricks have gotten smarter. Kids can make Lego toys that include electronics and microprocessors.
What Has Siemens Done for Us Lately?
We want to be the company that has all the tools for the next generation, said Grindstaff, at the executive Q&A. He drew on everyone’s favorite example of an unquestionable runaway success, the iPhone.
“Apple didn't come up with anything new with the iPhone,” said Grindstaff. “They just put it all together.”
He is talking about the one device into which all of our various devices, at present and in the future, have converged. Its name is an understatement. The iPhone is a phone, maybe secondarily. It is also our pager (remember those?), our camera, our music and our computer and it is quickly becoming our fitness device, our health monitor and our remote control for our TV and our smart home. Really, what can’t it be? It is at once the future and, by its nature, future-proof.
Siemens has all the tools we need as engineers, according to Grindstaff. He means for Siemens to be like Apple—the company that has put all the tools in one convenient place.
Has It Been That Long?
Can an old company be the one for the future? The Siemens PLM Connection 2016 conference facility is plastered with graphics highlighting the 40th anniversary of the PLM World user community, although the name of the conference has changed over the years to accommodate the shifting product and company names. Product lifecycle management (PLM) is a term that isn't even 40 years old.It’s as if Siemens does not want to be your father’s CAD company.