Innovation management at Audi: Start-Up meets Denkwerkstatt

A major corporation in the role of start-up? Why not! The Audi Denkwerkstatt in Berlin is testing out the cultural shift — and new methods of innovation management. Audi blog author Andreas Wittke met with Matthias Brendel, head of the think tank, and start-up expert Daniel Cronin to discuss it.

06/17/2019 Reading Time: 4 min

“We can learn a lot from start-ups. But what can we do to work together with them as effectively as possible?” With this question and vision statement, the Audi Denkwerkstatt was founded in 2016. Andi t has already produced its first innovation strategies and business models.

Matthias Brendel (center) and his team work on digital business models for premium mobility at the Audi Denkwerkstatt.

Matthias Brendel (center) and his team work on digital business models for premium mobility at the Audi Denkwerkstatt.

Is it actually possible for start-ups to change the culture of innovation in a large corporation?
Daniel: That’s only possible when the silo mentality is done away with and the awareness of every single individual in the organization is focused on the overarching goal. If someone has been working in a core area for many years, this process naturally takes longer. But that is exactly the exciting challenge for me, and for Audi. If you look at it that way, the Audi Denkwerkstatt is a really thrilling project that has enormous potential.

We’re talking about corporate innovation management. Matthias, what makes the Audi Denkwerkstatt so special to you?
Matthias: The personnel rotation is what makes it so unique. Alongside our permanent team, 15 colleagues from different departments come to us in Berlin for 6 months each. They are entirely freed up from their daily tasks, and they focus on a single topic from different perspectives. It’s like a giant innovation workshop. That creates enormous velocity and great ideas.

Daniel: An interesting point. In start-ups, the employees tend to be generalists. At large corporations, you’re more likely to find specialists. The Audi Denkwerkstatt does that really well; the personnel rotation opens up the silo mentality and increases awareness of the big picture and of innovation in the company.

Daniel, you’ve been the Audi brand ambassador since 2017. How did that happen?
Daniel: Audi had contacted me about moderating the Audi Osram Start-Up Jam in January of 2017. That went really well, and after that they contacted me for several more events. We make a great team, because I’ve been a huge motorsports fan and Audi-lover since childhood. Really! (laughs)

Which areas of innovation are you working on with Audi?
Daniel: As a serial entrepreneur, I’m the link between Audi and the start-ups we cooperate with. I always compare it to a car: if you just stick a motor and a transmission together, it would cause damage. You need a clutch between them to control the interaction. And that’s me. (laughs) I’m particularly interested in finding ways to make that interaction work as well as possible. So we want to create a place for start-ups at Audi where they can integrate themselves quickly  — for successful innovation management. And that’s where the Audi Denkwerkstatt comes into play.

Audi brand ambassador Daniel Cronin
"A corporate innovation culture should not be dictated externally; it must be modelled internally." says Audi brand ambassador and start-up expert Daniel Cronin

It's OK if things don't always work right from the start"

Daniel Cronin, Audi brand ambassador and start-up expert

What are the biggest differences between start-ups and large corporations?
Matthias: A big difference is the demand for perfection. A start-up begins with the goal of making something good enough for the initial launch. But, at Audi, we demand more: it has to be perfect right from the start. Both viewpoints are correct as well as important, and we can all learn from each other, but it takes a lot of understanding and open-mindedness on both sides.

Daniel: That’s true. Because a start-up is primarily based on hypotheses. “I think that could work” is the most important sentence. Then you try out the idea, show the product to a potential customer, and continuously optimize it based on their feedback. That way, you always know exactly what the customer wants and you can react extremely quickly. A large corporation needs to create processes in which it is possible to make decisions that don’t build on already-perfect products. I think that’s one reason why some large corporations expect cooperating with start-ups to be different. It all depends on mutual trust.

Does that mean that you see customer-centric and agile working methods as a cure-all?
Matthias: No. You have to carefully consider when to use which method, and why it should be used. Innovation management only works when you can answer these questions in a meaningful way. Because, at Audi, you have these very traditional departments that are very close to the core automobile business. For the employees, it’s totally normal to have a planning horizon of three to five years and not just test the first prototypes on customers. This is also important for the individual tasks. In that case, an agile working method would not be well-suited, and might even pose a safety risk.

Matthias Brendel, head of the Audi Werkstatt

Matthias Brendel (center) and his team work on digital business models for premium mobility at the Audi Denkwerkstatt.

What can a large corporation like Audi learn from start-ups?
Matthias: A lot. One thing is the velocity that occurs when everyone is entirely focused on a single topic. The other is the absolute focus on the customer. Our participants enter into direct dialog with their potential customers from the first day on. That way, they can find out whether the assumptions behind the development of their product or service are, in fact, accurate. That’s the only way to develop a product that will also find a market.

Daniel: What major corporations can learn from start-ups is how to deal with uncertainty and mistakes. If you set up a hypothesis, it means that sometimes things don’t work out straightaway. And sometimes things fail. But you still have to try things out. It’s a bit like rally-racing: if you drive quickly, you have to accept that you might have an accident. You roughly know the direction, but you will only find out if there is a cow standing around the next corner when you get there. And then you’ll have to decide what to do spontaneously.

Corporate innovation in real life: how do the various departments benefit from the Audi Denkwerkstatt?
Matthias: Obviously, the departments gain access to the start-up scene. In addition, the returnees share their insights into the methodology and the particular way of looking at things that they learned and used in the Audi Denkwerkstatt. Each of them returns to their department with a whole toolbox of suggestions and initiatives. When their superiors make use of them, it can positively change the working culture and innovation management.

What does the future hold for the Audi Denkwerkstatt?
Matthias: This year, we started offering short-term programs from members of management. We try to show them our way of working in a week. For example, they experience the variety of the urban mobility offerings, go to pitch events, and have lunch with people from our co-working space. But they primarily work in one of the teams, where they learn firsthand how we work and—most importantly—how we approach customers. The level of interest is phenomenal. We are totally booked up for next year. And that shows that we are really providing a valuable service for Audi.

Daniel: I think that is very important. Because corporate innovation culture should not be dictated externally; it must be modelled internally, especially by management.

Audi Denkwerkstatt at Bits & Pretzels
At Bits & Pretzels, the Denkwerkstatt employees explain to visitors how they use their ideas to support Audi on its path to becoming a digital car company.

Open the Blackbox - Audi Denkwerkstatt introduces itself

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