Employees' ideas drive new program at Cooper Standard

FAIRLAWN, Ohio—Sometimes a company has to look inward to move forward.

In the wake of the 2008-09 recession, Cooper Standard Holdings Inc. turned its focus to its research and development program. It didn't like what it found—the firm's focus on innovation wasn't as strong as it thought. So it carved out a team fully dedicated to new ideas, and so far the move has paid off.

“When we started to emerge from the (recession), most companies experienced a dramatic reduction in business, and we were no exception,” Lyle J. Otremba, vice president, innovation and advanced product strategy, said in a presentation at the recent Hose Manufacturers Conference in Fairlawn, Ohio. “But we knew that to emerge properly, we had to do something differently. One of the most important things we decided we needed to do was refocus how we were going to grow.”

Otremba benchmarked innovative companies, estimating he talked to at least 15 and spent a great deal of time trying to understand how their process of innovation worked for them.

He discovered that the best companies shared three traits:

• There is a strong, simple, well-known understood process in terms of how innovation happens and how projects are managed as part of the innovation process;

• They all separated their functional organization and put a group together strictly focused on the future—not just pure scientists, but a practical team that did not have to worry about everyday problems. Otremba said that was the biggest issue Cooper Standard had because its product development teams previously had day-to-day projects to worry about; and

• They create a culture of innovation within the company that everybody knew, could touch and be part of.

“The most innovative companies were also the most willing to share their process,” Otremba said. “They weren't willing to share their technologies, which is understandable. But they were very willing to share how they did it. I thought that was a very interesting characteristic because their culture was so ingrained with innovation that they were willing to spread the gospel.”

Cooper Standard's new gospel is i3, which stands for imagine, initiate and innovate. The program established an internal portal where every employee in the company, from plant-level associates to senior level executives, could participate. The Global Technology Council, which meets about once a month or every six weeks, evaluates those ideas.

Ideas are then vetted and either rejected or accepted. If accepted, it can go through either the normal product development process or—if Cooper Standard feels it could be a game changer—it is assigned to a dedicated innovation team, which consists of scientists located around the world.

Otremba estimated that the Global Innovation Council receives on average about 15 ideas between meetings.

When ideas are submitted to a portal, the submitter has to make a presentation to the council in order for it to be selected as a project. He said each presenter gets seven minutes to present the idea, and then must answer the committee's questions.

“It's not just purely technical,” the executive said. “It's not just an academic exercise. You're not just playing in a sandbox here, and that's OK, because every idea needs to have a payoff. You'll be surprised how often we'll think the idea won't pass, and then it does after we grade it and vice-versa.”

Once in the program, ideas must go through three stages until it is ready to market. Otremba said the program provides structure so that Cooper Standard is touching upon every point along the way. However, he said at some point in the middle, the team has an idea of whether or not the idea will win or fail. At that point, the executive said, if the team is sure it's going to win, the idea gets accelerated. If not, the data will show, and the firm moves on.

Being ready for market means not only a technical viability, it has to be scalable, be able to be manufactured and there needs to be a business plan in place.

“It's not just reaching a technical level of competence, but also commercial,” Otremba said. “Everything has to fit. We know when it leaves that final gate which customers have to be targeted, what the pricing is going to be and how we're going to roll it out.”

Throughout the process, Cooper Standard gives progress reports to the employee who generated it. There is a reward system within the company. Before this program, if an employee receives a patent, that employee received a monetary award. Now, while patents or trade secrets are still rewarded, the firm will give the employee a smaller payout if the idea reaches the second or third stage of i3.

Otremba described the payout as small but noticeable.

The i3 program has been in place at Cooper Standard for 21/2 years. Otremba said during that time, the firm has had six projects that have come completely through the system and are either in production, in the market, ready to launch or are just being introduced to customers.

One example Otremba cited as a success for i3 is its Armor Hose line, which he said started development before the innovation program was established. It was in limbo for 43 months, but the i3 program provided better direction. Within 16 months, it was ready for market.

“This is one of the greatest examples to validate our process and change the way companies think about how you innovate,” Otremba said. “Putting some structure around innovation is not always easy, but it's possible to do. You don't want to hinder creativity, but you want to provide some structure and focus.

“This was only possible through our i3 system. This was a live project before our system, and it was dead. I had to sort of argue to bring it back and make this the first project through our system.”

Armor Hose completely replaced the protective sleeves on a rubber hose in cars. Otremba said the firm had to make the hose strong enough so it wouldn't wear down or create a hole if it rubbed against itself, another hose or the car.

He said it replaced an EPDM layer with a layer of its proprietary armor material, allowing it to achieve the same level of abrasion performance on the hose as it typically would have been required of a protective sleeve.

“This was just the beginning,” Otremba said. “As part of the process we took it to the next step. We're at this point where we just completed Armor Hose II. This is a little different approach now. It's no longer EPDM; we've taken different polymer technology to create a much lower mass hose.”

Headquartered in Novi, Mich., Cooper Standard supplies about 90 percent of its products to the automotive industry and reported $3.24 billion in sales for 2014.

The firm operates 100 plants and focuses on four product areas—sealing and trim, fuel and brake delivery, fluid transfer, and anti-vibration systems.