Caterpillar’s Culture of Innovation

by George Taylor
Caterpillar Inc.

How we think like a customer and act like a startup…

For 90 years, Caterpillar has carried the worldwide reputation as sturdy, reliable and Built For It. But the reason we have earned that reputation is that we’re always focused on what’s next. Innovation is inherent here at Caterpillar.

In fact, our company was founded on innovation—like the distinctive steel belt that “crawled” through muddy fields, giving us our name. And we were the first to put a diesel engine into a tractor. In today’s high-tech world, we often forget innovation is not just about bits and bytes—but we know that’s important, too. That’s why we created a division that’s focusing on our efforts in digital, analytics and innovation, and it’s why we’re working with some of the best minds across the world to make sure our company has the culture and talent we need to innovate.

Think Like a Customer
Today’s manufacturing is sleek, clean and rooted in technology. But it isn’t technology for technology’s sake; it’s about focusing on what our customers need to drive improved business results. In other words, before we begin, our teams at Caterpillar try to think like a customer.

Once we have a clear idea of the problem our customers need us to solve, we work to take our machines and engines to the next level. Our innovative teams have delivered smart, connected technologies that are improving productivity, fuel efficiency, safety, infrastructure and more. In fact, in the industries we serve today, Caterpillar has the largest population of connected machines and engines in the world, and we’re using big data and analytics to help our customers become even more successful—getting big things done faster, more efficiently and at a lower cost.

Recently, our teams tested how Cat Connect technologies are transforming road construction, cutting the time spent building a road in half. We had teams building two roads—one with technology, and one without—and our findings demonstrated just how important our efforts to innovate are. Machines equipped with our cutting-edge technology cut labor time by more than 30 percent compared to the traditional methods of building a road. And the icing on the cake is that those technology-enabled machines also helped reduce fuel consumption by 37 percent and saved an estimated 12 acres of forest by reducing emissions. And that was a single project. We have dozens of other examples of improving our customers’ experience by giving them the tools and technology to enable their success.

Act Like a Startup
That has never been more important than it is today. Companies that don’t commit to the future will find themselves victims of what I refer to as “digital Darwinism.” It’s why we invest heavily in research and development and why we hire the best minds to keep us moving forward. Our company is more committed than ever to delivering the quality products we’ve become known for, but with a renewed emphasis on acting like a startup—experimenting, learning to move quickly and getting it right. Innovation is not always easily achieved, but the benefits to our customers make it all worthwhile.

Our 336E H hydraulic hybrid excavator stands out as a textbook example. We set out to make a best-in-class, diesel-electric hybrid excavator that delivers greater fuel efficiency and performance than the competition, and we did it. But it was a journey that involved trial and error, listening to customer feedback, and turning to the amazing minds working here at Caterpillar to find a solution our customers needed… one that didn’t exist in our industry. That solution began with a prototype so ugly it was nicknamed “Medusa” by the design team. But with time, inspiration and innovation, our team delivered a hybrid excavator that uses up to 25-percent less fuel, and proved to be 50 to 75 percent more efficient than the previous model. It has become one of Caterpillar’s most popular products because customers are out there voting for it every day.

Collaborate To Innovate
There’s no doubt we’re the best there is at making iron equipment, but in today’s world, we know it’s helpful to work with other companies to bring the very best technologies and products to our customers. So, we have a venture capital team constantly searching for companies with which we can collaborate. Last November, we hosted the Caterpillar Corporate Startup Challenge, inviting 10 startups from around the world to come and pitch us.

A panel of judges made up of key Caterpillar stakeholders was there to determine if these companies could help us make our customers even more successful—and the talent we see through these efforts is just phenomenal. There is such an opportunity when you combine minds from eager, young startups with the best and brightest we have here at Caterpillar.

Our customers deserve the best, and we’re determined to innovate and improve so they can keep making a difference across the world. We’ll do that by thinking like a customer and acting like a startup… and never forgetting where we came from. Innovation is at the core of our company, and it always will be. We’ll be Built For It for the next 90 years, because we will keep looking for the next big thing to make sure our customers and dealers succeed. iBi

George Taylor is chief marketing officer and vice president of Caterpillar’s Marketing & Digital Division.

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