One trait innovative leaders and companies have in common, says innovation consultant Simon Sinek, is asking ‘why?’ before they ask ‘what?’ and ‘how?’.
So why is Korean automaker Kia expanding in North America when, according to a recent KPMG survey, many auto executives are focusing their growth strategies on emerging economies, particularly in Brazil, Russia, India, and China?
A month ago, Kia Motors celebrated the grand opening of its first North American manufacturing facility in West Point, Georgia, about 150km southwest of Atlanta. Why did Kia choose for its first facility in North America the state of Georgia, where it manufactures the all-new Sorento SUV that is now rolling into Canadian showrooms?
The answer might be that Georgia’s focus on innovation has proven itself to be a best-practice model critical to the automotive industry’s economic survival and growth. The state’s quest for jobs and prosperity for its people enables global leaders like Kia to successfully compete in the international marketplace. Kia is one of the few auto manufacturers whose sales have increased in the past year, rising 9% in the US alone. The company has attributed its improved sales in the US to the popularity of its redesigned Sorento model, which is manufactured in Georgia.
Kia is not alone. Many leading international supplier companies have state-of-the-art manufacturing operations in Georgia, including Pirelli Tire (Italy), Toyo Tire (Japan), Bosal Industries (Belgium/Netherlands), ZF Industries (Germany), Freudenberg-NOK (Germany/Japan), and Habasit America (Switzerland). Georgia is also home to the North American headquarters for many leading global automotive companies, including Porsche, Lotus, and BBS. These companies have helped Georgia maintain a significant international presence, with the state exporting more than $1.2bn in vehicle and vehicle-related parts to the world in 2009. All in all, Georgia is now home to more than 230 automotive-related manufacturing companies that employ nearly 52,000 workers.
A primary consideration for automakers and their suppliers is the need to quickly hire and train a workforce so the company can focus on improving quality and growing productivity. Georgia addressed that issue long ago, and provides free, customised workforce training through its state-run Quick Start programme. Kia is among the thousands of companies who have taken advantage of Quick Start to ramp up production quickly. The state constructed and staffed a 70,000-square-foot training centre on the Kia site, which provides customised training for Kia plant employees – with a market value of close to $14.5m – free of charge.
Companies also need comprehensive logistics systems to enable them to quickly access supplies and then move products to market. The fastest-growing container port in the US and the busiest airport in the world are just two components of Georgia’s well-developed logistics system.
Last but not least, the automotive industry thrives on innovation, and access to cutting-edge research and technology is key to giving companies the competitive edge they need in today’s marketplace. Georgia is an excellent example of a state that approaches innovation as a systematic, ongoing effort.
There are six major centres of innovation in Georgia that connect technology-based companies with the networks of knowledge, research, and experts at the state’s higher education institutions. For example, the Center of Innovation for Manufacturing focuses on training and applied research. The technical college where it is based has instituted an automotive motor sports technology programme, with the largest educational collection of race cars in the US. The college’s automotive technology programme works closely with companies to find ways to streamline and reduce costs.
Why all this investment in innovation? First, because innovation pays off. According to a study conducted by the Georgia Institute of Technology, the Kia plant’s economic impact to Georgia is expected to be around $4bn per year, with 20,000 new jobs to be created in the region by 2012. Second, while manufacturing in Georgia is very cost-effective, cultivating a spirit of innovation is what really gives the state an edge on its global competition. And, finally, Georgia understands that, to grow, innovation is vital – not only for the automobile industry, but also its communities and the economy.
