In early 2011, a development team from Caterpillar chanced on an opportunity to pitch its work on its first hybrid-electric excavator to potential customers visiting the same plant in Japan. After four tries touting its environmentally-friendly benefits, however, an unexpected answer became impossible to ignore.
“One guy said the only reason they’d buy the machine was because the government subsidized it,” remembered Ken Gray, who’d led the Caterpillar team.
“He basically said we were wasting his time.”
The verdict sent Gray back to the drawing board or, in Caterpillar’s case, the dusty terrain of its Peoria Proving Ground, where he gathered his engineers around the pre-production prototype they’d built.
“It was one of the most gut-wrenching moments of my life,” Gray said. “The program hadn’t failed. We’d successfully innovated a solution that was ahead of its time. It just didn’t meet customer expectations on price or ROI. We couldn’t go forward with it.”
Fortunately, there was another machine hidden in a corner of a open-faced warehouse; nicknamed Medusa, it was an ungainly mess of exposed tubes, valves, and various devices that had been bolted onto any available spot. This excavator prototype used hydraulics to capture and reuse energy instead of electric batteries.
“Early on, a small team of engineers had said they could do electric one better, but we’d already picked our direction,” Gray explained. “We told them they could do it on their own without any funding.”
“If you know engineers, they took it as a dare.”
What had followed were months of after-hours and weekend work. Parts were “borrowed” from other machines, and an in-house hydraulics expert donated some equipment and time. Gray got regular updates, but the team was otherwise on their own, and worked outside of Caterpillar’s innovation program.
When it came time to reveal their progress, Gray brought executives out to the proving ground one at a time, so they could both run the machine, while learning about its unique performance attributes, including a 25%+ reduction in fuel consumption achieved through a combination of the hydraulics capturing energy, and a computer system optimizing that performance.“
“When I started getting calls from other executives looking for invites to see the machine, I knew we had a success,” said Gray. The excavator, introduced in 2013, is now in its 2nd iteration and 3rd model, has more than 300 patents, and has won 20+ awards (including the company’s own Chairman’s Innovation Award).
Gray is now Caterpillar’s corporate director of innovation, and said he learned at least three things from the experience.
“First, you can never get enough outside input, especially early in the innovation process, so we’re socializing our projects far more aggressively. Second, now we try to have a second approach in parallel development to every project, whether as a potential backup, or simply a force-multiplier for solving shared problems.”
“And third, the experience proved yet again that you really don’t get innovation unless you have passion. When people care about something, the challenge is less about management, and more about nurturing, and then getting out of the way.”
Delivering on these learnings is still a work in progress at Caterpillar, but its merits are already obvious and concrete. Key insights from the electric hybrid excavator project were applied to the hydraulic hybrid, just as solutions from the latter have been repurposed for other projects that followed it.
Plus, that “failed” electric machine is still parked at the proving grounds. When battery technology advances far enough, it’ll be a viable option for Caterpillar’s customers.