The first discipline is to identify important customer needs. Caterpillar, Inc. does this by talking with the users of the products. This includes the retailers, distributors, as well as the farmer or construction worker. By making interactions with these people, Caterpillar gets an understanding of the needs, wants, and demands of their consumers. They also identify customer needs by looking at industry norms. They can view the innovations that other companies in their industry are making and try to pick up on customers needs. The second discipline is creating solutions that fill the needs of the customers. Caterpillar does this through incremental innovation. They enhance their existing practices or make small improvements to their products. It allows Caterpillar to be more sustainable by extending or expanding their products lines without having to make radical innovations. The third discipline is to build innovation teams. Caterpillar operates under a matrix structure. This allows regional managers to have control over the production and distribution centers within their geographic region. Within the company there are many different product lines. Each has their own research and development divisions that are in charge of making changes to existing products or coming up with new products for the company. These R&D divisions are the innovation teams. They are in charge of innovation for the products that are manufactured and distributed using the matrix structure. The fourth discipline is empowering "innovation champions" who keep the effort on track. At Caterpillar the innovation champions come in many forms. It can be the CEO, dealers, regional salesmen, or world-wide regional managers that take the lead on being an innovation champion. An innovation champions job is to bring entrepreneurial ideas forward, identify what kind of market exists for the product, find resources to support the venture, and promote the venture concept to upper-management. At Caterpillar, this title can be given to anyone that has a great idea. It may not follow the exact definition of what an innovation champion is, but ideas and innovation are a key part of the success of Caterpillar. In the same respect, the company must have an exit champion. Again, anyone can be an exit champion at Caterpillar. Their main job is to voice concern about a product that is being brought to the public. They must be willing to say that the company should dump the project. It is a dirty job, but someone has to do it and it can save the company lots of money in the end. The fifth discipline is aligning the entire enterprise around creating value for customers. Caterpillar does this by manufacturing the best products in the world. They are the worlds largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. CAT also has a worldwide presence, which allows them to meet the needs of customers around the world. They have over 24 brands to offer their consumers. These things allow them to accomplish the fifth discipline and create what customers want.
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