Jason Noren

Hamp Colzie

Lindsey Solovey

Yang Cao

Amber Roberts

Siemens: Open Innovation Case Study

Why Open Innovation for Siemens?• Company founded by an visionary innovator...Werner von Siemens in 1847• Known as a global, integrated technology company• First mover in many sectors

• Infrastructure & Cities - telegraph line (1847)• Industry - commercial lighting (1878) and electric railway (1879)• Energy - power plan (1927)• Healthcare - X-ray (1934)

• Decentralized operating structure - 4 sectors, 18 divisions, many business units• Allowed for entrepreneurial opportunities

What is Open Innovation (OI)?Henry Chesbrough, organization theorist and adjunct professor at Berkeley, coined the term as “a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”

Pointer Telegraph (1847) Commercial Lightning (1878)

Electric Railway (1879)Boiler Plant (1927) X-ray (1934)

Siemens (1847)

Siemens is the definition of innovation. United 348,000 people over 200 countries, holds approx 56,000 patents, $5.2B in R&D

INSIGHT:Siemens not only continues to grow but

also continues to innovate. The company remembers “Not to reinvent the wheel”

but make a better one.

A new motto for Siemens could come from the wise words of a famous poet

“Do not go where the path may lead, go instead where there is no path and leave a

trail.” - Ralph Emerson

The Framework• First attempt to internal collaboration or

knowledge management project

• Based on IBM’s internal “Innovation Jams” as a model

• Web-based Knowledge Management (KM) platform that discussed two specific topics

•Anti-piracy•How future information technologies will impact Siemens business strategy

Not so well: Innovation Jams (2009-2010)

Results★ Occurred over a 3 to 5 day period★ 1,000+ employees participated in

each session★ Connected like-minded individuals

which fostered communities★ Over 1,000 ideas contributed

Innovation Jam Mis-steps:➢Lack of training on the technologies➢Employees went through a steep learning curve on the

usage of the new technologies➢NO guidance on how to conduct business on the

system➢Unplanned Repercussion: discovered that experts were

working together in meeting rooms, formulating contributions on Word documents, and then posting the document, which was not the intent.

Solid Framework: Eiffel Tower

Poor Framework: Apt Complex in China (2009)

TAKEAWAY:

What you don’t see is also what you get!

PONDER THIS:“It is not the beauty of a building you should look at; it’s the construction of the foundation that will

stand the test of time.” - David Allan Coe, Singer

Image courtesy of https://en.wikipedia.org/wiki/Eiffel_Tower

Image courtesy of http://bloomberg.com

TechnoWeb 2.0Connecting People and Ideas

Successful Program I: TechnoWeb 2.0 (2009)

Knowledge Increases When It Is Shared• More than 500 Urgent Requests posted by 32,000 participants and each request

received replies from an average of seven people, typically located in different geographies and divisions.

• Users reported saving days, and even months, of work because of access to suppliers and technologies through the KM system of TechnoWeb 2.0.

The Verdict: Continue the program!TechnoWeb 2.0 connects experts and ideas within Siemens, increases knowledge and is good for business.

Image from Siemens website

Image courtesy of http://www.todaystrucking.com/

“If only Siemens knew what Siemens knows”

Knowledge Management (KM) System At It’s Best

★ Enabled the discovery of people and knowledge within the broader Siemens community

★ Each user has a public profile that provides others with a snapshot of their activity

★ Participants were able to stay connected on the latest issues, topics, tech trends, and capabilities

The “Image”...• Goal of gathering new technologies for

information-structuring methodologies• Lasted five weeks• 54 proposals were submitted

Not again…Technology Mapping Contest

PERSPECTIVE:Who would want to evaluate proposals from outsiders to finish a project they started??

That Became Blurred...★ Lack of evaluators...WHY?...Waste of their time★ The winning idea was an add-on feature to the current

research project★ Employees felt this venture was another venue to

outsource the backend of the project★ Due to this resistance, idea was never implemented

Then Eventually Disappeared!

★ Thought of having idea being developed by external partner

★ Suggestion was deemed too expensive to implement

★ Demand inevitably died off as well...

Clear Road Ahead

Foggy or “Blurred-vision” Conditions

Image courtesy of http://4kwallpapers.site/

Image courtesy of http://arnold200.rssing.com/

Image courtesy of Pinterest website

Light It Up!

OSRAM LED Emotionalize Your Light Contest:• Contest consisted of two phases: generated ideas then improve those

ideas.

• In Phase I: Generate Ideas• Committee experts pre-selected 25 designs• Presented to a jury• Top three designs received prizes of €3,000, €1,500, and

€500• Three most active participants received OSRAM lighting

products worth €500

• Phase II offered prizes of €2,000 for the most improved ideas

Successful Prog II: LED Emotionalize (May 2009)

Image from Siemens website

Image from LEDs Magazine website

Image from OSRAM website

Contest Results★ Total of 952 participants from 86 countries★ More than 1,890 evaluations conducted★ Over 3,300 comments posted★ Logged over 4,300 hours on the platform

★ OSRAM selected two ideas that were prototyped and considered for commercialization.

★ Siemens had its first successful external innovation session due to company buy in and a much needed business use within the OSRAM organization

+ =

When Innovation is the Culture

Israel: The Start-Up Nation

Open innovation is encouraged and being utilized on a wide scale at even the youngest of ages•Innovate to Educate Hackathon at JVP Cyber Labs, Beer-Sheva, Israel-November 26th, 2015

Future Innovation Opportunity

• Culture – not failure averse; important knowledge gained from failures• Geography – historically surrounded by hostile neighbors; necessitates superior military skill and

security intelligence for protection• Climate & Landscape – requires innovative solutions for sustainable agriculture practices and water

conservation to support population • Mandatory military service – results in a young population with sense of community, accountability

and leadership experience; skills continue to be used to make a difference after leaving the military• Innovation – home to many innovation centers and accelerators; the government, academia and

industry and the financial sector all promote innovation and collaborate on various projectsImage courtesy of OurCrowd website

Images courtesy of the Temple 2015 Israel & Jordan Immersion students

• A hackathon is an event where individuals involved in software and hardware development get together and collaborate intensively on software projects.• High school and undergraduate students formed teams to develop technologies

that will change the face of learning and education in the future.• Temple graduate students and alumni were able to witness this collaboration in person, meet participants and discuss their

projects with them. We were surrounded by intelligence and creativity; it was an awe-inspiring event!!!• Siemens can consider using the hackathon model to modify and refine the failed “Innovation Jams” to be a

success.

The thoughts of Ramesh Viswanathan, head of Technology & Innovation Management at Corporate Technology (CT) in India, hit the nail on the head when it comes to change management within in an organization.

He expressed this ONE key point:

• Internal projects were “like changing the culture of an organization, you cannot simply change it overnight. . . . You need to keep doing it, and when you keep doing it on a sustained basis, you will start seeing results!”

Here are the “Keys” that Siemens Needs to Commit

• Needs a permanent leader on projects

• Needs leaders to manage new initiatives

• Needs to establish specific goals

• Needs a robust metrics program for tracking and sustainability such as return on investment metrics with strategic and operational impacts

Change ManagementThe Keys to Continued OI Success

FINAL THOUGHTS:

• CT teams conducted many open innovation contests with successes and failures.

• Reasons for failures was due to the lack of a solid framework in order to sustain each event.

• Siemens need to develop an Innovation branch/division to effectively deal with the plethora of ideas coming from internal and external stakeholders.

Image courtesy of http://www.bcodn.org/

METRICS do what?Drives investment behavior

&Evaluates the results of specific initiatives

Metrics…Why are they important?Why so difficult then?

★ Traditional innovation metrics only provide a limited view on the effectiveness in today’s environment of “open innovation”

○ Most prevalent metrics used include■ Annual R&D budget as % of

annual sales■ # of patents filed, active proj■ # of ideas submitted by

employees■ % of sales from products

introduced in the past year(s)★ Challenge of “metrics overload”

○ Remember, what gets measured drives behavior

BOTTOM LINE: Lots of metrics → Excessive activities =

Little value and conflicting behaviors

The “Simple” ANSWER:

Establish new “breed or family” of metrics to include Return on Investment (ROI), Organizational Capability, Leadership categories.

It’s not just simply numbers, innovation metrics requires a disciplined and strategic approach that begins with the company’s growth strategy down to the lowest unit structure.

How do you measure innovation?○ Simple question but no simple answer

○ Only 33% of all Fortune 1000 companies have formal innovation metrics

• Lakhani, K., Hutter, K., Pokrywa, S. & Füller, J. (2015). Open Innovation at Siemens. HBS No. 9-613-100. Boston, MA: Harvard Business School Publishing.

• http://www.ninesigma.com/open-innovation-resources/what-is-oi• http://www.innovation-point.com/• https://en.wikipedia.org/wiki/Hackathon• http://www.investmentu.com/article/detail/29694/siemens-social-network#.VxjOe_brumQ• https://www.siemens.com/history/en/innovations/• https://www.siemens.com/history/en/history/1989_2015_deregulation_and_globalization.htm• http://www.siemens.com/innovation/en/home/pictures-of-the-future/research-and-management/innovation-ma

nagement-knowledge-sharing-culture.html• http://blog.ourcrowd.com/tag/invest-in-israeli-startups/• http://www.ledsmagazine.com/articles/2009/05/competition-invites-designers-to-emotionalize-your-light.html

References