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Open Innovation at Siemens Case Solution

Solution Id Length Case Author Case Publisher
2847 1429 Words (6 Pages) Karim R. Lakhani, Katja Hutter, Stephanie Healy Pokrywa, Johann Fuller Harvard Business School : 613100
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Siemens came into inception in year 1847 in Germany by Werner von Siemens and Johann Georg Halske. Siemens has always been at the forefront of innovation which is why it has been able to establish its name globally in the four main sectors: Energy, Healthcare, Industry and Infrastructure and Cities. By the 20th century, Siemens had incorporated strategies of mergers and acquisitions, first movers’ approach and disruptive innovation techniques to expand and grow globally. The innovations were done in-house with a huge research team looking after it, but with changes in the business environment where systems are globally interconnected, there is a greater need of collaborating with the outside world and creating a pool of innovative ideas and making them a reality. Open innovation was considered a way to go forward for Siemen where external involvement of talented minds is taken into account to solve challenges and build innovation.

Following questions are answered in this case study solution:

  1. Why did Siemens create an open innovation initiative? What perceived problems was the initiative trying to solve? 

  2. Why do employees participate on Technoweb 2.0? What concerns might prevent them from participating?

  3. What metrics should be used at Siemens to assess the effectiveness of open innovation? Should they be different for each type of program? Why?

  4. Should responsibility for open innovation be centralized (i.e. be part of CT) or decentralized (i.e. be part of each business unit)? Explain.

Case Study Questions Answers

1. Why did Siemens create an open innovation initiative? What perceived problems was the initiative trying to solve?

With business units spread across the globe, it was a challenge to collaborate with different units and bring them together for innovation-related work. The CT department head realized that it was essential to find solution to this challenge in order to stay ahead in business. The answer to this lay in the open innovation strategy which was becoming increasingly popular in the business world. Open innovation involves the participation of external sources to drive innovation. This allowed for generation of ideas from a larger pool of minds and it also allowed for the company to reach its implementation phase of innovation process really fast. 

With open innovation and involvement of outside resources such as suppliers, customers and partner companies, management at Siemens feared that competitors might get to know the kind of innovation that the company was up to. Another opposition faced by open innovation was concerns related to intellectual property rights. These were valid concerns so open innovation started off inside the company to bring together Siemens 300,000 employees that work in different business units. 

With Open Innovation initiatives such as Jams and TechnoWeb, the aim was to increase cross culture collaboration and enhance the connection of employees in the company. In the decentralized organizational structure, employees were not aware of innovative projects that were being worked on across the company which could result in replicated projects and energy being wasted of employees. Due to lesser connection between business units, their were pockets of knowledge which were underutilized as employees were unaware of it. The purpose of open innovation initiatives enabled employees to share their ideas on running projects, discuss the problems faced by them and connect with the experts through the technology to find instant solutions to their problems. This collaboration resulted in improved business processes and opened avenue for more technological innovations in the company. 

2. Why do employees participate on Technoweb 2.0? What concerns might prevent them from participating?

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