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Nov 19

Globalizing Innovation Management: Is Cisco a Role Model ?

The global top innovators manage innovations via innovation centres which they increasingly spread out over the globe. Multiple important reasons support this: the innovation centres of individual divisions can be placed in countries in which the local business of the company possesses a particular strength or in which it has to deal with a particularly strong competition; more interesting career opportunities can be offered to the employees of the region; locations can be placed where there is a particularly big talent pool which in many cases is also much less costly.
The health division of GE e.g., which is one of the top 10 innovators according to the Innovation Survey by Boston Consulting, has its magnetic resonance tomographs, which normally cost several million dollars, developed by its innovation centre in Shanghai at a target price of half a million US $ with the option to later export these machines into other countries. And even Google, the No.2 of the BCG Innovation Survey, is decentralising its innovation activities away from one single innovation centre in Mountain View. In the meantime Google already runs 25 R&D centres worldwide.
One of the big challenges of the globalization of companies and by this of the globalization of innovation management is the co-ordination, collaboration and communication of the different parts of the company. In the future Cisco could potentially serve as a role model for this.
Cisco has grown up as a US company and as the market leader in networking equipment which enables the internet. Cisco has always been using its own equipment in order to become more productive, quicker and more innovative, and in order to then sell the equipment to its customers based on its own usage experience.
Now Cisco is taking the next step. Cisco is establishing itself as a truly global company with headquarters in multiple locations around the globe, and it is decentralising its innovation management. In order to get there Cisco wants to strengthen the collaborative business processes linking the different parts of the company, above all through the use of Web 2.0 technologies. Cisco is convinced that this phase II of the internet will enable dramatic innovations and productivity improvements. As far as using its own Web 2.0 technologies is concerned, Cisco intends to once more be the pioneer in order to be more persuasive selling them to its customers.
On October 31 Cisco inaugurated its Globalization Centre East in Bangalore, India. Wim Elfrink, Cisco´s Chief Globalization Officer, will move to Bangalore together with initially 20 top managers. Altogether 1200 employees are expected to work at the Globalization Centre in its first phase. The Globalization Centre encompasses, amongst others, an innovation centre. It is expected to create prototype services such as connected real estate, mobile services or services for illiterates for the complete “East”, i.e. Asia Pacific, Middle East and Africa. Mid-term one or the other of these innovations may be exported from here into the developed world.
One of its own Web 2.0 technologies which form the backbone of Cisco´s globalization is Cisco´s innovative TelePresence teleconferencing technology on the basis of the internet protocol, which was launched at the end of last year. TelePresence is designed to enable tele-conferences via the network for the first time in such a quality as if the other conference participants were personally sitting on the other side of the conference table. Cisco itself has already installed 110 TelePresence systems worldwide. In the first half of this calendar year Cisco employees held 17000 virtual meetings with the help of TelePresence.
.In the meantime Cisco has won over the first 50 customers for its TelePresence system. John Chambers, Cisco´s CEO, reports back a previously unseen excitement of his customers. The CEOs of his customers not only very quickly grasp the potential from time and travel cost savings, but they understand the value of the business transformation to their organizations. Their key purchase drivers are the creation of new products and services, the ability to collect and leverage experience more broadly, and the acceleration of decisions, implementation and speed-to-market.
It will therefore probably be a good idea observing Cisco as it globalizes and applies Web 2.0 technologies to its innovation management. Up to now incremental innovations could already be managed to some extent via so-called virtual teams which, however, had to meet “face-to-face” at certain intervals, whilst radical innovations have always required the permanent co-location of the team members. Most probably in the future several of the global “face-to-face” meetings which in the past were indispensable may be replaced by TelePresence meetings.

(c) Rolf-Christian Wentz

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