Monday, August 29, 2005

Siemens: holistic look at innovation?

Claus Weyrich, a member of the managing board of Siemens and head of Siemens Corporate Technology: Today we look at innovation more holistically than we once did. We consider not only technologies but also their associated business processes. And that in turn demands determined orientation toward the desires and needs of our customers.

The most important measure for the success of innovation is without doubt success in the market -- in other words, profitability. [But] there are many indicators and success factors that determine the degree to which a company is innovative.

One indicator is human resources. At Siemens we have some 45,000 employees worldwide who work in research and development. The second indicator is strong technology positioning in comparison to the competition, especially in key technologies and pace-setting technologies that create competitive advantages today and in the future. Take for example our Piezo fuel-injection technology, which Siemens VDO Automotive introduced to the market in 2000, creating a technological trend. Our first patent in this area was in 1980.

Another indicator is the number of patents a company files. We have over 48,000 patents worldwide, and we are among the world leaders in granted patents.
[LBE note: the number of patents is the third indicator, not the first.]

The fourth indicator of innovative strength is the degree to which we use corporate synergies, such as platform strategies and cross-divisional technologies.

The most important success factor is, of course, a highly developed innovation culture with uncompromising customer orientation, a high level of management attention to innovation activities, and a climate that rewards success and risk-taking. Last but not least is the excellence of our employees.

The primary trend is that innovation is increasingly driven by the market demands. With this in mind, our research and development divisions work closely with marketing and sales people from the business groups and regional units.

An example of innovation that originated at the country level is the TD-SCDMA mobile communication standard that was developed jointly by Siemens and researchers at the Datang Telecom Technology & Industry Group, whose parent company is the China Academy of Telecommunication Technology. Other examples are the multi-biometric card from Siemens India and the new postal automation systems for the U.S. Postal Service.

Another trend is that innovation is being created increasingly in multicultural teams. Innovation requires creative inventors as well as people who can translate ideas into marketable products -- and then make them a success in the market. These teams are globally networked, with each other, with customers, with suppliers and with public research centers.

The excellence of employees is an essential pillar of our success. And excellence is not simply a matter of superior qualifications in the subject area, but also strong personal qualities such as motivation and entrepreneurial thinking. But we also need sound experts, "deep drillers" who are able to solve complex technological problems.



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