Synergies for an Integrated Technology Company
In order to remain a trendsetter, Siemens is working to strengthen the innovative power it possesses as an integrated technology company. Such a strategy requires that innovations be pursued in an open network where cooperation with partners both inside and outside the company is a given. At the heart of this innovation network is the Chief Technology Officer (CTO), who is supported by the Chief Technology Office in his mission to bring together the strongest forces within the company, and ensure that innovations drive the creation of value for Siemens.
Synergies for an Integrated Technology Company
Practically no other company in the world possesses as much technological expertise in so many different fields as Siemens. As if that weren’t enough, the company’s three Sectors of Industry, Energy, and Healthcare give it a presence that covers virtually the entire planet. A global presence is only one of many advantages enjoyed by integrated technology companies, however.
Other factors that have led to Siemens’ success include its excellent financial position, its definition of clear performance goals, and its active portfolio management strategy, which concentrates on those business areas in which Siemens occupies a leading position in the market. Also important is the great attention the company pays to management skills that promote an entrepreneurial spirit and strong customer focus.
Nevertheless, one of the crucial elements of Siemens’ success is its ability to effectively manage innovations and push ahead with the development of new products and solutions. It is therefore very important for Siemens as an integrated technology company to develop methods that strengthen its innovative power in order to ensure that innovations increase its value. This can be achieved only if innovation strategy is part of the company’s overall business strategy — and if both are targeted toward attractive markets that are themselves undergoing sustained growth.
Siemens views itself as a trendsetter that combines strong market performance with technological strength. Its innovation strategy incorporates elements such as technology strategy, resource optimization for research and development, shaping the innovation process, and patent and standardization strategy, whereby consistent and rigorous application holds the key to success.
Siemens’ Chief Technology Officer (CTO), Prof. Hermann Requardt, who also serves as the Head of Corporate Technology, is essentially the heart of Siemens’ innovation network. Requardt’s job is to safeguard the company’s innovative power as a competitive advantage. His responsibilities therefore focus on:
- promoting the development of innovations and new business activities that impact all Sectors,
- improving the efficiency of research and development,
- assessing the company’s innovative power in a clear and transparent manner,
- creating open global innovation networks both internally and with universities, research institutes, and other companies, and
- improving both internal and external communication on innovations.
In this capacity, the CTO can act as an entrepreneur and take action to open up new business opportunities that have yet to be addressed by the individual Sectors (see “eCar” article on p. 65). Here, the crucial requirement is to be able to recognize current and future trends, identify new technologies, and make these technologies available in an efficient and effective manner by utilizing the innovation network.
The Chief Technology Officer is supported by a number of corporate bodies, organizations and processes. These include:
- the Siemens Managing Board — for example, when dealing with corporate strategy issues or during presentations on the company’s innovative power (so-called Innovation Reviews) — in addition to detailed innovation strategy discussions at the divisional level;
- the Steering Committee Innovation — a CTO body whose members mainly include the divisional CEOs — and the Innovation Working Group, which consists of the divisional CTOs;
- Corporate Technology, which contributes its technology, application, and innovation-process expertise, as well as its knowledge of patent, standardization, and regulation issues.
Requardt has also been receiving support since mid-2008 from the Chief Technology Office (CT O), which is part of the Corporate Technology organization. The CT O has approximately 25 employees who evaluate innovation strategies at the company, initiate innovation projects, promote open innovation networks, effectively utilize contacts with universities and research and scientific institutes through joint projects, and further improve project management processes and expertise under the motto “PM@Siemens.”
The overriding goal here is to bring together the company’s strongest forces in order to transform technologies and innovations into value drivers for Siemens in conjunction with the operating units, the regions, and Corporate Technology itself
Open Innovation throughout the Company
One important way to enhance Siemens’ innovative ability is to strategically open up the company across all units and departments, as well as to the outside. The Open Innovation program develops and makes available methods that accelerate innovation processes and increase the effectiveness of R&D investment. This approach is leading to the establishment of a company-wide IT-based network of experts that enables the company to more efficiently link together its existing knowledge of various technologies and markets. Plans also call for the structured consolidation of the innovative ability of numerous Siemens employees from diverse disciplines and regions to be achieved through so-called Innovation Jams. Also in the works is a project involving the use of specialized Internet marketplaces to attract thousands of experts worldwide simultaneously to make external knowledge and technologies available to Siemens in a targeted manner.
Establishing a Uniform Project Culture
Siemens generates more than 50 percent of its sales through projects. “PM@Siemens” is a company program administered by the CT Office that helps to continually improve project processes. The program supports all Siemens units worldwide that have a large share of project business. The aim is to help them with the further development of their project management processes and expertise. The requisite knowledge and the experience of the entire company has been brought together in PM@Siemens. For example, the program sets company-wide project management standards and promotes a systematic exchange of best-practice examples. The result is a uniform project culture designed to ensure sustained profitability. Success is measured by regularly collecting and analyzing the most important reporting data from units involved in project business. PM@Siemens therefore provides top management with a valuable instrument for assessing projects — and one that can also be used to improve them.
2009-Jan-22 | Author