“If Open Innovation is not seen as a long term capability building exercise then it will fail”. In this interview Thomas Lackner, Head of Open Innovation and Scouting at Siemens Corporate Technology, shares some of his experiences and how Siemens has evolved on the open innovation front. Thomas, who has been personally involved in many of Siemen’s innovation programs, also elaborates on some critical success factors that strongly influenced the outcome and quality of their programs.
Campbell Lockhart: Thomas Lackner, today you are Head of Open Innovation and the scouting initiative within Corporate Technology Unit at Siemens, but you have had a long and varied career before that. Can you outline the how you arrived at this post?
Tomas Lackner: You’re right, it has been varied and I think that is my strength. All my jobs at Siemens have had to do with research and innovation. During my career at Siemens I had the opportunity that you can find in a big corporation, I was able to change my job within the company almost every 3-5 years. This allowed me to learn how to influence the innovation power of Siemens, even within small and very different organizations. But I would like to highlight some of the jobs I have done.
I sincerely believe that the implementation of an Open Innovation program is part of a culture change.
I started at Siemens more than 25 years ago in a typical R&D Lab, within Corporate Technology or CT. In this post I started by doing real hands-on research on power semiconductor devices. After some junior management positions at Corporate Technology, I was given the chance to run a new business unit “Transport Telematics”; you could say it was like running a kind of start-up within the much bigger business unit “Road Traffic Control”.
There we developed innovative concepts for route guidance, parking, and tolling-systems, based on advanced technologies and this was by collaborating directly with our customers. Looking through the eyes of a customer and getting early and honest feedback on the value proposition and benefit of a technology was one of my key learning from those days and I applied this approach from then on.
One of my next jobs was CEO of Siemens Technology Accelerator (STA). Not every technology developed in corporate labs will get into a business and this can be for numerous reasons. Sometimes innovators at CT were ahead of time with their innovations, sometimes the strategy of Siemens changed and we lost our Siemens internal customers due to divestments (e.g. Infineon, Nokia Siemens Networks, Continental AG). Back in 2001 Siemens CT had the idea to set-up a unit for commercialization these “left-over” technologies.
This unit is now in its 4th generation and has become a big success with the commercialization almost 20 technologies. My last job as head of Open Innovation was created, one could say, by my own initiative. I was convinced, that getting access to leading edge technologies worldwide by using the wisdom and power of crowdsourcing was destined to play a decisive role in future innovation management. In 2008 I approached Prof. Requardt, our former CTO, with a proposal which he approved and asked me to implement and that is how I ended up as Head of Open Innovation and scouting today.
Open Innovation at Siemens is more about going beyond the trusted network and identifying unobvious connections and increasing our options, as a compliment to internal innovation.
CL: Thomas, you had a vision that Open Innovation would be able to play an important role at CT in Siemens, Open Innovation is a term that always provokes debate, how would you define as it is applied in Siemens?
TL: When we started our Open Innovation program many people were confused and asked us to explain what is new in this program. They saw Siemens as a company with already a lot of connections to the external world. Siemens employs almost 30,000 researchers and developers in more than 180 locations worldwide who have more than 2,000 co-operations with roughly 1,000 universities! Obviously, the number of co-operations was not the point we wanted to address.
Rather we wanted to connect experts, both inside and outside of Siemens, and who didn’t know of each other before and who perhaps had already developed ideas and technologies that matched with our needs. This approach would save time, reduce development costs and speed up the innovation processes. Open Innovation at Siemens is more about going beyond the trusted network and identifying unobvious connections and increasing our options, as a compliment to internal innovation.
This was very difficult 10 years ago, but today this has been made easier with the advance ofthe internet technologies such as Facebook and market places like NineSigma. Today with careful planning, it has become much easier to address the crowd and invite them to participate in a bigger challenge, a request for proposal or an idea contest. Open Innovation is a natural continuity to our internal innovation platform.
This was very difficult 10 years ago, but today this has been made easier with the advance of the internet technologies such as Facebook and market places like NineSigma.
CL: In a recent Harvard Business case report you made a very strong statement, and I quote “If [open innovation] it is not seen as a long term capability building exercise then it will fail”, can you enlarge on what this means and how you reached this conclusion?
TL: Yes, I really believe this. In the early days of our Open Innovation program we encountered a lot of internal challenges and resistance. In 2008 our employees were not used to social media and this way of connecting the dots. We did have Blogs and a Wikisphere, but an open idea contest for example was an unknown quantity. It takes time to set-up such a contest where every comment and exchange is transparent to the entire company, to convince management up-front of the value of such an approach, to show real business impact and harmonize this innovative web based tool with the already existing approaches.
We also approached our R&D colleagues to figure out the challenges they were working on and which were most suited as a Request for Proposal on the NineSigma website. At the very beginning we often got problems with no real business value behind but “unsolvable problems”, where the experts just wanted to prove their own expertise and show that no other solution exists! Typically researchers are educated to solve a given problem and not to organize a solution and often they don’t see the difference. The NIH (Not Invented Here) syndrome is a big barrier and should never be underestimated.
I sincerely believe that the implementation of an Open Innovation program is part of a culture change.
I sincerely believe that the implementation of an Open Innovation program is part of a culture change. It requires time, perseverance, top management support and communication of success stories. If a company doesn’t have these commitments for a long term capability-building exercise it will not succeed.
CL: So, would you agree with Alan Taub, former head of R&D at General Motors, where he commented that there is no spontaneous combustion when it comes to open innovation….for it to work it needs a behavioural change?
TL: I fully agree. It takes time and hard work to change the culture of big corporations. It requires a very deliberate and planned approach coming from the top down but with also needs adherence from all innovation players, this requires communication and training.
CL: Siemens has been active with different tools from the open innovation toolbox, innovation jams, idea contests, knowledge brokering and within these innovation initiatives you were behind TechnoWeb 2.0, how did this innovation platform work and what were the objectives of this program and do you think it was successful?
TL: We have created our Open Innovation toolbox with the aim of supporting our employees in finding ideas and technologies, no matter from where and encouraging them to evaluate these in an unbiased way. We want to leverage the usage of existing knowledge and assets, whether these are internal or outside of Siemens. If there is a company or a university that has already developed a technology, which is of value for us, why reinvent the wheel and develop it from scratch? The only issue is how to find this “needle in the haystack of technologies”? And if you look within Siemens it is very likely that someone has an expertise, technology or even a hint of an idea to solve a given problem, and that will save you a lot of time and effort. At Siemens we have the saying “Wenn Siemens wüßte was Siemens weiß (If Siemens knew what Siemens knows)”. This is what was behind TechnoWeb.
The only issue is how to find this “needle in the haystack of technologies”?
With TechnoWeb, our internal social media tool, we have been able to network more than 35,000 experts within approximately 1,200 technology-oriented communities. It is an open platform with no access restrictions where every Siemens employee can open a new network or join existing ones; he or she can post questions or provide and exchange information to his or her colleagues. One very successful feature is the Urgent Request where you can get help within a few minutes from Siemens colleagues you never have met before. We see that 1 to 5 Urgent Request are posted a day and the business impact of these can be in the range of 1,000€ up to 1 Mio. Euros! It has taken time, but I am proud to say that we now have a unanimous acceptance for TechnoWebat all management levels. This success was not so obvious when we started the project 4 years ago. Open Innovation is a natural follow up to this when the challenges cannot be solved internally and we need to reach out beyond the internal and known network. This is where companies like NineSigma can add value.
CL: You have been personally involved in many of Siemens innovation programs; can you share some critical success factors that strongly influenced the outcome and quality of these programs?
TL: By far the most important is to have serious and visible support from top management. Without this nothing can or will happen, as you mentioned above there can be no “spontaneous combustion”. But this is not enough; you need to get all players on board, for them to understand the benefits that they can reap through these practices. This requires orchestration and a strong leader or champion is critical. To be successful in this role you have to have both technical and business acumen, broad knowledge of the company you work is also important to allow you to detect opportunities and work within the company to benefit from these. But on top of that you have to be determined, an experienced communicator and be continually seeking to draw people into the circuit. The word is perhaps, relentless.
By far the most important is to have serious and visible support from top management.
CL: With this wealth of experience, what is your final take home message on Open Innovation?
TL: If companies want to be successful in Open Innovation then they have to learn how to benefit from an eco-system and how to build trustful partnerships within this eco-system. The Open Innovation strategy involves accessing the best potential partners and managing partnerships with e.g. universities, start-ups, customers or even competitors. This involves a careful plan in disseminating Open Innovation practices, through training and communication, and organising the absorption of information to create value. Just how effectively a company is in adapting new ideas and technologies will ultimately weigh on the sustainable competitive edge of that company. I believe that Siemens has successfully done a large part of this journey.
CL: Thomas thank you for sharing these important insights into how you have successfully implemented many innovative tools at Siemens.
About the Author
Dr. Campbell Lockhart, is Senior Delivery Director at NineSigma Europe. He has over 20 years medical device industry experience and 10 years in the investment industry as a venture investor.