1. ESC Rennes School of Business
Siemens' Strategy for Implementing Open
Innovation
Dr. Dirk Schneckenberg
Cantine Numerique - Champs Libres
5 October 2011 in Rennes, France

2. ESC Rennes School of Business
PROFILE OF SIEMENS
Age
Founded in 1847
Size
405.000 employees, 1640 locations in 190 regions
Markets
Industry, Energy & Health
Scope
Global enterprise
Performance in 2009:
Turnover 76.6 billion EUR, earnings 2.45 billion EUR

3. ESC Rennes School of Business
RESEARCH PROBLEM
OI Model Chesbrough
Open up firm boundaries to let distributed
knowledge flow from industry environments
into corporate innovation
Principles vs Implementation
Principle of OI well accepted in theoretical discourse of management research
We know less about the complex organisational processes during the corporate-
wide adoption of OI strategies

4. ESC Rennes School of Business
RESEARCH DESIGN
Question
How to bring open innovation in a large international firm from strategic
vision at top management level to organisation-wide reality?
Method
In-depth case study and action research that combines primary and
secondary data analysis to analyse the OI implementation at Siemens
- Interviews of key open innovation evangelists in the organisation
- Ongoing observation of the workforce & corporate culture
- Content analysis of strategic documentation on open innovation and
knowledge networking

5. ESC Rennes School of Business
FINDINGS: THE OPEN INNOVATION DIAMOND
Four key dimensions for implementing an open innovation strategy
FIGURE: THE O PEN IN NO VATIO N DIAM O ND
PRIN CIPLES
CAPABILITIES CON TEXT
TECHNO LO GIES

6. ESC Rennes School of Business
OPEN INNOVATION DIAMOND: PRINCIPLES
PRINCIPLES
OI Strategy Foundation
CA PABI LITIES CON TEX T
Strong belief of leadership that future success of
TECHN O LOG IES
Siemens relies on capability to combine best ideas and
industry players for every component of value chain
External Environment
Many project components are no longer produced by internal workforce. Siemens
shifts both its development and production towards external industry players
Aim of OI Strategy
Leverage participation of employees and external stakeholders for the creation of
new business ideas in the various industries in which Siemens operates
-> New production realities lead to redesign of work organisation and allocation

7. ESC Rennes School of Business
OPEN INNOVATION DIAMOND: CAPABILITIES
PRINCIPLES
Knowledge Networking CA PABI LITIES CON TEX T
Knowledge Networking capability as core competence for
TECHN O LOG IES
Siemens to cope with volatile environments
From centralised, monolithic to modular, networked work organisation
Modules as core teams that take responsibility for specific project components
Mindset of openness and capability to act flexible in uncertain contexts
Intense networking to develop this cognitive and behavioural ability
Switching Capability
To balance opposing tensions in innovation
freedom and reflection <-> operational pressure and time-scarcity
bottom up creativity <-> top-down decision-making
creative part <-> rigorous part of innovation
Dynamical switching between hierarchy and network modes of work organisation
Stepping back as managers to allow creative innovation <-> Rigorous decisions to
transform inventions into corporate innovation

8. ESC Rennes School of Business
OPEN INNOVATION DIAMOND: CONTEXT
PRINCIPLES
Innovation Niches CA PABI LITIES CON TEX T
Corporate age and size
TECHN O LOG IES
Large firms vs agile start ups/ Old and big = less flexible and changeable
Large size allows to create experimentation niches
Innovation niche is a playground to apply OI principles for work organisation to
limited group. If experiences are positive, principles can be scaled up
Mental Models
Conceptual and mental barriers: reasons to resist cultural change
Traditional hierarchies and silo mentalities: hoarding of knowledge is power
OI contexts: value of knowledge in sharing in open networks -> leads to
increased visibility of expertise and reputation
OI requires change of mental models so that workforce can develop openness of
minds and managerial practices

9. ESC Rennes School of Business
OPEN INNOVATION DIAMOND: CONTEXT
PRINCIPLES
Network Behaviour CA PABI LITIES CON TEX T
people respond to two key drivers for platform adoption
TECHN O LOG IES
link between reputationin networks and opportunities to advance careers
Reputation as modern currency for moving up ladder in organisations
humaninstinct to help other people in critical situations
Subcultures
technologies only extend corporate culture and practice
knowledge sharing behaviour of employees depends on predominant culture in
specific groups
corporate culture is breaking down in array of subcultures in different units
development unit of Siemens has knowledge-sharing culture, unit members are
not incentive driven
consulting unit is knowledge-hoarding culture, incentives of unit members
depend on total requests for service units

10. ESC Rennes School of Business
OPEN INNOVATION DIAMOND: TECHNOLOGIES
PRINCIPLES
TechnoWeb 2.0 Ratio CA PABI LITIES CON TEX T
To exchange knowledge and to bridge silo boundaries
TECHN O LOG IES
Helps people to identify cross-sector competences and to leverage synergies
TechnoWeb 2.0 Features
Combines a set of web 2.0 technologies - like wikis, blogs, microblogging, RSS
feeds, tags, expert profiles and instant messaging
Example 'urgent request': microblogging to reach to get rapid help from experts on a burning issue
TechnoWeb 2.0 Adoption Process
Pilot approach for incremental use of collaborative platform
1. Identify project group with open-minded middle manager
2. Develop pilot that combines cultural (OI workshops) and technological (collaborative tools) features
3. Facilitate platform adoption for work processes
4. Scale up pilot to wider population

11. ESC Rennes School of Business
OPEN INNOVATION DIAMOND: TECHNOLOGIES
PRINCIPLES
Information Architecture
information overflow as challenge for information architecture
CA PABI LITIES CON TEX T
knowledge workers follow variety of emerging trends TECHN O LOG IES
options to focus, filter and canalise information
move away from eMail as main communication tool
Filter for Efficiency
Technoweb design includes filter mechanisms to give different kinds of
information different importance
Represents business and knowledge communication streams in different ways
Underlying Logic
project-related business communication is obligatory for employees to follow
community-related knowledge communication is voluntary, employees can dive
into this stream when they find time

12. ESC Rennes School of Business
CONTRIBUTIONS
PRINCIPLES
Holistic OI Implementation Model CA PABI LITIES CON TEX T
OI Diamond as holistic view to conceptualise key
TECHN O LOG IES
dimensions for implementing OI strategy in large
organisation
Balance Four Dimensions
Key managerial challenge is to balance complex interplay between the four
dimensions of the OI diamond
Develop Measures for All Dimensions
Need to design and realise adequate measures in all four dimensions to move OI
from strategic objective to corporate reality

13. ESC Rennes School of Business
PRACTICAL IMPLICATIONS
PRINCIPLES
Principles CA PABI LITIES CON TEX T
Define coherent OI strategy for your organisation
TECHN O LOG IES
Capabilities
Focus on change of workforce mindsets and managerial practices
Context
Take one step after another, concentrate on your own culture first: internal
openness precedes external openness of organisations
Technologies
Use platform of collaborative tools to design information architecture that
enhances knowledge networking and open innovation behaviour

14. ESC Rennes School of Business
Open Innovation and Knowledge Networking @ Siemens
Contact
Dirk Schneckenberg, Associate Professor for Strategy & KM
ESC Rennes School of Business, 2 rue Robert d'Arbrissel,
35065 Rennes, France.
E-mail: dirk.schneckenberg@gmail.com
Thank you very much for your attention :-)