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- 1. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 1 Accelerating Innovation Reza Mahdavi Vice President Corporate Affairs and General manager Global Learning Networks Cisco System rmahdavi@cisco.com
- 2. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 2 Dream of Flying……
- 3. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 3 The great Leonardo Davinci
- 4. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 4 Bishop John Wilkins
- 5. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 5 Gliding and not flapping…..
- 6. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 6 The wrights Brothers
- 7. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 7 Innovation Is Occurring Everywhere Connecting for Innovation Global National Regional Customers Partners Suppliers Intra-Organizational Enterprise Innovation Inter-Organizational Open Innovation Extra-Organizational Environmental Innovation
- 8. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 8 CULTURE
- 9. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 9 Innovation Is the Cornerstone of Cisco’s Culture
- 10. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 10 Cisco Innovation Evolution 1984 1986 Started at Stanford Shipped First Router; Developed IGRP Protocol 1988 1990 1992 Shipped Multiport Communications Interface (MCI) IPO; 192 Employees Acquired Crescendo; Released 3000, 4000 and 7000 Series Routers Released Catalyst Switch: Collaboration with IBM 1994 1996 Entered Service Provider Market; Released Gigabit Switch Router (GSR) 1998 2000 2002 2004 2006 Shipped First IP Telephone; Developed Optical Strategy; First GGSN to market with Microsoft (1999) Released Wireless LAN Products Acquired Andiamo; Purchased Linksys to Enter Home Networking Market; EMC, Hitachi, HP, IBM become OSMs for MDS (2003); W/less, security embedded in Intel silicon (2003) Developed CRS-1 Carrier Routing System; Shipped 6-millionth IP Phone (2005) ; Launch SMB Communications with Microsoft Introduced Integrated Services Router; Purchased Scientific Atlanta for Video; Deliver Next-Gen Routers with Fujitsu (2005)
- 11. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 11 Innovation Outputs: Multiple Manifestations New Technology CRS-1/IOX New Product or Service IP Telephony New Customer Experience Network Advanced Services New Process Business Councils New Education Engine Networking Academies New Business Model Linksys New Market Unified Communications New Channel E-Commerce
- 12. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 12 BUILD BUY Cisco’s Innovation Model... Build / Buy / Partner... Collaborate COLLABORATE PARTNER
- 13. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 13 Cisco—The Technology Innovator $4+ Billion R&D Investment Annually More than 17,000 Engineers Working in More than 10 Major Labs Worldwide More than 2000 Patents Have Been Issued to Cisco Inventors 99 issued patents and 386 patents pending from India-based R&D Recent Innovations CRS-1 Carrier Routing System IOS XR Self-Defending, Self-Healing Operating System Software TelePresence High-Definition Network-Based Meeting Solution
- 14. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 14 Innovation Enables New Opportunity Invention Zone Optimization Zone Deployment Zone 1 Invent 2 Scale 3 Optimize 4 Offload Foundation Advanced Emerging
- 15. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 15 Find 2. Deploy 1. Invent New Innovation for New Markets Filter Initiate BU Formed Graduate Eliminate Accelerate $1B, 5-7 yrs? Execute Commit Ideas
- 16. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 16 Source: Cisco, TCG Advisors Invention Zone Optimization Zone Deployment Zone 1 Invent 2 Scale 3 Optimize 4 Offload TDM PBX Unified Comm Case Study Reinventing an Industry
- 17. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 17 Innovation … is built into Cisco’s culture … takes many forms: Technology, products, business processes and models … results from common tools: Build, buy, partner Innovation at Cisco A Continuous Process
- 18. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 18 INTERNAL VENTURING EMERGING MARKETS TECHNOLOGY GROUP
- 19. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 19 Cycle of Innovation Deploy Differentiation at Scale Invent Differentiated Offering Manage Mission-critical Processes at Scale Extract Resources to Reinvest for Core 2. Deploy 1. Invent 3. Manage 4. Offload / Repurpose Advanced Technology Foundation Technology Emerging Technology Reinvent Technology Source: Cisco, TCG Advisors
- 20. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 20 What is “Core” to you? “Any activity that creates sustainable differentiation in the target markets resulting in premium prices or increased volume. Core management seeks to dramatically outperform all competitors within the domain of core. Source: Cisco, TCG Advisors
- 21. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 21 15 Successful ET’s $6.5B 75% 1,000 Prospects 20 ET Investments 2% Internal Venture Math
- 22. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 22 Cisco EMTG New BU Source: “Mapping your Innovation Strategy”, Harvard Business Review, May 2006 Demos Alliance Channels Job RFP Lab Acquisition Nurture & Scale Internal Innovation Protect and Grow
- 23. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 23 Invent Like a Startup Scale Like Cisco New BU Invent Build Sell Support Mfg Marketing Sales Services Integrated Go-To-Market Approach
- 24. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 24 Source: Geoffrey Moore, “Dealing with Darwin” EMTG EMTG and Innovation Types Focus on the Product Leadership Zone
- 25. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 25 OPEN INNOVATION
- 26. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 26 Top Three External R&D Partners 1. Other Companies 2. Academia 3. Commercial labs 4. Possible Partners…. InnoCentives – global 25K problem solvers Yet2be.com – online broker Source: Dr. J. Duga and T. Studt, “ 2006 R&D Funding Improves Amid Increasing Restraints”, R&D Magazine, January 2006
- 27. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 27 Benefits Share risk of costly and disruptive innovation Curb shrinkage of local talent pool Address emerging market needs Reduce new product and services failures Increase responsiveness to unpredictable market shifts Source: Forrester research,” Innovation Networks: Global Process report 2006
- 28. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 28 What to do Find your core – pick the right role Networked Innovation culture Increase Innovation Capabilities (process & Governance, comp) Share IP Involve customers
- 29. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 29 Hire for Adaptability Strategic thinking Team building Customer empathy Ability to make connections Cross cultural communications
- 30. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 30 Innovation Driven By Consumers Source: TrendWatching, 2006 Description Involving consumers as a source of new ideas to create or improve products and services Proof Points Firms like P&G, Nokia, and Nestle are using the Internet to gathering input from customers Impact Products that include consumer input are better and more responsive to consumer needs Thought Starter Launch an “Innovations Hub” and invite customers to design a next new product or service
- 31. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 31 “CONNECTED INNOVATION”
- 32. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 32 It’s All About Connections THINGS Availability PEOPLE Diversity PLACES Accessibility NETWORK Mobility Enterprise Internet
- 33. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 33 Everything Will Be Connected Source: Forrester Research, February 2005 14 billion devices will be connected to the Internet by 2010 14 Billion 300 Million 2001 2006 2008 2009 2010 2007 2002 2003 2004 2005
- 34. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 34 Innovation Is Occurring Everywhere Connecting for Innovation Global National Regional Customers Partners Suppliers Intra-Organizational Enterprise Innovation Inter-Organizational Open Innovation Extra-Organizational Environmental Innovation
- 35. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 35 Network-Accelerated Innovation (NAI) Connects all sources in the innovation process—from idea to execution Diversity of ideas Independent thought Decentralization of power Aggregation of information Benefits Improves quality, desirability, and viability of ideas Increases productivity; reduces costs in the process Delivers faster time to value NAI
- 36. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 36 BARRIERS TO INNOVATIONS
- 37. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 37 The Innovation Process Generate Sense Select Develop Commercialize to bring into being; combine to become aware of; perceive; notice trends to make a choice among several; prioritize to come gradually into existence or activity to put into effect; carry out; make valid
- 38. © 2007 CiscoSystems, Inc. All rights reserved. Cisco Confidential Reza…Innovation… 38