The document discusses Cisco's approach to innovation, which includes building innovation into its culture. Cisco innovates through building, buying, and partnering. It invests heavily in R&D and has a continuous innovation process of inventing new technologies and products, scaling them, and optimizing or offloading older technologies. Cisco also promotes open innovation through partnerships with other companies and academia.

1. Accelerating Innovation Reza Mahdavi Vice President Corporate Affairs and General manager Global Learning Networks Cisco System [email_address]

2. Dream of Flying……

3. The great Leonardo Davinci

4. Bishop John Wilkins

5. Gliding and not flapping…..

6. The wrights Brothers

7. Innovation Is Occurring Everywhere Connecting for Innovation Global National Regional Customers Partners Suppliers Intra-Organizational Enterprise Innovation Inter-Organizationa l Open Innovation Extra-Organizational Environmental Innovation

8. CULTURE

9. Innovation Is the Cornerstone of Cisco’s Culture

10. Cisco Innovation Evolution Started at Stanford Shipped First Router; Developed IGRP Protocol Shipped Multiport Communications Interface (MCI) IPO; 192 Employees Acquired Crescendo; Released 3000, 4000 and 7000 Series Routers Released Catalyst Switch: Collaboration with IBM Entered Service Provider Market; Released Gigabit Switch Router (GSR) 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) 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

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. Cisco’s Innovation Model... Build / Buy / Partner... Collaborate COLLABORATE BUILD BUY PARTNER

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. Innovation Enables New Opportunity Invention Zone Optimization Zone Deployment Zone Foundation Advanced Emerging 1 Invent 2 Scale 3 Optimize 4 Offload

15. New Innovation for New Markets Ideas Find 2. Deploy 1. Invent Filter Initiate BU Formed Graduate Eliminate Accelerate $1B, 5-7 yrs? Execute Commit

16. Case Study Reinventing an Industry Source: Cisco, TCG Advisors Invention Zone Optimization Zone Deployment Zone TDM PBX Unified Comm 1 Invent 2 Scale 3 Optimize 4 Offload

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. INTERNAL VENTURING EMERGING MARKETS TECHNOLOGY GROUP

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. 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. Internal Venture Math 15 Successful ET’s $6.5B 75% 1,000 Prospects 20 ET Investments 2%

22. Nurture & Scale Internal Innovation Protect and Grow Source: “Mapping your Innovation Strategy”, Harvard Business Review, May 2006 Cisco EMTG New BU Demos Alliance Channels Job RFP Lab Acquisition

23. Invent Like a Startup Scale Like Cisco New BU Mfg Marketing Sales Services Integrated Go-To-Market Approach Invent Build Sell Support

24. EMTG and Innovation Types Focus on the Product Leadership Zone Source: Geoffrey Moore, “Dealing with Darwin” EMTG

25. OPEN INNOVATION

26. Top Three External R&D Partners Other Companies Academia Commercial labs 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. 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. What to do Find your core – pick the right role Networked Innovation culture Increase Innovation Capabilities (process & Governance, comp) Share IP Involve customers

29. Hire for Adaptability Strategic thinking Team building Customer empathy Ability to make connections Cross cultural communications

30. Innovation Driven By Consumers 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 Source: TrendWatching , 2006

31. “ CONNECTED INNOVATION”

32. It’s All About Connections THINGS Availability PEOPLE Diversity PLACES Accessibility NETWORK Mobility Enterprise Internet

33. Everything Will Be Connected 14 billion devices will be connected to the Internet by 2010 Source: Forrester Research, February 2005 14 Billion 300 Million 2001 2006 2008 2009 2010 2007 2002 2003 2004 2005

34. Innovation Is Occurring Everywhere Connecting for Innovation Global National Regional Customers Partners Suppliers Intra-Organizational Enterprise Innovation Inter-Organizationa l Open Innovation Extra-Organizational Environmental 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. BARRIERS TO INNOVATIONS

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