PRESENTER
Alex Goryachev
Senior Director, Corporate Strategy and Innovation Group
Cisco Systems
SESSION ABSTRACT
No company – no matter how big or established — can dominate innovation by itself anymore because of the hyper-accelerated pace and complexity of change. Mass disruption of industries and business models are the new and chaotic normal in this era of mass digitization. Today, it’s imperative that companies co-innovate customer solutions to keep up and succeed at a time when unforeseen competition can come from anywhere, any time. At Cisco, the most valuable co-innovation comes from synergies realized by two vital and interdependent sources: external startups, partners or even customers, and the entrepreneurial talent already inside the organization.
KEY TAKE-AWAYS
- Success factors in developing a dynamic external ecosystem of innovation partners, including accelerators, incubators, startups, entrepreneurs, and application developers
- Insight on igniting a startup culture within by unleashing the full potential and passion of employee talent
- Proven ways to synergize both external and internal co-innovation experiences to become more competitive, retain and attract top talent, and to shape the workforce of the future
Alex Goryachev: Our company was founded 30 years ago. It was two cables and a desire to connect. Large companies are made for scale. Some companies missed out—the companies that died. Listening to employees, customer and market trends is best.
In 2020, most of the Fortune 500 companies will be gone. What’s driving that is a shift in consumer behavior. We’re seeing new business models everywhere. The pace of change in increasing, and there are new business models, like UBER, LYFT, AirBnb, Amazon, Prosper, and LiquidSpace. Amazon transformed the book market, then electronics, and how we buy things, now they have retail pop-ups. It doesn’t cost a lot of money to start a business. There are way more businesses starting up than 10 years ago.
Disrupt or be disrupted:
- The speed of innovation is accelerating
- Ideas can come from anywhere
- If we don’t act, our employees will leave and act on their own
- If we don’t act, our employees will leave and act on their own
- Competitive landscape shifts constantly
- Leaders are confused
- It’s a challenging environment
- Talent is essential
- Focus on the innovators not the innovation
TAKE-AWAY
Lending has changed. People are no longer buying storage or infrastructure. Now, with technology, you can start a business anywhere. It’s a low entry point. Or you can crowdsource a business. Every day we wake up in a different world. We don’t know who our competitors are. There are more consumers because of globalization. We’re noticing everything is super-fast. Our employees leave and start their own businesses. Our competitors go in and out of business every day. In the past we had dominant players we would compete with. Now there are small companies are chipping away at our wallet. We are now competing with hundreds of companies. This causes so much confusion. Everything is changing. This is the new normal.
What is the solution? Think like a startup! We establish pockets of startups within the company so we can move faster. Everyone has a common purpose. When people are highly engaged and focused they can sometimes change the world.
Cisco Innovation Strategy
Traditionally we were building stuff. We were selling to customers. Now, we buy companies for three reasons:
- We like the team
- Intellectual property
- Route to market/relationships
When we buy a company, we hope that we acquire all three of the above. We move into partner mode. Today we think of partnership as a model. We are investing in our partner companies. Right now we are accelerating. You get to work with startups. As we discover startups, we don’t want to acquire them. We want them to develop on top of Cisco. It can be a university too. We have shifted from building to a solutions world where we partner with many people.
Cisco Innovation Centers
Our goal is to get an idea, customer, or startup and see if we can partner with them. We’ll make money, we are quick to monetize. We have 9 of these centers. They are all over the world. The goal is to create a strategic presence. There are 5 – 10 people in these centers.
Innovating with Employees
In the past, there was no way to innovate outside the box, which led to many silos. We put together a program that’s structured. We work with our employees. We give them themes to innovate. We give them resources and tools. Time off to implement their ideas. The goal is to give everyone a role in innovation. How do you get everyone aligned to innovation? Angel personas are important. We’re building a role for coaches, mentors, judges etc.
We want them to focus on the business outcome. If we think about drones, focus their ideas on this area. We encourage people to form teams. The goal is to get people thinking about their daily jobs. We follow a structured process and it has been successful: 52 percent participated—in a company of 30,000 people. We gave them $1,000 for innovative projects. At first, there was a lot of resistance from managers. It’s going in the right direction. There are opportunities to work with like-minded people.
One catch: you cannot innovate within your day job. Not a rewards and recognition program. We have spent $1 million dollars so far.
TAKE-AWAY
- Listen to employees, customer and market trends
- Create an entrepreneurial environment within your organization
- You are now competing with hundreds of companies
IMPLEMENTATION GUIDELINES
- Diversify the silos (engineers with engineers, marketing with marketing)
- Listen to employees as much as you do customers
- Be aware that consumers are way more savvy than in the past
BEST PRACTICE
- Innovate with your employees
- Give all employees a role in innovation
- Offer a cash reward
ACTION ITEM
- Be thoughtful with your employees, they have good ideas
- Understand that the price of entry to the marketplace is inexpensive, so your competitors can come from anywhere
- Listen to your employees
FINAL THOUGHT
Every day we wake up in a different world. We don’t know who our competitors are. To stay ahead of the curve, Cisco has implemented an internal entrepreneurship program for their employees. Their participation rate of 52 percent of 30,000 employees was a huge surprise to this 30-year old.
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