The APQC Blog

Why Cisco Builds, Buys, and Partners its Way to Innovation

According to the The New Reality of R&D  article in the May 2014 issue of Fast Company magazine, organizations are no longer investing large amounts of money into long-term research that only offers a return on investment way down the road. Instead, they are teaming up with other organizations that have the necessary resources to improve the amount of time it takes to see a return on R&D investment. 

Cisco Systems Inc., a best-practice organization in APQC’s 2012 study Open Innovation: Enhancing Idea Generation Through Collaboration, is one such organization. Cisco’s innovation strategy is, simply stated, to build, buy, and partner. The company builds products and solutions, partners with innovative companies, or acquires new technologies and companies. Cisco has purchased more than 150 companies to access new technologies—and more importantly, the people who developed those technologies—in order to accelerate its growth in key markets. Cisco believes in retaining and integrating entrepreneurial leadership from its startup acquisitions in order to gain a competitive advantage. Cisco positions this talent to help the organization grow into new business areas. At the same time, these employees’ backgrounds influence Cisco’s overall culture in an entrepreneurial direction.

Many other companies are realizing the benefit of teaming with other organizations in order to minimize the amount of time to see a return on investment in R&D. Working with startups is allowing these organizations to break new research and development ground. What type of outside organizations is your organization teaming up with to develop new products and services?