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

Andrea Stroud's picture

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?

1 Comment

Anonymous's picture

Sharing a recent example in support of Andrea’s article on Cisco’s approach to innovation. Signavio’s free SaaS based platform for modeling Enterprise Architecture (EA) is a direct result of Cisco partnering with its suppliers using this new approach to jointly develop solutions rather than only investing in internal R&D. Cisco was modeling its business processes according to the Object Management Group’s BPMN2.0 Object Management Group’s BPMN2.0 standard and asked if we would be interested in adding support for The Open Group’s ArchiMate2.1 notation . Cisco knew they could generate internal value and potentially help its customers by linking the two notations. There is a natural alignment and just enough overlap to make the connection between the two notations. While BPM is light on its ability to describe the IT stack supporting business process, ArchiMate nicely fits the bill. Conversely, ArchiMate’s limited ability to define the process logic that is typically required within an enterprise happens to be exactly where BPMN2.0 excels. By linking BPM and ArchiMate, the impact of business process changes on IT become clearer and IT’s contributions supporting the business are also better understood and appreciated by business users. By adopting ArchiMate as a standard many organizations who previously could not afford to define the IT landscape of their enterprise (due to costly and proprietary EA tools), could now have the ability to do so. Cisco asked if it would be possible for Signavio to add ArchiMate support in our modeling platform. We said that it certainly was and that the concept was well aligned with our product plan roadmap. All good, but our ability to meet their schedule was not ideal. The solution to the delivery timeline challenge was found by both Cisco and Signavio developers collaborating and using Signavio’s SDK to create the ArchiMate stencils much more quickly than either company could on its own. Because Cisco wanted to promote the ArchiMate standard, they insisted the resulting stencils were also made available under an open source license. We agreed. Signavio’s other contribution to supporting enterprises’ EA modeling efforts with the open standard includes offering a completely free SaaS based ArchiMate modeler . Cisco’s actions clearly not only create value for itself but also its partners and customers. It’s a very nice example what is possible when a “customer” and “supplier” work together to deliver innovative solutions. In this case, the benefits extend well beyond the boundaries of either organization.