September/October 2013

Driving a culture of innovation

By Raj Batra

Innovation. What is the first thing that comes to mind? For most people, it is probably an image of a research and development (R&D) department where cloistered employees are sworn to secrecy about the next big thing being hatched in their labs. We see some of that, to be sure. But we are also seeing innovation "from the outside in" and its impact on our products, our business models, and even our company culture.

There is also a spillover effect in terms of how our customers think about their own businesses. Just recently, I had the pleasure of seeing this outside-in thinking in my own job. A hugely successful customer in the automotive space agreed to open its doors to a food and beverage client on the verge of a major technology upgrade. While their products could not be more different, the similarity in their operations became apparent very quickly. Both companies have an emphasis on speed, quality, volume, and high availability of technology supporting sequential processes. And both companies appreciated the insights into the other's operations and the innovative way automation and control technology was being used in such diverse settings.

From potato chips to vacuum cleaners

The cross-pollination of ideas across industries is itself not entirely new. A few years ago, Procter and Gamble generated buzz after sharing how it used high-power computing and experiences in the aerospace industry to better understand the aerodynamics of the Pringle potato chip. And more recently, Siemens juxtaposed the use of its product life-cycle management (PLM) software technology, which played a part in the development of the Mars rover Curiosity, with similar applications used to design and build Dyson vacuum cleaners.

What is new is the increasing extent to which innovation success depends on outside inputs. In many companies, R&D budgets have declined, so companies are filling their innovation pipeline with customer input. "Crowd sourcing" (generating ideas from the online public versus employees) and "social manufacturing" (using social media to drive the entire PLM process) require an ability to be open and accepting of ideas from diverse sources. The key is to be able to channel the information through information technology tools that can accelerate and improve the decision-making process across the product life cycle. According to research done by Siemens and Harvard Business Review, 55 percent of companies are taking this approach.

Diversity driving innovation

In my own division, our emphasis on diverse thought processes is driving business innovation. Several of our employee affinity groups, such as the African-American employee community and our young professionals network, have joined forces to create small teams assigned to solve discrete business problems.

The program stands out for two reasons. First, the teams are about as diverse as they come, representing geographically dispersed talent from a wide spray of functions and businesses. Second, the program is so popular that employee demand for additional challenges is outstripping our supply of projects. I am impressed with the hunger among our most engaged and diverse employees to learn and contribute above and beyond their typical sphere of responsibilities.

More than R&D

Solutions come from everywhere. That is why our R&D concept includes a lot more than the $5 billion annual R&D budget. We measure our ability to innovate based on our success in creating new designs, new technologies, new features, and new services. In addition, however, our corporate innovation processes focus on innovating around new markets, new organizational forms, new business models, new processes, and new ways of thinking.

A major R&D focus is on automation technologies, where the most promising fields of innovation are identified to drive a renaissance in manufacturing. New products are changing the paradigm for automation.

As employees, customers, and partners open up to new ways of solving problems in automation, we are seeing a great deal of optimism about the impact that new technologies can have on increasingly complex industries. Owing to the well-known spillover effects of industrial innovation into the rest of the economy, these innovations have the power to fuel a renaissance not only in manufacturing but in society as a whole.


batra1Raj Batra serves as president of the Industry Automation Division, Siemens Industry sector in the U.S., where he is responsible for overseeing all development, marketing, sales, R&D, and manufacturing aspects for IA in the U.S.