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Arcus Innovation Leaders Series
How business leaders use innovative approaches to shape their strategies.
Siemens’ view on the Innovation Imperative: An interview with Mr. Dirk Miller, Vice President, Corporate Communications.
Mr. Miller believes investments in research and development are the best investments that can be made in a company’s future.
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This principle applies to every company, but it’s especially true for a high-tech company like Siemens, which has set itself the goals of growing twice as rapidly as the worldwide gross domestic product and occupying leading market positions while maintaining sustainable profitability. In pursuit of these goals, Siemens is focusing on the megatrends of urbanization, demographic change and the challenges they pose with regard to energy, infrastructure, healthcare and the environment.
What does it take to innovate? The majority of executives say it involves achieving technological leadership, global presence and a comprehensive portfolio of patents that will enable the company to help define major trends regarding products, systems and services, and to offering its customers important added value. They say such steps reduce costs, increase sales and achieve higher earnings. But how does one come up with new solutions, and can innovations really be part of a strategy plan? Arcus’ multi-industry survey of senior executives, conducted with the Canadian Marketing Association, found that of all the challenges companies face in this area, the biggest challenge is finding ways to create a “climate for innovation”.
As Arcus research indicates, doing so means that you need to be surrounded by highly talented people. It also means finding a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like “a culture of innovation” into their assessments of a company’s long-term value.
Please share some insight into Siemens’ commitment to Innovation.
Mr. Miller: Siemens was founded a hundred and sixty years ago in 1847 by Werner von Siemens, the inventor of the pointer telegraph. The pointer telegraph was, at that time, a unique new product that allowed people to communicate over a distance of eighty kilometres. Since then, innovation has been part of our company's lifeblood. Everything we do is driven by innovation, technology and engineering. And you can see this throughout the company's history. A couple of years after Werner von Siemens’ introduction of the pointer telegraph, Siemens had another innovation, the electrical dynamo. Then in the early twentieth century Siemens invented the Coaxial cable. The vacuum cleaner was invented by Siemens in 1906. In 1974, we developed the computer thermograph, an imaging system, an important innovation for healthcare. In 2003, Siemens produced the Transrapid, Shanghai’s high speed train. Over the last hundred and sixty years we've become very convinced that innovations keep us competitive.
“Innovation is one of our three core values within the company. Over 32,500 of our employees work in R&D."
You identified a need and then created a product to meet that need?
Mr. Miller: Yes. That's a good point. We strongly believe that any innovation begins and ends with the customer. It's like what you mentioned before: in order to generate ideas for inventions or to start or focus your research efforts, you have to have really intensive dialogues with your customers and all different stakeholders.
What makes Siemens' approach towards innovation different philosophically from other companies that operate in the same area?
Mr. Miller: I cannot talk about our competitors and how they have set up their own programs but I can definitely explain how Siemens approaches innovation. First of all, innovation is one of our three core values. Those values are Responsibility, Excellence and Innovation. They are part of our culture, and therefore we have put in place a number of tools and platforms to encourage our people and where to foster innovative thinking and innovative processes. For example, Siemens has a really large R&D department. Over 32,500 employees worldwide are working in R&D. We have over 17,000 software engineers. We have more software engineers than Microsoft. All of that software is in all of our products today.
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