Siemens introduces measures to kick-start ‘innovation culture’

SIEMENS is trying to shed its reputation for being slow moving and overly cautious by introducing measures to foster a start-up culture.

Europe’s largest engineering company’s plan included a 100 million (R1.6 billion) fund dedicated to innovative projects proposed by employees and two new research and development centres, chief executive Joe Kaeser said yesterday in Munich. The money will be spent over three years.

“We need a plan for innovation management, which creates a sustainable start-up culture,” Kaeser said. “Across all Siemens businesses, digitalisation is a paradigm shift. But it is also an opportunity.”

Siemens, which has products spanning gas turbines to trains to magnetic resonance imaging scanners, is trying to pre-empt disruptive technologies capable of harming its businesses. In a 2014 interview, Kaeser cited the example of Cisco Systems. Siemens turned down an offer to invest in the internet protocol-based supplier of telephony that helped bring about the demise of Siemens’ telecom operations.

Large companies’ lengthy project approval processes often serve to stunt innovation, academics such as Harvard Business School’s Clayton Christensen have said. The less convoluted cash allocation process of smaller companies allows them to act with greater agility and innovate more quickly.

As well as the 100m, which employees can tap to fund their proposals, Siemens is also introducing a plan called “Innovation AG”. The programme is intended to foster an “innovation culture”. – Bloomberg