Demystifying Cisco's Five Pillar Innovation Strategy

 Large companies that are leaders in their industry in general have difficulty maintaining the entrepreneurial spirit that has its leadership position in the first place. On the one hand it has a social "new" relatively few companies like Facebook FB -1.92% that keep growing and, secondly, with companies like Yahoo YHOO -3.13% struggling in the new era of mobility, and the emerging wave IoT. For a company with a market capitalization of more than $ 130 billion, it is difficult for a company like Cisco Systems CSCO + 0.00% and peers to continue to innovate as they did when they started. While innovation is not necessarily on the structure when it comes to big business, we have to have some order around and it seems that executives and employees to waste time and have fun. Pouf chairs, open office, Starbucks SBUX -1.74% and gastronomy at work should be balanced with clear objectives and accountability. That's why Cisco has developed an innovation strategy multifaceted and structured to ensure that the innovative spirit is kept alive while taking responsibility.

Cisco's strategy is structured around five pillars. These five pillars are what you expect, if you have been involved in any part of the product or business strategy to build, buy, partner, co-invest and develop. Although these pillars may not be unique, I think the shape and amplitude that Cisco Systems is performed on them. I spent some time delving into the engine of innovation Cisco and want to share some of my findings.

Build

Promote the culture of innovation, Cisco was the first to build products and create their own IP (Intellectual Property). Cisco has more than 70,000 employees and of these, 25,000 are engineers ending require $ 6.3 billion in R & D. While the success of innovation is not only determined by how much you spend, but rather so spend on it and what you do with it, $ 6.3B dwarfs its rival networks -3.57% JNPR Juniper Networks, Brocade Communications Systems, Palo Alto Networks and Arista Networks. The amount of R & D spending indicates that Cisco puts gravity to maintain market leadership and the creation of new and innovative products.

The company strives to enhance the culture of innovation by implementing certain practices that foster innovation. Some of these practices include having 35% of engineers working in an environment of agile development and generally work on smaller, more agile teams. They are also supporting the project called "Alpha" which facilitate new disruptive technologies that drive innovation. As a result of these efforts, the company was able to generate 19,000 patents worldwide, with 12,000 of those coming to the United States.

Cisco also operates a technology investment fund that has financed 18 projects. These efforts are common among large high-tech companies as a way to influence small new companies that could be potential acquisition targets and the drivers of demand for its existing products.