Innovation at cisco

Innovation and creativity is the core of ciscos success Risk taking, initiatives and responsibility is emphasised Employees are passionate about staying on the leading edge of technology New e business initiatives taken with a combination of inspiration, creativity and study of latest technology trends Customer satisfaction through innovation is their ultimate goal

Funding new e-business initiatives

Until 1993: Funding came through IT department From 1993: A system was created that decentralized IT investments Objectives of IT department aligned with strategic goals of the company Client Funded Model: business-unit manager was given authority to make whatever expenditures were sensible to increase sales and customer satisfaction

 Organization structure changed e-business initiatives were all evaluated on the basis of cost reduction, often overlooking impacts on sales, customer satisfaction, or employee retention New funding mechanism reduced cost incurred

Need for centralization in innovation process

Innovation process is somewhat chaotic As the company grows, controlling the management becomes more complex Major challenges are staying connected and pursuance of similar initiatives by different business units New initiative generated within business units has very narrow scope For developing projects across business unit, Involvement of senior executives to establish connection and to guide the collaboration is required

Three possible options for future

A Technology Research and Training Team Centralized think-tank A Venture Engineering Team Centralized technology research & implementation team An Internal Venture Capital Group Centralized technology business analysis and funding team

Technology Research and Training Team:

Keep employees cognizant of the current initiative and ramification of those initiative Wider scope of new initiatives Complexity will be reduced Help in developing as well as discovering new Innovations which is ultimately beneficial to CISCO

Measurement of innovative efforts and compensation system

Innovative efforts: Profitability- R.O.I Maximizing shareholders value Organizational culture Compensation system: Revenue system Earnings growth Customer satisfaction

Measurement of innovative efforts and compensation system (employees)

Employees

efforts to come up with new e-business initiatives should be well rewarded

rewards

It acts as motivation among employees to come u with new innovative ideas

efforts

Thus, resulting into a direct proportion between rewards and efforts