Open Innovations Case Report

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Introduction

Siemens is large multi-national German company, with over 340,000 employees operating in over 200 regions worldwide, getting involved in various industries. Industries such as automation, energy, healthcare and financing. Companies of this size do not escape the infamous issues of ‘knowledge’. The case is provided by two individuals in the company, Dr Lutke-Entrup, head of Seimens’ Corporate Technologies (CT), and Dr Lackner, head of CT’s Open Innovation initiative. They go on to discuss the new learning and innovation initiative, that is, Open Innovation, a way for the company to connect experts from all around the organisation, to assist in problem solving, decision making, innovation and knowledge management.  In this report, I will outline what some of the problems and challenges that Siemens faces in regards to knowledge, detail why this is important, as well as provide further insight into some recommendations to address and solve the issues and challenges that Siemens faces. With that in mind, let us talk about knowledge.

Knowledge

So what is ‘knowledge’? It is not simply knowing something, it is not a generic collection of information and data. It is a combination of experience, skills, wisdom and intuition. It is the ability to know how to act on a given piece of information, to apply judgement to help solve problems and make decisions (Tsoukas and Vladmirou, 2001).  This is valuable to Siemens, as it offers a competitive advantage over competitors, as it assists in enabling the firm to respond to external and internal threats and opportunities. It is rare, as knowledge can be developed internally within the company, so competitors do not possess them. It cannot be substituted or replicated or stolen. In essence, it adds value to an organisation. However, arguably the most important use of knowledge, is its ability to innovate, to gather new ideas and insights, new connections and new ways of looking at and tackling challenges. This is what Siemens tries to obtain. But are two types of knowledge, and they are very different. The first is ‘explicit knowledge’, this is the hard data, the procedures, the deadlines, reports, policies, plans guidelines etc. If it can be recorded and written down, it is explicit knowledge. The second type is ‘tacit knowledge’. This is more ambiguous, as it cannot be quantified, and for purposes, it is ‘invisible’. Experience, insight and expertise is what tacit knowledge is all about, and it is usually held within the employees as ‘experts’. Meaning, that this type of knowledge could walk straight out of the door; literally.

Siemens is a large company, with over 340,000 employees, there is no denying that there are a lot of experts working there, people that are full of knowledge and wisdom. Being involved is such a variety of industries with a long history and background, Siemens’ experts would be valuable and provide a competitive advantage. For explicit knowledge, the history and sheer experience has allowed Siemens to develop a strong and reliable set of rules, policies and guidelines for employees to follow and abide by. So to that, Siemens would be considered to have a strong explicit knowledge database. If Siemens has both tacit and explicit knowledge, where are the issues?