Transcript Leading for Results: Day two

Open Innovation:
An HP Case Study
Mauricio Leon
Hewlett Packard
Consumer Desktops BU
Taiwan
August 2008
© 2008 Hewlett-Packard Development Company, L.P.
The information contained herein is subject to change without notice
Agenda
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Consumer Desktop PCs at HP
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Open/Closed Innovation
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Open Innovation at the Consumer Desktop GBU
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Challenges
HP’s Consumer Desktop PC GBU
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Responsible for managing the consumer desktop
category worldwide
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Classical business unit organization
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Headquarters in Cupertino, California
Consumer Desktops -Business Environment
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Very competitive
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Flat to declining market
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New product categories
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Geographical segmentation
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Need to do more with less
Closed Innovation
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Ideas are internally generated
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Results of innovation carried through to the markets
as a product or service by the same company
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Commercialized innovations generated this way drove
profits and enabled further investment in R&D
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Innovation model followed by most companies in first
half of 20th century
Open Innovation
•
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Internal and external ideas as inputs to the innovation process,
combined with internal and external paths to markets
Under Open Innovation, ideas come to the innovation process via
− Internal research, external research
− Licensing other companies’ technologies
− Acquisition of other companies products
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Conditions that supported the transition from Closed to Open
− Increased availability of quality technical talent globally
− Increased mobility of talent across geographies and firms
− The increasing number of firms developing new products and services
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Adoption is driven by R&D management or business strategy
Open Innovation at
HP’s Consumer Desktop GBU
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Open Innovation has been a key part of the
Consumer Desktop GBU’s business strategy
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Our use of Open Innovation has evolved with time
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Focus has evolved from R&D to global R&D
management
− Taipei operations
− Develop new skills
Business Drivers of Open Innovation
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Very competitive market
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Low profit margins, low R&D budgets
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Complex product portfolio
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Open Innovation delivers for Consumer Desktops
− New ideas, new products
− Lower R&D investments, manageable risks
− Broader product portfolio
Enablers of Open Innovation
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Standards, open architectures, platforms
− Design modularization
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Ecosystem around platforms
− Standards
− Products
− Companies
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Information and communication technologies
Challenges
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Determine how to evolve the Open Innovation model
as the PC market matures
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Identify the need for developing owned IP
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Develop the skills to execute “Closed Innovation”
where needed
Questions