Harvard Case - Open Innovation at Fujitsu (A)
"Open Innovation at Fujitsu (A)" Harvard business case study is written by Amy C. Edmondson, Jean-Francois Harvey. It deals with the challenges in the field of General Management. The case study is 20 page(s) long and it was first published on : Jan 14, 2016
At Fern Fort University, we recommend that Fujitsu implement a comprehensive Open Innovation strategy to drive growth, enhance competitiveness, and foster a culture of innovation within the organization. This strategy should prioritize collaboration with external partners, leverage digital technologies, and focus on developing a robust ecosystem for innovation.
2. Background
Fujitsu, a leading Japanese technology company, faced a critical juncture in 2010. The company, known for its hardware and software solutions, struggled to adapt to the rapidly changing technological landscape. The rise of cloud computing, mobile devices, and big data analytics threatened Fujitsu's traditional business model. To address these challenges, Fujitsu's CEO, Masami Yamamoto, embarked on a strategic shift towards Open Innovation.
The case study focuses on Fujitsu's efforts to establish an Open Innovation program, including the creation of the 'Fujitsu Open Innovation Lab' and the development of partnerships with startups, universities, and research institutions.
3. Analysis of the Case Study
Fujitsu's Open Innovation strategy can be analyzed through the lens of several frameworks:
Strategic Framework:
- SWOT Analysis: Fujitsu possessed strong brand recognition, a global presence, and a solid technological foundation. However, it faced challenges in adapting to new technologies, fostering a culture of innovation, and competing with agile startups.
- Porter's Five Forces: The IT industry was characterized by intense competition from established players like IBM and HP, as well as emerging startups. The bargaining power of buyers was high due to readily available alternatives.
- Competitive Advantage: Fujitsu sought to gain a competitive advantage by leveraging its existing strengths in hardware and software, while embracing new technologies and collaborating with external partners.
Organizational Framework:
- Organizational Structure: Fujitsu's hierarchical structure, while efficient for managing large-scale projects, hindered agility and collaboration.
- Leadership Styles: The company's leadership needed to shift from a command-and-control style to one that encouraged risk-taking, experimentation, and collaboration.
- Corporate Culture: Fujitsu's culture, historically focused on internal expertise, needed to evolve to embrace external ideas and partnerships.
Innovation Management Framework:
- Innovation Funnel: Fujitsu's Open Innovation program aimed to create a robust innovation funnel, capturing ideas from external sources and filtering them through a rigorous process of evaluation and development.
- Innovation Ecosystem: The company sought to build an ecosystem of partners, including startups, universities, and research institutions, to foster collaboration and knowledge sharing.
Financial Framework:
- Resource Allocation: Fujitsu needed to allocate resources strategically to support its Open Innovation program, including funding for research and development, talent acquisition, and partnership initiatives.
- Performance Evaluation: The company needed to establish clear metrics to track the success of its Open Innovation program and measure its impact on revenue growth, market share, and customer satisfaction.
4. Recommendations
To effectively implement an Open Innovation strategy, Fujitsu should take the following steps:
1. Cultivate a Culture of Innovation:
- Leadership Commitment: Fujitsu's leadership needs to demonstrate a strong commitment to Open Innovation, actively championing the initiative and fostering a culture of experimentation and risk-taking.
- Empowerment and Collaboration: The company should create a more collaborative work environment, empowering employees to share ideas, experiment with new technologies, and work closely with external partners.
- Incentives and Recognition: Fujitsu should implement reward systems that recognize and incentivize innovation, rewarding employees for their contributions to Open Innovation projects.
2. Build a Robust Open Innovation Ecosystem:
- Strategic Partnerships: Fujitsu should strategically identify and partner with startups, universities, and research institutions that possess complementary expertise and innovative capabilities.
- Open Innovation Platforms: The company should establish online platforms and communities that facilitate collaboration, knowledge sharing, and idea generation among internal and external stakeholders.
- Fujitsu Open Innovation Lab: The company should invest in its Open Innovation Lab, providing resources and infrastructure to support collaboration and prototyping.
3. Leverage Digital Technologies:
- Data Analytics: Fujitsu should leverage data analytics to identify emerging trends, understand customer needs, and evaluate the potential of new technologies.
- AI and Machine Learning: The company should explore the use of AI and machine learning to automate tasks, enhance decision-making, and accelerate innovation.
- Cloud Computing: Fujitsu should embrace cloud computing to provide scalable infrastructure and support collaboration among internal and external partners.
4. Implement a Rigorous Innovation Management Process:
- Idea Generation: Fujitsu should establish a structured process for capturing ideas from internal and external sources, including online platforms, hackathons, and open calls for proposals.
- Idea Evaluation: The company should develop a rigorous process for evaluating ideas, assessing their potential impact, feasibility, and alignment with strategic goals.
- Project Management: Fujitsu should implement efficient project management methodologies to manage Open Innovation projects, ensuring timely completion and successful implementation.
5. Measure and Track Performance:
- Key Performance Indicators: Fujitsu should define and track key performance indicators (KPIs) to measure the success of its Open Innovation program, including the number of partnerships, the volume of ideas generated, and the impact on revenue growth.
- Continuous Improvement: The company should regularly review and refine its Open Innovation strategy based on performance data, feedback from stakeholders, and industry trends.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Fujitsu's Open Innovation strategy aligns with its core competencies in technology and its mission to provide innovative solutions to its customers.
- External Customers and Internal Clients: The strategy addresses the needs of both external customers seeking innovative solutions and internal clients seeking to develop new products and services.
- Competitors: Fujitsu's Open Innovation strategy aims to differentiate the company from its competitors by fostering a more collaborative and agile approach to innovation.
- Attractiveness: The strategy is expected to generate significant value for Fujitsu, driving revenue growth, enhancing competitiveness, and fostering a culture of innovation.
6. Conclusion
By implementing a comprehensive Open Innovation strategy, Fujitsu can position itself as a leader in the rapidly evolving IT industry. The company's commitment to collaboration, digital technologies, and a culture of innovation will enable it to capitalize on emerging trends, develop innovative solutions, and drive sustainable growth.
7. Discussion
Other alternatives not selected include:
- Focusing solely on internal innovation: This approach would limit Fujitsu's access to new ideas and perspectives from external sources.
- Acquiring startups: While acquisitions can provide access to new technologies and talent, they can be expensive and disruptive.
Risks and Key Assumptions:
- Cultural resistance: Overcoming resistance to change and fostering a culture of collaboration could be challenging.
- Partner selection: Identifying and partnering with the right external organizations is crucial to the success of the Open Innovation program.
- Intellectual property protection: Fujitsu needs to establish clear agreements with partners to protect its intellectual property.
8. Next Steps
- Develop a detailed implementation plan: Define specific actions, timelines, and resources required to implement the Open Innovation strategy.
- Establish a dedicated Open Innovation team: Recruit and train a team of experts to lead and manage the program.
- Pilot test key initiatives: Pilot test key elements of the Open Innovation strategy to validate assumptions and gather feedback.
- Communicate the strategy to stakeholders: Communicate the Open Innovation strategy to employees, partners, and investors to ensure alignment and support.
- Monitor progress and make adjustments: Regularly monitor progress, collect feedback, and make adjustments to the strategy as needed.
By taking these steps, Fujitsu can successfully implement an Open Innovation strategy that will drive growth, enhance competitiveness, and position the company for long-term success in the rapidly evolving IT industry.
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Case Description
This case study examines the open innovation journey at Fujitsu, a global information and communication technology company. The case ends with the location decision between Tokyo, Japan, downtown San Francisco or Sunnyvale, California, regarding establishing a small unit for the purpose of institutionalizing Fujitsu's open innovation journey. Mohi Ahmed, together with Mikito Kiname and Tango Matsumoto, embarked on the journey to strengthen Fujitsu's marketing and innovation platform in North America, and to transform the company's innovation culture by making the Japanese giant more open and leaner in its approach to innovation. In the past, Fujitsu struggled with opening up its innovation process in Silicon Valley: partnering with other organizations to integrate outside technology in its products and services; spinning out unexploited technology had proved challenging. With input from thinkers and practitioners inside and outside of Fujitsu, Ahmed identified the maker movement as a potential avenue to begin Fujitsu's open innovation journey because of the significance of Monozukuri (art and science of making) in the company's origin. He engaged with Mark Hatch, CEO of TechShop Inc., a fast-growing chain of member-based maker spaces, in a conversation about how companies could focus on "doing well by doing good," and they jointly initiated four projects on which they could collaborate. Ahmed planned to leverage these projects to transform Fujitsu's innovation culture by illustrating that the company could successfully engage in exploration with new external partners, and could move quickly into experimentation to accelerate learning and innovation.
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