To paraphrase Thomas Edison, “innovation is 1% inspiration, 79% perspiration, and 20% organisation”. In a wide-ranging presentation at the Huawei Global Analyst Summit in Shenzhen this April, Ryan Ding, the company’s president of products and solutions, explained how the ICT vendor had structured innovation into three layers – recognising that no company, not even one as big as Huawei, has a monopoly of new ideas in all the areas in which its products and services are used.
The three-layer model has at its heart, Huawei’s own innovation in fundamental technologies such as chipsets, optical switching, and “full field” communications: essentially it’s R&D that Huawei doesn’t need any help with.
Around this core is a layer Huawei calls “allied innovation”, and what I would call joint development with partners up and down the value chain. In this category Huawei lists the R&D it does with SAP on enterprise automation, with Intel on Internet of Things, and with Sony and others on 4K high-definition video.
Finally, the outer layer – “ecosystem innovation” – is development work done by companies building apps to run on Huawei platforms.
Though not intrinsically innovative in itself, it is a neat articulation of how new products and services can be developed in telecoms today by any company with an R&D resource. And Huawei is clearly doing innovation very well. Of course it has colossal resources, and is committed to R&D as a key strategic priority. But there is a danger that innovation effort is directed in a scattergun way, and wasted.
By thinking properly about what innovation and development is best done by whom, and how, companies can avoid waste and technology dead-ends (or minimise their risks). Huawei should be complimented for its innovation approach. It is clearly paying off; the company's financial performance has been remarkable, and so too has been the way it is contributing ideas to international standards bodies (in the area of mobile wireless technologies, for instance, Huawei is the leading contributor to 3GPP for LTE-A ideas). And it is committed to continuing its layered innovation approach: the company's Fan Chen, VP of accounting, said it was to quadruple its spend on collaboration activities (including work with standards bodies).
A final note: I should add that the %s of inspiration, perspiration and organisation are mine, not Huawei's!