Case #8 – NEC in Princeton

It has been a considerable while since my last posting—I have been teaching quite a lot over the past few months, so I have had a chance to reacquaint myself with some brilliant case studies. The one I would like to talk about today is “NEC: A New R&D Site in Princeton” (HBS Case 9-898-027). Until a short time ago, I would have only looked at this case as one to teach the organization of R&D to students, and in particular the internationalization of R&D. Of course, the case is also a brilliant example of how changes in a company’s innovation strategy need to be concomitantly reflected in its organization of R&D. However, what struck me this time is how much the case actually resonates with the open innovation perspective.

The case sets out to describe NEC’s evolving innovation strategy, beginning with its foundation around 1900 to a fundamental change in its vision in the 1950s  and a shift in its enactment that begins to become more prominent around 1980 (note that the case itself takes place in 1992 – this is a true classic!). We learn how NEC decides to create a lab for basic research outside its native Japan to be able to access locally generated knowledge – instructors familiar with the topic will immediately think of Bartlett and Ghoshal’s work, and, of course, Kuemmerle (who is in fact the lead author of the case!). These authors have created essential works on internationalization strategies for R&D, which can be perfectly elaborated using this case. In addition, the bridge to the concept of open innovation is easy to make, since a large bit of the case is describing how NEC tries to facilitate arrangements to be able to access knowledge from beyond the boundary of the firm. In particular, authors interested in introducing this angle to the case can easily have students explore how engagement in open innovation might come in handy for companies shifting their innovation strategies.

I have found this case to work extremely nicely in classes on innovation management in connection with other cases that play the open innovation angle more strongly. In that situation, I would use the NEC case to generally speak about how R&D needs to be organized so that innovation strategy can be appropriately executed. Doing so would allow me to introduce topics such as clusters and external sources of knowledge, and the importance of being able to access them for innovative success. In a subsequent session, I would then be further elaborating on these topics, looking specifically at companies’ larger strategic efforts to make use of their environments using multiple practices strategically at the same time—that is, how they engage in open innovation! Here, for example, the case on Intel Research I spoke about earlier is a very nice fit.

Regarding the teaching note for the NEC case (HBS Case 5-800-392), it provides instructors with all relevant materials to successfully conduct their class. Having said that, I have actually always deviated quite a bit from it, only picking those bits that were essential to conveying the concepts I had in mind. But that is exactly what is so nice about this case—it is very easy to take it and apply it convincingly to different topics which are touched upon in the excellent descriptions of NEC’s innovative strategy and activities.

References

Walter Kuemmerle, Kiichiro Kobayashi “NEC: A New R&D Site in Princeton” HBS Case 9-898-027, Revised April 28, 2004, http://cb.hbsp.harvard.edu/cb/web/product_detail.seam?R=898027-PDF-ENG, last accessed February 22, 2012