Think Like a Startup – Innovation in the Enterprise
By Aiaz Kazi, SVP, Head of Product and Innovation Platform Strategy and Adoption
At the recently concluded SAP Select event (Nov 12-13 2014) in Berlin, I moderated a panel that discussed two main themes – how large enterprises could innovate like startups and how startups can scale up for the enterprise.
This is the second ‘Think Like a Startup’ panel that we have conducted this year. While the theme was largely similar to the first panel at SAPPHIRE (Compete And Win Through Startup-Like Innovation) the discussion at SAP Select went in a very different direction given that the background of the panelists varied significantly. The mainstay of both the panels was Dr. Hasso Plattner, Chairman of the Supervisory Board, and more importantly one of the original co-founders of SAP.
This time in Berlin, we were joined on the panel by Dr. Stefan Gross-Selbeck, former head of eBay Germany, and former CEO of Xing (a social network for professionals in Germany and Europe similar to LinkedIn). Stefan is currently managing director of BCG Digital Ventures, a unique company that helps large enterprises innovate, incubate, and scale digital products and businesses. To round out the panel with a mix of perspectives, we also brought in two founder CEOs – Bastian Nominacher of Celonis (real-time process mining and visibility) and Dan Somers of Warwick Analytics (predictive and root-cause analysis for manufacturing scenarios). Both Celonis and Warwick are involved in the SAP Startup Focus, a program that has over 1700 startups building unique applications on SAP HANA, including 130 market-ready solutions.
It was an animated panel discussion that dealt with enterprise innovation, start-ups, society, culture, and across all these – how to balance disruptive innovation and operational excellence. While many important topics were touched on, the following lessons were my key takeaways:
- Ring-fence innovation and keep out the controllers – Enterprises must resist the urge to redirect resources to current products or begin questioning too early in the process how much money an innovation is going to generate. The new idea must be given leeway to succeed or fail and the time to experiment with and discover new business models. The controllers serve a necessary and important function to operationalize and scale the business, but the new idea needs to be nurtured before the controllers can be let in. A small team that forms around the new idea should be encouraged and given time until they get to a point where they can feel they have the beginnings of something meaningful. That’s when the adrenalin kicks in and drives this team further to success or failure – and all of this is necessary before thinking of scaling the start-up idea.
- Suspend your disbelief and go beyond the art-of-the-possible – Startup innovation or disruptive ideas need to be “crazy” and “new” and should be allowed to thrive and not be put through feasibility and viability justifications before they explore the desirability to the fullest. They have to be a bit out there or “not here yet.”
- Provide a financial incentive to the team – Similar to how startups motivate their people, providing a personal financial incentive to the “new idea” team is essential. This is easier said than done as companies not only need to think about financial incentives but also need to then provide all their employees a fair chance to be part of this entrepreneurial group.
- Work around the IT gatekeepers – In addition to keeping out the controllers within their own organization it is important to know how to work around the IT “gatekeeper” at the customer. This is even more difficult if the gatekeeper is the initial contact into the customer. Also, most IT gatekeepers are focused on keeping costs down and not driving innovation. The key here is to either have two or three entry points to the organization or find a way to make the gatekeeper look like a champion to the other areas of the customer enterprise.
- Learn the art of selling yourself (and your idea) – A culture that supports startups is a culture that teaches the ability to present and sell oneself (in a good way) very early on. Schools in the U.S. teach this at a very early age. In Germany, and even more so in India, the pendulum swings to the other side, where being humble, understated and letting your work speak for itself is ingrained from a young age. The panel was unanimous: founders from these cultures must overcome this hurdle and be comfortable with the idea of selling themselves.
In conclusion, startups are given a trial by fire based on the strength of their idea, their new business model and their singularity of focus. For innovation to flourish in an enterprise, we need an innovation pipeline, just like we have a sales pipeline and a demand pipeline. This provides a roadmap to success that gives it space and time to flourish or fail.