Standing Still is Not An Option – Constant Innovation Is Needed
Last year, we discussed innovation happening in our region (see below for the original blog) and how every single one of us can contribute. I was reminded on last year’s blog as I attended the German Summit of Hidden Champions (“Gipfeltreffen der Weltmarktführer”) in Schwäbisch Hall on January 27 to 29, 2015.
This Summit brought together more than 400 leaders from German mid-size companies, each one a world champion in their domain. I used this perfect opportunity to explore what role innovation plays when a company moves to the top and how they use innovation to stay on top. Let me share with you some insights from the event.
Innovation involves digitalization. In a world where 4 million searches are executed per minute, where 700 new users hit the internet per minute and where every minute 72 hours of user generated videos are published on YouTube, no industry can hide from digitalization anymore.
Industry 4.0 starts with digitizing all processes with software. Yet its full potential can only be realized if a business extends its internal value chains to value networks including suppliers and customers, introduces the appropriate level of centralized versus decentralized processes and utilizes data in real time.
Data is the new currency. Data fuels the engine of innovation. The good news is: data does not lose value over time. The bad news: data requires security, especially when personal data is involved. In that regard, Europe has to catch up with global standards: 28 different data security laws will hinder competitiveness of European businesses.
Speaking about challenges: Germany needs to address these and other topics in order to stay competitive:
- The demographic challenge: the average age in Germany is about 7 years higher than in the US
- Cost of energy: Americans pay only half of what Germans need to pay for electricity
- Amount of capital: the 5 leading US businesses (in terms of market capitalization) are valued higher than all German DAX30 companies combined
- Regulations and bureaucratic processes: German businesses feel that to be a huge (and growing) challenge compared to their American competitors.
In order to stay competitive, businesses usually try to disrupt the status quo. Disruption is driven by new business models, not by new technologies. Business models are invented and executed by people. People need to be recognized and motivated. Motivation is ambition coupled with fun. You don’t believe that simple formula? Here is a proof point.
Where does this all lead us? If you are on top, rest for a moment. But do not take too much time enjoying the view or else you might miss the run to the next summit.
To stay still is to go back – innovation requires constant changes, constantly questioning the business model and all underlying processes. Know how is not enough anymore, know why is needed.
Let me know how you feel about innovation (and why you feel this way) and how you stay on top.
Thanks for listening,
Here my blog on innovation in our region, originally posted on February 28, 2014:
The following is an excerpt from my contribution to the “Rethinking Business and IT” series which kicked off on February 28, 2014 at the Audimax St. Leon Rot. Please comment on your experience with innovation in our region. I would love to hear from you. Happy reading, Steffen
Innovation happens in our region
I have a dream. No I do not want to send men to the moon. That has been accomplished. I want to send a message to the world: innovation happens here in our region.
It can be done. 2 days of SAP D-code in Mannheim and at SAP HQ. In addition, the first SAP HANA Startup event here in Heidelberg. 34 Startups, 100 participants, 20 Venture Capitalist representatives, one of the best SAP startup events ever. There was a lot of excitement and passion in the room (the SAP AppHouse in Heidelberg with its impressive and cool atmosphere).
You can be part of it. I have been asked in 2012 to help mentor some of the startups from InnoWerft, a local startup hub. I am proud to report that Revoprint, the startup I mentored, has survived the whirlwind of startup craziness for more than 2 years and is doing well.
What value can I bring to the table? As with many startups, Revoprint started with an idea, the rest still is hard work and persistence. That involves expertise and experience in many day to day activities that most startups do not have or cannot afford to hire. They literally need a harbor such as InnoWerft to dock onto which provides advice, guidance, mentorship, prepackaged services to efficiently close gaps in their operations. Yet we can help too. Most of us can act as sounding board for proposals and pitches, offer project management tips and tricks or build bridges to experts and skills through our network to the community.
All it took for me, apart from business sense, was passion and proximity to startups.
Startups present our future today, millenials are the future of tomorrow.We need to work with millenials, the early talent for SAP and our ecosystem. We need to understand their needs and desires and the way they work and interact with each other. They will be our customers, partners, and our team members. By 2025, millenials will make up 75% of our workforce.
So the question is: are you ready for the challenge? Do you want to be part of the innovation culture here in our region? Not all of you will found a startup now or in the future. Yet you can and should contribute: reach out to startups, ask Hans-Heinrich or myself how you can get engaged at InnoWerft, approach Ann Rosenberg or Niraj Singh from our University Alliance team for ways to help recruit early talents for SAP, mentor a student in your team (such as the SaKP Student Roundtable community in our unit), or get engaged in your community.
We are all part of the innovation community in our region. We can make it happen.