Co-innovation is a strength not a weakness

This post is a bit of a ramble, actually more thinking out loud than well crafted missive, but then most of my posts probably fall into that category. I’ve been reviewing various Sapphire bits and pieces- sad thing to be doing on the May day public holiday, I know…

One thing that stuck with me was Henning quoting the CEO of Procter & Gamble, AG Lafley:

 In 2000 a little more than 10 percent of our innovation was partnered …last year a bit more than 40 percent of what we commercialized had at least one external partner.

 Henning also talked a lot about the Business Transformation Network.  I expect he will explore that more in Vienna, and I’m looking forward to hearing Geoffrey Moore on the topic too.

Joe McKendrik from ZDNET picks up on the SOA angle of Henning’s talk, with title collaborate or die  Technically speaking SOA makes it a whole lot easier to build systems that react faster and facilitate  collaboration, but I’m not going to dwell on SOA here. There are many others out there that can debate SAP and SOA far more adeptly than I can.

The business transformation network is partly about delivering a product set that makes it easier for SAP customers to co-innovate and network.  But the implications of co-innovation for SAP as an organisation is the target of this meander here. I think it has significant bearing not only on products, but on the very nature of how SAP as a company will function.   

The nature of product development is fundamentally changing (or changed) across many industries. Product development is no longer just about what clever internal labs can come up with, but what can several organisations working together deliver. This requires a more cooperative and trusting way of working, lets call it co-innovation. To co-innovate there needs to be a level of trust between the organisations, a lowering of the walls if you like, new business models and new ways to look at IP. 

I sense that the development organisation at SAP is internalising this, and this episode below may illustrate that.  Susan Scrupski posted about SAP SDN using the Confluence wiki. (I was hoping that Susan would be at Sapphire as a blogger, but perhaps she will come along next year.)

What struck me about the post wasn’t the post itself (no offence Susan), but a comment from an SAP solution manager:

To your comment about innovation on the edge, I agree completely. Technology titans like SAP benefit incredibly from the larger world of innovators, startups, and smaller established companies. Even within the world of SAP, we are well aware that most of the best SAP developers and most of the innovation is outside SAP walls – at our customers and partners. That’s the true strength of the SAP community, the conversation and co-innovation between community members

It would be easy to label this as a cluetrainy statement , and yet another case of Thomas’s SAP flag waving, but if we look beyond the Cluetrain and my bias into the academic research into innovation, then Von Hippel’s sources of innovation and his more recent book, Democratizing innovation, point the way to the fundamental importance of customer and partner driven innovation. Enabling folks to innovate themselves with SAP stuff is just as valuable as what we cook up in Walldorf, Bangalore or Palo Alto. And if you follow Von Hippel’s arguments, he’d say that customer led innovations are what makes the difference. (I’m not denying the importance of the lone inventor; breaking the mould, but that shouldn’t be the starting assumption for most innovation)

Developments such as the BI accelerator and enterprise search appliance with Intel, Cisco and GRC, and the Duet appliance with HP and Microsoft are also a step in the right direction.  Enterprise services too, are evidence of a deeper customer centric co-innovation mindset. SDN itself is a big leap forward to openness and conversation, but there is much more to do.

I don’t think the SAP can afford to be smug about SDN. It is just the beginning. It would be a shame to say we have SDN, therefore we get this community- co-innovation thing.  We need to continue to focus on how to expand, enrich and deepen the conversation, not how we market the fact that we are having a conversation.

 I think we can learn a lot from other companies –  IBM for instance. We need to look more proactively for co-innovation partners and opportunities, and sometimes in unlikely places. We need more customer centric design thinking and execution – immersing the customer in the software design process. deserves respect for  idea exchange – its simplicity is entrancing.

SAP must  to be easy to co-innovate with, not hard.  Much blog ink has been spilt on the Colgate fellowship, but I’d love to see these going on all over the place in SAP. I’d also like to see more of this happen the other way around. Let’s have more developers deep in customer sites, not just firefighting, but as a real part of the customer IT function. 

The recent move to consolidate partner management and ecosystem under one leader will hopefully herald a quantum leap for simplification in co-innovating with SAP. I cringe when I hear of the loops that we sometimes make people that want to work with us jump through.

Henning mentioned more than once that Innovation occurs on the edges. He is right. I hope that it is on our edges, and to do that we need an Oktoberfest’s worth of Cluetrain kool-aid.  Simply put, we need to become the best company in the world to co-innovate with.  It starts with listening.



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12 thoughts on “Co-innovation is a strength not a weakness”

  1. Couldn’t agree more about getting some SAP developers on site working on one of our projects. Quid pro quo. If the folks that write the CRM system could work on one of our TPM implementations they might see how design choices taken 3 years ago really affect a real running enterprise. Would be great insight all the way around.

    I assume this means you are volunteering some folks you know? 🙂


  2. How do you differentiate between Innovation and Solution?

    Till date Customers and IT Integrator have been working closely to configure and enhance software [provided by product companies]. Most of these enhancements or integrations at best can be called a ‘Solution’.

    Let’s say SAP has provided Industry specific solution for 21 industry types and then they decide to make one for 22nd, would you call it an innovation?

    At a higher level, I would say the guy who thought about developing Industry specific solution first, only he can be termed as innovative here. Rest were just helping in providing a solution for his idea.

    I think, Innovation is a very individualistic trait and co-innovation contradicts that.

    Teams and collaboration can help in providing a platform to nurture the original idea and deliver the solution but innovation has to be individualistic.

    By the way, will SAP’s partners be called as Solution partner or Innovation-partner?

  3. Ram,
    I’d say that invention is an individualistic trait, but most innovation is driven by more than that.
    One definition of innovation is that it is invention+execution.
    Wikipedia on innovation is worth a visit.

    To quote…Much of the current business literature blurs the concept of innovation with value creation, value extraction and operational execution. In this view, an innovation is not an innovation until someone successfully implements and makes money on an idea. Extracting the essential concept of innovation from these other closely linked notions is no easy thing.

  4. Hi Thomas,

    Thanks for pointing me to Wikipedia’s co-innovative 😉 definition of Innovation.

    And the other one as :
    Innovation = Invention + Execution.

    So the point is, why should we call it co-innovation when Invention, one of the major part, is an individualistic trait.

    Why not simply call it as co-execution and let the invention part be alone.

    However, I do understand that Innovation is in fashion now a days, more than ever.

    I really appreciate SAP’s decision on co-innovation or co-execution, the way you like it. But overuse of the term ‘Innovation’, across the industry, will surely end up in diluting the sanctity of it.

    Will appreciate your views.


  5. Ram,
    good to be talking. I’d really like to get your views on the Von Hippel stuff I link to in the post.

    Innovation means that something changes. Invention on its own doesnt change anything.

    The word is overused by marketing folks, but with this post I’ve tried to return to the core definition.

    When two or more companies sit down and figure out a way of doing something new, or significantly better, cheaper, faster, then I’d label it co-innovation.

    Let’s take examples outside software.

    Colgate and a chewing gum company getting together to develop a totally new product line in teeth protecting gum is co-innovation.

    An investment bank and a hotel chain getting together to create a new financial instrument for investors to buy hotel rooms is co-innovation.

    Some innovation destroys previous ways of doing things, some innovation merely improves.

    Have a look at the latest SAP annual report, there is quite a lot of good stuff on SAP’s views on innovation there.

    And if you go back to Henning’s point, success tomorrow is dependent on building and sustaining networks that enable you to innovate at a faster rate than your competition.

    If you don’t innovate, you lose.

    And on invention, if it was purely individualistic, why would companies build labs, bringing people together? They could build sheds in people’s gardens for a whole lot less.

    It is often the open exchange of ideas, peer reviews and so on that create the spark for invention.

    So bringing together people from different companies is a big part of this. This is why intel have developers inside Walldorf. It isnt because it is good marketing. They want to engineer products that work better with our software. The BI accelerator is an example of this sort of work, is it innovation? In true Schumpeter style, lets have the market decide.

  6. absolutely co-innovation is a strength. In the end what customers do with your or others software is what matters. But co means they are investing – where’s the discussion on how they are being taken care of for that investment?.In SDN, most of your partners are building content, and are billing customers. Customer innovation is on their dime…there needs to be a mechanism for them to be compensated for this. Through lowered SAP maintenance, through lowered partner billing, or through shared royalties from the incremental revenue. Till that discussion happens, I am not sure SAP should call it co-innovation. It’s their IP.

  7. Hi Thomas,

    Good to have this discussion.

    I must admit that I’ve only read the introduction of the book by Von Hippel’s.

    But I think even that talks mostly on utilizing user’s ideas or to know their pain-points to come up with a solution through co-execution.

    And this co-execution is not a new concept. Most of the innovation that we ( system integrators ) have delivered, if any, the driver has been the ideas/requirements from the user side or the ideas evolved due to our proximity to the users.

    Even the wiki link talks about borrowing or lending an idea/invention for further co-execution.

    “And on invention, if it was purely individualistic, why would companies build labs, bringing people together?”

    Excuse my ignorance but how many of these labs can actually win a Noble prize?

    Necessity is the mother of most of the inventions, if not all. And of course it’s important to bring people together so that the inventors can see and be aware of the necessaties and the pain that users are going through. And I appreciate that SAP has taken the hint from SIs.

    About Vinnie’s point, again SIs and Product companies take the idea/hint from users as it comes for free, generally. But user’s are hardly given any share in the IP.

    Further, when we know that it’s important to bring people together then why not execute it as ‘open source’? e.g. why colgate-sap joint venture can’t disclose about what exactly they are working on? Who knows, if GM will have their viewpoint.

    May be to develop a software which will remind you while travelling in the car that you forgot to brush your teeth, and then it will send a message to your Boss/Girlfriend that be ready for the bad-breadth 🙂

  8. Ram,
    not sure where the Nobel prize comes into the equation with regards to the nitty gritty of Enterprise Software, but many prizes are awarded for joint work. (Think the DNA….)

  9. I found your blog on google and read a few of your other posts. I really interested and I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future.Cheer!

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