SAP Co-CEO Talking Innovation

Jim Hagemann Snabe was appointed SAP co-CEO in February 2010. Jim Joined the organisation in 1990 and has been a member of the Executive Board of SAP AG since 2008. He spoke with CIO about how he fosters innovation within the enterprise.

CIO: We talk a lot about innovation being technological advance, but what is innovation for you and for you individually as a leader? How does a leader drive that in a business?

Hagemann Snabe: We’re doing a number of things. We sat down and tried to define what we meant when we say “innovation” and people often confuse creativity with innovation. They think having great ideas is innovation. We believe having great ideas that don’t impact business is not innovation — they’re just great ideas. And so the ability to bring great ideas to consumption is key and that’s where we see an opportunity to combine the best of two worlds.

On one side, we are today known for our ability to scale. We have almost 100,000 customers, we’re in almost every single country in the world and we have a very strong and powerful ecosystem. If we bring something new out we, can bring it out globally and rapidly? The second dimension — and what we’re missing a little bit — is the entrepreneurial aspect. Having smaller teams bring these ideas to life.

That’s what we have with agile methodologies; we’re empowering [teams] to have time to innovate with customers.

Bring these two aspects together and you have real time to innovate. Creative ideas are brought to the market in large scale. The iPad is a good example of that. What was it, 1 million sold in 22 days? And the iPhone sold a million in seven days. That’s innovation and impact. That’s what we’re looking for; engineering is challenged by looking at how it is easy to consume.

It’s easy to disrupt the market by saying: “We have something new.” It may be innovative and creative, but if you need to delete everything [in order] to adopt it, it’s going to be a slow impact. The challenge is to find ways to deliver disruptive technologies in non-disruptive ways to our customers. That’s much harder, but if we do that we achieve impact like no-one else in this industry.

One example is the memory technology. We launched this idea at Sapphire this year that instead of dramatically changing current applications, we put an appliance next to the business suites that takes a copy of the transactions and replicates it real time into the memory and you build new applications on top of that. It gives you the power of no disruptions with a very disruptive technology.

That’s how we define innovation. How we drive it is to look at time it takes from an idea is generated until 100 customers are using it effectively. That’s not just the production time — it’s looking at how you go to market, how you get it installed –that’s a whole process that we want to shrink. We need to reduce the time to impact.

The idea of smaller groups making an impact through knowledge or creativity reminds us of Google in the way it operates. What other businesses do you look to in our industry or other industries who have achieved that vision of innovation?

A large number of companies who are our customers in the consumer industry have achieved real innovation. Obviously there are companies like Apple, but also Nestle and Colgate — innovative consumer orientated products. And we get inspiration from different companies.

I took my whole leadership team to EA Games in California where we learned: How do you get customer feedback? They receive more than 1 million feedbacks per game and the feedback comes directly from the players — that is extremely valuable feedback. And we’re trying to learn from the best in different categories about innovation from different companies.

We went to Porsche to learn about lean and we went to Cisco to look at how do you incubate new businesses. We’re always eager to learn but we also have an opportunity because we are in 25 different industries, so a customer can learn from another customer. A retail bank could learn from a retailer. Banks feel they are in a limited environment — well try and look at pharmaceuticals. There’s a lot of learning that can happen across the boundaries of industries and we’re trying to facilitate that. It’s all very interesting.