SAP & InnoCentive

Jevon at Socialwrite recently wrote about SAP's partnership with InnoCentive. My my, how things have changed. It wasn't too long ago that I was sitting down with SAP and listening to their philosophy on business practices which was the furthest thing away from crowdsource thinking like InnoCentive.

SAP had traditionally been about "best practices". According to SAP, companies stand to gain from SAP's global customer base and taking what is context for others and making it core for them. For example, what large scale operation would "build" their own inventory management system or human resource management system instead of buying it? You would spend much more effort and dollars to accomplish only a fraction of what a company like SAP has already been able to do. In addition, you benefit from their global R&D and refinement of best practices.

To fully reap the value of leveraging pre-packaged best practices however often requires you to minimize customization. Over customization would diminish the value of having a set best-practice to start with. Hence companies that just adopt the SAP practices would tend to benefit from higher levels of efficiencies. Or so goes the philosophy...

As I've written previously, the challenge with this thinking is that it limits innovation. Sure, you could argue innovation only matters around what is "core" to your business. But that line of distinction can be a bit fuzzy, and strong delineation could mean missed opportunities of taking what was "context" and transforming into "core". For example, if your core was manufacturing PC's and distribution was really context for you, you may miss out on creating a competitive differentiator by drastically changing the distribution practices.

For me it's been quite interesting to see how SAP has been on a road to "re-inventing" itself. The focus on SOA & BPM over the last few years and this most recent partnership with InnoCentive to crowdsource innovation could be a sign of things to come for all enterprises. If the world's biggest enterprise software giant whose core is around best-practices is now crowdsourcing for new practices... What are the implications to your organization?

Or perhaps it's just hoopla and SAP may not really be all that serious around crowdsourcing and is just doing this for appearances. Jevon ends his post by quoting Mark Yolton, Senior VP of the SAP community network, “We will only be posting problems which are not core to our business”. I hope not. As Clay Shirky stated, the old thinking was to focus on 80% gain for 20% effort but the new thinking is, why give up that last 20% of gain? Thoughts?

Three "Best Practices" that Kill Collaboration

"Why must we keep convincing people about the importance of collaboration!? This is not a new topic or a radical concept. We all know it's good. If man, by nature is a social creature, then why haven't we cracked the nut on collaboration".

This was a statement made by a participant at a meeting I recently attended. It was one of those comments that just made the room stop for a minute and think. It was a legitimate question, that was rooted in frustration over years of work on the topic of collaboration.

I've written a set of blogs (Desire, Opportunity, Capability, Connectivity) that talk to the ingredients required for collaboration. If you're really interested in creating a collaborative work environment in a traditional company or in a Enterprise 2.0 organization, I suggest you read those 4 articles.

In this blog, I thought I'd focus on 3 controversial reasons that actually kill collaboration. These 3 obstacles, are often considered "best practices". You may even read these as proud statements on the next resume you review but, it could turn out to be the reason your organization can't get to the next level of collaboration.


1. Well defined, measurable set of objectives directly linked to compensation, recognition & rewards tailored for each employee.

There are several proponents of having well defined measurable objectives and tying them directly to compensation. Management by Objectives (MBO) & Jack Welch are just a couple of names you'd hear praising the benefits. It seems logical that if you do a good job, and it's linked to your objectives then you should be compensated for this.

The difficulty lies in the individual nature. The first concern is around the competitive aspects of this kind of model. If your knowledge or expertise could really assist someone else but helping them had no relation to your objectives, would you help them? What if we took it one step further. What if your helping of someone else actually hurt your ability to meet your objectives? Perhaps it would take you away from completing your objectives or actually go counter to your objectives? What if the more important thing for the company was helping that other person?

Often a cascading objectives model (one in which, you get your objectives from your boss, and she gets them from her boss, etc..), leads to solio'd thinking. Opportunities that arise that cut across silo's (and requiring collaboration) are simply never seen. It's not that people want to be malicious, they simply don't see the opportunity.

Is it possible to structure objectives, that allow for collaboration that still are well defined, measurable and linked to compensation? The answer depends in what "well defined" means. In theory, an objective about collaborating could resolve this. It's worked for other organizations. If you go this route though, keep in mind the implications it has on organizational structure as well. Proceed with caution, you're changing institutional models that may be as old as the organization itself.


2. A strong track record of success & being an expert.

William Torbert and associates have done some very interesting research looking at effective leadership styles. One of his findings is that most leaders are good leaders. In fact they would be considered "experts." How could this be a bad thing? Well, think of when you last asked for help. I bet it was likely because you needed help! Why would you ask for help if you knew how to do something? The answer of course is that there could be a better way...

Collaboration fails when the participants, aren't really listening. This tends to happen when we become experts in a field (or believe we are experts in a field). It becomes even worse when others also identify you as the expert in an area seeking advice and recommendations. What happens is we are so confident in our ability, that we simply get things done. We understand the most complex issues and when someone, with basic understanding offers a suggestion that could go against years and years of thinking in a field, we tend to dismiss it. If you're a parent, and consider yourself to be a good parent, how likely will you listen to someone (who doesn't even have a child) give you some parenting advice???

Acknowledging this is the first step to becoming more open & receptive. Torbet talks about "Alchemists" who can "transform" information and concepts into radically new things in a collaborative model. Keep in mind, this doesn't mean you need to collaborate on everything and that expertise isn't a good thing. It's knowing how to be receptive to collaboration.


3. Focus on getting things done and taking quick action.

Today more than ever, we are praised for our ability to get things done. Business moves at the speed of thought. Competitive pressures drive us into action. We must take first mover advantage.

I won't argue that speed & agility aren't critical for today's successful business. The problem occurs when we find out afterwards that we were running the wrong race. Short-term solutions that provide immediate payback cause us to ignore the longer term implications. In addition, we mis-interpret action for speed. We see the guy who is busy responding to e-mails, & making decisions as more productive then the guy who is chatting with his team over coffee.

Reality is that the race starts way before we even get to the start line. It's in all the preparation we do prior to. Collaboration, in these early stages sets the stage for swift action. As Covey would say... Seek first to understand the problem/opportunity and then to be understood.

Conclusions

For each of these factors it's all about balance. Those things that created success may at a certain point, be the same things that stop us from getting to the next level of collaboration.

What do you think? Have you experienced any of these? Do you have other examples?

Consultants in the Web 2.0 era?

Over the last few years, I've noticed a change in the value proposition of consultants. It really hit home in a meeting I was in where an "advisor" for a large company was explaining their product to us and it's adoption rate.

They discussed how they could help us with our next set of opportunities, what was happening with other customers and what best practices are. As they were going through their slides, one of the folks on my team pointed out some flaws to the material. In fact, they even googled it on the spot and sent them details which contradicted what we were be presented.

This was just an example. Over and over again, I encounter similar situations where the "experts" don't seem to provide a tremendous amount of insight. If best practices, case studies, methodologies, are freely available and I have instance access to knowledge what is the value of the consultant? If I can consult with the best minds in the world via blogs, articles, white papers, and often for free, where is the value proposition? Why would I bring them on? In fact, if I insource 'consulting', I get the advantage of deep understanding of the business that a consultant would have to learn as it is not available. Just as Don Tapscott talks about the "prosumer" where individuals are no longer just consumers but producers, companies are also becoming prosumers. Their knowledge sometimes eclipsing that of the vendor or consultant.

Don't get me wrong, some of the smartest people I've met and some close friends are indeed consultants. Experience has got to count for something right? Perhaps. Many times I've personally just "felt something didn't feel right" which I base on experience. Does external experience outweigh internal experience? Do we need to hire a consultant ;)

I suspect, the consultant has to move up the value chain. Has to provide more than "thought leadership" and "best practices". She/He would require critical skills that I do not have or have decided not to invest in. I suppose the other aspect is neutrality. But that would depend on the situation and whether neutrality is even required.

At a minimum, I think it's a wake-up call for companies to focus on their own people. This means more than just saying we believe in our people but giving them an opportunity, the skills to think and contribute to the long-term success of your firm.

Why Best Practices can Kill Innovation.

Not too long ago, I was asked to take a look at what SAP was doing and see if I was interested in helping define how our company could leverage their "Next Generation" of ERP. To be honest, the thought of working on SAP was less than thrilling. But, I knew my boss, and I very much respected him so if he asked, then he must have seen something and the minimum I could do was look at it.

My hesitation stemmed from the perception of SAP as simply an ERP. SAP is a whole business built on defining the world's "best practices". The logic went like this... SAP's business is defining the "best ways" to handle functions which are not "core" to other businesses. Since these functions are core to SAP, they are able to spend massive amounts of R&D on these functions and with a customer footprint as large as SAP's, they are able to define best practice and productionize it into their product suite. The clients of SAP therefore benefit from best practices.

What I disliked about this is that, by definition, a best practice is a system/process which has already been done and repeated and proven to drive efficiency across several organizations. It runs counter to innovation. By implementing these best practices you will be as good as anyone else who also implemented these practices.

Now some would argue, that if it's not "core" to your business (aka "context"), then why would you care? Instead of wasting R&D on these, just focus on core competency of your organization and allow others define best practices for everything else. For example how many companies write their own Word Processors? This is true. But as the processes become larger and larger, they encroach on areas that are core to an organization and in the quest for efficiency, we turn a blind eye to opportunities for creating true differentiators. For example, if a company differentiates itself on it's "customer service" and it has implemented a best practice CRM suite, they have successfully become as good as everyone else who has implemented this suite.

By implementing the best of the best, they ignore opportunities to change their processes and truly differentiate the experience with the customer. Instead, they've become dependant on a third party to innovate on their behalf. Where is the line between context and core? And could there be elements in the context which can brought into the core?

So do you throw out everything and start from scratch? No. The key is to use it as a starting point only and allow for innovation from there. In some situations, if it's really core to your business then you may indeed have to start from scratch. Consider Google... Their "core" was in their proprietary advanced search engine algorithm. Google's business was not about servers or massive data warehouses. BUT rather than using "best practices" in data warehousing technology, and purchasing a massive data warehousing environment like IBM, Oracle or Teradata, they took many many many PC's, stripped them down, strung them together and created their own proprietary datawarehousing. NOT core to their business.... OR was it?

So back to SAP... It turns out that those clever folks at SAP have realized this as well. Their proprietary nature has given way to open standards which if their vision pans out, means we should be able to use their best practices as starting points. Through the SAP NetWeaver technology (SOA based ERP), companies will be able to to dis-assemble best practices and build unique and differentiated processes which can lead to a competitive advantage.

The big question though.... Will companies actually drive innovation now and take advantage of best practices as only a starting point? With all the hype SAP is putting behind NetWeaver, and the hype around SOA? I suspect for most big companies the answer is "no". Well at least not immediately. Why? Well, that's another blog for another time but it has something to do with our fascination on efficiency.