If there’s one thing that’s true about the tech marketplace, it’s that you can never stop learning or asking questions to better your understanding or deepen your knowledge. Yes, these gadgets and platforms change the way we live and do business, and they’re unendingly interesting to examine and explore—ultimately, though, the heart of this industry comes back to communication. That’s what most of these tools are for, after all—communicating with customers, employees and partners in ways that boost meaning and efficiency. We’re constantly asking ourselves myriad questions: What do you know? What else can you discover? Why does it matter? How can you best put that knowledge to use?
At Converge, we aim to answer those questions, and we covet the perspectives of other leaders in the industry along the way. That’s why I jumped at the opportunity to talk shop with Jonathan Becher, Chief Digital Officer (CDO) of SAP—a company proactively positioned (like us) at that oh-so sweet spot where tech and business collide. Below are some Q&A snippets and key takeaways from that exchange that you don’t want to miss.
Q: Of the following, what are the biggest obstacles when it comes to driving an effective digital transformation in an organization the size of SAP?
- Conveying the risk/reward equation to the company’s leadership
- Getting buy-in across the organization
- The ability to execute, build and deploy
- Adapting fast enough (i.e., velocity)
- Overcoming fear of risk (product cannibalization, alienating customers, etc.)
A: Getting buy-in across the organization. SAP has been phenomenally successful for nearly 45 years. As such, there is a natural resistance to change what has worked so well for so long. In addition, large companies usually have distributed responsibility; decisions and execution require coordination across many stakeholders.
Q: How does the equation change for Small and Midsize Companies (SMBs)?
A: I have had the opportunity to work for large companies and startups. Smaller companies can move from decisions to execution very quickly. However, they can have trouble remaining focused on the long term. Short-term opportunities can distract them—especially if they are cash constrained.
Q: How do you convince the company leadership to agree to support innovation or an idea that will ultimately cannibalize their cash cow? This is a question of both long-term vs. short-term thinking and planned obsolescence.
A: I think the days are gone that you have to convince a leadership team to support innovation—they all want it but aren’t sure how to get there. It’s a separate question of whether they would be willing to cannibalize their cash cow. Most want innovation that extends their market reach, rather than to replace a current offering. To paraphrase Gordon Moore, legendary CEO of Intel, ‘only the paranoid survive: disrupt yourself before you get disrupted.’
Q: Can you shed some light on how planned obsolescence (and product lifecycle planning) can help organizations get better at accelerating their innovation cycles?
A: I’d advise looking at the concept of minimal viable product instead. A successful digital culture embraces a minimal viable product with rapid iterations. This goes beyond a first-mover advantage leading to higher market share; digital cultures operate at a higher frequency than more traditional businesses (e.g. weekly product releases, hourly sales forecasts, 10-min response times to customer inquiries).
Q: What other way, besides incorporating planned obsolescence into their product management model, can organizations get better at becoming innovation powerhouses?
A: There is a big difference between designing things to break or wear out (the traditional definition of planned obsolescence) and designing things to evolve and improve over time. I’d challenge you to reconsider the premise that planned obsolescence is a path to becoming an innovation powerhouse. Instead, embrace the concept of minimal viable product with rapid iterations. And then cultivate the right company culture to get you there—improve risk tolerance, be inclusive of diverse backgrounds, encourage people to be hands-on and not outsource their brains.
I think we can agree that efforts to drive digital transformation are imperative for both enterprise companies and SMBs, although they may be handled a bit differently depending on available resources. The above exchange both answers a few questions and poses new ones—how do you incorporate planned obsolesce into product management, if you do at all? From a leadership perspective, how do you and your team approach innovation in the long-term and the costs of taking risks? I’d love to hear your thoughts.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.