Canada needs to shake up business: SAP

Canadian business is too slow to react, and too scared of change, according to speakers at the SAP World Tour in Toronto Thursday. Innovation, according to president and managing director of SAP Canada Inc., Mark Aboud, CBC anchor Amanda Lang and business author Gary Hamel, can only occur fast enough if businesses are willing to take risks and promote innovation from within.

Aboud, who presented first and then conducted a conversation between him and Lang, spoke passionately about the changes that have happened at SAP Canada in the last three to four years. He said that, at SAP, they have even started referring to themselves as “the new SAP” now because of the shift in tone. Without that shift, he thinks, the company might have stagnated and slowly lost ground with its successful ERP business. So happy in fact, it might never have explored its new data storage technology, HANA.

“The new SAP has a whole new culture even than we had three or four years ago,” Aboud said. “We still have the base ERP business, but today it’s less than half of my business.”

This theme of risk and opportunity was prevalent in all aspects of the keynotes. Lang said that, in her new book, she calls for Canadian business to start acknowledging our competitors to the south and to notice that they innovate faster because they know they know that facing fear is how you stay competitive. This “status quo” culture can lead to some pretty damaging trends, Lang said. “A lot of employees treat their boss like a substitute teacher,” she said. Instead of seeing them as someone who inspires them to think differently, they are “someone to thwart.”

Both Aboud and Lang acknowledged that if companies rely on aging management who are stuck in their ways for change, innovation can’t happen, or at least not fast enough for Canadian business to stay competitive.

Aboud said this is the kind of culture he’s tried to create at SAP. “(We) fostered an atmosphere of innovation. Fostered an atmosphere of, ‘It’s OK to fail if you’re trying something new,'” he said. “Our fear of failure can prevent us from trying things.”
But Aboud warned this isn’t as simple as telling people to innovate, telling them to be different. It’s an overall cultural shift of risk and opportunity that has to be started from the top down so employees feel safe to try. “Rather than dictate it you have to foster a climate and an environment for this to happen.”
Gary Hamel, whom Amazon and the Wall Street Journal have called one of the foremost authors on management, echoed Aboud’s statements but called for a more radical reaction. First, he acknowledged that, “management is perhaps human-kind’s best human invention.” But he quickly added that, “management grows disproportionately to business growth.”
Hamel cited companies like Google Inc. and W. L. Gore & Associates Inc. (makers of military and consumer tech like GoreTex fabric) as examples of truly innovative companies that help foster that kind of climate by decentralizing authority and control. At Google, he said, no group can exceed 200 employees without being split into smaller groups. This keeps a level footing for employees to submit ideas.
At Gore, it’s an even more extreme example. In every 20-or-so person team, there are no VPs, no CEOs, no management to dictate change. Hamel said there are only elected “leaders,” employees selected by their own group as fit to lead, and ideas are sourced from absolutely anyone.
Hamel argues that innovation can come from anywhere if you’re open to hearing it. Sometimes, as with R3D in the US, the best and most profitable ideas can come even from administration. A member of the administration staff there thought that maybe the company’s 3D modelling technology would be attractive in the games industry, and looked into licensing it there. It proved to be an incredibly fruitful endeavour, and one that might never have happened without that culture of innovation from all sides.
And Lang is worried that this is exactly where Canadians are lacking. Instead of encouraging employees to accept everything that comes down from on high, Lang argues to “simply encourage people to ask why or why not.”
“(It) demonstrates that innovation can be incremental.” This timidness, she allowed, “might be a Canadian problem.”
Aboud agreed. He said North Americans, because of our resources and talent, are sitting on an untapped pile of cash. “I woudl love to see Canadian business kick…whatever around the world,” he said. “We have so many assets but we’re a little bit too timid.”

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