1.
MARTIN GEORG FASSUNGE & TOBIAS HILDENBRAND | SAP AG | 12 JUNE 2013
CO-INNOVATION AND INTRAPRENEURSHIP
IN AGILE SOFTWARE DEVELOPMENT
HOW TO INNOVATE COST-EFFECTIVELY IN LARGE ORGANIZATIONS?

2.
© SAP 2012 | 2
“Ich wollte Mitarbeiter so motivieren, dass sie mehr leisten
als der Durchschnitt. Freie Entfaltung und Kreativität, ohne
bürokratische Zwänge und Regeln. Dazu passt auch keine
Stempeluhr, die mir immer zuwider war.”
Dietmar Hopp (one of the founders of SAP)

3.
© SAP 2013 | 3
WHAT DOES SAP DO?

4.
© SAP 2013 | 4 A LOT MORE THAN 40 YEARS AGO WHEN WE STARTED
Cloud
HANA
Mobile
67k
Analytics
Applications

5.
© SAP 2013 | 5
WHERE DO WE
COME FROM?

6.
© SAP 2013 | 6 40 YEARS OF SAP…
Source: SAP

7.
© SAP 2013 | 7 DON‘T WAIT ANOTHER 40 YEARS
1. Take an Economic View
2. Actively Manage Queues
3. Exploit Variability
4. Reduce Batch Size
5. Apply WIP Constraints
6. Control Flow: Cadence and
Synchronization
7. Apply Fast Feedback
8. Decentralize Control
Source: Donald G. Reinertsen (2009) – Lean Product Development Flow
The Principles of
Product
Development FLOW
Second Generation Lean
Product Development
Donald G. Reinertsen

8.
© SAP 2013 | 8 SCRUM IMPLEMENTS MOST PRINCIPLES OF LEAN
 Iterative feedback
 Empirical process
control
 Velocity understood
 Limited team size
 Iteration cycles,
 Limited WIP*
*) WIP = work-in-progress

9.
© SAP 2013 | 9 WE MANAGE OUR REQUIREMENTS THE AGILE WAY
fixed
estimated
Requirements
Requirements
Resources Release Date
Resources Release Date
Plan-driven (traditional) Value-driven (agile)

10.
© SAP 2013 | 10 OUR DELIVERY IS MORE RELIABLE AND EFFICIENT TODAY
Chief Product
team
release
backlog
sprint
backlog
product
backlog
Scrum
Teams

11.
© SAP 2013 | 11
AGILE = “QUICK AND WELL COORDINATED”

12.
© SAP 2013 | 12 SCRUM REDUCES PRODUCT RISKS DRAMATICALLY
Conduct regular
Retrospectives
Split organization
into teams
Split work
Split time
Deliver more
frequently
Risk
Risk

13.
© SAP 2013 | 13 WITH LEAN, WE LEARNED HOW TO CHANGE AND SCALE
Improve ratio of
planning and
execution
Build quality into
products from
the inside out.
Incorporate
feedback
early
Build Coaches
within the
organization

14.
© SAP 2013 | 14 WE LEARNED TO DELIVER RELIABLY AND PREDICTABLY

15.
© SAP 2013 | 15
HOW TO INNOVATE
COST-EFFECTIVELY IN
LARGE ORGANIZATIONS?

16.
© SAP 2013 | 16 INNOVATION = VALIDATED IDEA + COMMERCIALIZATION
Idea Commercialization
Development

17.
© SAP 2012 | 17
“What innovation boils down to
is one per cent inspiration and
ninety-nine per cent
perspiration.” (Thomas Edison)

18.
© SAP 2013 | 18 SUSTAINING VERSUS DISRUPTIVE INNOVATION
Sustaining Innovation Disruptive Innovation
 Problem well understood
 Existing market
 Incremental improvement
 Customer is believable
 Market is predictable
 Traditional approaches are
more or less sufficient
 Problem not well understood
 New market
 Dramatic, game-changing
 Customer doesn’t know
 Market is unpredictable
 Traditional approaches and
business methods fail…

19.
© SAP 2013 | 19 PRINCIPLES OF COST-EFFECTIVE INNOVATION
1. Make your mistakes faster and cheaper
2. Bet on people not just on ideas –
3. Recognize real intrapreneurs
4. Don’t filter the truth
5. Treat the team as a single entity
6. Don’t trigger the corporate immune
system
7. Value all kinds of innovation
8. Choose innovation that fit who you are
9. Live with your customers
10. Build financial systems early
…
Source: Pinchot and Pellman (1999) – Intrapreneuring in Action
Intrapreneuring
in Action
A Handbook for
Business Innovation
Gifford Pinchot and
Ron Pellman

20.
© SAP 2013 | 20 MAKE YOUR MISTAKES FASTER AND CHEAPER
Source: Eric Ries (2011) – The Lean Startup
…but beware of
”vanity metrics”!
Iterate…

21.
© SAP 2013 | 21 BUSINESS MODEL DESIGN WITH THE LEAN CANVAS

22.
© SAP 2013 | 22 ITERATE ENTIRE BUSINESS MODELS, NOT JUST PRODUCTS
Source: Ash Maurya (2012) – Running Lean

23.
© SAP 2013 | 23 TREAT THE TEAM AS A SINGLE ENTITY

24.
© SAP 2013 | 24 DON’T FILTER OUT THE TRUTH, LOOK AT THE FACTS

25.
© SAP 2013 | 25
“There Are No Facts Inside
Your Building, So Get
Outside.” (Steve Blank)

26.
© SAP 2013 | 26 LIVE WITH YOUR CUSTOMERS

27.
© SAP 2013 | 27 EXAMPLE: CO-INNOVATION SETUP AND WORKING MODEL
Common Roadmap

28.
© SAP 2013 | 28
…AND WHAT ABOUT
DISRUPTIVE INNOVATION
IN LARGE ORGS?

29.
© SAP 2013 | 29 PRINCIPLES OF A “LEAN STARTUP”
1. There are no facts inside your building
2. Pair customer development with agile
development
3. Failure is an integral part of the search
4. Make continuous iterations and pivots
5. No business plan survives first contact with
customers
6. Validate your hypotheses
7. Agree on market type. It changes everything.
8. Startup metrics differ from those in existing
companies
9. Fast decision making, cycle time and speed
10. Startup job titles are very different from a
large company’s…
Source: Blank and Dorf(2012) – The Starup Owner’s Manual
The Startup
Owner’s Manual
A Step-by-Step Guide
for Building Great
Companies
Steve Blank and Bob Dorf

30.
© SAP 2013 | 30 CUSTOMER DEVELOPMENT INCORPORATES AGILE VALUES
Short Iterations
Incremental
Delivery
Small Cross-Functional Teams

31.
© SAP 2013 | 31
CONCLUSION

32.
© SAP 2013 | 32 CONCLUSION: INNOVATION IN LARGE ORGANIZATION
Intrapreneurship
Customer
Development
Agile Software
Development
Business Model

33.
Thank You!
Dr. Tobias Hildenbrand
SAP AG
Dietmar-Hopp-Allee 16
69190 Walldorf
tobias.hildenbrand@sap.com
Martin Georg Fassunge
SAP AG
Dietmar-Hopp-Allee 16
69190 Walldorf
martin.georg.fassunge@sap.com