Interview: Philipp Skogstad [BUSINESS INNOVATOR]

BUSINESS INNOVATOR
Philipp Skogstad –  Senior Director, Global Design and Innovation Culture at SAP

Q: We operate in a highly unpredictable and disruptive business world. What attributes define current market leaders? Which will define tomorrow’s market leaders as well, and why so?
Philipp Skogstad: We used to design and build to maximize reliability and predictability. Current market leaders rose to their position over many years by offering stability. These market leaders created loyal customers who depended on them and were held captive by high switching costs.

Increasingly ubiquitous information access shortens economic, technology, and communication cycles. In this environment, change is the norm and switching costs drop. Future market leaders will rise (and likely fall) quickly by addressing transient needs. Companies that can change rapidly and continuously, while keeping customers loyal, will be the most successful. The relationship will shift, with future market leaders loyal to their customers who they depend on and who must be kept to reduce high acquisition costs.

Q: What should organizations and working professionals be doing today to change and innovate if they want to ensure that they’ll continue to maintain success and relevancy tomorrow?
PS: Embrace change. Organizations must redesign structures and processes for change – the structure or process AND it’s load. Professionals must create an efficient and effective way to learn about change as early as possible in this era of information overload.

Q: In a fast-changing business world, what strategies and solutions do you and your organization utilize to continually stay ahead of the curve?
PS: Study your customer rather than the competition. You will never get ahead of the competition by playing catch-up.

Q: Which habits and practices should every business looking to stay relevant, stay competitive, and stay in front of the competition going forward be embracing?
PS: Engage with university students. They guide you to your next customer and their needs and to the answers to meet those needs. In addition, they will be your source of talent.

Q: What’s the most effective approach to innovation from your perspective?
PS: Innovation cannot be managed. It can only be harvested and the seed of innovation is very small but takes a long time to germinate. Most innovations start from an unexpected idea or discovery made by an individual or small group when exposed to an outside spark while exploring a new technology or need. I recommend hiring people who are inquisitive and want results – then get out of their way. Let them experiment as much as possible.

Q: Some surprising and unexpected things you’ve discovered as part of your efforts to innovate include…?
PS: People must be freed to be innovative but they cannot be made to be innovative. Those who demand innovation loudest are often the biggest obstacles to innovation. They get in its way by rewarding progress according to plan rather than the pursuit of new and even disruptive opportunities.

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