Before you think innovation, think simplicity

Bill McDermott_BW1

Bill McDermott

Do you sometimes roll your eyes when you hear the word innovation? Sure, it sounds great, but for many it’s hard enough just to maintain the status quo. Keynote speaker and SAP CEO Bill McDermott knows this all too well, and because of that he made “simplicity” SAP’s new priority. Simplicity can beat our common enemy, complexity, but according to McDermott it’s not as easy as it sounds: “We chose to do simple because it’s hard.”

In a recent talk McDermott gave for SAP’s Sapphire Now conference, McDermott points to a few different contributors to the complexity problem, with management at the top of his list. The difference between managers and leaders, he says, is that “Managers create complexity, and leaders have the sense to remove it. Increasing layers is killing companies.”

The more management layers there are in an organization, the farther away the company is from its consumers. McDermott compares these complex levels of reporting to peeling an onion: “A big company should not be structured like an onion and it shouldn’t make you cry when you peel back each layer.” The more levels you remove in your organization, the closer your employees are to the strategy, and the easier it is for them to connect with your customers.

The second complexity culprit? Internal processes.

“Instead of having processes for employees to work around, why not make it easier for them to work?” asks McDermott. He points to simple tasks like buying a new tablet and retrieving information which are often easier to do at home than at work.

For digital native employees, who expect their digital experience at work to mimic the experience they have at home, overly complex processes can make the difference between choosing a job at one company or another. With more and more members of this generation entering the workforce, McDermott warns that it’s time to start taking the user experience of your employees just as seriously as those of your customers.

Lastly, McDermott points to data as the third cause of complexity. Because of the vast amount of data—of which only one percent is analyzed—and sprawling IT environments, critical information is often trapped in silos. Alarmingly, he tells us that on average 72 percent of a company’s resources go towards hardware and services that are maintaining the status quo in organizations, leaving only 28 percent for innovation and moving the needle.

“How many of you want to stop playing office?” McDermott asked the crowd at Sapphire Now. To learn how to stop “playing” and start enacting real change and innovation, attend Bill McDermott’s keynote session at this year’s World Conference.

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