The Innovation Paradox

Rinse Tamsma

I’ve been thinking about innovation adoption and how it relates to different cultures. I work with companies in western European countries such as Austria, Germany, and Switzerland, central European countries such as Hungary, Poland, and Slovenia, and eastern countries such as Kazakhstan and Russia.

I’ve been intrigued by patterns of adoption that I’ve seen. In some countries, there’s a first adoption approach to new technology, whereas in others they take a very conservative wait and see approach – and these are seemingly tied to the cultures. My observations seem supported in the Global Innovation Index 2016 (GII), which I saw the other day. The accompanying report acknowledges, “innovation is now widely recognized as a central driver of economic growth and development.”

Innovation adoption happens much faster in regions such as North America and Latin America than the German speaking countries, known as DACH. I’ve seen world-class companies in DACH that are delivering world-class products, competitive on the world stage (including small and midsized companies as much as large enterprises) – and they’re latent innovation adopters. DACH-based companies are time and again conservative at adopting new technologies. At CeBIT in March, I asked some DACH-based journalists how they see adoption in their countries. They unanimously answered “conservative.”

When I started in this role in 2015, I saw a European Union report on cloud adoption across the 27 countries in the EU. Most of the countries we at SAP call Middle & Eastern Europe (MEE) were behind the average, some close to it, but none above it.

In a recent IDC report, most of the countries in our region were at the global average. It was interesting to see Kazakhstan, which has an aggressive innovation agenda, is on par for innovation – and even ahead of more mature European countries. This is also reflected in the GII index referenced above. Moreover, in cloud maturity we see Kazakhstan and Russia ahead of countries such as Austria and Switzerland.

There’s a cultural filter built into the DACH region. When new ideas or innovations arrive, they are met with skepticism. Businesses in these markets will research things in depth, preferring to conduct the research themselves and run pilot projects to gain confidence. An interesting question arises: How do you remain a world-class company with this thorough, but time consuming, approach to adopting new technologies? Aren’t you running the risk that you get too slow and far behind competitors that jump in immediately?

In my opinion, when companies look at their IT systems they should understand which systems give them a strategic edge; those are the systems that should always be cutting edge. For some companies, that could be a logistics system; for others it’s customer relationship management.

The second consideration is to make room within the organization to try new things. Google gives employees 20% of their time to try new things, which is a great idea – they get the entire company involved in exploration.

A third consideration is companies should closely monitor which technologies could change their industry’s business model. This is a harder one, because it requires an entrepreneurial perspective.

I would offer a caution as well: Don’t assume you shouldn’t look at new and emerging technologies. For instance, watch what teens are doing because they’re likely on the front of the coming wave. Don’t shut yourself off from new tech and trends  and don’t ignore emerging tech – instead, ask yourself what these new innovations might be able to bring to your business.

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Rinse Tamsma

About Rinse Tamsma

Rinse Tamsma is senior vice president of the Global Partner Organization Region Middle and Eastern Europe at SAP.