“At Oracle and SAP the corporate walls are so high. We can’t see in, but they can’t see out. I used to work at Siebel and it was the same there. It is amazing just how myopic that sort of company is. If you take a risk there then you get shot. The organisational structure in those companies means that they cannot possibly innovate. Their only hope is to acquire and hope they can integrate effectively."
It's a common refrain that also plays well as a marketing expression. Is it true?
If you're on my side of the fence and looking in, then it is easy to see where this perception occurs and how it is manifested. In commenting about the 'new' Microsoft, I noted that for all the shuffling around and massive profit projections, there really isn't much sign of innovation as a driver for growth or value.
Vinnie Mirchandani regularly exhorts us to look away from the well known vendors and look instead at the innovation and value being created inside business.
After a time you can easily believe that an SAP, Oracle, Microsoft, IBM, Sage, MYOB, Accenture (take your pick) are stuck and will not adapt to the 'new.' It kinda fits with the common wisdom. And in any event, the fast moving technology industry is littered with the names of once great companies that have disappeared. Blackberry has taken itself behind closed doors in an effort to re-invigorate itself.
And while the signs of atrophy are readily seen from within this industry, I get uncomfortable when I hear the 'can't change, won't change' mantra constantly trotted out. Why? Such statements of inevitability are a form of prediction that have no basis in first hand current knowledge. They may prove true for some but inevitable for all? No.
I have consistently argued that pain is a great motivator for change so it was with some interest that I listened in on Deanna Oppenheimer, recent past CEO Barclays Bank UK, talking about the pressures forcing change (webcast) in the banking and insurance industries. The parallels to tech were startling if not quite the same. Ms Oppenheimer suggests that management should move from 'run the bank' to 'chaneg the bank.' A great idea you might think. So how does the argument get framed?She said in almost a throwaway fashion that banks are very good at change - that is dealing with panic situations (i.e. pain) and then went on to talk about the various threats facing the industry. One such example is PayPal, nibbling away at transactions. She argues that PayPal and others' impact might be small now but should be treated as a pain point and responded to accordingly.
I totally get that. The problem is that large though it is, PayPal is a relative minnow in the financial services marketplace. It's impact is modest at best and too often large organizations adopt what to the outsider looks like a suicidal view based upon the notion that goes something like: 'We're so large and have been so successful that we can never be brought down.' Try telling that to Blackberry today.
The truth is that all empires fall. Every one of them. The idea of 'too big to fail' is nonsensical and only survives as an artefact of what governments are prepared to do in certain circumstances.
As organizations grow, they develop what Oppenheimer calls 'vertical hierarchies.' It's a modern way of describing the chain of command. Absolutely necessary for running a smooth operation but almost completely useless for innovation. Why? There's no room for collaboration across the verticals or for the building of informal groups capable of developing fresh, actionable thought when needed or in the crisis moment.
As an alternative, she argues persuasively for actively engaging third parties and in particular smaller firms that can add value to whatever problem faces the organization. Oppenheimer also draws the distinction between what she sees as the 'old' and 'new' worlds where the emphasis has shifted from 'information as power' to 'information shared is power.' This is a daunting prospect for many organizations and especially those built upon business models that depend on intellectual property (IP).
Central to Oppernheimer's thesis is that success in transformation and the response to real threats lies in creating communities able to not just share but act on information and ideas. She claims past success at Barclays and urges others in the banking industry to get on the train before the advantages enjoyed by the new breed of alternative finance operations overwhelm them.
It's a novel idea and one to which I would willingly subscribe if it wasn't for that fact that a motivated community alone will not do it. There has to be much more and especially in the area of leadership.
As I observe organizations responding to current pressures, there is a tendency to panic and go jumping in all sorts of directions. I've been there and got those scars. What's needed is calm leadership. Lighting fires under the troops is fine to get them to sit up straight, but pouring gas on those same fires means people get burned.
Even so, technology clearly has a role to play in helping disseminate the wheat from chaff and exposing the best thinking.
Bonus points - here's the link to the full set of presentation slides
Disclosure: SAP and Oracle are premium partners
Images taken from Lithium webinar, featured image: © Michael Brown - Fotolia.com