For the big German software company SAP, it was a classic chicken-and-egg dilemma. The year was 2003, and SAP was just releasing its new NetWeaver platform–a nifty piece of software that fit on top of and around its existing enterprise applications, helping them talk to each other and to non-SAP applications.

SAP was trying to make the most of a then-new way of integrating software called service-oriented architectures, which allow computers to more easily share data and services.

The dilemma was this: the product’s full potential wouldn’t become apparent until customers began using it and discovering what it could do. Yet customers might not adopt NetWeaver–which SAP was essentially giving away as part of its applications–until they could grasp its potential.

Even NetWeaver’s early adopters–typically among the most tech-savvy of its customers–were struggling with its basics. Yet SAP had neither the reach nor the resources to train and teach its entire customer base–let alone educate tens of thousands of systems integrator consultants.

That’s when SAP Executive Board Member Shai Agassi came up with a great idea: why not let all of SAP’s customers, systems integrators and independent service vendors (ISVs) teach each other about NetWeaver, peer-to-peer, as they learned to use it?

The result was the SAP Developer Network (SDN), a creation space of forums, wikis, videos, and blogs targeting not just SAP customers but the 3rd parties whose participation would prove crucial to the platform’s success. The SDN community grew quickly and powerfully and, as it did, SAP was able to establish NetWeaver with its customers.

What’s instructive about this story is how Shai Agassi and his team reached across SAP’s corporate boundaries (after first convincing SAP’s internal groups to create one rather than many communities) to knit together a broad network of developers, consultants, users, pundits, and experts. Few of them were on the SAP payroll, but nearly all were passionate about software. At minimal cost to SAP–relative to push models–SAP harnessed the collective power of hundreds of thousands of talented individuals to help achieve the company’s strategic goals. In effect, Shai Agassi was “pulling from the top” to increase the rate at which SAP could learn, innovate, and perform.

How can other institutional leaders follow suit to foster the emergence of creation spaces and collaboration curves? Here are four broad suggestions:

1. Re-frame the institutional challenge and opportunity. Today’s institutional leaders mostly focus on attracting and developing talent inside their own institution. Shai’s insight was to look beyond company boundaries to access and develop the talent SAP needed. More broadly, leaders must redefine the reason their institutions exist, breaking down institutional walls to move from scalable push to scalable pull.

2. Identify and mobilize passionate individuals. Shai Agassi didn’t do it for the money–he’d sold the company he’d founded, TopTier Software, to SAP for $400 million in 2001. Yet he stayed with SAP for six years after that because he so passionately believed in software’s (and in particular NetWeaver’s) ability to have a huge impact on the world through productivity gains. SAP CEO Hasso Plattner recognized Shai’s passion and invested in it, even though many in the company viewed Shai–who hadn’t risen through the SAP ranks–as something of an “outsider,” even a bit of a renegade.

Passionate individuals are usually talented and motivated, but they’re often unhappy – they see the potential for themselves and for the institution where they work, but can feel blocked in their efforts to achieve it. Institutional leaders must put mechanisms in place to connect these individuals with each other, and serve as their champion.

3. Re-orient institutional activities. Mobilizing passion means re-thinking strategy, organization, and operations. Strategy prioritizes the growth needed to create new things for passionate people to do. Organization shifts towards scaling teams in broad creation spaces where people get better faster by working with others. Operations focuses on the two or three initiatives that pull passionate people with the dispositions required to operate successfully in less structured and defined situations. Modified incentive and reward systems help keep these people learning – through both success and failure – and rewarded for taking on more near-term risk.

4. Embrace new forms of information technology. Younger generations of employees are using new Enterprise 3.0 technologies to connect with their peers across institutional boundaries. These contrast with Enterprise 2.0 tools that mostly focus on collaboration within the enterprise. Enterprise 3.0 will eventually fuel the definition and deployment of new IT architectures designed to foster long-term, trust-based relationships across thousands of independent institutions–rather than short-term, narrowly defined transactions executed largely within a single institution. Institutional leaders must recognize and embrace these new forms of IT.

What early examples of institutional change do you see? Are our institutional leaders up for the challenge? What else would you tell them to change in a world of pull?

Read additional posts from John Hagel III, John Seely Brown, and Lang Davison.

Author: The Big Shift @ HBP