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When it comes to design thinking and software, Silicon Valley might as well be the cradle of civilization. With the mother of all design companies, IDEO, and the Stanford D-School down the street it’s fitting that SAP Labs Silicon Valley expanded its design footprint regionally with some big news last week.

SAP has been quietly gathering strength and accolades in design-centric innovation for over a decade. For example, last year the company won The Red Dot Award, a much-coveted design award, for SAP Fiori -- the new interface SAP developed for its software.

Last week marked the opening of a new AppHaus in Palo Alto and the second annual HIVE conference, an event dedicated to understanding what immersive technologies -- like virtual reality and robotics – mean to designers and business applications. 

The AppHaus Palo Alto is one of three such spaces around the world and joins other locations at SAP campuses in Heidelberg and Korea. The AppHauses fall under the Design and Co-Innovation Center (DCC) – an SAP Labs team devoted to highly customized co-innovation with SAP clients. The Palo Alto site will include a D-shop where SAP employees, customers and university students can tinker with the latest technologies including robotics, virtual reality headsets and 3D printing.

“When people come into the AppHaus they are inspired to create and try something new,” Janaki Kumar, Americas Head of the DCC, said of the Palo Alto space at its opening ceremony. “All the organizational silos, the constraints, the hierarchies – they don’t exist anymore. People come here to open themselves up to new possibilities.”

Sam Yen, who a few years ago was appointed SAP’s first Chief Design Officer, also spoke at the event, putting into perspective what this new creative space means for the company. “We have gone through our own transformation figuring out what design means to our organization, and how we can use it to change the mindset and culture,” Yen told those gathered at the AppHaus the opening. “We have seen a significant shift at SAP in how we approach software, and that’s what this space represents.”

The next day at SAP held its annual design and development conference, HIVE. Yen keynoted at the event and reiterated the importance of design in today’s business landscape.

“Designed-centered organizations have really outperformed the market over the past ten years. Those organizations that don’t have internal design talent, or have not fostered a design culture over the last few years, have massively acquired [design consulting firms],” Yen told the audience of SAP employees.

Transformation from the inside out

SAP is even taking innovation a step further. The company’s commitment to core principles of design thinking – empathy, creativity, collaboration and iteration – has helped support a culture of innovation readiness.

By extending its design-thinking offerings to customers, SAP can help clients be more innovative by collaborating with them on specific projects, and helping entire organizations to think like designers and reorient their entire business around core design principles.

Visiting Palo Alto recently, Andreas Hauser, Global Head of the DCC, spoke to the unique opportunity his team at SAP has to really shape business going forward. “What’s motivating me so much is that there is a unique opportunity for us in this industry to help change the way people work,” Hauser said.

Design Thinking Goes Mainstream

The world may finally be catching on to the importance of design thinking, but these ideas are not new to SAP. Yen recently told employees, “You see a lot of companies over the last few years taking credit for introducing design thinking and running with it, but we’ve been at this for a long time.”

It will be interesting to see what comes next.