The expectations from the digital natives are so high that you will lose the war if you wait
Leaders are going to be the drivers of change. They help attract the best talent and determine how organizations cope with transformation
Stefan Ries, Chief Human Resources Officer (CHRO), is a member of the Global Managing Board of SAP SE with global responsibility for Human Resources. He was appointed to the Global Managing Board of SAP SE in May 2014. Prior to SAP, Stefan worked as a consultant with Egon Zehnder International and was a member of the global High Technologies/Information Technologies Practice Group, overseeing local and international projects to recruit, assess, and select top management talent.
You have worked with some great companies like Microsoft and Compaq. You are now the Global CHRO for SAP. What are some of your biggest learnings from this journey?
I went from the corporate world to consulting back to the corporate world because I am excited about SAP’s journey. I am excited about the people working here and more so, I am excited about the challenges in front of us. I have witnessed that organizations and HR alike have constantly undergone changes, and currently HR departments are in the midst of a paradigm shift in the way they function. What I have learned during my journey is that you have to be open to change. Across industries, we are facing a situation that is complex and its complexity is getting bigger. Even if you focus on a specific product line, Even if you focus on a specific product line, at the end of the day, there are increasing demands from customers. And this shows that running a business is becoming really complex. To give an example from SAP, in the past, we put robust ERP systems in place which took years to get installed. As cloud solutions are becoming the norm for customers, our 75,000 employees globally have had to respond to dramatically changing market requirements by re-imagining our business just as much as helping our customers do the same. Our employees have had to rethink and reinvent despite the fact that the ERP business was also very successful. I have discovered that learning and leadership are fundamental in enabling organizations to change and get ready for the future.
How important has it become to reimagine HR?
A common mistake HR makes is that it thinks that if the system is not broken, there is no need to fix it. And that prevents HR departments from being proactive. We had a very interesting discussion with a customer, whose viewpoint was that his company did not need to change its current system because it wasn’t broken. The demand and expectations from the external world - the new generation of digital natives - is so high that you will lose the war if you wait. This means you will miss the chance to track the talent in your organization and attract talent to your organization. When we talk about complexity, we need to think about standardization and simplification. I truly believe that first you need to standardize and simplify your transactional services. And then you need to think about your leadership agenda, your talent development approach and improving learning. These three elements will pay huge dividends in your business transformation. That is what we have done at SAP. We need to think about talent management, work force analytics and how to deal with a diverse and multi-generational workforce. And then we need to determine the best leadership approach and the core elements we want to introduce from a talent perspective.
You place leadership as the fundamental key for making organizations future-ready. Why is that the most critical element in organizational transformation? Can you share some anecdotes from your career?
Leadership is crucial because when an organization is in the midst of transforming itself, it has no choice but to have the very best leaders and managers in place. They are going to be the drivers of change that help attract the best talent and determine how organizations cope with the transformation. When I came back to SAP, Leadership Development was unorganized. SAP is a truly global organization. Only 17,000 of our 75,000 employees are based in Germany. The rest work around the world. Besides Germany, we also have development centers in India, Israel, Bulgaria, US and Brazil. At that time, we were also transforming, and we had 7,000 of the best leaders and managers around the world. So here is the initiative we took: I brought a business case to our board and said we need to shift gears. When I rejoined SAP, leadership education was distributed among the various business units and the approach was not consistent. We were spending a lot of money but the return on investment in terms of employee engagement and leadership trust was not what we expected. So we put in place a new leadership curriculum, from first line managers to the executives. Most of the modules are now designed to be accessed in a mobile cloud environment, so that managers and executives can learn whenever they have time. Earlier at SAP, leadership development courses were not free of charge. We made them free of charge and created a mandatory curriculum for all leaders around the world. We started with the board and initially there was some resistance. As of now, we have retrained 2,000 first line managers and the top executive population of SAP. Now our focus is on the middle management layer because that is also important and critical. In my view, leadership education is vital for an organization to transform.
You also characterize learning as another crucial element in preparing organizations to be future ready. What has been your experience?
When I came back to SAP and looked into the learning space, I found that 65 organizations delivered our learning content. That’s just sheer complexity. We checked employee perception towards learning through a survey and found that individual learning experience got the lowest rating. We had already invested millions of euros around the world for learning but the impact was not what we had expected. So we changed the organizational setup, introduced a Chief Learning Officer, collected all the budgets and introduced a new learning platform using web and mobile technology. We have also streamlined the platform and made learning fun by adding games. SAP employees love technology and this attribute helps us when we launch a new learning platform.
Technology has certainly emerged as a huge game changer in HR. How do you perceive the role of technology? Technology is undoubtedly a huge asset. However, technology alone will not help HR move to the next level. Technology is only an enabler. I’ll give you one specific example: we have centralized on-boarding for new hires, for which we receive positive customer feedback that shows high satisfaction levels. This would have never been possible if I had just introduced the technology; the vital issue was the process from start to finish. So I had to look at it from an employee’s perspective and from a leader’s perspective. And I urge other HR leaders and managers to do the same.
What advice would you want to give to HR leaders in the context of a changing environment?
The problem HR is facing right now is the current situation within HR. If we are not smart in dealing with the problem at hand and if we do not have clarity on what we are going to introduce next, there will be no future. I am absolutely convinced that this is something we need to tackle now. I have worked in HR for 25 years, and I am tired of hearing the discussion on whether we have a seat at the table or not. HR is crucial to each and every organization. We must remember that if we don’t get a chair at the table, we need to stand. That said, I am sure we do have a seat at the table; we just have to make sure that our voices are heard. Topics like leadership, learning, organizational transformation are very crucial and CEOs, boards and executives will listen to us. The current complexity is a good opportunity to pick a few battles to convince them. HR needs to not only earn the trust of top level management but also start to change their minds. We need to convince leaders that the voice of HR is as important as other functions in the company, such as finance and controlling. I truly believe we need to pick the battles that will give us a guaranteed seat at the table. I also truly believe that executives will listen to us because we are a major enabler of business transformation.