Talent management at SAP Labs is driven by its culture. Though difficult to define, culture is the way of life in the company, which includes fun, feeling involved, and the joy of creating the next game changing product for businesses around the world. As Bhuvaneswar Naik, VP, HR, SAP India explains, “We never say it is a ‘workplace’, we say it is a ‘way of life’.” This is particularly true in a product development company where business is a function of constant innovation.
Talent management in such a backdrop emerges as critical. This is true because ensuring that people have fun while working and stay with the organization long enough to internalize the product and functional knowledge, holds the baton for continuous innovation.

Talent drives innovation

Talent management at SAP Labs caters to talent at multiple levels, all of which works towards ensuring that employees are excited about innovations. There are people who do exceedingly well, those who manage to do well and then there are people who need help and support to get better. The top 10% of the organization is called ‘high potential’ and the company invests on them to develop them further. However, the definition of ‘high potential’ here is unique, as it not only caters to people who do extraordinarily well, but also have the right attitude. Top performers who do not showcase the right attitude at work are called ‘derailers’ and Naik shares, “We are firmly saying that you can be a great guy and you can create the next generation product, but if you have the ‘derailer’ qualities in you, then you don’t qualify as high potential. This is a unique practice we started last year, where we drive home the fact that along with being great at your work, it is equally important that you carry the required attitude.”

There is a different approach towards managing the different customer groups in the company. These customer groups belong to different age groups – employees who are 45 years old and have spent 15 years in SAP, and the Gen Y who are 22 to 23 years old, and just out of college. The challenge is in helping managers to deal with the generational diversity. Most managers, middle management or even senior management, do not necessarily have children in the age group of 22-23 years. Thus, being in a different stage in life does not make it easy for them to identify the needs of those who have entered that life stage. A critical focus of talent management is, therefore, to sensitize these managers to accept inclusiveness and embrace this new generation, because there is so much to learn from one another. Another customer group includes managers, who are tenured in the company, but have not grown, and such talent demand has to be managed differently. This diversity in workforce requires HR to be sensitive towards the needs of the customer to be able to segment them and have robust solutions for each segment. And in the present world, there is a need to demonstrate a sense of urgency in every action.

Today, business operates in an ecosystem which is fast, continuously evolving and things go out of fashion the very next day. To effectively convey this changing nature to an employee base of about 4,000-5,000 people, communication needs to be short and concise, because no one has the time. Contrary to this present scenario, an R&D setup like SAP Labs demands a long term investment in one particular product before an innovation actually takes shape. Thus, the uniqueness of an R&D setup in this backdrop is to be able to build the required stickiness to the product, which is possible only through continuous excitement that employees experience at work. When employees start believing that they are changing the way the world is running, their efforts and contributions flow naturally. For example, people working in Google are changing the way people are searching today, while Facebook is changing the way people are communicating. Similarly, SAP enables its people to change the way businesses run around the world. And that is what creates that constant stickiness to their work as they develop innovative products. Therefore, when one starts identifying himself/herself as a game changer in some form, the stickiness becomes so important to hold on to people.

Investment in top talent

There is a great impetus on investing in top talent to develop them as next generation leaders. Innovation is also seen in the different delivery platforms used for employee development, rather than the usual classroom interventions. The belief is, that experiential learning has a greater return on investment. Whether it is exposing top talent to a sailing intervention, or associating with the theatre group Jagriti in Bangalore, or using art & music as delivery platforms for learning interventions, SAP has ventured out-of-the-box to make learning most exciting and relevant. These new techniques are critical for the new generation that has very little attention span, and demands constant engagement. They will only learn what is interesting and attractive enough to learn. With 30 percent of the workforce being Gen Y, innovation in learning has worked very well in driving the requisite competencies to develop future generation leaders for SAP Labs.

The future workplace

The rapid market dynamics and how it is impacting the way business operates, is urging companies to focus on building a future workplace. The way talent management happens today, may not be valid 4-5 years from now. Therefore, sustainability of the business is vested on the ability to nurture future leaders, who will be relevant to the future business demands. SAP embarked on such a journey around 18 months ago to define a future workplace. They used the concept of the Medici Effect, which states that revolutions happen at the intersection of culture and technology, and it is critical to be present at that intersection. Working closely with a leadership thinker from the London School of Economics, SAP focused on building a culture where people from different walks, backgrounds, cultures, and expertise come together. Therefore, along with creating a diverse and inclusive workplace, SAP also brings together authors, musicians and other artists into the SAP campus to provide that intersection. There are monthly book reading sessions as well as ‘leadership talk series’ by accomplished personalities like Dr. Abdul Kalam, N. R. Narayana Murthy, Harsha Bhogle, and Shankar Mahadevan, among many others. These initiatives provide a platform to share and experience alternate thoughts that in turn inspire people to think differently, leading to further innovation. As Naik shares, “Alternate thinking and innovation will be the foundation of the way future workplaces will run. Today, SAP has a culture of innovation, which means that in everything we do, we want to think differently. We want to see how we can bring newness into our system, what new values we can create for our people and how we can create excitement for them.” Research shows that the future holds a democratic way of building organizations. In this scenario, the statement ‘the power of people is greater than people in power’ will hold true and therefore, Naik affirms that future organizations will have to consider an important question which is, “Would a group of 50-20 leaders in a corner room decide how an organization of 5,000 be run, or will the 5,000 people want to decide on their own?”

The future workplace will demand a transparent system of operation, where every employee will want to decide what matters to them. At SAP Labs, there is a continuous feedback process where employees are asked to vote on what matters to them most and the inputs are then used to introduce or bring changes to policies as voted by employees. For example, in the December 2011 employee poll, more than 200 employees raised the need for a childcare center. This led to setting up a 200 seater childcare center for the age group of 9 months to 6 years including Montessori education. Similarly, in the last 18 months, significant employee policies have been changed, not because leaders thought the change was needed, but because employees wanted it. Even the entire work-life balance paradigm was brought in by employees. The sabbatical policy, one day in a week work-from-home policy, and part-time work policy were all a result of employees’ demands. Further, even the reward & recognition policy has seen a sea change. The ‘employee of the year’ is shortlisted after a rigorous methodology to identify people and the chosen employee is sent to a prestigious institution like Harvard as a reward. Similarly, the chosen ‘leader of the year’ is sent to Stanford. The company invests on the rigorous identification process and the awards to maintain the high value status of such programs. And all these policies are a result of what employees voted for, and this practice is a reflection of how companies will be run in the future. Companies will witness a democratic way of running the show on policies and topics, which effect people and increasingly allow them to take charge.

The effectiveness of the talent strategy is tracked in two ways – through internal and external validation, which is reflected in how engaged employees are in the company. The global employee satisfaction survey every year is a good indicator of the same. About 70 percent of the employees took part in the engagement survey last year, which is very positive. Further, engagement scores increased by 13 percent points from 2010 to 2011 and it is now at an exceptional 85 percent, all results of actions taken in the last 18 months. Further, external validation takes place through the company’s participation in best employer surveys, which helps in benchmarking with the best in India. SAP Labs was ranked 4th in the DQ IT industry survey last year.

In the next 4-5 years, SAP Labs is set to become an iconic company in the product development space in this country. SAP Labs has already begun working towards preparing the future workplace that will see the Gen Y, who joined the company last year, grow to become future leaders in the next 4-5 years. The focus is towards preparing the organization to ready itself to optimize the presence of a multi-generational workforce that needs to work together, which can otherwise cripple any growing organization.

The dilemma of low attrition

Interestingly, SAP Labs does not sail the same boat with respect to retention of talent, because of the unique employee type they hire. People stay on in the company because of the emotional connect they have to the product that they are building in the R&D setup. The sense of ownership and the joy of creating a product that will change the way business is run, is what drives people to stay committed not only to their product, but also to the organization