SAP is Germany’s largest IT company, and specializes in business software. It is currently in the midst of transforming itself from a staid software giant to a trendy cloud service provider, as highlighted by its hip new offices in a former tobacco factory in Heidelberg, central Germany. The building is furnished with a wild mix of furniture put together by SAP employees.
In one of them sits the company’s global head of human resources, Stefan Ries, who is tasked with carrying out the necessary staff changes among his almost 75,000 employees to support the company’s new direction. The 49-year-old has been in charge of personnel at SAP since last year.
Mr. Ries, SAP’s new subscription business software allows customers to, in principle, run their companies by smartphone. SAP chairman Hasso Plattner calls it a “sensation.” Do you have enough whiz kids to maintain this edge over the competition?
Definitely yes. However, with the change in our software and our business model, something must now change in the heads of our employees.
Five generations are now working with us, from the post-war generation all the way to student interns. They have much in common. But in matters of leadership and learning, the younger generation is bringing whole new concepts into the company. We have to react quickly to that.
To what degree are the needs of a 25-year-old employee different to those of his 55-year-old coworker?
While older employees generally are more loyal to their employer, the younger ones base their commitment to the company primarily on how close their relationship is with their immediate superior.
And what constitutes a good relationship between employee and management these days?
A manager should be a role model and a person you can trust, responsible, motivational, communicative and empathetic. They should keep employees completely informed about everything relevant to them in the company. Employees want to play a greater role in important decisions.
So the young people at SAP want their boss to be a coach or they’ll change companies?
That’s how it looks. But we can’t and don’t want to risk losing them, considering that today there is a shortage of around 100,000 IT specialists in Europe. This makes it more important than ever before for employers to address the subject of management behavior, and not only in our industry.
What do you do when the boss is a great expert, but not so great in matters of leadership?
It is good and not uncommon that specialists develop into managers. However, our annual employee survey shows that we must address the issue of leadership. That is why we want to train all of our 7,000 managers worldwide in 2015.
From team leaders all the way to the company chairman, Bill McDermott?
Yes, that’s what we plan to do.
What do you specifically plan for the management team?
There is a compulsory curriculum with relevant training courses that can be completed in part online. We are placing a particular focus on self-reflection. Colleagues should recognize their own potential for improvement in matters of leadership behavior. If needed, we also offer coaching sessions or participation in a mentoring program.
How much does that cost SAP?
We are investing a double-digit million amount to make our management fit for the future.
Are measures being taken in the executive board, as well?
Yes, the board also had a look at the results of the employees survey, focusing on the staff’s confidence in management, how well the board is communicating in the opinion of employees and what we should do better. All employees have the opportunity until mid-March to discuss this with the executive board.
A movement from the bottom up?
Yes, that is our main approach. If we decree something from the top down, it is much harder to bring about a change of mind.
That sounds like a major revolution?
It’s more like a logical development. How young people view their careers has changed. It used to be that after entering a large company, ambitious junior staff would go out into the world to gain additional experience for their employers in different locations. But young digital natives tend to say, “I grew up here, I want to stay in familiar surroundings and not pursue my career advancement according to the pattern 'today Tokyo, tomorrow Rio and after that New York'.”
Why are traditional training courses out at SAP?
Smartphones and tablets have become much more important among younger colleagues. They don’t need a classroom anymore and would rather learn when and where it suits them. Those are clearly new needs and they mean we have to re-conceptualize our training programs.
For example, we offer MOOCs [eds: massive open online courses, which are web-based teaching aids often taking the form of recorded lectures]. But our version of an MOOC not only has the character of a lecture, but also of a network.
Young people grew up being connected digitally and it is a matter of course for them to exchange ideas and information on platforms such as Facebook. That is exactly what they expect in the working world. This is where it gets interesting for employers.
There are some companies that have started shutting down their email servers at 6 p.m., to limit the availability of staff outside hours. In my opinion, that is something that can also really backfire.
Why? The employer has the obligation of making sure employees don’t exceed the permissible working time.
That’s correct, but ignores the needs of the young generation. Why should highly desirable talent choose an employer who shuts off their digital connection? This doesn’t correspond to the wish for flexible work and training opportunities. Naturally, as head of personnel, I understand that a company must ensure a sensible balance between work and free time.
What does your solution look like?
Management must accept responsibility and after successfully concluding a project, for example, give employees the chance to recharge their batteries at home.
Your managers say, “Go home and take a rest”?
Yes, we are already doing that with our trust-based working time.
Despite downsizing in 2014, SAP has an employee loyalty rate of 93.5 percent. For most employees, it’s straight from SAP to retirement. Can the older troops be any more loyal?
I’m not at all worried about being successful at keeping older employees working for us for a long time. The company is growing. To tap new markets, we need those who are on board just as much as we need new talent. These colleagues have valuable insights and experience. For instance, that is why we introduced out “Space Cowboy” initiative. They are retired workers, whom we reactivate to do specific jobs in a project.
When do you need their help?
In the future, if someone wants to be available for only 10 months per year, and use the remaining two months for additional training or a time out, we will need to fill those gaps. Otherwise, we won’t be able to hold on to this talent. But in combination with our Space Cowboys, we are better able to meet individual desires concerning work time.
When you speak of new talent, who are you thinking of?
We wish we had more women, or people with an immigrant background, or people with disabilities.
What are you doing to increase diversity? The executive board, for example, has a woman problem.
We still stand behind our goal of reaching 25 percent women in management positions in 2017. At the moment, management is 21 percent female. With job vacancies, we make an extra effort to ensure there are suitable female candidates from which to choose. We also must do everything we can to make our work environment more attractive to families, such having on-site child-care facilities. We cannot afford to let up now.
Claudia Obmann is a Handelsblatt editor focusing on jobs and career issues. To contact the author: [email protected]