The enterprise software market competes on thought leadership and innovation to win business and then on efficiencies and effectiveness on bottom line impact after a system is productive. In order to win both 'the deal' and happy reference customers with minimal, and preferably no shelf ware, leaders must enable their workforces with the right cultural constructs.
A big fear for mature technology companies like enterprise software giant SAP is that they get too big and become dinosaurs among young, innovative companies. In order for a technology company to remain cutting age, or at the very least relevant, a continuous focus on cultural and process change is needed.
SAP is forty-four years old. While some cultural aspects of a business evolve as the company ages, others require a more concentrated effort. Many leaders adopt change programs with the right intent of cultural change only to become part of the 75% of change programs that fail.
Mary Haskins*, Global Head of Leadership Experience and Organizational Development at SAP, has been developing and leading efforts that enable continuous learning and renewal among leaders for years. Her current effort follows a three-stage path to enable large scale cultural change that translates into changes that permanently define how business is done, moving from the existing status quo to a new way of being.
Step 1: Be super clear on what you need to achieve and how it relates to your core business. Many cultural transformation programs focus in on leadership development in order to create the right environment for innovation. Haskins has found another approach that is proving to be effective in evolving the culture of the enterprise. "My job and that of my team is not to develop leaders. Our focus is on creating a culture where leaders can grow and bring out the best in each other," says Haskins.
This context makes sense for SAP, where innovation continues to be a key catalyst for change. "SAP is an innovation company," says Peter Meier, an early SAP employee who is now an executive leading the company's energy and natural resources industries line of business. "It used to take 18 months for a new product to hit the market. If you did that today, the market would already be gone," says Maier. With programs focused on enabling leaders to grow and create the best high performing teams in the industry, the speed of innovation, and how leaders communicate and use technology to interact as well as make decisions, has been greatly enhanced.
Step 2: Map out the organizational change journey. SAP is a very successful company. When what you have done to get you to greatness has worked, there is little catalyst for change. Yet, SAP's executives know that what got them to where they are will not be the path that gets the company to where it needs to be for future success. With a head nod to the company's deep seeded roots in the on-premise ERP applications industry, a market that they were instrumental in creating and therefore will be forever affiliated with their brand, co-founder Hasso Plattner acknowledged that the cultural transformation needed for the company to become the leader in the cloud and big data technology industries went beyond a 'nice to have', stating, "If this doesn't work, we're dead".
Transforming from an on-premise applications vendor to that of a technology provider translates into changes in business models, customer value expectations and development cycles, just to name a few. "Not everyone likes the term 'digital transformation.' What it means for us and our market is the need to foster agility and speed for cost and efficiency," says Maier.
Haskins warned that a catalyst to change may be evident from the outside, but expecting people to change simply because their executives tell them to is not realistic. A catalyst that connects with a need for change at the individual level must be created and implemented along a well thought out organizational change journey.
Step 3: Meet people where they are in order to get them where you need them to be...even if that means the occasional detour on the path to the line. The road to successful transformation is never straightforward and never goes according to plan. "The success of digital transformation programs hinges on the will to change - much more than people's skills and competences. Our SAP leaders are passionate about doing the right things for our customers - and our initiative shows that we translate empathy with our customers' needs into action," says Maier.
Haskins and her team created a two-phase transformation journey:
- Year One focused on getting every leader on the map and the years that followed focused on program rollout and mainstreaming. Sometimes this meant making small impacts that spoke large volumes. "People were eager to see something change, to see a real and noticeable difference," says Haskins. She and her team delivered training to first-line managers. The investment was a drop in the bucket in terms of the bigger changes that needed to happen; yet it served a purpose: Show progress in order to gain attention and trust from target stakeholders.
- Year Two centered on rolling out the program to the leadership population. In addition to the four change levers of role modeling, compelling stories, enablement and reinforcement that accelerate transformation at the individual level, SAP's top 250 leaders were enrolled in a mandatory immersion program with executive sponsorship from the board and the c-suite. Leaders and their teams are often told to take part in change programs while also doing their days jobs. Haskins also tapped into a potentially derailing need. "Our leaders needed air-cover. It was critical that we worked through identifying the success factors to support our leaders through this process," says Haskins.
*Disclosure: This author has worked with Haskins 2011 - 2012 on leading large-scale cultural change at SAP. Although the collaboration informed the strategy and approach shared in this article, the work is not related to Haskin's current role and the content of this article.