Podcast
Podcast
- 28 Sep 2022
- Managing the Future of Work
SAP's Sabine Bendiek on workforce strategy
Bill Kerr: What are the workforce implications of running your operations in the cloud? And how can organizations manage the balancing act of hybrid work? The pandemic has imposed these and other complexities on businesses. Their responses, in turn, are changing HR and performance management. Will this reset result in a more productive and equitable workplace?
Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host Bill Kerr. My guest today is Sabine Bendiek, Chief People and Operating Officer and Labor Relations Director at business software giant, SAP. The company’s experience with its more than 100,000 employees worldwide is helping inform its products and services. We’ll talk about hybrid and flexible work models and how they can foster diversity and inclusion. We’ll also discuss what it takes to combine operational and personnel roles at the C-suite level. Welcome to the podcast, Sabine.
Sabine Bendiek: Thank you. And it’s great being here. Thank you for having me.
Kerr: Sabine, why don’t we begin with a little bit of your background and how you came to occupy multiple C-suite roles at SAP?
Bendiek: I’m not a trained sort of HR person. I’m actually from a background of general management. So I’ve been at tech companies for pretty much my entire career. When you look at it, I mean, we are all sort of looking to create that resilient organization. Especially the pandemic, the aftermath of the pandemic, and actually sort of the crisis that we’re having right now, actually, has taught us a lot about the importance of having resilient organizations. And if you look at the elements of a resilient organization, there’s actually four pillars. First one, of course, people. They are front and center. Everything starts and ends with people. Second, culture. They get it, live in a culture that really enables them to bring their best—meaning it’s inclusive, and actually it does have the psychological safety. So it’s truly a culture of learning and being able to also learn from mistakes. Third, actually, that process component—sort of simplifying processes to enable you to really truly empower your people and the way they run the business and take the hard decisions. And fourth, technology, to actually support it all. And if you put it together, this is really what that role entails because, in the end, the operations part and the people part, they are two sides of the same coin, called “agility and resilience of an organization.” When we had the discussions, I signed up saying, this is a great opportunity for me to actually really make a difference along those four pillars.
Kerr: And if people are the key input to the organization, then it makes sense that there’s a tight link between people and operations. Do you see that, Sabine, as being different perhaps from earlier points in your career and my career, as we think about the shifting nature of the forces that are influencing the future of work?
Bendiek: I think what you’ve definitely seen is a continued acceleration, and I think that’s driving that need to be even closer synchronized. I think the need’s always been there to synchronize, but I think it’s now that acceleration that has happened, where it’ll continue. So, therefore, that has been driving that need to get that cycle, that loop, closed to truly continue to reinforce each part of that loop.
Kerr: Okay. As we think about the specific role of IT and technology, many firms are migrating to network and cloud-based applications. How do you portray the needs in terms of skills and workforce? And what’s different about that environment than traditional enterprise IT? Or is it an acceleration, again, of some of those conditions and types of skills we needed before? Or is it something that’s unique and different?
Bendiek: I think when you look at it, I think what has happened is IT has come out of the expert silo. It’s now basically everywhere. It’s everywhere within the workforce, which means everybody in the workforce needs some digital skills and some capability to learn and continue to learn. You’re talking about citizen developers with low-code/no-code applications, sort of automating their own processes, as one of the examples. You’re talking about people on the shop floor actually having to deal with highly, highly technologically advanced systems and machines. And that means you have to come to a culture of enabling that lifelong learning for all the employees. And that is, I think, one of the core pieces that has truly changed.
Kerr: Yeah, and you’ve written specifically about a technical skills deficit. So maybe define that a little bit more for us. And what are some of the causes—but also solutions that we can embark on?
Bendiek: Yeah. There’s many studies. Just to cite a few, when you look at Korn Ferry, they recently estimated a shortage of more than 85 million workers with digital skills by 2030 worldwide. You look at what the World Economic Forum says; they’re basically saying that we’re assuming that a billion, or they expect a billion of workers having to be retrained by 2030. So digital skills are required by everybody. When you look at SAP specifically, we’re at the core of so many things our customers are looking to do. If you look at the broken supply-chains issue, we have something which is called the “Business Network,” which means you can truly network across the entire supply chain. Also, looking at certifications around sustainably sourced products, that is one of the core pieces. The other piece is looking at sustainability in general—understanding your carbon footprint, as one of the examples. Driving toward a more cyclical production. All of those things. Again, I mean, you need to do this by putting technology at play, and what you need is people who know how to put that technology to work, to actually get it toward doing the right thing for you, specifically, as a company. And that means we have to really train our entire ecosystem, meaning partners, our own people, but actually also the people at the customers. And that’s why we have invested significantly in scaling up our learning ecosystem.
Kerr: This seems like one of those—given the size of the workforce gap—one of those all-hands-on-deck kinds of moments. But maybe we can break it down a little bit more and try to think about the traditional education infrastructure, including four- or five-year college degrees and that pathway versus the rise of certifications, nontraditional credentials, and so forth. How’s SAP working with the ecosystem to enable that environment?
Bendiek: Well, I mean, first of all, we have to look at different ways of bringing skills into the workforce. And I think the traditional degrees are only one potential path. I think the others are on certifications, just like the SAP certifications that we are doing in our ecosystem—where we’re enabling everybody, like students, all students, no matter where they are, to really get their certifications. Where we’re working with specific populations. Where we’re working with people interested in getting those certifications to really sort of get them for free, to really sort of lower the barriers to access for people, to get the training that they need to really sort of get onto that technology ladder of digital skills. When you look at that, I think there’s so many more things we have to do. And I think the other piece, just next to the skilling piece, I think it’s getting a better understanding how we hire for potential instead of just hiring for experience and proven capabilities. So it’s both sort of moving from traditional to also accepting nontraditional certifications and offering certifications to many people coming from nontraditional roles. But then also really, truly getting better and hiring for capabilities and then really developing people in the job, in the role, because we have to do that anyway. If there’s one thing that’s here for sure, after we’ve talked about it for a long, long time, it is actually the concept of lifelong learning, because we’ll all have to do it. Looking at another World Economic Forum favorite, they’re basically saying two out of three children entering primary school today will probably end up enrolled in job types we don’t even know will be existing.
Kerr: Yeah. It’s a fascinating future, and that job replenishment is important. Let’s stay on the hiring for capabilities and for the potential there. And that’s really important, in part, because we know that digital skills are so important, and they atrophy even faster, maybe at twice the rate for a given role compared to non-digital skills. It’s just the nature of the work. To what extent do you think we’ve been able to characterize well how to hire for capabilities and for that potential? Do you think we’re getting closer to being able to find the right candidates that have those? Or is it still a little bit elusive?
Bendiek: I would say we’re probably somewhere halfway up, halfway there, because I think we’ve gotten much better in describing capabilities required for roles. And I think that’s one of the things every professional HR organization has been doing. I think moving toward really truly understanding the potential of the individual applicant, I think that’s another piece, right? And I think that’s, by the way, a piece where I think AI and other technologies can actually really help us. And the other piece also is, I mean, in terms of the job interviews, you have to start moving toward really changing. It’s not about just asking questions, especially in the tech space; it’s a lot more around, just really sort of having people kind of demonstrate their actual skills and capabilities and demonstrate their thinking, how to actually problem-solve. So you actually have to move, how we actually interviewing for jobs, and I think that’s one of the things where we have to, I guess, become way more consistent.
Kerr: Yeah. Maybe you can expand a little bit more on that view of AI, machine learning and HR. What’s it great for? Where do you see the future use cases? And what are some of the areas of concern you might have about it?
Bendiek: Yeah. When I look at it, I think there’s probably three big areas where you see a lot of things happening right now. The first one is actually on the recruiting side, making sure we’re taking bias out of recruiting. Like, let’s call it the “D&I” [diversity and inclusion] side of recruiting. So really taking bias out, correcting those sort of unknown little voices in your head around how you take decisions. And it’s actually very encouraging to see how much is happening there, actually, in terms of start-ups doing this and addressing this. I think the next piece is around the training and learning side of things, where definitely, I mean, AI can help us a lot to make sure training and learning is just way more focused toward the individual’s capabilities. And then also it creates that feedback loop around, “Hey, has the person, the learner, really understood the concept? Do we have to go back? Do we have to reframe things?” So I do think there’s a lot of things there that I’m quite excited about. And I think the last thing is, actually again, around those parts of the HR job where today you actually need way more of the human factor, because the machines won’t do a great job. Again, going back to recruiting, screening CVs in terms of what are the top 10 people with the best fit for the role. I think there’s lots of stuff where AI can enable us to scale a bit more, to really get to meaningful subsets, where then the human comes in and does that last mile, adding the expertise but enabling us to scale up more.
Kerr: Yeah. Let me pick up a couple of the things you mentioned there, and just we’ll dive just a little bit more in depth on them. So one is around the diversity issue, and that’s an area where the tech sector has frankly lagged, it has been roundly criticized for, and rightly so. Can you help us a little bit more of what you see as the root causes and the role of technology and other things to help improve the diversity of the organizations?
Bendiek: Yeah. I mean, first one of course is, I think, in the tech sector, there’s a number of factors at play. What we have is highly dynamic. So there’s the many companies that are relatively young. And if you look at the start-up world, it’s actually, unfortunately, relatively male, right? Then the second piece, clearly, I mean, you look at the number of STEM graduates. I mean, we all know that the gender mix there in many, many countries is not what we would hope for. So that, of course, also hits the tech sector. And I think the third piece is really around just that resulting lack of role models. So there’s been a lot of women and girls kind of looking at the tech sector saying, “It’s probably not me, because I’m not seeing a lot of women out there.” And I think we’re, actually, probably 15 years into sort of course-correcting on this—being very, very conscious about making sure we’re creating those role models in all places. And then, of course, we’re also creating, we’re getting away with the bias that happens if you have all-male panels interviewing candidates for jobs, all those kinds of things. I do think we’ve seen movement. So I think all of us have aggressive targets. So SAP has the target of basically having a 50 percent, like a 50/50 share in the next couple of years in the workforce. We’re now up, we have more than 34 percent, 35 percent of women in the workforce. So we are actually sort of ... we’re getting closer. But yes, of course, I mean, it is a lot of work, and we’ll continue to do this. So what are the things where technology can help? I think, again, some of that bias that might come in, in the very beginning, I think it’s one of those where technology, and again, also AI, can truly help us to course-correct for those biases. I think data—on the spot, in the moment, kind of like data analyses capabilities and feedback loops. When you look at promotion decisions, when you look at compensation decisions, I think can also help. You basically give, you provide a mirror to the manager, and they’re kind of like, expectations would be this, this is what’s actually in the system right now. Are you happy with this, right? Are there things we should be changing? So I think that’s going to be helping. And I think the last piece that certainly will be helping is actually another piece, which is around providing more flexibility in terms of where you work, when you work, and how you work. Because again, we all know, that very often still, women do take a larger share of the care work and the family work, which means we have to make sure we provide flexibility without losing them and forcing them to give up their career opportunity. Which, again, means you’ve got to make sure they actually have that choice in terms of where they work and how they work, but then also making sure that we’re really sort of upskilling our leaders so they truly understand what those hybrid work approaches mean in terms of the changed leadership approach.
Kerr: Yeah. It’s a very natural segue into us just asking what has SAP been doing about hybrid and remote work, as we both went into the pandemic, as we are emerging from it? Is there a back to the office plan in place? How are you coming on that, and how does it then go back to the diversity question and the other things that in a talent-scarce environment that companies are trying to do to compete for the best workers?
Bendiek: Yeah. In general. I mean, you look at it, I think it was fascinating. When you look at the full office model that probably got invented someone in the ’50s. So we went in many ways ... I mean, SAP was always a bit different, because given we’re a technology company and we had basically everything at play to actually enable our workers to work remotely, it’s always been a very flexible company. But it’s kind of like, heading into the pandemic, a lot of other companies were forced to go full remote from full office. And, of course, we had deep discussions around what’s the right approach. And for us, it was very clear that the evolution has to be a trust-based flexible approach, which we call “Pledge to Flex,” because our employees were very clear around, “Hey, listen. We actually have come to really appreciate the significant additional flexibility in terms of how we work.” And when you have like 79 percent, 80 percent of your employee base telling you that that’s where they want to go, I think this is a good motivation to really think about it. And if you have the technology to actually make it work, it comes back to, just go and set out the right frameworks. And the framework for us was, it is an empowerment of our employee to take the thoughtful right decision, together, with their managers, their teams, around what’s their right setup on every given day, in terms of when are they going to be coming to the office to collaborate, or when is it that they prefer to work from somewhere else because it better suits their specific needs.
Kerr: Let me take us back up to the earlier conversation around learning on the job, lifelong learning, and similar. And whether we wanted to or not, the last two and a half years have been something of a crash course in online virtual education. How is SAP approaching the, you know, how much can this be done in a virtual format versus needs to be in person? And have you made any buckets and said, “Some things must be over there, some things must be over there,” as you think about your own training programs?
Bendiek: I think when we look at it in terms of the training programs, I think what you’ve seen is a very broad shift away from classroom-based trainings to different forms of trainings, different components actually making up a great training. So I think digital is actually a great way of scaling. And if we look at it, I think one of the big challenges, going back to the lifelong learning, going back to the skilling at scale, one of the challenges is, in order to skill at scale, you don’t only have to have digital technologies in place, you also have to have that possibility to truly individualize learning journeys at scale. So using the same modules, understanding what’s required for the role, understanding the ambition of the actual person taking the training, and actually understanding the skill level of that specific person. And there, of course, technology plays a huge role and digital can truly help to get there. But then, of course, next to digital, I think there is actually a lot of learning around experiential learning. So trying things out, which also gives you, by the way, an enormous sense of gratification, because it’s kind of like achieving something, just by trying something out, is actually a very important concept, especially in tech, by the way. So experiential learning is a huge component that we’re trying to add to it. And then the other piece is actually peer-to-peer learning, because there’s nothing as powerful as actually learning from next best practices, learning from feedback you’re receiving from a peer. So, therefore, there’s actually a pretty important role for that as well.
Kerr: We have yet to really spend much time on one of your other jobs. You’ve got many as we send the introduction. So you’re Labor Relations Director at SAP. So can you tell us a little bit about that role? And then, also, what are some of the priorities, concerns, you have in that capacity right now?
Bendiek: Well, labor relations, of course, is a very, very important part, specifically. I mean, being a global company with an employee base of 110,000 people, I mean, clearly there are many social partners in many countries, and you do have to have very close interactions and very good understanding in terms of the frameworks, actually, those countries operate in. When you sort look at the topics, I mean very naturally, I mean, what is it that they’re really interested in? They’re interested in skilling. Skilling and learning is a huge part of the discussions. It’s like, “How do we make sure we future-proof our workforce? How do we make sure we’re giving people the opportunity to continue to perform and be their best and have their opportunity also to develop?” And, actually, there’s another piece that also plays into this, which by the way, is also one thing that really is a very important piece for us around future work, which is also bringing the health component into it. And it’s actually seen in a way that you have to make sure that you’re basically providing the right toolset for your employees to ensure they can look after themselves—they can stay healthy. And they also understand where to find help if there is something. And, actually, also taking the stigma out of mental health issues. That’s the other piece that’s been coming up with many companies, where we’re saying, while it’s become quite okay to actually seek help if there’s kind of like a physical issue you have, I mean this whole sort of mental health issue, we definitely have to take the stigma out. And that’s a huge program we have. And we have to make sure people understand it’s okay to actually ask for help in that specific respect as well, and actually understanding the toolsets that are there for them to actually also address heightened stress levels, to make sure they can continue to focus, and actually also where to go when they really need help if it’s larger issues.
Kerr: Many of our listeners will be in the U.S., and labor relations in the U.S. compared to Europe is I think characterized historically a bit more antagonistic. And yet, the size of the reskilling problem is one that, to your point, if we’re all rowing in the same direction, that’s going to be a much better response. Do you find that the urgency of the situation is helping to bring better alignment around labor relations and workplace practices and with the worker representation groups?
Bendiek: I think it certainly does because, if there’s one thing that we’ve all seen and we all understand, that competition for talent, that competition—I think even translated into, I mean, just getting the right workforce and keeping and retaining that workforce and making sure they can continue to perform at their best. I mean, we all know it’s become such a big factor for us and for our future success. And, specifically, when you look at tech, I mean, nothing in terms of ... Well, if you want to maintain your future competitiveness, I mean, product is something that’s there at a certain point in time, product competitiveness. Continued innovation. It’s just something that happens because you have the right people, with the right motivation, in the right culture, pulling together, continuing to challenge, continuing to ... wanting to change the world. And that is what you need. So, therefore, I think there’s a lot of alignment I think around, we’ve got to do the right thing for our people, because that’s making us competitive in the long run.
Kerr: Another thing that in the labor context organizations are working through right now is the embrace of gig work, part-time work, just not traditional employees and opening up the workplace, either in order to be able to bring someone that’s outside the workforce in as a competitive advantage to an SAP or because the skills are in such high demand and you need them only at a specific moment, that it’s best to tap into them that way. How’s that process playing out at SAP? And is it something you see as a significant change that’s underway, or are you kind of dialed into the point where you expect to stay in terms of gig-based part-time work?
Bendiek: I actually think it’s certainly a very important component of your overall strategic workforce planning, because there’s always skills that you look at basically bringing in from the outside, because you believe that there’s actually experts out there who actually have the newest and the latest knowledge. Where honestly, it’s hard for you to just continue to develop everything in-house all the time. Because, by the way, I think perspective from the outside is a very useful thing. So I think being very, very conscious about what are the kinds of skills that you need in-house versus what are the kinds of skills and what’s the kind of knowledge that you want to bring in from the outside, is a very important one. When you look at it specifically—learning for instance, when we look at our leadership development journeys, that’s one thing where in terms of the concept, how we do it, that’s very much us, that’s in-house. That’s something we need to understand. But bringing in top-notch experts, who really help us bring in the latest thinking and the latest research, I mean, that is something where we continue to work with external institutions and, actually, external people. And that work happens at many other levels as well. And I think this is one where you have to manage this very consciously, because you don’t want to be in a situation where you basically keep on buying critical skills, deeply critical skills, through gig workers. You have to build those yourself. But on the other hand, you don’t want to sort go stale, because you’re basically expecting your people all the time to just have the latest knowledge on board, because they do need external perspective. But it’s got to be true. It has to be chosen wisely where you bring that in and help.
Kerr: So we’ve covered an amazing number of stress points on the organization already in terms of bringing talent in, training talent, retention, and so forth. I want to turn to one that I think has been particularly stressed during the pandemic, which is the role of the manager. And how is SAP just internally developing its managers to better handle this online/offline hybrid sort of multifaceted world that they are increasingly experiencing?
Bendiek: We actually have a goal of basically touching every leader every two years. So that’s actually one of the key performance indicators we’ve given ourselves—or let’s call it the “North Star” we’ve given ourselves. We want to make sure that every leader in this organization has this one sort of really immersive learning opportunity at least every two years to continue his or her development. And when you look at the change in leadership that’s required with hybrid work—and actually also looking at lifelong learning and many other things—it comes back to leaders feeling comfortable, leading through clarity and objectives, creating that culture of psychological safety, and being able of coaching instead of telling how to do things, which, of course, is by the way, very tough. So many of us actually got promoted initially because we were the best at doing something. And then you become a leader, and then you have to step back and actually enable others to bring their best to the table and kind of figure out how to get this done. How do you foster collaboration? How do you foster inclusiveness in hybrid environments, where people have to collaborate in virtual environments? So those are the kinds of things that we’re really doubling down on.
Kerr: ESG [environmental, social and governance] goals have been front and center for a while, they’ve also gotten a lot of pushback recently. How is SAP navigating those important dimensions? And how do you even see leading in an increasingly polarized landscape? What are the ways you’re trying to navigate this difficult to lead in external environment?
Bendiek: In the end, I think as a company we’ve set ourselves very clearly North Stars. We’ve actually been focused on a sustainable business for many, many years. We haven’t really talked about it a lot, but we actually use that work to actually incorporate some of that knowledge we’ve accumulated into our products to enable our customers to actually do the same thing. And that’s actually not only around the CO2 footprint or cyclical or manufacturing, it’s actually also around our people practices. It’s like, how do you root out inequality? How do you really get to that truly inclusive workplace? And when you look at it, that’s such an important one that we’ve fully bought into. And actually it was very interesting there was a recent study by Bain & Company, I think, where they actually had some very interesting results when they looked at the importance of the inclusive workspace. The first result they had was they got 65 percent of people actually do say it’s very important to have an inclusive workspace when they apply. It’s actually a key part of the consideration. But the second thing then was that only about 30 percent of the respondents really felt fully included, which is not a great statistic, right? And then, of course, I mean, as you all know those who don’t feel fully included, I think, if I recall it correctly, they’re six times more likely to leave because they’re missing that affiliation. So if you look at that, you just know that this whole notion of an inclusive workplace has to be a very important part of your sustainability work. And going back to ESG, I think it’s a very important part of what we as a company have signed up for and will continue to drive toward.
Kerr: Sabine, thanks so much for joining us today. We appreciate you sharing what SAP is doing and also how you view the future of work. Thank you.
Bendiek: Thank you so much.
Kerr: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.