Book review - Dreams and Details, Jim Snabe's insights into SAP's business transformation
- Jim Snabe, former co-CEO SAP, board chair Maersk and vice chair Siemens along with Danish national volleyball coach Mikael Trolle offer a model for business transformation. Does it success?
I first met Jim Snabe shortly after he had been given the SAP co-CEO role alongside Bill McDermott. That was 2010. They are chalk and cheese. Bill is the outgoing sales guy who is a glass and a half full person. 24/7. Jim is contemplative, quiet yet precise in his thinking and constantly questioning the status quo. It's a formula that worked for SAP at a time when it needed to change, a process I'd argue that continues to this day, some eight years on.
Over the course of his time as co-CEO Jim and I met on a number of occasions and I was privileged to observe as Jim grew into his position, becoming ever more confident, comfortable and clearly delighted to be central in SAP's acquisition of SuccessFactors in December 2011. The day after the acquisition was announced, Jim hosted a dinner for some of us in Boston. His excitement at consummating the deal with all that he dreamed (sic) might happen was infectious, if a tad wild at the time.
It is now a little over four years since Jim stepped aside in favor of Bill taking on the sole CEO role so when Dreams and Details was published, I was keen to discover what nuggets I'd glean having been a close observer of the changes SAP made during Jim's time in the top job and watching Jim's own personal transformation.
It is against that background I offer this critique.
Dreams and Details - the central thesis
The book draws its inspiration from a comparison between high performing sports teams and high performing businesses that face the challenge of directional change.
The argument goes something like this - the best sports teams focus on the performance of the team as a whole and not the talent of individuals, nor the results. The guiding theory is that if teams are constantly working towards improving overall performance, then the results will follow. Jim takes that idea and applies it to how he sees the successful business transformation of established businesses in times of what he terms 'new seasons.'
A new season is something that represents a break from the past; the obvious example being the meteoric rise of Amazon as the place we shop for everything from pretty much nowhere 20 years ago. A converse example would be Kodak, the company that invented the digital camera yet which shied away from understanding and developing the technology for fear of destroying its lucrative print business. As we know, that didn't end well.
Dreams and Details takes this idea of seasons one step further in the business context by arguing that any business transformation must have as its starting point a dream - an aspiration if you like - that resonates with the whole organization. But it's not that simple. As Jim points out, the hardest part is figuring out how to transform a business from a position of strength. That was certainly the case with SAP, one of the world's most successful software companies, yet one I knew was bedeviled with difficult and sometimes perplexing issues.
I can't begin to count the number of 'You don't get it...' conversations I had in that 2009-12 time period. Even now those same conversations can arise. But then that's always easy to say from the 'outside-in' cheap seats.
Assembling the big picture
As I read Dreams and Details, one thought kept popping up: question everything. Jim acknowledges early on that successful companies almost always fall foul of reflecting upon their past successes, managing accordingly and rarely having the insight to recognize that as things around them are changing, the past is no guarantee of future success.
Even those that do set audacious ambitions for the future fail to put those dreams into a context that excites the whole workforce. In the SAP case, Jim talks about the much-publicised ambition of reaching a billion users by 2015. He also talks about making the world a better place, articulating that in the context of setting clear goals for SAP reducing carbon emissions.
One of the biggest changes came when SAP introduced agile development and design thinking methodologies as replacements for waterfall software development. This was based on the premise that SAP could no longer spend years bringing functionality to the market but had to iteratively accelerate so that it could get closer to customer needs.
The people factor
There is a certain irony in that Jim talks a great deal about 'unleashing human potential' and how SAP strove to ensure that not only was the mission well understood with clarity and transparency but that people are empowered to self-organize the best way in order to meet their objectives. The irony comes in the fact Jim avoids talking about the software part of the HR equation and I think I understand why.
So much of what we see in HR is predicated around admin and compliance tasks rather than getting the right people doing the right things in a fulfilling manner. The book attempts to address this by talking about two, sometimes conflicting ideas.
On the one hand, Jim understands all too clearly that people today want much more than a decent paycheck. They want to feel as though they are part of something bigger, that their work is appreciated and has value, that they continue to learn and acquire fresh and relevant skills. As he says, these are qualities requiring a mindset shift that is far from comfortable and often means changing the way people are measured for their performance achievements. It is no longer just about the financial outcomes, but about building trust and encouragement.
On the other hand, the book talks about the 'uncompromising leader' who has a clear, precise and convincing vision and who is not going to be distracted by internal political intrigue or power games. Therein lies a whole bag of worms.
Jim has always been someone who struck me as caught in the uncomfortable space between the logical process thinker and the intensely human person who wants to do the right thing. But he did his best to live it. Seeing Jim plug his EV in at the Building One parking lot in Walldorf rather than taking the chauffered corporate option is a good example of what I mean by 'living the dream.'
For Jim, working out the essential and critical transformational details represents a tension that leaders have to master in a human way. Dreams and Details expresses the thinking this way:
At SAP, we decided to focus on two crucial details, the speed of innovation and the value for customers. In the world of sports, the work with the details is called training. In fact, most of the time in sports is spent on training the crucial details, so the team is ready to win the game. In business, we need to spend more time training the crucial details as well. The crucial details must be revisited, reviewed and rehearsed continuously to increase performance in future capabilities. Leaders have to look at what roles and skills are needed in the company and how they have to collaborate if the company is to perform at the needed level to achieve the dream. If everyone knows what their role is, has the right skills and knows how to use them individually and together, they will achieve superior performance needed to achieve the dream.
Sounds simple, doesn't it? Yet Jim knows that's not the case and warns against for example micro-managing, preferring the expression of mico-leadership where leaders sweat the details of what needs to be done but leave others to get on with the job at hand.
If you are expecting this book to outline how SAP went from kings of the ERP world to a wildly successful transformed, cloud-first, customer-centric business you're going to be disappointed. Jim is humble enough to know that trap when he sees it, leaving the informed reader to figure out for themselves, how well that is working and whether Dreams and Details provide enough of a roadmap to get transformation underway.
Instead, along with co-author Mikael Trolle, Jim Snabe provides a series of caveated advisory notes. Call them guideposts if you will with each rooted in the idea that the primary job of leadership is to enable the individuals they lead to reach their potential as part of the goal for reinvention.
Dreams and Details explained one thing that has puzzled me over the years. The book describes at a fairly high level how a successful company begins the transformation process without killing the existing business. It represents an intriguing set of ideas that won't translate to every business but certainly applies when, as in the case of SAP, you enjoy a degree of market control. It also sets out how the transition can be accomplished without necessarily leaving behind the incumbent people who need to keep the milch cow functioning.
One thing I've come to understand over the years is that leadership involves the notion of 'strong ideas, loosely held.' In other words, what makes for a strong vision today will suggest a variety of paths one or a few of which should be followed until they are no longer the right path or the right vision. Dreams and Details takes that idea in an interesting direction.
I particularly liked Jim's understanding of how breakthrough innovation often happens when it's least expected or in serendipitous encounters. I also like how business and sports thinking are aligned to provide an inclusive view of how a successful business operates.
Where this book adds the most value though is in the suggested steps that leaders should consider. In short, it is in the detail that the visionary dream becomes reality.
Where the book falls down is in explaining how the concepts, ideas, and actions are marketed. This, I think, was SAP's greatest failure in the 2010-15 period. Looking back, I can see how the book's ideas dovetail to what I saw unfolding at the company.
I've said it before and will say again: SAP has no shortage of bold ideas but the manner in which it markets them is often sub-par. Ideas seem to come out of nowhere and are not always fully articulated in a way that extends beyond the headline-grabbing soundbite. The book provides that context which is fine but retrospective marketing isn't something I see as catching on anytime soon.
Also, the book avoids a discussion about the sometimes chaotic ramifications of shifting thousands of people from point A to point B. There were (and continue to be) plenty of occasions where resistance to change is real. While the book suggests ways to overcome those roadblocks, it's never quite as easy as reading a recipe and the book omits what could have been interesting anecdotes on this topic.