SAP takes a stand on diversity to beat the talent shortage

With 85,000 employees worldwide, enterprise software giant SAP provides an extensive "testbed" for its own SuccessFactors HCM software suite, says the company's CHRO Stefan Ries. So it's no surprise that SAP's commitment to diversity and inclusion is now being reflected in new functionality coming to SuccessFactors, which is designed to help its customers foster greater diversity in the workplace.

Research shows that improving diversity is good for the financial welfare of enterprises, and SAP's own experience has been persuasive, says Ries:

There's lots of research and studies out there. Those studies prove that the richer and more diverse you are as an organization, it has a very positive outcome on your financial KPI's.

For those not persuaded by research, any organization can prove the impact by just going ahead, he adds:

You just prove it. You just make sure that you force that environment of inclusion and diversity in your organization. When you see it up and running in life, people look at it and just say, 'That's the best proof point I can get.'

SAP has labeled its own initiative 'Business Beyond Bias' and is supporting it with examples of its successes, such as its initiative to hire autistic people. The new SuccessFactors technology is designed to support such initiatives by using machine learning and analytics to pre-empt potentially biased language in job descriptions, or to provide alerts of possible hidden bias in performance monitoring. The vendor has also published an e-book with guidance on how to optimize their use of its software to support diversity and inclusion. SAP SuccessFactors Mike Ettling says:

Our hypothesis says there's a lot of bias happening in the workplace. If we can identify those origins of bias, can we use technology to eliminate it.

'The talent shortage is a myth'

Enterprises create an artificial talent shortage when they fail to look outside their habitual hiring pools, he believes.

The talent shortage is a myth.

If there's a perception of a talent shortage because 'I only want to hire managers from the G20 countries' or 'I only want to hire white males to be managers' then yes, there might be a shortage of talent in that group.

But if you eliminate that and you go fishing in a bigger pond and you look globally, how can you say there's a shortage? There's 3 billion people coming out of emerging markets with pretty skilled education and a billion people shifting to middle class in Africa. We believe that bias, be it conscious or unconscious, is causing the perception of a talent shortage. But actually there's not a talent shortage.

Emerging markets can provide a new crop of management leaders, he believes.

We've seen some interesting scenarioes, where companies have implemented really focusing on, 'How do you develop emerging market talents?' in particular in some of our clients — and actually filled leadership out of those new groups. We've seen it ourselves in SAP in terms of our candidate programs.

For a global enterprise like SAP and many of its customers, diversity is a necessity in order to be able to service the full breadth of its customer base, says Ries.

We want to have a workforce which is almost the same as all of our customers. That's the trigger. They are diverse per definition, because they are living from Japan to Brazil. They have all sorts of people in their organization.

We need to be representative of that, because we want to develop solutions which fit our customer needs. Therefore, per definition you need a highly diverse and inclusive working environment.

Building an inclusive culture

Getting this right goes beyond the recruitment and succession planning processes. Enterprises must build a truly inclusive culture that accepts diversity and is open to collaboration. That's easier for some roles than it is for others, Ries admits:

An engineering team who's used to agile software methodology, who's used to design thinking workshops, for them a team spirit is quite natural. That's the way how they sprint, that's the way how they work. That's how they come with innovation, dismiss some stuff they don't like, or bring a brilliant idea to the next level. It's part of their day-to-day working environment.

In other roles where inclusive teamwork is less ingrained, leaders have to make some 'lighthouse' appointments as proof points, he believes:

Research helps a lot, but you also need to make sure that the people live it and see it. [At SAP] we took controlled-risk decisions on a few lighthouse positions to make sure that people see the company is really serious to change something which we probably took for granted for many years. [Positions where we used to say], 'Well, a chief marketing officer always needs to be a man who has done that already three times.' Or, 'A lead development person needs to be always a German engineering-driven person.'

When you have those kinds of lighthouse examples in place, a lot of people look at it and say, 'That's interesting.' Then they watch it for a period of time and then after a year they say, 'That person is still there so there must be something which is really relevant.'

That in turn encourages others to put themselves forward who may in the past have felt excluded, he explains:

I give them the opportunity to raise their hand and to see that 'There's an opportunity for me' where even people said at the beginning, 'Oh, maybe that's not me.'

Diversity for business growth

Enterprises will find it increasingly important to promote diversity, Ries believes, because it is something that millennials and other potential recruits look for:

This was one of my key learnings over the last one-and-a-half years. Whenever I speak to the youngest generation and when you want to attract them to SAP, there are two things which are very important:

Purpose — the impact of their role and responsibility at the end of the day, and how can they improve people's lives. That's much more important than any generations before.

The second thing is, believe it or not, they ask you what is your strategy in order to make sure we act as a diverse organization.

Therefore a commitment to diversity and inclusion has become a business imperative, he concludes:

I've spoken to many of my peers, they see the same trend. If they miss the boat, if they can't offer that kind of solution — that's why you hear us a lot talking about Business Beyond Bias, diversity, and inclusion — if they miss the boat, they exclude themselves for a certain talent pool.

That's a missed opportunity, which then will reflect probably in not [achieving] the growth they have in mind, in terms of business.

My take

It's good to see SAP 'walking the talk' on inclusion and diversity. I have further thoughts on this which I'll add in a separate post as there are several threads to consider.