In 2019, after 17 years of stellar growth under Bill McDermott’s reign, Christian Klein was ushered in alongside Jennifer Morgan as co-CEO for one of the world’s largest software companies, SAP. Shortly while after, Jennifer Morgan stepped down, leaving Christian Klein to helm the company alone in the face of an emerging global pandemic. Klein’s singular role as the leader marks a return to the company’s roots; for years, the German headquartered company was led by an American.
Klein joined SAP in 1999 as a student. He quickly rose through the ranks to take on many critical roles at the large software firm. From serving as the Chief Financial Officer at SuccessFactors between 2011 to 2012 to landing the role as Chief Operating Officer in 2019, Klein has seen the company through its growth period and many acquisitions. His long tenure at the firm positions him to understand the core competencies of the business. He comes to lead SAP at a time where migrating to cloud is imperative and regaining their client confidence is paramount. We take a look back over the past few years and draw out some key business leadership lessons from Klein.
1. Have a plan and stick to it
Following the shoes of a business magnate is no easy feat. By the time he stepped down in 2019, McDermott had grown SAP from a $39 billion to $156 billion. In October 2020, in light of the pandemic and despite the global move to digital, Klein slashed SAP’s financial forecast, providing a more conservative view of the company’s short-term financials. He recognized that the company was behind in cloud and that migrating their customers at rapid speed would come at a short-term cost. Such forecasts didn’t fare well with investors, leading the firm’s share price to drop 22%.[1] However, Klein stayed his course, recognizing the need for their new strategy to unfold.
Today, SAP continues to see revenue growth, casting aside investor doubts. It’s gaining traction in their growing cloud business. Additionally, it’s shed some business units that do not have direct and immediate benefits to their model. All of this speaks to Klein’s steadfast hand in his strategy and not giving into mounting pressures from the media. It also speaks to his instincts for what SAP needs after a decade of acquisitions.
2. Remote work conditions requires extensive communication
Klein took over as the sole CEO right as the pandemic shut the world down. This means minimized facetime with his employees and clients. With a significant portion of his client base in the US, the German-based CEO didn’t have means to connect with his stakeholders in a meaningful manner. Through this, he has recognized the importance of communicating often to his people.[2]
Like anyone who started a new job or role during the pandemic, it is incredibly difficult to build connections and establish yourself. Even as the top leader, Klein was not immune to this. Communicating often and frequently is one way to help bridge the gap to your teammates. This also means having a blend of personal and frequent communications.
3. If you have to do it fast, still do it right
When the pandemic hit, SAP mobilized to help their clients safely continue their business. For many businesses, this meant finally migrating many of their clients to the cloud. As Klein and the team worked through their long list of clients, it became apparent that a fulsome approach to transformation is needed in order for businesses to be successful.
The pandemic forced organizations to digitize their operations at warp speed. Whether it is equipping employees with technology to work from home or bringing all their operational processes online, many leaders were forced to push forward with their digital transformation agendas that have historically taken a back seat. Doing something quickly still requires that you do it thoughtfully. Which means not cutting corners and taking a critical lens to the work required. In Klein’s observations, the clients that did not transform their core business were left with a system that was still suboptimal.
[1] Can SAP’s new boss reset its business model? (10 December 2020), https://www.economist.com/business/2020/12/12/can-saps-new-boss-reset-its-business-model Retrieved December 28, 2021
[2] SAP CEO Christian Klein looks back on his first year, (4 May 2021), https://techcrunch.com/2021/05/04/sap-ceo-christian-klein-looks-back-on-his-first-year/ Retrieved December 28, 2021
Additional sources:
Christian Klein: the ‘details guy’ who has to fix SAP (30 October 2020), https://www.ft.com/content/fbaabe9d-c7e6-4d32-b6fd-78c546818bc9 Retrieved December 28, 2021
