On Being A Manager by Trade, An Entrepreneur by Heart and An Overall Leader
Simon Kaluža, Managing Director, SAP CEE
Simon, let us start with reflection as this quality is often mentioned to be the one that today’s leaders are typically lacking. During the last round of the SAP Forum in Prague, you and panelists reflected upon the changes brought about since last year. However, let us go further back. You have been responsible for SAP in the CEE region for almost 5 years, what are the major substantial changes on the regional level?
When I took over my role, I faced two kinds of challenges. The external ones were linked to the way the market perceived SAP as a company. People from IT were often asking why is the CEO part of the IT project, and the CEO tried to explain that it’s not only implementing an IT system but the future of the company. That’s how much technology is important. The internal challenges were linked to adapting to the fast changes on the market. Some challenges were easy to address, such as the way we approached our customers and the way we were selling or positioning our products. Speaking of reflection and history, I will take you back even further.
It seems like ages now, but 20 years ago, it was sufficient to have a state of the art product that customers were buying because of its quality and robustness. Suddenly, this was not enough and the products started to become solution based. As customers were becoming more knowledgeable about business processes, competitors and, in general, about the whole ecosystem they operated in, SAP also had to respond. We came with the so called “challenger way” for how to sell and position our products.
We are in a position to be able to challenge our customers and to show them what business opportunities they are missing by not investing into our solutions and technologies. Such perspective brings about some substantial prerequisites. The first one is being able to understand the businesses of our customers inside out then going even beyond that. We need to understand the customers of our customers. In order to do that, we need to challenge our mindsets, be more agile…faster than both the competition and our customers. In today’s already fast developing world, this represents a true challenge. That is why you need “the best of the breed,” the best people, products and industries. We brought many industry experts, we invested a lot in training. However, the biggest change occurred on the mindset level.
Speaking of the mindset change, would you agree with the quote: “Innovation is not a department, it is an attitude”.
I would go even further, innovation for me is a culture, because behavior can vary from one day to the other. It is by no means an easy task to change the culture in a multinational environment. It is a hard work that has to start at the top and go all the way to the last employee but in the end, it pays off. The customers then perceive us in a completely different manner, far from the previous image of a rigid company providing ERP (Enterprise Resource Planning) systems. To complete the previous question about reflection on the past five years, I am proud to say that our portfolio has not only expanded, it exploded. Next to ERP systems and business intelligence products, we have provided the cutting edge technology SAP HANA that became a platform. Introducing SAP HANA led to an avalanche of other events. The customer was put in the middle of our universe: not today’s customer but rather the customer of 2020 and beyond.
We understood the change that millennials are bringing about, we made several acquisitions, such as SAP Hybris, SAP Ariba and SAP SuccessFactors and we created a strategy for SAP, one that is also applicable to any single organization, be it a production company, a service company or even a public sector company. Every single organization has four stake holders: customers, employees, suppliers and assets. The way you manage these four corresponds to the way you manage your business. And just to underscore the fast and exponential development we face: last year at the SAP Forum, we were discussing digital transformation, and that is already happening. This year, we are discussing artificial intelligence and how it can be incorporated into all elements of the business and by next year I am positive that we will already have examples of successful implementation in our region. Time needed to re-invent your business cannot be measured in years, it has to be measured in months or sometimes even days.
Digital transformation is an issue that SAP has been pursuing for several years. However, it might sound too abstract or even scary, particularly for small and medium sized local companies. What is your advice regarding small, safe “baby” steps on how to get digitized?
Well, I might use a parallel that quite well known companies, such as Nokia or Kodak used, claiming that no change is safe and we all know the outcome of such business decisions. I can understand people being afraid of the investment. Let me introduce another approach – leaving technology aside, as it is just the means. For any company, the key is to know all about its customers, starting with expectations and its competitors but also development and change. Would you ask a child today if he or she watches regularly scheduled TV? It is nonsense for them: why would they watch a movie at any fixed time determined by someone else? The generation of our parents, on the other hand, still wait for their movie on Saturday night. Thinking about customers in this way will then transform to suitable business models to attract tomorrow’s customers. If you do not start adapting today, you will miss out on tomorrow.
Can you be more specific and share two examples or best practices of customer digitization from the CEE region?
Well, let me start with a company that produces spare parts for the automotive industry. When I talked to the CEO, he mentioned that his IT people kept challenging him about the need for them to be on the project team. However, such projects are not only about IT anymore, as they influence the future of the company. In four or five years the automotive industry will change completely. We are not investing in IT, we are investing in our future and new business models. As I have mentioned above, the IT is only the tool.
The second reference project concerns a Czech global company AVAST and it is linked to millennials. As a high tech company, producing top security software, it is attracting mainly young talent. What is important for millennials? Customization. They expect the same environment that they have at home. They enjoy nice computers, tablets, gadgets and they like to connect using social media. For someone my age, this might be slightly disturbing but for the coming generations such aspects are of the utmost importance. We teamed up with them and successfully implemented our HR solution, called SAP SuccessFactors. This solution is based on a social network model and enables you to comfortably address the most common HR issues, such as communicating with your colleagues, providing them with goals, trainings, or education, engaging with them regarding business development. This particular tool is not only natural but was expected by the millennial employees in order to avoid a leadership gap. Luckily, the leadership team of AVAST recognized the importance of such a solution and made the investment. The implementation also enabled them to measure satisfaction and we were pleased to see tangible preliminary results, showing that the immediate satisfaction grew by 3%. Such results allow you to calculate a return on your investments, which is often argued in HR solutions. Yes, there are financials behind it. Higher satisfaction increases productivity and performance, attracts young talent in the market and supports retention.
In May, you held your biggest annual conference SAPPHIRE NOW. Can you share some major announcements with our readers?
The major announcement was a conceptual one, concerning Leonardo. Leonardo is not a product but a set of tools that help you intelligently connect people, businesses and assets. The conceptual change introduces the new approach for how we partner with our customers. Until now, we were bringing pre-built solutions that were implemented and customized. The Leonardo platform allows us to co-innovate together. The new set of tools helps materialize innovative customers from both sides. We not only deploy and implement, but we truly build new solutions together. This is the key message regarding our future evolution as a business. That does not mean that we will stop selling traditional solutions and products but we have to keep coming up with new approaches.
You describe yourself as a manager by trade, entrepreneur by heart and a leader… What message concerning leadership do you want to pass on?
If you want to make everybody happy, sell ice- cream. Everything depends on trust and the people. I have the best team ever. I trust them and they trust me and together we can go to the Moon.
What are your personal plans for the summer and what advice do you give your colleagues regarding recharging batteries?
We have repeatedly demonstrated our mantra: “Work hard, party hard”. Personally, I like to sail; I have been a passionate sailor for the past twenty years. It does not come as a surprise that the Adriatic region is the one I prefer. I also play guitar in a rock band. I am just afraid that revealing that I have done so for almost 40 years will make me look old. I wish a pleasant summer to all readers of the Czech and Slovak Leaders magazine!
Linda Štucbartová