- Industry, Business, Technology
Social Sabbatical Program Combines CSR and Leadership Development: SAP
July 28, 2016
SAP is a global software company headquartered in Germany. Founded in 1972 by five engineers from IBM, the company has grown dramatically over the 40-plus years since then, becoming a major worldwide corporation with over 70,000 employees and offices in over 130 countries. The company supplies enterprise software to hundreds of thousands of customers, probably including the employers of many readers of this article.
SAP’s corporate social responsibility program took its current shape only recently, though, following the company’s adoption of a global CSR strategy in 2011. Before then, its CSR activities had consisted mainly of donations. There was no globally coordinated program; instead, the companies’ offices in each country made donations on the basis of local considerations.
In truth, SAP had nothing to point to as its own CSR. The company’s focus was on business operations in line with the corporate mission, namely, to develop standard application software for real-time data processing. This was the basis for the company’s name, which stands for “System Analysis and Program [Development].” And the engineers’ mindset that had informed the company since its establishment relegated CSR to the status of philanthropic activities unrelated to the company’s main business.
After years of writing checks for charitable causes, however, the company began to wonder if it was doing the right thing. Giving money is helpful, but is it going where it should, and is it being used for proper purposes? Is the company generating an impact identifiable as its own? Are the donations helping bring about change? These are the questions that began to nag managers at SAP.
These concerns prompted, in 2010, the adoption of a new corporate vision: “To make the world run better.” This was refined in 2011 to: “To help the world run better and improve people’s lives.” The adoption of this explicit commitment to social improvement led to the formulation of a global CSR strategy.
Tools to Tackle Society’s Problems
The task began with a search for ways that SAP could “help the world run better and improve people’s lives” using the distinctive capabilities of a company that had grown into a world-leading software developer in four decades. The approach needed to draw on its main business operations and also to contribute to those operations in order to win the support of shareholders and other stakeholders and thus ensure its sustainability. After substantial consideration, the company came up with two planks for its CSR program: entrepreneurship and STEM education, “STEM” being short for science, technology, engineering, and mathematics.
As a company founded by former IBM engineers, SAP had entrepreneurship in its corporate blood. The firm has an office in Palo Alto, California, in the heart of Silicon Valley, and supporting and training entrepreneurs was a key to SAP’s own future. Also essential for SAP was the development of specialists versed in the STEM subjects, which are the core elements of information technology. So when SAP considered how it could undertake CSR activities that would draw on its business operations, it was only natural that it settled on the twin planks of entrepreneurship and STEM education, focused on equipping the world’s youth with the tools they would need to tackle society’s problems in the twenty-first century.
The next question was how to turn these planks into concrete action. The company’s experience suggested that simply giving money tended to leave the company without a direct stake in the activities it was supporting. In order to conduct CSR activities that would both draw on the company’s existing business operations and provide inputs for future operations, it was essential to turn the CSR program into something to which the entire company would be committed—an undertaking directly related to SAP’s way of doing business, not a special operation handled by an isolated unit within the company.
In order to make the program sustainable, moreover, it needed to appeal to the pride of the company’s professionals and make them want to play an active part. Another key requirement was for the activities to produce a social impact. After considering these factors, in 2012 the company launched its Social Sabbatical program, which combines CSR with human resources development, particularly for the company’s future executives.
Under this program, teams of employees from SAP offices around the world, working in various departments, are sent to assist social entrepreneurs and nongovernmental organizations involved in tackling social issues in emerging markets. Spending four weeks at the target organization, the team members tap into their respective skills to help find solutions for the organization’s management issues. Eligibility to participate is limited to the “top performers,” a designation applied to the top 10% of SAP employees from around the world.
In 2012, the first year of the program, teams were dispatched to three countries: Brazil, India, and South Africa. The number of target countries has since risen to eight, including China, Turkey, and the Philippines, and about 120 employees now take part, including some from SAP Japan. Other companies have implemented similar programs, but what distinguishes SAP’s undertaking is that the targets are explicitly limited to organizations aligned to its CSR strategy, such as social businesses and NGOs dedicated to addressing social issues, and that participation is limited to the top 10% tier of employees—the company’s top performers.
SAP positions this program not only as a means of providing CSR education to the participating employees but also as opportunities for leadership training and market development. The teams are created specifically for the program and include members from different professional backgrounds and nationalities. While members have virtual meetings and other contacts from their respective offices before they set off, they do not meet face to face until they arrive at their destination. In order to produce results within four weeks, members must quickly transcend differences and start functioning as a team. And they must operate in an emerging market where the conventional wisdom of their home countries does not necessarily apply. On top of that, in order to grasp the background of the target organization’s problems and find clues to dealing with them, they must communicate with the organization’s employees and build a team with them, even though in many cases they do not have a common business language.
SAP employees must thus display team-building skills on two levels, among themselves and with members of the target organization, along with cross-cultural adaptability. And their stay tests and hones their ability to identify and resolve issues within a short time frame.
In addition, SAP expects them to sow the seeds for future business by winning high marks from the target organization. Since the dispatched team members represent SAP’s top tier of employees, a certain degree of success is taken for granted. If the target organization is able to solve its problems and improve its operations through the development of new skill sets and the acquisition of new perspectives as a result of the team’s activities, it will think highly both of the team members and of SAP as the company that sent them. Even if it does not currently have the resources to adopt software or IT solutions from SAP, it may consider doing so in the future. In this way, the team’s success means the birth of a new potential client for the company.
The team members are responsible sowing such seeds, and during their stay they learn about the various needs of an emerging economy. They have the opportunity to put their own professional skills to work in dealing with social issues, to benefit others, and also to develop future clients. Their activities are the embodiment of SAP’s vision: “To help the world run better and improve people’s lives.”
Producing Results in China and Kenya
Let us next look at two actual cases. In the first, a team was sent to provide support for a start-up in Shanghai. China has been achieving dramatic economic growth, but many people have been left behind, and fighting poverty is an urgent task. NuoMi Shanghai, a fashion firm launched in 2006, has been designing and selling high-quality, stylish apparel made from natural materials, and from the start it has operated as a social business, hiring orphans, homeless people, and people with disabilities so as to allow them to break out of the poverty cycle. Often hired without any previous experience, new employees receive on-the-job training, learning how to sew and eventually becoming skilled workers capable of supporting themselves.
Bonita Lim, the founder and chief executive of NuoMi, wanted to increase its earnings so as to create more jobs. She was confident that IT could be used to develop new sales channels for the company’s products. But she is a designer by profession, and she had little familiarity with IT-related matters. SAP dispatched a team made up of experts in technological support, corporate finance, and marketing.
The members listened to Lim’s hopes, and they also spoke with employees who said their jobs at NuoMi had changed their lives. They came up with a branding strategy based on the firm’s distinctive identity as a social enterprise. Lim declares that the team members were “heaven-sent helpers.” Based on the strategy they devised, the company’s website was revamped to highlight the social value of NuoMi products. And both in shops and at its periodic fashion shows, NuoMi strongly pushed the message that wearing NuoMi clothes has a positive impact on society.
The other case involves a team sent to Kenya. The target was Juhudi Kilimo, a microfinance start-up headquartered in Nairobi. In addition to offering loans to smallholder farmers, the firm provides various sorts of training to help them improve their lives. It actively finances farmers’ purchases of livestock and installation of hothouses. It has extended more than $20 million in loans to some 30,000 farmers. The firm wanted to improve the communications between headquarters in the capital and the sites of its lending activities, which are conducted locally across the country.
The team from SAP consisted of specialists in IT support and project management. When they arrived in Nairobi, the reality they encountered at Juhudi Kilimo’s headquarters was on an entirely different level than what they had imagined from the company’s reference to “improvement of communications.” The company’s operating processes were all paper-based, and employees’ workspaces were buried under piles of documents. The company warehouse was also full to overflowing with papers. Unsurprisingly, the loan approval process was time-consuming.
The team members also traveled to a rural village where the firm had been providing loans. There they heard from farmers who had used financing from Juhudi Kilimo to buy dairy cattle, thanks to which they had increased their income and found hope in the future. Talking to the farmers allowed the SAP team members to view the lending process from the clients’ perspective. Farmers seeking a loan had to travel to Nairobi, which took a long time. Often they had to spend an entire day on the process—meaning a day away from work on their farm.
The SAP team proposed streamlining the loan approval system by using mobile phones, which are widespread in Kenya, and automating the process. Under the new arrangement, farmers no longer needed to travel to Nairobi, and the processing period was cut from two weeks to three days. The digital data is stored in the cloud, and the company’s headquarters is no longer overloaded with paper. Thanks to the new system, the burden on farmers has been lightened, and the company’s employees are able to spend more time gathering opinions and requests from farmers. And the company is now able to provide loans to a larger number of them.
As can be seen from these two cases, participation in the Social Sabbatical program puts SAP’s future leaders into environments unlike anything they had experienced until then and gives them a visceral understanding of social issues. They tap their own skills and experience to solve business problems at the target organization, and they see how this can also contribute to the resolution of social issues. They learn that their work for SAP can be socially meaningful and help people live better—in other words, they directly experience the realization of the company’s vision, “to help the world run better and improve people’s lives.” The program encourages them to internalize the concept of CSR and to integrate it naturally with the company’s business operations. And it has become a gateway to success for the company’s executives-to-be.
The participants so far have given high ratings to this program. Unlike their ordinary business-to-business work, which offers little opportunity to sense that they are contributing to society, it allows them to experience a direct connection between the deployment of their abilities and skills and the resolution of social issues. Many have said that participating in it changed their lives. Team members gain confidence from the successes they achieve in addressing social issues, and they have a heightened awareness of and interest in tackling such issues after they return to their home countries. In addition, the concept of CSR takes root and grows in the minds of each of these future leaders.
The participants also share their experiences with other SAP employees, enthusiastically relating how they were able to put their skills to work for the benefit of society. In effect they become CSR ambassadors within the company. As a result, the number of participants has been growing from year to year, jumping from 29 in 2012, the first year, to 360 in 2014, and this has been accompanied by a rise in competitiveness, there being nearly four times as many applicants as participants. The range of target countries—10 locations in 2015—has also expanded, broadening the variety of participants’ experiences and extending the social impact of the program.
The benefits of the program are by no means limited to the top 10% tier of employees chosen to participate. Every year SAP designates October as a “Month of Service” and implements more than 550 volunteer activities for employees at offices in over 50 countries around the world. The participants in the Social Sabbatical program play a major part in planning and implementing these activities. SAP has also launched a locally targeted version of the program, called “SAP Engaging for Local Impact,” under which local employees are dispatched for a month to support the activities of local NGOs and social enterprises involved in tackling social issues. The program is currently being implemented in Ireland, China, India, the United States, Mexico, Bulgaria, and Australia
Though the Social Sabbatical program itself is a company-launched initiative, the experiences that participants gain from it allow them to internalize the concept of CSR and exercise leadership informed by this concept, coming up with new initiatives of their own. And their activities are having a favorable impact on other employees. A positive cycle is now operating both for the employees and for SAP as a whole.
To be sure, this program is still young, and the process of trial and error is likely to continue for some time yet. A long-term perspective will be required to gauge the social impact generated by the program, and this may clash with the focus on short-term results that is commonly seen in the business world. Finding the key performance indicators for measuring long-term social impact is an issue for SAP.
The company may be said just to have reached one milestone on the long journey of implementing CSR. But over the course of time, the hundreds of employees who have participated in this program will come to form the mainstay of the company. These employees, with an internalized awareness of how their own work can change society, will shape SAP’s future. This is the leadership-development side of SAP’s agenda for its Social Sabbatical program.
One of the points brought into view by the Tokyo Foundation’s CSR Corporate Survey is the tendency of Japanese companies to address social issues that have already become widely recognized rather than seek to mitigate emerging issues. Japanese firms may thus benefit from looking at SAP’s program, which puts participants face to face with social issues in emerging economies, an environment totally different from their usual one, and heightens their sensitivity to social issues in general.
One aspect of SAP’s program that may be difficult for Japanese firms to imitate is the focus on elite training limited to the top performers. But SAP’s carefully considered integration of efforts to resolve social issues with business operations—encouraging employees to internalize the concept of CSR through experience that combines leadership training and activities aimed at tackling social issues—is an approach that can offer valuable insights for Japan’s companies as well.