A CEO sometimes must lead momentous change for the good of the company. SAP’s CEO, Bill McDermott, is on such a mission. When asked about the next steps in his plan to execute the needed change, McDermott’s response was rich and instructive (Geoff Colvin “A CEO’s Plan to Defy Disruption” Fortune, November 17, 2014, p. 36):
“Many large global companies today have too many management layers between the top executive and the ultimate customer. So we had to de-layer the company. . . . What we used to innovate in 18 months is now coming out in monthly or even weekly cycles. . . . Empower people. Once you come out with the plan, I have no interest in having management teams inspect people’s progress. I don’t want managers that report the news. I want managers who are out there on the frontlines making the news.”
McDermott articulates three crucial components:
Flatten The Management Structure. Repeatedly we see that anytime you can connect top executive leadership with frontline workers, fantastic communication can occur. The value of that communication more effectively informs the company leadership thereby keeping strategy on track.
Innovate Faster. The constant argument of quantity versus quality will continue. Nevertheless, the fact remains that speed-to-market will make you a hero or a zero. Companies must continuously look for ways to speed up the innovation cycle.
Empower People. Who does not want to be empowered? When companies implement policies and issue directives that clearly communicate that employees are empowered to take action, then great things will happen. Companies that do not empower their people that are going to die. Companies that empower their people are going to live strong.
These are powerful lessons we can take from a SAP.