Natalie Hanson Greener, happier commute
This longish blog post describes how SAP could reduce it’s carbon footprint, while achieving the company’s goals of improved employee innovation, satisfaction, and productivity.
Overview
One of the gems in SAP’s current strategy is the company’s focus on sustainability. I have been working for SAP for over twelve years, and for the most part I find that there are not a lot of surprises – at least, not good ones! So when I first heard about SAP’s sustainability initiative, I was admittedly skeptical, assuming that it was part of the ongoing go-to-market messaging that the company churns out. But as it turns out, SAP’s focus on going green is not just marketing – it’s really about changing our internal operations, with a commitment to reducing our carbon footprint. One of the perks of this initiative is that I work in a beautiful new building at SAP’s Americas’ headquarters in Pennsylvania. It is one of only 338 Platinum-certified LEED buildings in the world!
The atrium in SAP’s Newtown Square, Pa., building features a floor-to-ceiling, triple-glazed glass exterior wall that allows natural light to permeate the building. The design is anchored by locally-sourced, Forest Stewardship Council-certified wood suppors. The building is designed to the LEED Platinum standard. (SAP photo)
As communicated via the company’s internal newsletter SAP Weekly, overall SAP is committed to ensuring that at a minimum, all new buildings meet the LEED Silver standard, and furthermore, there are also numerous projects underway to retrofit buildings “with energy-saving technology, such as motion detectors, timer-controlled lighting, and improved heating and cooling systems. … Energy-efficient buildings support SAP’s global efforts to lower our total carbon emissions to the level of 2000 by the year 2020. This represents an overall reduction of 50 percent compared to the peak year 2007.”
You can read more about what SAP is doing in this area in the publicly available Sustainability Report. I’ve provided a screenshot of the summary page here:
In addition providing some transparency on internal operations , SAP has provided visibility to some other interesting data, including our current metrics on employee engagement. For some time I have been meaning to write about the challenges we’re facing in employee satisfaction, but I didn’t feel there was much to say without being able to share some of the key data. Now that I’ve realized SAP provides some of that information externally, the topic is fair game! What I’d like to do in this post is to talk about the ways in which SAP could continue it’s focus on reducing our carbon footprint, and making employees happier at the same time. It’s a long post, but I hope you’ll come along for the read …
SAP’s Sustainability Initiative
Prior to assuming the role of Chief Sustainability Officer for SAP a few years ago, Peter Graf worked in our Global Marketing organization. He has been instrumental in shaping both external and internal understanding of SAP’s interest in this space. During an interview with Forbes earlier this year, Graf described the five major drivers for SAP’s focus on sustainability:
The first piece is compliance. For customers of SAP who are in regulated industries, compliance is obviously a much bigger issue than it is for us, a software company, which is not really a regulated industry. But we have to comply with our customers’ codes of conduct.
One of our largest German customers told us, “We cannot buy any more software from you,” and we almost fell off our chairs. We asked why, and they said, “Well, you don’t have sustainability in your code of conduct. You don’t have a sustainability strategy. We have it in our code of conduct. And we can’t buy from you.”
The second thing is resource productivity. What we committed to in the business case was that not only can we make money and enhance our brand, but we can save a lot of money throughout SAP, too. … In our first year of existence … I had promised cuts of 10 million euros, and we delivered 90 million.
The third aspect to the business case was the competitive edge we could create in the marketplace. … We open the door into the boardroom, because that’s where we are strongest in selling and that’s where this discussion’s really happening. … It was never easier to get into a boardroom than with this topic. It’s what people have on their minds.
The fourth part of the business case is the way sustainability really re-energizes our workforce. We needed something where people say, “Yeah, I’m proud to work for SAP. We have a huge impact. This is a great opportunity.” People need to come to work for a purpose that’s bigger than selling software.
The last piece, which is the actual deal maker, is beyond the business case. The last piece is to sustain the business model. … Sustainability has the power to fundamentally change the way business processes work. And we must, as the leader in business process software, be a leader in sustainability if we don’t want to lose our leadership position.
I have known for some time that sustainability was a topic of growing importance, but I had no idea about how much it was driving changes to business behavior!
The internal campaign to raise (and keep) employee’s interest in this topic is well done from my point of view. For example, we have carbon footprint and commuting dashboards on an intranet site, and a Sustainability Corner in the company’s internal newsletter. The internal materials include ways to reduce our carbon footprint, e.g. through biking and carpooling. There is a little area about telecommuting, too, but it’s not a big focus. After writing about how he bikes to work, one employee admitted that it was not a practical alternative for many, and addressed the question of telecommuting:
What are other alternative options if you start considering to save environment on your commute? One reasonable answer could be: Telecommuting instead of Commuting. Telecommuting (working from home) is, for sure, the best way to stay green and reduce your carbon footprint. Telecommuting has become a popular option to reduce not only commuting time but also your carbon emission. Undoubtedly, telecommuting is becoming a reality and is going to be the nature of work in many companies. The main question is whether we (SAP) are ready to support this kind of work-style?
Not unlike many blog posts, his questions met mostly with silence … but the questions are key from my point of view. As part of our efforts to understand more about employee satisfaction and work-life balance, my UX team conducted a small survey, and we learned that in both the US and Germany travel between 40-60 minutes on average to work each day. If we could work at home one to two days a week more – and others in the company did the same – we could probably have an impact on the company’s carbon footprint!
SAP’s Employee Satisfaction
As you may have noticed above, the numbers from our Employee Survey are pretty grim – a drop in employee engagement from 84 to 69%. It’s not just SAP, of course. The economic downturn and related pressures make having a job and keeping one of extraordinary concern. The average age of the SAP employee is in the mid to late 40s, which means they are faced with a different set of concerns than younger employees might be – aging parents, college tuition, their own retirement. The fear of job loss is surely multiplied by those kinds of financial pressures. I know it has been a tough year for me, and when I look around at the many people I’ve worked with at SAP over the years, many of us are in the same boat.
Given all that, it’s hard to imagine that here is much SAP could to to impact employee satisfaction. But there are two major things that are tied to employee satisfaction which make it critical for the company to try: (1) employee retention, and (2) customer satisfaction. (In case you were not aware, there is a direct correlation between employee satisfaction and customer satisfaction, and happy customers buy more software.) Since part of my responsibilities include people management, I have an interest and concern in improving employee satisfaction. I have been reading articles online about the recent research in this area, and have come across some interesting findings that could be relevant for the challenges SAP currently faces. Quite simply, the research indicates that employee satisfaction is tied to flexible working arrangements.
In a 2009 special report on Work-Life Balance, Business Week summarized these trends:
In the current economic environment, work-life balance now ranks as one of the most important workplace attributes – second only to compensation, according to research conducted by the Corporate Executive Board among more than 50,000 global workers. And employees who feel they have a better work-life balance tend to work 21% harder than those that don’t.
The critical need to ensure an adequate work-life balance for employees in the downturn is largely being neglected by employers as more and more pressure is put onto employees. In 2006, 53% of employees felt they had a good work-life balance; that number fell to 30% in the first quarter of 2009.
More than 60% of the employees polled in the CEB study identified flexible schedules as the most important work-life practice their employer could provide.
Earlier this year I had the chance to hear Dan Pink speak in a webinar about his book Drive. Although I didn’t have time to write up what I learned, it has had significant impact in my thinking. Among other things, Pink talked about a concept called ROWE (results only work environment), which has been implemented in many innovative organizations including Best Buy. In essence, employees come and go as they please, as long as the work gets done. This has proven to be extraordinarily effective at Best Buy, and has subsequently been implemented at the Gap, with the following results:
A post-pilot assessment conducted in February 2009 revealed that productivity increased 21 percent and quality improved 15 percent among the pilot group. Turnover plummeted 18 percent, down to 5 percent in 2008 over the year prior. Engagement scores spiked from 67 percent in 2007 to 86 percent in 2008, and work/life balance scores rose significantly from 72 percent to 82 percent.
Now, I am not suggesting that SAP is ready to implement ROWE – though I’d love to try! But even some small adjustments to SAP’s telecommuting and work-at-home policies could start to move the company in this direction and maybe help impact some key employee-related metrics. A demonstrated trust in employees and a realization that work also needs to flex to accommodate the rest of our lives … I think those things could go a long way towards addressing SAP’s employee satisfaction issues.
Furthermore, according to a study conducted at IBM, employees who have flexible work arrangements on average work 57 hours a week before they feel that work begins to impinge on their personal life – in contrast to 38 hours if they are working in the office. This has been corroborated with a study conducted by Cisco, which found that employees were more productive and felt that the quality of their work was improved while working remotely. Futhermore, the Cisco study found that “telecommuting can also lead to a higher employee retention rate, as more than 91 percent of respondents say telecommuting is somewhat or very important to their overall satisfaction.” So, not only are employees more satisfied, but they are more productive! And … to continue to bring the themes from this post together, the Cisco study also found that in 2008, “Cisco teleworkers prevented approximately 47,320 metric tons of greenhouse gas emissions from being released into the environment due to avoided travel”.
A greener, happier commute
The significant dip in Employee Satisfaction metrics was no surprise to me. I can easily say that this has been the crummiest 12-18 months in my tenure with the company. And that’s saying something, because I have been through some tough times! Within my team we weathered a significant number of executive changes, including the departure of SAP’s CEO Leo Apotheker, COO Ernie Gunst, and my own SVP and VP. It’s very hard to stay focused – and keep a team focused – with such significant changes!
As part of the company’s commitment to Lean, the executive team has also made a commitment to flattening the organization, with the goal of having no more than five layers (L5) between a Board member (Level 0, or L0), and the people within their organization. In addition to reducing complexity, in theory these changes will also better enable communication to cascade to all employees. In fact, the most recent Pulse Check on the Employee Survey results does indicate improvements in the area of employees’ understanding of the corporate strategy – a good sign that things are headed in the right direction. However, in addition to all the executive changes, our area was also affected by these leveling activities, which has required additional messaging, discussion, adjustment of internal processes, and support for the affected employees – myself included.
I was fortunate that the outcome for me was more responsibility and not less, but others have not been so lucky either in terms of the outcomes of the leveling, or it was messaged and managed. Given the pervasive concerns about employee satisfaction, I’ve spent a lot of time meeting with my new team to ensure we’re all moving with clarity in the same direction. During those sessions, one of the questions that has been raised repeatedly and with trepidation is what the new guidelines will be regarding working at home. Since I am a busy mom of two kids with an active professional life outside of work, this is extremely important to me as well, as working at home allows mw to get more work done while not impacting the time I have available for my kids. I believe our current approach to work at home is outdated, and reflects old ways of working for employees that are in global functions.
I still feel like SAP has a lot of underlying assumptions regarding what is acceptable in this area. The current guidance from HR is that each line manager should define an approach that makes sense for their area. But with a global team, varying cultural expectations, and the data I’ve outlined above, I would challenge that approach. What if we let employees work at home on an as-needed basis, no apologies? What if we were even more radical and implemented ROWE? If we could have employees that were happier, more innovative, and more productive … wouldn’t it be worth it? I would love to see SAP rise to the challenge of creating the working climate that it’s employees are looking for – for myself, for my team, and for the company as a whole.
I’m going to start small – we’re using the data from our small survey to have another conversation with our Human Resources representative. And to the extent that I can do the right thing for the members of my team, I’m going to do that, too. But in the end, I think we need something much more ambitious if we’re going to effectuate real change on a company level. I’d like to have a cup of coffee with Peter Graf and new Board member Angelika Dammann (responsible for HR and the shaping of the company’s People strategy) to see what we can do here. In fact, I might just send them an email linking to this post. If I hear back I’ll let you know!
Natalie Hanson 
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