How CEO Christian Klein led SAP’s seismic shift to a cloud company

Christian Klein is a man on a mission. The CEO of Europe’s largest software company, SAP, wants to catapult his company into the major leagues of “Big Tech”. He also wants to change the image of German businesses and change the way European decision-makers and investors approach technology and innovation.

In terms of both optics and performance, Klein is well on its way to success. SAP’s share price has nearly doubled since he became CEO five years ago, earning him a contract renewal and the additional title of “chairman” earlier this year. In the German media and global business gatherings like Davos, Klein, 44, is becoming the poster boy for European affairs.

I also met Klein for the first time at Davos and he shared some of his big ambitions with me. European business should reinvent itself, he told me, and politicians should wake up. Klein is right: many of our continent’s biggest companies remain stuck in the past, whether it’s because of their 20th-century business models or their legacy leaders.

In this CEO Agenda, we go beyond these titles. You will learn about Klein’s views, his approach to business and his personal touches as a leader.

This interview has been edited for brevity.

At work

Wealth: What is the most important project you are working on with your company?

One of our most strategic projects right now is Business AI.

To make AI a growth engine, it needs to be deeply embedded in companies’ core processes, including finance and procurement, demand planning, supply chain management, HR and more. That’s exactly what SAP is doing with Business AI. Our customers generate 87% of global trade. As we introduce Business AI into these processes, the way businesses run and work will change forever.

Which long-term trend are you most optimistic about for society and the economy in general?

Cloud and Business AI. The cloud is no longer news, but millions of businesses still want to reap the enormous benefits it offers, especially smaller and mid-sized businesses. In Europe, for example, less than half of companies now use cloud technology. Getting these companies into the cloud and helping them transform their businesses there can drive growth and competitiveness across the board – it’s a low-hanging fruit.

Add Business AI to the speed, innovation and accessibility of data that the cloud provides, and you have the biggest opportunity for the tech industry in two decades – and perhaps the biggest opportunity for the global economy since the invention of the Internet.

If you were an economic policy maker, what would be your top priority?

Three things come to mind: removing unnecessary barriers to the free flow of data between organizations and between countries, unifying regulations and tackling climate change.

Breaking down barriers: The free flow of data and information between organizations and between countries is the basis for innovation and discovery around the world. Wherever we can remove unnecessary barriers to this free flow, people and nations will benefit.

Unifying regulations: Digital innovation is most powerful when it comes to scale. In the EU, however, the digital market is still fragmented, with 27 countries building their own regulations on, for example, cloud computing and the “sovereign cloud”. On a global scale, there is a danger of a normative decoupling between the great economic powers.

Any such fragmentation stifles innovation, and especially in startups and mid-sized companies that don’t have the wherewithal to deal with this kind of political and regulatory complexity. Wherever we simplify and unify, we unleash innovation and make economies more competitive.

Finally, addressing climate change: it is perhaps humanity’s greatest challenge, because meaningful progress requires nations and societies to act more closely together than we have ever been able to before. I believe that digital solutions can make climate action much more precise, pragmatic and effective. One example is technology that establishes full transparency of emissions and resource consumption along the supply chain, based on actual data rather than estimated data. Greater clarity and transparency provided by digital solutions can pave the way for greater cooperation. It’s time to use these tools more.

Being productive

What time do you wake up and what part of your morning routine prepares you for the day?

To be honest, I’m more of a night owl, so I try to prioritize a healthy breakfast to help me start the day. I also enjoy an early workout whenever I can.

Courtesy of SAP

until what time do you work? Do you keep sending emails at night and/or on weekends?

I like to work in the evening. Most of my meetings are usually over by then and that’s when I’m at my most creative. As for weekends: I try to keep them reserved for my family as much as possible.

What apps or methods do you use to be more productive?

I’m a big fan of “design thinking”. It is a method of finding innovative and impactful solutions to almost any complex problem. SAP founder Hasso Plattner, as well as SAP as a company, played a major role in popularizing the technique in Europe.

Alliance Uwe Anspach/picture via Getty Images

I like it because it encourages looking at problems and solutions from the end user’s point of view. This helps us to be radically customer-centric – a virtue you must cultivate to keep your organization successful over long periods of time.

Who is part of your “personal board”?

I am often asked what advice I would give colleagues starting at SAP and I always say that it is important to remember that no one can know everything. I am not an expert in all areas but SAP is full of experts at every level and I learn so much from them. Understanding what is happening, where the real challenges and opportunities lie and how to address them is essential.

Finally, of course, my family and especially my children are an amazing source of strength and good advice. They help me stay grounded in the often very busy life as a CEO. And a tennis match with friends from my sports club in my hometown always helps me relax.

Ihlow/ullstein image via Getty Images

I get personal

What book have you read, either recently or in the past, that inspired you?

“The Innovator’s Dilemma” by Clayton Christensen was a great source of inspiration. It’s a book every CEO should read.

Amazon.co.uk

Christensen recognized that companies must fundamentally reinvent their businesses to remain relevant and successful over time. But the speed of innovation – and therefore the necessary speed of reinvention – has accelerated greatly in our time. The key challenge is reinventing your business for the future while your traditional business is still very successful – and when only a few stakeholders feel the pressure to change anything.

As a consumer, what is your favorite company and why?

Well, we have hundreds of large consumer companies as clients, so I couldn’t pick one.

However, I happen to live in a region with a vibrant food and drink culture – and I’m happy to reveal that one of my favorite coffees in the world can be found at Da Giovanni’s in my hometown of Muehlhausen.

And to end on a lighter note: What was the last costume you wore?

I’m not sure if it was the last time, but it certainly stands out in my mind. A few years ago, my Executive Committee colleagues and I dressed up as Sesame Street characters for Halloween. I was Elmo and it certainly made for a memorable Council meeting.

The CEO Agenda offers unique insights into how leaders think and lead and what keeps them busy in an ever-changing world. We look into the lives, minds and agendas of CEOs from the world’s most iconic companies. Delve into our other CEO Agenda profiles.