How CEO Christian Klein spearheaded SAP’s seismic shift to a cloud firm

Christian Klein is a man on a mission. The CEO of Europe’s largest software company, SAP, wants to catapult his company to major leagues of “Big Tech”. He also wants to change the image of German enterprises and alter the way European policymakers and investors deal with tech and innovation.

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

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

In this CEO Agenda, we go beyond those headlines. You’ll learn Klein’s views, his approach to business, and his personal touches as a leader.

This interview has been edited for brevity.

Down to business

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

One of our most strategic projects at the moment is Business AI.

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

Which long-term trend are you most bullish about for society and the economy at large?

The Cloud and Business AI. The cloud isn’t news anymore, but millions of companies still stand to reap the enormous benefits it offers–especially smaller and medium-sized companies. In Europe, for instance, less than half of companies are using cloud technology right now. Getting these companies into the cloud and helping them transform their businesses there can boost growth and competitiveness across the board – it’s low-hanging fruit.

Add Business AI to the speed, innovation and data accessibility that the cloud offers and you’ve got the greatest opportunity for the technology industry in two decades – and quite likely the biggest opportunity for the world economy since the invention of the internet.

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

Three things come to my mind: Removing unnecessary barriers to the free flow of data between organizations and across countries, unifying regulation, and addressing climate change.

Removing barriers: The free flow of data and information between organizations and across countries is the basis for innovation and breakthroughs all over the world. Wherever we can remove unnecessary barriers to this free flow, people and nations will profit.

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

Any such fragmentation hampers innovation, and especially in startups and medium-sized companies, which don’t have the means 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’s perhaps humanity’s greatest challenge because meaningful progress requires nations and societies to act together more closely than we have ever managed before. I believe that digital solutions can make climate action much more precise, pragmatic, and efficient. One example is technology that establishes full transparency on emissions and resource consumption along the supply chain, based on actual rather than estimated data. The greater clarity and transparency digital solutions offer can pave the way towards more cooperation. It’s time we make more use of these tools.

Being productive

What time do you get up, and what part of your morning routine sets you up for the day?

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

Courtesy SAP

What time do you work until? Do you continue sending emails during the night and/or 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’s a method for finding innovative and impactful solutions to just about any complex problem. SAP founder Hasso Plattner, and also SAP as a company, played a major role in popularizing the technique in Europe.

Uwe Anspach/picture alliance 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 be radically customer-centric – a virtue you have to cultivate to keep your organization successful over long periods of time.

Who is on your “personal board”?

I often get asked what advice I’d give to colleagues just starting at SAP, and I always say it’s important to remember that no one can know everything. I’m not an expert in every field but SAP is full of experts at every level, and I learn so much from them. Understanding what’s going on, where the real challenges and opportunities lie, and how to tackle them, is key.

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 middle of the often very busy life as CEO. And a tennis game with my hometown sports club friends always helps me unwind.

Ihlow/ullstein bild via Getty Images

Getting personal

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

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

Amazon.co.uk

Christensen recognized that companies have to fundamentally reinvent their businessnes to stay relevant and successful over time. But the speed of innovation – and hence the necessary speed of reinvention – has greatly accelerated in our time. The key challenge is to reinvent 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 great consumer companies as customers, so I couldn’t possibly pick one.

I happen to live in a region with a vibrant food and drink culture, though – and I’m glad 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 couple of years ago, my Executive Board colleagues and I dressed up as characters from Sesame Street for Halloween. I was Elmo, and it definitely made for a memorable Board meeting.

CEO Agenda provides unique insights into how leaders think and lead, and what keeps them busy in a world of constant change. We look into the lives, minds and agendas of CEOs at the world’s most iconic companies. Dive into our other CEO Agenda profiles.