Sections

Increase Your Company Value By Simply Caring For Your People

Dr. Natalie Lotzmann

Executives are becoming more aware of the impact that the physical and mental health of employees, as well as the health of their organizations, has on their companies’ value. In fact, researcher Dr. Dee Edington says that the health of employees can significantly improve a company’s bottom line. Additionally, research conducted by McKinsey & Company in more than 800 organizations around the world found that healthy companies generated total returns to shareholders three times higher than those of unhealthy ones.

It’s clear from evidence like this that investing in safeguarding employee and organizational health is well worth the effort. However, many companies aren’t sure how to start creating this kind of outcome.

From my perspective, it all begins with creating and fostering a caring culture within the workplace – and here’s why I feel this is so important.

Caring for employees creates a domino effect of value  

When organizations create a caring workplace with foundations built on trust and empathy, employees can achieve a sense of empowerment that enables them to perform at their best. And when a caring culture becomes a strategic priority, an interconnected triad of organizational health emerges.

This triad in turn fuels a company’s ability to achieve its goals and sustain business success. Here’s a quick look at the components of this organizational health triangle, which includes employees, customers, and an organization’s ecosystem, and how they impact each other.

  • It starts with well-cared-for employees. From Edington’s perspective, the key to a healthy company is to focus on people – on ALL of the people in a company. “The rationale is that people, if they are in the best of physical and mental shape, will add to the financial value of the company,” says Edington. I agree with this premise, and believe when people feel healthy, respected, and cared for, their company can reach its goals at an accelerated speed.
  • When employees feel cared for, the customer experience improves. A report by the research firm Insync highlights how employee commitment and advocacy behavior can have a direct and profound impact on customer loyalty. The report says that 70% of customer brand perception is determined by experiences with people. Additionally the report finds that 41% of customers are loyal because of a good employee attitude. It is evident that when employees are happy, there is greater customer satisfaction and loyalty, which leads to greater financial sustainability and increased sales.
  • With happy employees and loyal customers, a company’s value improves. I believe that a healthy business culture has benefits that extend beyond employees and customers. The positive impact of a caring culture can extend to an ecosystem outside a company and affect such things as the value of shareholders, corporate citizenship, and an organization’s brand. 

Caring drives profitability too

The McKinsey research found that sustained organizational health is one of the most powerful assets a company can have. And it states that when companies manage with an equal eye on performance and health, they more than double the probability of outperforming their competitors.

The research company also shared a profile of a global chemical manufacturer that shows exactly what kind of impact a healthy culture can have. After implementing organizational health practices, the company realized a 50% increase in productivity, with US$350 million in additional profits and an annual-run rate savings of approximately US$180 million.

Measuring the impact of a caring culture

SAP has been fostering a caring culture for several years now. We know that our organizational health contributes to our vision and purpose. We are dedicated to helping the world run better and improving people’s lives, including those of our employees.

Because we want our employees to stay healthy and balanced and to perform at their best, we ask them to rate their personal well-being and working conditions via regular surveys. From these anonymized results, we calculate the annual Business Health Culture Index (BHCI) as a measurement of the general cultural conditions at SAP.

Based on our internal model and assumptions (which are externally audited by PwC), we can then quantify the connection between the BHCI and our operating profit. For instance, in 2014, the BHCI increased, and for each percentage point, the positive impact on our operating profit was approximately between €65 million and €75 million in 2014.

To sum up, caring is not only a win-win for employees’ individual heath, our ‘Be human culture’ is also a business imperative that can help a company achieve gains with customers and within its ecosystem.

Learn more about our BHCI and other ways SAP is helping to improve lives through our other health initiatives.

Comments

Dr. Natalie Lotzmann

About Dr. Natalie Lotzmann

Dr. Natalie Lotzmann is the Chief Medical Officer, responsible for executing on SAP's Health Strategy globally. She is a seasoned thought leader in the field of linking health metrics to talent management and an innovative people strategy.

IoT Can Keep You Healthy — Even When You Sleep [VIDEO]

Christine Donato

Today the Internet of Things is revamping technology. IoT image from American Geniuses.jpg

Smart devices speak to each other and work together to provide the end user with a better product experience.

Coinciding with this change in technology is a change in people. We’ve transitioned from a world of people who love processed foods and french fries to people who eat kale chips and Greek yogurt…and actually like it.

People are taking ownership of their well-being, and preventative care is at the forefront of focus for both physicians and patients. Fitness trackers alert wearers of the exact number of calories burned from walking a certain number of steps. Mobile apps calculate our perfect nutritional balance. And even while we sleep, people are realizing that it’s important to monitor vitals.

According to research conducted at Harvard University, proper sleep patterns bolster healthy side effects such as improved immune function, a faster metabolism, preserved memory, and reduced stress and depression.

Conversely, the Harvard study determined that lack of sleep can negatively affect judgement, mood, and the ability retain information, as well as increase the risk of obesity, diabetes, cardiovascular disease, and even premature death.

Through the Internet of Things, researchers can now explore sleep patterns without the usual sleep labs and movement-restricting electrode wires. And with connected devices, individuals can now easily monitor and positively influence their own health.

EarlySense, a startup credited with the creation of continuous patient monitoring solutions focused on early detection of patient deterioration, mid-sleep falls, and pressure ulcers, began with a mission to prevent premature and preventable deaths.

Without constant monitoring, patients with unexpected clinical deterioration may be accidentally neglected, and their conditions can easily escalate into emergency situations.

Motivated by many instances of patients who died from preventable post-elective surgery complications, EarlySense founders created a product that constantly monitors patients when hospital nurses can’t, alerting the main nurse station when a patient leaves his or her bed and could potentially fall, or when a patient’s vital signs drop or rise unexpectedly.

Now EarlySense technology has expanded outside of the hospital realm. The EarlySense wellness sensor, a device connected via the Internet of Things, mobile solutions, and supported by SAP HANA Cloud Platform, monitors all vital signs while a person sleeps. The device is completely wireless and lies subtly underneath one’s mattress. The sensor collects all mechanical vibrations that the patient’s body emits while sleeping, continuously monitoring heart and respiratory rates.

Watch this short video to learn more about how the EarlySense wellness sensor works:

The result is faster diagnoses with better treatments and outcomes. Sleep issues can be identified and addressed; individuals can use the data collected to make adjustments in diet or exercise habits; and those on heavy pain medications can monitor the way their bodies react to the medication. In addition, physicians can use the data collected from the sensor to identify patient health problems before they escalate into an emergency situation.

Connected care is opening the door for a new way to practice health. Through connected care apps that link people with their doctors, fitness trackers that measure daily activity, and sensors like the EarlySense wellness sensor, today’s technology enables people and physicians to work together to prevent sickness and accidents before they occur. Technology is forever changing the way we live, and in turn we are living longer, healthier lives.

To learn how SAP HANA Cloud Platform can affect your business, visit It&Me.

For more stories, join me on Twitter.

Comments

Christine Donato

About Christine Donato

Christine Donato is a Senior Integrated Marketing Specialist at SAP. She is an accomplished project manager and leader of multiple marketing and sales enablement campaigns and events, that supported a multi million euro business.

Zhena’s Gypsy Tea Brews Sustainable Growth On Cloud ERP

David Trites

Recently I had the pleasure of hosting a podcast with Paula Muesse, COO and CFO of Zhena’s Gypsy Tea, a small, organic, fair-trade tea company based in California, and Ursula Ringham from SAP. We talked about some of the business challenges Zhena’s faces and how the company’s ERP solution helped spur growth and digital transformation.

Small but complex business

~ERP helped Zhena’s sustain growthZhena’s has grown from one person (Zhena Muzyka) selling hand-packed tea from a cart, into a thriving small business that puts quality, sustainability, and fair trade first. And although the company is small its business is complex.

For starters, tea isn’t grown in the United States, so Zhena’s has to maintain and import inventory from multiple warehouses around the world. Some of their tea blends have up to 14 ingredients, and each one has a different lead time. That makes demand-planning difficult. In addition, the FDA and US Customs require designated ingredients be traced and treated a certain way to comply with regulations.

Being organic and fair trade also makes things more complicated. Zhena’s has to pass an annual organic compliance audit for all products and processing facilities. And all products need to be traceable back to the farms where the tea was grown and picked to ensure the workers (mostly women) are paid fair wages.

Sustainable growth

Prior to implementing its new ERP system, Zhena’s was using a mix of tools like QuickBooks, Excel, and paper to manage the business. But to sustain growth and ensure future success, the company had to make some changes. Zhena’s needed an integrated software solution that could handle all facets of the business. It needed a tool that could help with cost control and profitability analysis and facilitate complex reporting and regulatory requirements.

The SAP Business ByDesign solution was the perfect choice. The cloud-based ERP solution reduced both business and IT costs, simplified processes from demand planning to accounting, and enabled mobile access and real-time reporting.

Check out the podcast to hear more about how Zhena’s successfully transformed its business by moving to SAP Business ByDesign.

 This article originally appeared on SAP Business Trends.

Building a successful company is hard work. SAP’s affordable solutions for small and midsize companies are designed to make it easier. Simple to install and use, SAP SME Solutions help you automate and integrate your business processes to give real-time, actionable insights. So you can make decisions on the spot. Find out how Run Simple can work for you. Visit sap.com/sme.

Comments

David Trites

About David Trites

David Trites is a Director of SAP Global Marketing. He is responsible for producing interesting and compelling customer stories that will humanize the SAP brand, support sales and marketing teams across SAP, and increase the awareness of SAP in key markets.

How Much Will Digital Cannibalization Eat into Your Business?

Fawn Fitter

Former Cisco CEO John Chambers predicts that 40% of companies will crumble when they fail to complete a successful digital transformation.

These legacy companies may be trying to keep up with insurgent companies that are introducing disruptive technologies, but they’re being held back by the ease of doing business the way they always have – or by how vehemently their customers object to change.

Most organizations today know that they have to embrace innovation. The question is whether they can put a digital business model in place without damaging their existing business so badly that they don’t survive the transition. We gathered a panel of experts to discuss the fine line between disruption and destruction.

SAP_Disruption_QA_images2400x1600_3

qa_qIn 2011, when Netflix hiked prices and tried to split its streaming and DVD-bymail services, it lost 3.25% of its customer base and 75% of its market capitalization.²︐³ What can we learn from that?

Scott Anthony: That debacle shows that sometimes you can get ahead of your customers. The key is to manage things at the pace of the market, not at your internal speed. You need to know what your customers are looking for and what they’re willing to tolerate. Sometimes companies forget what their customers want and care about, and they try to push things on them before they’re ready.

R. “Ray” Wang: You need to be able to split your traditional business and your growth business so that you can focus on big shifts instead of moving the needle 2%. Netflix was responding to its customers – by deciding not to define its brand too narrowly.

qa_qDoes disruption always involve cannibalizing your own business?

Wang: You can’t design new experiences in existing systems. But you have to make sure you manage the revenue stream on the way down in the old business model while managing the growth of the new one.

Merijn Helle: Traditional brick-and-mortar stores are putting a lot of capital into digital initiatives that aren’t paying enough back yet in the form of online sales, and they’re cannibalizing their profits so they can deliver a single authentic experience. Customers don’t see channels, they see brands; and they want to interact with brands seamlessly in real time, regardless of channel or format.

Lars Bastian: In manufacturing, new technologies aren’t about disrupting your business model as much as they are about expanding it. Think about predictive maintenance, the ability to warn customers when the product they’ve purchased will need service. You’re not going to lose customers by introducing new processes. You have to add these digitized services to remain competitive.

qa_qIs cannibalizing your own business better or worse than losing market share to a more innovative competitor?

Michael Liebhold: You have to create that digital business and mandate it to grow. If you cannibalize the existing business, that’s just the price you have to pay.

Wang: Companies that cannibalize their own businesses are the ones that survive. If you don’t do it, someone else will. What we’re really talking about is “Why do you exist? Why does anyone want to buy from you?”

Anthony: I’m not sure that’s the right question. The fundamental question is what you’re using disruption to do. How do you use it to strengthen what you’re doing today, and what new things does it enable? I think you can get so consumed with all the changes that reconfigure what you’re doing today that you do only that. And if you do only that, your business becomes smaller, less significant, and less interesting.

qa_qSo how should companies think about smart disruption?

Anthony: Leaders have to reconfigure today and imagine tomorrow at the same time. It’s not either/or. Every disruptive threat has an equal, if not greater, opportunity. When disruption strikes, it’s a mistake only to feel the threat to your legacy business. It’s an opportunity to expand into a different marke.

SAP_Disruption_QA_images2400x1600_4Liebhold: It starts at the top. You can’t ask a CEO for an eight-figure budget to upgrade a cloud analytics system if the C-suite doesn’t understand the power of integrating data from across all the legacy systems. So the first task is to educate the senior team so it can approve the budgets.

Scott Underwood: Some of the most interesting questions are internal organizational questions, keeping people from feeling that their livelihoods are in danger or introducing ways to keep them engaged.

Leon Segal: Absolutely. If you want to enter a new market or introduce a new product, there’s a whole chain of stakeholders – including your own employees and the distribution chain. Their experiences are also new. Once you start looking for things that affect their experience, you can’t help doing it. You walk around the office and say, “That doesn’t look right, they don’t look happy. Maybe we should change that around.”

Fawn Fitter is a freelance writer specializing in business and technology. 

To learn more about how to disrupt your business without destroying it, read the in-depth report Digital Disruption: When to Cook the Golden Goose.

Download the PDF (1.2MB)

Comments

Tags:

Digitization Of The Supplier Network: Grinding Away Competitive Edges

Kai Goerlich

Competitors with advanced digital capabilities are invading markets with new disruptive business models – and a range of new challenges across all industries. Prices are falling and changing quickly. Margins are thinning. Resources are increasingly volatile while the balance between supply and fast-changing customer demands are next-to-impossible to match. All the while, 30% of industry leaders are at risk of being disrupted by 2018 by a digitally enabled competitor, according to IDC.

Under these conditions, companies are beginning to ask whether their supply networks should be open to the digital world. Will they accept the risk of being copied and losing competitive advantage? Or will they secure their best practices in supply chain and logistics?

Using an analytical framework of 15 ecosystem factors, we compared traditional companies against digital newcomers. Our ad hoc study revealed that digitization influences business systems on several levels, but standard best practices are not one of them.

Network resiliency

In most supply chains, the hierarchical model is still living and prospering. Digital newcomers usually create a web-like structure across the entire business. While the traditional approach may guarantee price stability and quality, this web structure allows a much faster ramp-up and exchange of partners – making it more resilient to change.

Dependencies

In traditional networks, the business is likely evolving around mutual advantages. Very often, there are tight, symbiotic business connections with limited sets of partners. New digital networks are operating with an increased focus on leveraging opportunities. Plus, partners are encouraged to participate, widen, and promote the network – even if they do not directly contribute to revenue or profit margins.

Brand management

Web structures are especially attractive to companies that find it difficult to access traditional value chains. In general, classic supply chains cannot keep up with the speed of change nor deal with new and unexpected supply-chain partners in future digital networks. And as “new and unexpected” translate into “interesting and exciting” for consumers, companies may encounter significant branding issues.

Path dependency

Digital newcomers usually have a lower path dependency, such as mode of action. Unfortunately, this can be attributed to perspectives and business plans that are not based on decades of experience in one business. Of course, knowing a business for many years has its advantages as well – but only if knowledge is successfully transferred into the digital world.

A new way to operate

As pointed out in an earlier blog, digitization is proven to be a shortcut for some traditional processes and functions. In turn, embedding best practices into supply-chain and logistics processes and avoiding any transfer of knowledge as long as possible may appear to be an obvious solution. However, according to our findings, it might not be the best path to dealing with changes related to digital transformation.

While digitization may indeed wash away former competitive advantages, it also empowers companies to use their vast knowledge and connections to get on par with digital newcomers – on a new and different level. For example, most traditional best practices are now outsourced and can be easily applied as a service. But more important, instead of waiting to be disrupted by digitization, businesses can become as flexible as possible to enhance the customer experience and build loyalty.

For more on disruption without damage, see 4 Ways to Digitally Disrupt Your Business Without Destroying It.

Comments

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Idea Director of Thought Leadership at SAP. His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.