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Leading from Authenticity: In Conversation with Jennifer Morgan, Co-CEO, SAP and Ellen McGirt, Senior Editor, FORTUNE and RaceAhead

Speakers: Jennifer Morgan, Co-CEO, SAP

In Conversation with Women Leading Marriott focuses on empowering women leadership, with a nod to International Women’s Day. Marriott is one of only eight companies to have been named on the Fortune 100 Best Companies list every year since it launched in 1998. It’s also been recognized on other Great Place to Work lists over the years, including the Best Big Companies to Work For. Leaders discuss their backgrounds, what’s made a difference in their career trajectories, how they’re empowering women leaders coming behind them and what advice they would give today’s leaders.

Show Transcript
Julian Lute:

More powerhouse women, more powerhouse women. Our next guest is the first female CEO in SAP history and the first woman to serve as the CEO of a company on the German Dax 30 index. She has been named multiple times as one of fortune magazine's most powerful women in business and by Forbes as one of the most powerful women in the world and technology. As the co-chief executive officer of SAP, Jennifer is responsible for the experience of SAP's nearly a hundred thousand employees and 437,000 customers around the globe. Prior to being named to co-CEO, Jennifer served as a president of SAPs cloud business group where she had the end to end responsibility for the company's cloud lines of business and really spearheaded SAP's rapid and aggressive shift into the cloud. So join me in welcoming co-CEO of SAP, Jennifer Morgan. Look at they're learning, we're learning.

Julian Lute:

Now, the person who's going to moderate the interview is one of my absolute favorite people and favorite journalists in the world. As a senior editor at Fortune, she established the race and culture beat in 2019 and in addition to her long form magazine features, she writes for Race Ahead. All right, so if you have not subscribed to Race Ahead, you should definitely do that after her talk. This column has received a New York Press Club award for commentary, a National Headliner Award and the Steven Heller Prize for commentary from the AIGA. she is also the co-chair of the Fortune CEO initiative and Fortune's Most Powerful Women's Summit. Please join me in welcoming Ellen McGirt.

Ellen McGirt:

I am suffering because I can't hug everybody.

Jennifer Morgan:

I know.

Ellen McGirt:

So before we begin, I want to thank everybody for the supportive Race Ahead and for that beautiful introduction. And also thank you. SAP is the sponsor of Race Ahead our second corporate sponsor so if you would like my work and if you like the energy I bring to it, thank SAP.

Jennifer Morgan:

Oh thank you. It's an honor.

Ellen McGirt:

I appreciate it. It was a risk. These are tough conversations in your email inbox every day. So before we dig into your big thoughts on leadership and changing the world, I do want to learn a little bit more about what it's like to be a co-CEO. In my journalistic mind, in the Netflix film script, I'm writing about this in my head, it was a very dramatic moment where a charismatic CEO of a global tech company reaches down two levels of leadership and plucks you into the top spot. Can you tell us a little bit about what that moment was like?

Jennifer Morgan:

Yeah. I think that the timing was a little bit of a surprise. I mean, I think the word that comes to mind is humbling. It's humbling. One of the things that I've learned over the years and I felt that every, every time I took a new role, you realize how important learning becomes even more, right? When we're early in our careers, we think that everybody in leadership roles has it all figured out. It's like, "When I get here, I'll know everything I need to know. And that'll be great." And as you progress, you realize how much more of a student you constantly have to be. So that sense of humility I think is the first thing I felt. And then just a deep sense of gratitude and responsibility.

Jennifer Morgan:

And really this world is changing so much, I mean every single day. So really having this constant feeling of being in a sense, you have to be as a leader, overwhelmed by what you don't know and be obsessed

with learning. Because that outside in context is really important. But it was a very special moment. And we get the question a lot, "So how does this co-CEO thing work?" Right? And it's, leadership takes time, right? And in anything, I think companies today, people have to come together, not just at the leadership levels, but across all parts of an organization.

Jennifer Morgan:

And so for Christian and me, the first thing that we did is we made a commitment to each other, "No matter what we come first." It's like parents, leaders have to come first, nobody can come between. And we have a very common vision for the company and where we need to go. And having been an operator in the business, it gives you real insight into the challenges you have, the opportunities you have. So having that common, just complete trust, unbridled trust combined with a really strong common vision for where you want to take the company is really, really important.

Jennifer Morgan:

And then you have to really look at, all right, how do you get the benefit of a two for one, right in the day to day execution. And so we've divided kind of the areas of responsibility. We're very different backgrounds, which helps. I think it would be probably a little bit more of a challenge if our backgrounds and our skill sets were very similar. Because they're very different and that allows us to then be able to kind of divide and conquer on an every day plan.

Ellen McGirt:

And how do you communicate to the company? I know it's somewhat informal. It's Jen and Christian an American and a German. That means it's very cinematic. I have Anne Hathaway playing you in my role. I know.

Jennifer Morgan:

Maybe I should start a reality television show.

Ellen McGirt:

I think we could make that work. So in my vision in a counter intuitive bit of casting. I have Chadwick Boseman playing the German. I think it would work. You're laughing, I'm glad.

Jennifer Morgan:

I'd like to continue on this one. This is fun.

Ellen McGirt:

Well, it's one way to teach leadership, isn't it? I mean just how to communicate to the rest of the world. I laugh a little bit, I cover a lot of entertainment stuff because we learned so much about how the world actually works when we put it into a story, into a novel.

Jennifer Morgan:

Yes, yes.

Ellen McGirt:

But I'm curious how you do communicate to the company and what that transition was like. I've interviewed Bill McDermott. It's literally like having a superstar and he was an extraordinary person. He continues to be an extraordinary personality. Really lights up a room but had very specific leadership style. And here we've got a-

Jennifer Morgan:

He does. So Bill who has been my mentor and sponsor for almost 20 years, and he's phenomenal. I don't know if any of you know who who Bill McDermott is, but the man is just a relentless optimist. Right. And he's just full of positive energy and you can't leave a conversation with him without feeling like you are the most important person in the world and that just, it was all about you in that conversation.

Jennifer Morgan:

And it was funny because a few years ago, Bill and I for different team meetings, we like to do fun things, fun videos. And we did James Cordon with James Corden Carpool Karaoke.

Ellen McGirt:

Stop it.

Jennifer Morgan:

Yes. And this was back in 2016 and I always like to do, before our big kickoff meetings in my previous job, I always like to start with a surprise video and we would have a different theme every year. So this was 2016 and I called Bill, I said, "Hey, come with me, let's do this carpool karaoke. We'll keep it totally secret and that'll be the video." And this was right before James Cordon went crazy. So this is hilarious. So we're in the car and we're driving around, we're singing and I was only able to show the video just to that group of people, right. So it's not one of those things that's out there on the internet or anything else. So as Bill is riffing with James Corden, James Corden says to Bill to, to validate your point. "You make Walt Disney looked like he's on antidepressants." And that describes Bill McDermott.

Ellen McGirt:

It does. It really does. It's amazing. And he's acquisitive.

Jennifer Morgan:

Yes.

Ellen McGirt:

He buys a lot of companies. Under his leadership SAP grew dramatically. And so now part of your big job, you and Christian is figuring out how to simplify this structure, how to think about it in a new way as the world unfolds. How have you begun that process?

Jennifer Morgan:

So you asked me, I didn't answer your question before because somehow I told the James cordon story. I'm sorry I took us off track there. But back to communication, right? Because asked about that because that's where it starts. So one of the first things, having been an operator in the business you see the things that that you need to fix. You see, "Gosh we need to do more of this." So you have an idea of what you want to do. But a really important saying that I felt that we needed to do a better job of as we kind of move to this next level of our journey is communication and communication has to start with why.

Jennifer Morgan:

A lot of times in leadership it's very easy because you do maybe know and have a broad, you can see the forest through the trees. And you have an understanding of what you need to do and how you need to organize the company, what you need to focus on. And you're focused on, "How do we operationally make those changes or those moves?"

Jennifer Morgan:

What I feel leaders don't spend enough time on is the why. Because if you're just telling the employees the what without the why in today's world with all the choices employees have, then they draw their own conclusions or they don't buy in and that undermines what it is that you're trying to do. So the first thing that we really focused on was knowing a lot of the things that we thought we wanted to do and maybe change or or fix as an example. Is we started using the stories to kind of articulate what were the things that we saw and what were the things we wanted to focus on. Around our customers and their success, around innovation, around the integration of our portfolio around focus. And we would give examples of what that meant. And we would give examples of when we had done it well and the outcomes of that and what it meant. And we would give examples very open and honest and radically candid examples of what was wrong and why certain things couldn't continue as is. So you're telling the why when you're giving people examples and stories of that before you move to the what.

Jennifer Morgan:

And so we did make a pretty radical change over the last couple of weeks in our organization because as you mentioned, SAP had a really strong heritage, which is really great. But having a really strong heritage is also a challenge because many times it clouds people's ability to think of you differently or to think about doing things differently as an example. And so through the acquisition of a lot of amazing companies and amazing teams we had this new DNA that needed to come together. And the reality is with any acquisition, you have to give that acquisition time to come over and continue to grow and then find the right time to integrate it. I mean, it's an art in a sense.

Jennifer Morgan:

And so for us, making sure that we were going to start to bring this company together in a way that would start to bring the differences, the ideas, the different energy, the different DNA together to address many of the things that we had been talking about. So when we talked about the what and the organizational changes that we were going to make they were probably the biggest ones we've made in the company's history. Pride for at least the last 10 or 15 years. And we were really pleased with the reaction because if people understand, number one, if they understand the why and number two, if they feel that their leaders are just really, really transparent in real time, even if it's imperfect. I find that being imperfect is okay as long as you're transparent in real time. People prefer that in my experience. And so the reaction has been positive. Doesn't mean it's not going to be tough. Doesn't mean people don't have questions, but it means they're going to take the journey with you. And that's the first step.

Ellen McGirt:

Yeah, that makes a lot of sense. So I want to talk about your idea about being ready for the next job. Which is a big part of your philosophy of leadership and also the way you think about the talent pipeline, which is not where anybody wants it to be, and it's a struggle for everyone. But disrupting the idea of what it means to be ready for the next job, a big job, a stretch assignment is something that I think people struggle with. How have you come to think about this as a leader or as someone that encourages people who run big teams?

Jennifer Morgan:

So I'm really passionate about this topic because if you think about it, I mean, what do we read about and hear about every day? Business models being disrupted, technology disruption, new companies. I mean it's like we talk about the disruption all around us. Yet when we think about our talent, we're still a little bit traditional in the way we think about our talent, the way we put together the prerequisites of what's needed to go in the next role. It's just, I don't think we've caught up in terms of how we think about the talent and disrupting what it means to be ready because for new businesses, new ways of doing things, new models, it's going to require different skill sets. So that's number one.

Jennifer Morgan:

And for me, number two, I had the opportunity to actually see what it meant to disrupt ready. And I'll give you a couple examples because these were very pivotal moments for me in my career. So the first one was when I was probably, I was a second line leader and I was called in for a skip level discussion with at the time the president of our North American business. And so I was really excited about that because that was a good thing. So I go into this meeting all prepared and we had a great discussion and he asked me, we were talking about kind of what's next, "So when do you think you'd be ready to go ahead and take on this next role?"

Jennifer Morgan:

And you know what I said? I said, "I think I'll probably need another year." And I didn't think anything of it. And I walked out of the meeting and it was a great meeting and I was happy.

Jennifer Morgan:

And it wasn't until a few months later I was at a conference, very similar to this and I was sitting in the audience and I was listening to, I don't remember her name, but she was, I think the first EVP at CNN, I think her name was Gail. I don't remember. But she was talking, she's having a conversation much like this. And she told the story about, "Listen, if you go to a man and a woman out on the street in New York and ask him you know, tell them, 'You should run for Congress.' The woman's going to say, 'Oh my gosh, I need more time. I need to do this.' And the man is going to say, 'That's a great idea. I'm ready. I'm going to do it.'" And by the way, he's not wrong. Right. But her point was, a lot of times women hold themselves back.

Jennifer Morgan:

And I sat there and I went, "Oh my gosh, I just did that." And not only did I not realize I was doing it, I was explaining to somebody else why I wasn't ready. And so that stuck with me. So when I had an opportunity a couple years later, I was at a pivotal moment in my career to stay at SAP, to do something different. I had some choices I had to make. And it's interesting because when you have choices that gives you a level of freedom. I mean, look at the people in our workforce today. There's a lot of choices. And so we see employees, employees are advocating for themselves in a way they never have before. Employees are are becoming the biggest activists for their companies and what they want their companies to represent. When you have choices, you're a little bit more fearless to ask for what you want.

Jennifer Morgan:

And so I asked for what I wanted at one point too, to run a bigger business in North America. And honestly, I, I didn't know if that would happen, but I said, "I'm fearless." Because when you have choices, you're fearless. And it happened. And it was a two, two level jump to the point you made before. And part of me was like, "Wow, Oh my goodness, this is happening."

Jennifer Morgan:

And I'm sure that there were people who thought it was crazy. Like, "What are you doing? This is a time of change. Our North American business."

Jennifer Morgan:

But then there were a lot of people in the employee base who looked up and said, "Wow, this could be me." And you know what? Like it wasn't the traditional choice, it wasn't the traditional move. It actually inspired I think a whole level of people to say, "I have an opportunity to do more and there isn't a traditional line of people who I have to get behind and wait." And that was a pivotal moment for me.

Ellen McGirt:

So how do you make that kind of inspiration systemic? How do you make sure that your frontline leaders and your executives are thinking this way and are not just hiring and developing mini mes are not just looking for a certain kind of college credential, but thinking about people's aptitude and their potential?

Jennifer Morgan:

It's a great question. So number one, I think you have to lead through example. I mean, I know that that sounds obvious, but many times when you're in big leadership positions you have to think about what are all those little times where maybe you think people aren't watching or those smaller meetings that maybe aren't huge or when you're not on a stage, those things add up. That defines character and leaders. So I think that's very, very important when you think about leaders and think about examples around how to do that.

Jennifer Morgan:

When I look at people and as they hire different people on their team. When I meet with leaders, it's really important for me to have them bring their people to the table and let them do the presenting. Because you learn a lot about not just your leader, but then their teams. I believe that the leaders who shine the light on their people, those are leaders where the light reflects back on them and they're incredible leaders. But I love to watch my leaders in meetings with their leaders because you learn about, like I said, a lot about your leaders. And then you see how that team, you get to see their talent, how they think. And in environments like that, it bubbles to the surface a lot of things that maybe are missing. It's really obvious when you're a room with a bunch of people who maybe have the same background or very similar. It becomes very, very obvious in the discussion itself because the discussion itself isn't... I like messy discussions. I encourage messy discussions, that's when you get to better answers.

Jennifer Morgan:

So you have to find, I think, opportunities where you can sometimes in a very direct way, right? Like for example, somebody is hiring in a new position and you want to see what the talent pool is and if you've got five resumes and they all look exactly the same, well come on. Really?

Ellen McGirt:

You got to dig in.

Jennifer Morgan:

So that's the obvious. Like you have to do those things. But it's those little moments that really matter. And I think everybody here knows when something good happens to somebody in a company or something bad happens that spreads like wildfire, right? And so those little examples where you can show that by example that spreads. And when you do that over and over, and when you amplify that through other leaders, that's how something takes hold. You can talk about it, you can tell people, but until you actually live that and show others, you know how to live that by example, it'll move slow.

Ellen McGirt:

So I read this troubling survey this morning from the UN Development Program, the UNDP, and I was thinking about it particularly as I was preparing to talk with you today. It means so much I think to have a woman co- CEO of a major technology company, a global company. It means so much just visually, I have a sense of faith that you're thinking about things in a way that maybe other CEOs are not particularly coming from the cloud business. And I read this report and I thought, "This is tough." The respondents, they surveyed people in 75 countries. You're in a 190?

Jennifer Morgan:

180.1.

Ellen McGirt:

80 countries, 75 countries. Half of respondents said that men make better political leaders. 40% said that they make better business executives. And a third said that it was okay for men to still hit their wives or partners. I know. So the contrast between my sense of faith that diversity at the top spot in technology company was going to make a big difference and the kinds of misogyny that we're still seeing baked into cultures all around the world. I guarantee you have customers in these 75 countries.

Jennifer Morgan:

Yeah, of course.

Ellen McGirt:

Means that we just can't role model our way out of these kinds of issues. I mean, it really becomes, it's not just the business case for diversity, it's the moral case for diversity. And is the case for businesses to have a presence in the communities that they serve. How do you think about that?

Jennifer Morgan:

That's troubling.

Ellen McGirt:

Right?

Jennifer Morgan:

Yeah. When you think about a lot of these topics, one of the things I see sometimes as we have these important discussions, but we're not having the discussions with the people who can make a difference in changing it beyond just us, at the table. And so one of the things about our business, which I'm so fortunate and blessed to have the opportunity to lead is that we are such a global company and we are in so many different places. And we have a lot of employees in the communities in all these places. And so for me, I've really put a focus on number one, I think I underestimated, for example, as a leader who happens to be a woman, it's really important to me to be recognized for my leadership, not for my gender.

Jennifer Morgan:

Now that said, and I was having this conversation with somebody, a very senior woman here in the Valley the other night and she said, But at the same time, we both feel the same way, right? We don't want to be talked about is just women leaders." But I think I underestimated how many younger women in even underrepresented minorities who look to people who are in these positions. And I've had so many people say, "You're our hope. We need you. We're rooting for you." And so that again brings on that sense of humility because I think sometimes I try so hard to not have that defined. But in doing so, I think I underestimate how important it is for people to see that and to give them hope. And to hopefully have that become an example that becomes real and actionable and other places.

Jennifer Morgan:

And so, to answer your question more directly, what I've done is in a lot of the different countries where we are making sure that many of the men are part of these conversations in the action. And I think we have a lot of amazing men who want to be part of the solution. Some of them don't know how. Some of them feel like they don't, "Am I invited to have a point of view or come to the table?" So I think you have some people who are a little bit, they don't know how to be part of that conversation.

Jennifer Morgan:

So we have to pull some of them in and help them not help them, but, "It's okay. Jump into this help advocate." And that's what I'm trying to focus on is bringing many of those people at table in particular in some of the areas of the world where it isn't traditional.

Jennifer Morgan:

I'm going to Saudi Arabia later this month and a big part of that trip in addition to some of the business that we're doing is going to be to meet with many of the incredible women that we have over there and women in leadership. Not just within our own company, but others. When you go over to countries like Japan, right? And making sure that you're meeting, yes, with maybe some of the females or the underrepresented minorities. But bringing men into those discussions to be part of it. I think it's really, really important. And that to me is something that I and other, I think female leaders can really drive is bringing everybody into that discussion.

Ellen McGirt:

So, we only have a couple of seconds left. I think this group in particular is very committed to having uncomfortable conversations, to having these messy conversations, but it's tiring work. How do you keep recharged? How do you keep fresh to have these messy, interesting, fabulous, and but vital conversations all around the world every day?

Jennifer Morgan:

Look, I really believe that in the end people want leaders to be human today. And that means being vulnerable. And being vulnerable doesn't mean the traditional definition of being vulnerable, which is weak. It means being willing to learn, being willing to know what you don't know, being willing to show that you're human, that you've made a mistake. The other day I had a tough day I was really frustrated about something. And I probably vented at somebody in a way that I could've kept that to myself. And so I called them later that day and I said, "Listen, I just I wanted to call and say I shouldn't have vented at you like that was something I could've handled better. And I just want to apologize for that."

Jennifer Morgan:

And, and, and you know the person like, "Oh, you don't need to apologize. It's fine. It wasn't a big deal, I'm glad you're sharing that with me."

Jennifer Morgan:

And I said, "Yeah, but I'd calling you because I want you to know I'm human. I don't always have all the answers. And that was a moment of frustration." Because I want to show people it's okay to be human, be vulnerable, be willing to learn. But as long as you're honest and empathetic, I think those are the defining qualities of leadership with where we need to go.

Ellen McGirt:

Well, we're going to end on that note. I cannot encourage you enough to bring back Carpool Karaoke, to your life to this group. I think we would appreciate that.

Jennifer Morgan:

It was a pretty amazing experience.

Ellen McGirt:

Oh my gosh.

Jennifer Morgan:

He was unbelievable.

Ellen McGirt:

Oh my gosh. Good luck to you. Good luck to Chadwick-

Jennifer Morgan:

Thank you.

Ellen McGirt:

... in my mind.

Jennifer Morgan:

Thank you.

Ellen McGirt:

And I hope to write myself into your script another time really soon.

Jennifer Morgan:

I would love that. I think that's perfect. And I want to thank the audience so much for being here. I know it's a very difficult time and I just, I really appreciate the opportunity to learn from you, to be with you and for you all to listen. Thank you, so much. Thank you.

Ellen McGirt:

Sorry. Stand or sit?

Julian Lute:

Got to be flexible. You can stand, you can both stand. Yeah. So we've surprised you before. Okay, this is a different kind of thing. It's not going to be about you, but it's going to be a little bit about you.

Jennifer Morgan:

Okay.

Julian Lute:

It's going to be about her though in a minute. Okay.

Ellen McGirt:

You're going to have to sing now.

Julian Lute:

I just wanted to let everyone know who Ellen McGirt is. This is the queen. Okay. So if you don't know that, I strongly recommend you just Google Race Ahead or Ellen McGirt and download that article. Every day you're going to get the facts on what's going on in terms of diversity and inclusion. You're going to have to read something uplifting right afterwards some days. But the facts and reality is critical change isn't going to happen any other way. And this woman innovated, created that whole space of getting the facts out in two thumb scrolls every day, every morning, and she makes it happen every morning. Please give a warm thank you to Ellen McGirt.

Ellen McGirt:

Thank you.

Julian Lute:

Jennifer Morgan. I just wanted to let you know you are a woman.

Jennifer Morgan:

I am. I am.

Julian Lute:

So to us, you are a woman. You're not a leader who happens to be a woman. You are a woman because that's important, it's critically important. And don't underestimate, I think you're trying to accept and acknowledge. When you got that job I celebrated a lot of people celebrate it. Anybody who's having a tough time getting there, we went wild.

Jennifer Morgan:

Thank you.

Julian Lute:

Because it finally freaking happened, so these moves are incredible for us. And white men made it happen. We celebrate them too, so we're not leaving anybody out. We're not leaving anybody out. So you are the one, I think it was easy to make the decision, but they made it happen as well. So we celebrate everybody. And two nights ago, you weren't able to be with us when we acknowledged you as one of the few for all leaders. So I wanted to take this moment to do that.

Jennifer Morgan:

Thank you.

Julian Lute:

So please give a warm thank yo of acknowledgement.

Jennifer Morgan:

Thank you, so much. Thank you. Thank you.

Julian Lute:

Congratulations.

Jennifer Morgan:

Thank you. Thank you.