I dare say that everybody in the SAP Community has noticed the culture change that has been turning SAP inside out in recent years. It began with Shai Agassi, it continued with the acquisition of BOBJ and BOBJ’s executives such as Hervé Couturier and Marge Breya being placed in key positions at SAP, and it went off like a rocket when Hasso Plattner installed Jim Snabe, Bill McDermott and, most importantly, CTO Vishal Sikka.
SAP has effectively transformed into a company you can hardly identify with the grey-concrete type of company it was in the nineties, when I got started in the SAP industry. Let me give you some examples that, taken together, characterize the “new SAP”:
In fact, in my SAP Mentor role I have many conversations in which innovators tell me how hard it is to bring an innovative application forward against the concerns of the legal department and how many great ideas fail several times because of legal concerns (until eventually, years later, it is suddenly miraculously possible and the product becomes a success). Some of the successes from the above list were thwarted by old thinking several times over many years until they were allowed to be fully executed. The creativity and resourcefulness have been around in SAP’s workforce and community for a long time, but it took the new thinking to stop suppressing that and begin to channel it into innovation that drives the company forward.
Of course there is still plenty of old thinking in SAP. It is the perception of many people that the more conservative forces are very strong and might even be strong enough to put the project of shaping a new, innovative, speedboat SAP at risk. Somebody said: The future is already there – it is just unevenly distributed. That is something you can observe very clearly by speaking with employees in the different areas at SAP.
Generally, it can be observed that the installation of the new thinking is driven top-down, with Hasso Plattner positioning Jim Snabe, Bill McDermott, and Vishal Sikka (who is in more than one way the successor of a previous attempt by Hasso Plattner to reinvent the company top-down made with Shai Agassi). Looking at the executives they install (or uninstall) and by looking at the rising stars and how they earn top management attention, it is evident that top management makes it a point to install representatives of the new thinking. As I mentioned before, there is plenty of resistance. Frequent answers to new suggestion are: “That’s against the process. That’s not how we can do it. It’s impossible. Legal has concerns. We would need to streamline this with 300 other projects. It can’t be done.” It is relatively easy to fire an executive because he or she doesn’t get the new thinking and stands in the way of innovation. It is practically impossible to fire 5,000 employees who display the same “can’t do” attitude. It is also very difficult to turn such a person around and change her into someone who is actually happy to do something new.
What can you do? Create islands of creativity, tweak the motivation systems, massage the old structures (rather than breaking them up, which would harm SAP’s ability to maintain and evolve the Business Suite) by creating the right incentives, lead by example, inspire, and even clear the path with micro-decisions where absolutely necessary, be persistent, be a force of nature. This is the leadership that I observe at SAP.
It is hard to characterize a culture with few words, but I will try. Cultures can be described either in terms of lore and traditions, or in terms of their core values. The New Thinking is clearly a culture that draws its power from core values. Here we go: Innovation. Invention. Open Thinking. Community. Learning. Quest. Courage. And, perhaps most importantly, Passion. (Open Thinking is notable because it is a slogan coined by SAP Mentor Oliver Kohl that even became the motto of SAP TechEd 2009.)
Looking at company's lifecycles, you can frequently observe that they start as very open and innovative spaces where every employee makes a huge difference. The company is flexible enough to allow everyone to be themselves and contribute all they can. Every single person in the company feels they are making as crucial contribution to every major successful step. They feel it's their company. The boss is perceived as a leader and supporter, with no mindless or evil suppression machinery between them and the employees. As companies grow, they tend to loose the spirit of the founding days. The entrepreneurial spirit, room for innovation, initiative, and passion of the early days are lost. Great role models move on and are replaced by uninspired corporate drones. Early-days employees feel like in the movie "Bodysnatchers", where step by step all the humans are replaced by soulless replicas as the initial boring corporate drones hire more people who are like them.
When dissecting such events, it is frequently acknowledged that "early years" types of corporate culture work very well in small companies but don't scale: When you have a few hundred employees, you need to have more strict regulations and administration-focused management. Energy has to be spent on scanning employees' PCs and introducing plenty of form-based processes, the internal implementation of the product lifecycle becomes so complicated that every process in the company has to become formalized and standardized, and initiative and passions suffer from that naturally and necessarily. Big companies can't be as innovative and passionate as startups. (That's what many people think.)
Conversely, SAP's current culture change seems to be an attempt to bring some of the "early years" innovation spirit back to the companies. The challenge here is to make it scale. If they succeed, it will be a truly remarkable success that will give SAP a competitive edge for many years to come. In the software industry, culture is mission-critical. (I guess it cost Léo Apotheker his last job that he didn't understand that.)
In my next blog, I will talk about a concept from psychology in which a system of character types and their interactions are described. I will try to map that to the culture change outlined in this blog and derive some new ideas from that.
(Disclaimer: I wish I had come up with the phrase "Not your grandfather's SAP", but I haven't. I don't even know who it was, but I'd like to thank them because it captures SAP's transformation so perfectly that there was no way I couldn't use it as a title for this blog.)