The changing SAP culture

As Henning Kagermann, SAP's co-CEO prepares for what will probably be his swansong keynote speech at SAPPHIRE 2008 and Leo Apotheker, CEO-in-waiting prepares for the transfer in power, still a year away, a group of the Enterprise Irregulars were able to contrast the different styles of these two industry leaders.

Henning Kagermann is the consummate business manager. Always careful in his choice of words, moderated in tone and often refreshingly honest. Leo Apotheker is the big ticket sales man. Confident, at times mischevious and almost always ebullient.

Both men said the transition is going smoothly, giving the consistent impression of a steady ship. This was interesting as the questions Charlie Wood put on behalf of the team came in separate sessions. Whether the two leaders were separately prepped is another matter but I doubt it would make a difference. Each is his own man. However, it is what lies beneath that really matters.

Already we're seeing the hand of the sales and marketing professional guide direction. In our meeting with Apotheker, he made it clear the company needs to be accountable to the market. Business ByDesign (of which more later), has had $100 million shaved from what Kagermann described as 'accelerated marketing spend.' In the last but one earnings call, Apotheker talked about spending 'not a penny more nor a penny less' than is required to deliver results. The company is clearly looking to ramp margins and increase bottom line results.

I'm not sure whether these are good or bad signs for SAP. Under Kagermann's stewardship, it has always portrayed itself as playing the long game. Under Apotheker's leadership, I suspect that will change. When Apotheker said that he wants to see the company give customers what they want and be delighted in the process, Brian Sommer took that as code for price cutting to secure accelerated deal flow. If he can do this without cutting margins then he will have pulled off a great trick. But all that is in the future.

In the meantime, I sense a divide within the company. The people I know who are leading innovation out of Palo Alto have a different mindset to the more rigorous engineering focus customers have come to know and love. The company needs to get much closer to the business yet I was left wondering whether it has the DNA to turn itself into a 'people' business. Discussions with Kagermann around Enterprise 2.0 technologies for instance didn't exactly fall on stony ground but were not met with enthusiasm either.

Any company going through change faces many challenges. SAP is addressing those with its customary emphasis on caution and attention to detail. In a fast moving world, that may not serve it well enough. But many of its customers will want to see a 'steady as she goes' transition.

Quite how this all plays out has yet to be seen. The ride will be interesting.