Some thoughts on SAP’s competitive advantage and Germany

The ongoing workers council discussions at SAP  prompted me to write this, without really thinking what to do with it.  Reading a couple of blogs and many newspaper articles made me think it might be worth posting here. (my blog is all of three days old, so I cant be too picky)

Again, my views, not those of my employer.

I figure if Jeff in the US can write about it then I might as well too. 

SAP isn't about to be unionised, just that a union (the metalworkers union, go figure)  is pushing for SAP to have a formal workers council like just about all other German companies and german subisidiairies (IBM for instance) with more than 5 people and a dog do.

 More than 90 percent of employees voted  against the idea, but the German law states that three employees can ask for a works council to be voted in. (dumb law?). .

 This article. covers the story in English with some minor errors..  Lots of the non-German blogs don't really get the German company law stuff.  (sorry Jeff)

 There is lots of German press coverage

My main thoughts are on the broader "Germanness" thing and SAP

Continued globalisation is clearly key for SAP's long term success, more and more revenue comes from outside of Germany, and more and more development will take place in Asia, Eastern Europe and around the world. Our board is clearly right to search the world for the best talent and bring them to SAP. If we are to succeed we need the best developers, sales people, consultants, marketeers,  administrators and managers at SAP, irrespective of their background or nationality. We need new ideas, we need to be challenged by people with other experiences, views and concepts. What worked before will not necessarily work in the future. The Austrian economist Schumpeter's "creative destruction" thesis has never been truer than today, in our industry especially. Bangalore, Palo Alto etc bring new ideas, clearly we need to be part of the world's major innovation clusters.

In Walldorf we hear a lot about this need to be "global" and some employees based in Walldorf feel uneasy about the perceived powershift to Palo Alto and elsewhere, and the relative ease in which those that used to work at Oracle, PeopleSoft or JD Edwards have moved across to SAP, hailed as the new messiah, or at the least as the new VP.

I'm neither American or German, so I'm something of a spectator of this "americanisation" angst.  I moved to SAP in Germany from Africa at a time when all emails were in German, and as a foreigner you learnt quickly that you needed to invest in understanding the German culture if you were to succeed at SAP. It was a big investment learning German (still trying)  and figuring out how the Germans function (also still trying). Ordnung muss sein was one of my first sentences. It was also fun.

I've also lived and worked in America, so I have some idea how that functions too. I understand the most of the rules of baseball.

As SAP continues to globalise though, I think it is worthwhile to pause and think back to what has made SAP the success it is. A big part of that success comes from that very "Germanness" that is now perceived by some as unfashionable and irrelevant.  Discipline, debate, deliberation, diligence, a focus on detail, a healthy skepticism of "marketing blah-blah", consensus, thorough execution, and a strong ability to self-criticise are key to SAP's success to date.
Many of the world's greatest industries were founded within 30 minutes drive of SAP. The first car drove from Mannheim to Pforzheim, or there abouts. Soon after that Benz built the first car garage in Ladenburg. Friedrich Engelhorn's BASF, the world's biggest chemical firm, is just across the river. Many of the world's great philosophers and mathematicians were German: Gauss, Reimann, Hilbert, Jacobi, Kant, Runge, Hegel, Marx and so on. More recently,  MP3 is a German invention. SAP is part of a long line of German innovation.
SAP's german roots are part of its success and its long term competitive advantage. We should not ignore them. As we grow as a global company, we shouldn't forget that  innovation and engineering are at the core of SAP's success. At the same time, we need to be open to new ideas from abroad and from people from other companies, and adapt to those new ideas and ways of working. Other great German brands, although global, leverage their German heritage. Vorsprung Durch Technik, for example.
But Max Weber, another famous Heidelberger , wrote of "The passion for bureaucratisation drives us to despair."  and the "the iron cage of bureaucracy".

I know which Germany I prefer. The SAP and the Germany that attracts people like me is the Germany of innovators, not of stagnators. Those that fear globalisation will not find safety in further bureaucratisation. To compete, innovate and grow we need less rules, not more.

As the TV campaign notes, "Du Bist Deutschland"  Wir auch SAP.

14 thoughts on “Some thoughts on SAP’s competitive advantage and Germany”

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