SAP finds a defender of discipline

By Gerrit Wiesmann in Berlin

Published: June 15 2008 19:17 | Last updated: June 15 2008 19:17

Léo Apotheker, the new co-chief executive of German software giant SAP, exudes such a love of discipline and precision that it is tempting to suggest he conforms to national stereotype. But his cosmopolitan family history, which touches on Europe’s bleakest moments, gives the lie to any such claim.

EDITOR’S CHOICE
Lex: Slowdown at SAP - Apr-30SAP delays software rollout - Apr-30SAP paves way for chief’s succession - Apr-02SAP confident of software sales - Jan-31Lex: Enterprise software - Jan-28Strong holiday sales lift SAP shares - Jan-15Mr Apotheker’s Jewish parents fled their home on the Polish-Ukrainian border to escape the Nazis in 1942, spending the rest of the second world war in the Soviet Union before settling in Aachen, West Germany. Léo was born there in 1953, and was seven when the family moved to Antwerp. He studied in Jerusalem, moving to Brussels in 1980, before settling in Paris, where he still lives.

“I consider myself a European with all the dark and the light this implies,” says the German national, speaking from a makeshift office on the fringes of one of SAP’s huge sales fairs in Berlin. “Europe has given the world a lot and presented it with catastrophes. That is part of the package. We have to make something better of it.

“My history occupies me. I think about it a lot. But you can’t live in the past,” he admits. “You have to live in the future, or at least the present.”

He feels confident about his future at the software company. This spring, after six years in charge of sales and marketing, he was made co-chief executive alongside Henning Kagermann, who will retire next May. Mr Apotheker will become the third sole boss of the group, founded in 1972, and its first non-techie leader.

This was not the original plan. Only a year ago, Mr Kagermann had aimed to hand over to Mr Apotheker and Shai Agassi, then SAP’s precocious research director. However, Mr Agassi, aged 40, quit last year, unhappy over the succession timetable, leaving Mr Apotheker as sole heir.

Some in the industry were unsettled by the idea that a sales expert rather than a programmer would take charge of SAP. Mr Apotheker dismisses such talk as “a bit naive”, explaining that a salesman could not sell a product he does not understand. He also makes the point: “I once wrote code.”

Over the coming 11 months Mr Apotheker and Mr Kagermann will oversee the launch of a new online product for small firms, Business by Design. This software range is designed to reduce SAP’s dependence on big companies, whose demand for software is slowing.

Shared values with the best people in the right jobs
When he joined the SAP executive board as head of sales in 2002, Léo Apotheker was also entrusted with turning round the US operation. Clients were saying SAP had missed the internet bandwagon.

“We had an exodus of clients and staff,” Mr Apotheker recalls. “We were in deep crisis in the US. I had a day job running worldwide sales, my night job was to fix the American problem.”

His experience of turning round SAP’s French operations in 1995 stood him in good stead. “There are usually no more than three or four reasons why a company isn’t working – and you have to identify them very quickly. Mostly it will be people.”

The main problem, according to Mr Apotheker, was indeed people: “The wrong ones in important places.” This, he says, meant SAP did not respond well to a whispering campaign that it was not as web-savvy as rival Oracle.

“We had a people and a perception problem,” he says. “We developed a clear idea of what our future would look like. My closest colleagues were as convinced of this as I was. That started a cascade that reached other employees and our clients.”

Mr Apotheker believes “hiring the best people” is the basis for good management. But he says the best are not always those who bring the most profit.

“If you have a manager who performs brilliantly, but doesn’t share your company’s values, he is in the wrong place. If a person’s performance is not good, but his values are, then it is your job to help him improve his performance.”
Once this launch – which has taken longer than expected – is cleared, Mr Apotheker says he will present new goals. “If we do not innovate, SAP will be gone in five or 10 years.” Though at this stage all he will commit to is that he has “something else in mind”.

His balding head and a close-cropped beard, more salt than pepper, make him look older than his 54 years. Mr Apotheker combines a serious manner with a deadpan delivery, and he later admits that people at SAP see him as “a hard nut”.

But toughness is just one facet of a personality that, as far as Mr Apotheker is concerned, owes much more to upbringing and background. He says his family history has had “a huge influence” on him. “For one, it always fascinated me that my parents did not hate anyone,” he says in a sombre voice.

He says that his parents taught their children to question, and they always drew a clear line between responsibility and guilt. “Be sceptical. Never trust someone blindly. Be responsible for your actions,” was the message that his parents conveyed.

“[There] is a kind of complexity that is normal for many Europeans – my family history is a typical case,” Mr Apotheker says. “I think complexity belongs to daily life. I always had a problem with people who tried to simplify things.

“Complexity is a given in daily life and in business. If you look at business processes, you’ll see they are phenomenally complicated,” he says. “But you have to look at them, analyse them, understand them, and make the best of them.”

His capacity to embrace life’s difficulties, he believes, provided fertile ground for his later love of computer software.

He recalls first being impressed by the potential of computer software in the early 1980s when he was working as a financial controller in Brussels for Swift, a specialist in cross-border payments between banks.

“It was my first encounter with software. It wasn’t SAP, but I fell in love with it. [It was] the best idea I’d ever seen.”

This experience swiftly led to him working – and writing code – for the US software maker McCormack & Dodge in Paris: then a giant, now defunct.

It was late 1987, Mr Apotheker says, when he came across SAP, which was then relatively small. By chance he stumbled across the fact-packed manual of a smallish firm called SAP. “It took me a couple of nights to read, but after that I was convinced SAP had an idea that would revolutionise business software.”

SAP was then marketing a product called R/2, which bundled various programs onto one platform. Until then, different departments within a company would often run different software programs. In those days SAP employed 500 people compared with 45,000 today.

So he wrote a letter to SAP and was invited for an interview at the company’s headquarters in the small town of Walldorf, an hour’s drive south of Frankfurt. It led to his appointment in 1988 as head of a tiny sales operation that was grandly called SAP France.

He left three years later because “there were certain ambitions and opinions I couldn’t realise at the time”, only to return in 1995 to put a struggling SAP France back on its feet. Soon after, he was made sales head for Europe and in 2002 he took charge of global sales.

“I always had the ambition of managing my sales force as precisely as a troop of engineers,” he says of the ensuing mission to fuse disparate national teams and practices into a single entity that “listened more to the customers’ needs”.

Although he pleads guilty to micromanaging at times, he says delegating is vital – as is tolerating slip-ups. “If someone is successful, makes mistakes, owns up to them, that’s good. Freedom brings responsibility with it. You learn from mistakes.

“If I did wrong at home, I could never say I hadn’t done it on purpose or it wasn’t my fault. I could say, I misunderstood or I analysed incorrectly. You have to stand by what you do.”


Copyright The Financial Times Limited 2008