SAP's efforts at Globalization and Cultural Barriers

Today’s Wall Street Journal has a facinating article SAP’s Plan to Globalize Hits Cultural Barriers (Subscription Required).

This facinating brief history of recent events recounts how Hasso Plattner, CEO of SAP bought an Israeli Company. And along with it, came Shai Agassi to SAP, a very vibrant entrepreneur who had built software companies and sold them by the time he was 24.

Till then all of SAP’s software was made in Walldorf, 50 miles south of Frankfurt, all by German Engineers, who preferred to do things slow and deliberately with a lot of thought; with "german engineering" to be precise.

This was just before, during and after the Dot Com boom. Shai Agassi was pushing for a lot of change within SAP, the way they did products, etc. Shai Agassi wanted a lot of products developed quickly and he had a 100 products in 100 days goal once as opposed to the slow, deliberate way in which SAP was used to do things.

At this time, Shai Agassi got a series of promotions and he started building up a lot of executives in Palo Alto while building multiple software development groups in the US, India and China. SAP wanted to get more English into their company culture since they were selling a lot to English speaking countries (may be 80% of it or more?- my own question).

The article talks about the differences in dealing with US, German, Indian and Chinese engineers. Indian engineers wanted a lot of interactions while Germans preferred to be left alone. US executives needed more speed in execution than German ones.

Engineers in Germany almost formed a sort of a union but Hasso Plattner is committed to Globalization. He preferred to increase head counts elsewhere in the US, India and China faster than in Germany but promised to keep the headcount in Germany constant and reassigning people there.

Meanwhile Shai Agassi left the company recently since Hasso Plattner’s second in command seemed likely to get the CEO position rather than Shai Agassi.

Fascinating article! Has a lot of lessons for companies still struggling with country based identities. Particularly US companies that seem to think that labor costs are the only reason to be in India or China, ignoring their vast markets given the potential in growth for their middle classes. In the future, both the markets for companies as well as labor pools will be increasingly diffuse throughout the world. Learning to deal with where your markets are and where your labor pools are and how to deal with them are not options. And they are creeping up on you faster than you think!