SAPPHIRE US - Kagermann Reflects on His Years At SAP

SAP co-CEO Henning Kagermann took center stage at this week's SAPPHIRE conference in Orlando, but that may not be the case next time around, as the veteran company leader enters his last year on the job.

In an interview with the IDG Applications Service at SAPPHIRE, Kagermann reflected on his career and how his successor, fellow co-CEO Leo Apotheker, will do when he takes the reins next year.

IDGNS: What kind of advice are you giving Apotheker?

Kagermann: I don't give him advice. We're pretty much aligned. The transition: That's why we had a year as co-CEO, I think it helps. I can hand over responsibilities slowly, and he can get used to it. This is not a concern for me.

With his team, he will see that we meet our 2010 targets. Next year is the first time we will declare the strategy for beyond 2010. We are waiting half a year. Otherwise, I would have done it this year, but it's something I feel the new team should be behind.

IDGNS: Apotheker is not a technologist or scientist, unlike many other top SAP executives [Kagermann is a former theoretical physics professor]. Is that a handicap?

Kagermann: No. Look, SAP is a different company now. We are pretty large, we are balanced. We have many, many people who are driving the technology position. It's not only one person any longer. From that point of view, you need someone more who understands SAP, and he understands SAP and the clients' issues, and is able to assemble a good team around them. I think that's more important in the future. It's not necessary that somebody must be a technologist to run a software company.

IDGNS: Can the co-CEO concept work in the U.S. tech sector, where you have strong personalities like Larry Ellison and Steve Ballmer?

Kagermann: No, I don't think so. Whenever you speak to CEOs of the U.S., they are surprised at what we are doing. For SAP, it's not exceptional, I think. I was co-CEO with [SAP co-founder] Hasso Plattner for five years. Now it's more a question of preparing the transition. Maybe it's different if you don't know each other. But in this case [Apotheker and I] have worked together for many, many years.

It's better for a company, also. People feel it's a more continuous succession. It's not 'a new man is coming' and then the organization is speculating what has to be changed, etcetera. A year as co-CEOs sends a good signal. People see that there are no radical shifts. Decisions that are made now are backed up by the new CEO. It's much better.

IDGNS: Speaking of strong personalities, do you miss Shai Agassi? [Agassi, former head of SAP's product and technology group and an expected successor to Kagermann as co-CEO, left the company in 2007 after Kagermann's contract was extended into 2009.]

Kagermann: I cannot say. We have to respect decisions. If you look at the bench strength of SAP, it's pretty large. It's not really, for a large company like SAP, an issue. I always say, there's nobody who cannot be replaced within SAP. Otherwise something's wrong in a company. It has to be that way.

IDGNS: Regarding SAP's culture: The company went through a publicly ugly battle a couple of years ago over the enactment of a worker's council, which was ultimately forced by court order. Top executives and most employees had opposed the council, saying the company's "startup" like culture didn't mesh well with it. Has the council affected the entrepreneurial spirit within SAP?

Kagermann: [The worker's council] is a very special voice that is not, I would say, represented globally for SAP. It's something elected in Germany, that is representing some people in the German locations, but not all. Many people were not in favor of it. But we have to respect it, it's the law. We work with them, we listen, we support them.

It's always difficult to speak about entrepreneurial spirit in a company. ... I think you cannot run a company that is publicly listed like you are the founder of the company. That's not possible. You have many shareholders and are responsible to all shareholders. From that point of view, sometimes decisions take longer. You cannot do it out of the air. However, if I look to what we have done in the last years in terms of innovation, new products, no one can say it is less than before.

IDGNS: What do you see as your major accomplishments, as you wrap up your tenure?

Kagermann: We started in 2002 in a very tough environment, to come back to double-digit growth and market share gains. We are now in the largest acquisition SAP has ever done [with Business Objects], and I think [the new on-demand ERP offering] Business ByDesign is another important piece. As I leave, SAP is in a good position to grow into new areas and from a product point of view, and has a good product portfolio for the next five to 10 years.

Copyright © 2008 IDG Communications, Inc.

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