The stories behind SAP – the German modern-day startup. Startups aren’t supposed to start in Germany. Germany is famous for its Mittelstand – a broad and diverse range of long-established privately owned SMEs started after World War II, alongside long-term established giants like Mercedes Benz, BASF, Bilfinger & Berger and Mannheimer Versicherung – all of which I have also worked for. But it isn’t famous for being a destination or a nurturing place for new businesses or startups.
But SAP was different.
Helping SAP tell their story
As part of a small team of 10 from IKL – the Institute of Kreativ Lernen – our language training soon expanded into pitch and presentation training. (Do you know the difference?). For four years I conducted 2.5 day group coaching sessions as well as 1-2-1 training sessions for senior executives.
SAP strongly believes in the training, education, and development of its people. It has a seriously impressive personal development programme – even by German standards.
During the time I worked with SAP, the company joined the DAX. Then there was only one building; now there is a whole SAP campus.
I worked 1-2-1 with a number of SAP’ers including employee number 97, never-ending groups of developers and others involved in the rollout from R2 (mainframe) to R3, SAP Partners and senior managers and developers in HR, Marketing and other teams.
The modern SAP campus is huge compared to the original single building
The Idea Behind SAP and The Vision of the Five Founders
I love the origin story behind SAP. In 1972, five friends who were IBM’ers (Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner and Claus Wellenreuther) made what many would have considered a crazy career move: They left their secure jobs with IBM and started a software company in a two-bedroom flat in Heidelberg. They believed that the future would be digital.
At that time, when a client made an order, it was written or typed on paper. This piece of paper might take a few days to be passed to the production team, which then manually, clipboard in hand, checked their stock and then more pieces of paper were created – orders for the Tier One members of their supply chain. They, in turn, would create more pieces of paper, which were orders for the lower-ranking members of their supply chain. Then, the paper invoice chain went back up the line. Slowly.
This meant that it could take months before work started on an order, for the order to be delivered and finally paid for. This was massively inefficient and time-consuming.
The five SAP founders saw a future in which this would be instantaneous. A client order would instantly assess stock levels and trigger supply chain orders. Potential sales and their probability could be added, meaning anticipatory supply chain orders could also be triggered. This might sound normal today, standard, just common sense. But then, it was a revolutionary and time-saving story.
Some Stories Behind SAP
These stories are to my knowledge true. They all contributed to the myth, legend, and company culture of SAP. The first four letters in the word culture are cult – all CEOs and leaders want to build a tribe with focus, alignment and a sense of team focus.
When I worked with IBM, I discovered that many IBM staff call themselves IBMers. SAP people were equally aware of their tribe membership.
SAP was certainly aware of all these stories, and in my four and a half years there doing pitch and presentation coaching, I never heard anyone rebut them. Some of these aren’t stories but simply memories of SAP’s wonderland nature. They all are facets of SAP’s overarching story.
What do the letters SAP stand for? What is the story behind those three letters?
The original name was Systemanalyse Programmeentwicklung, which translates as System Analysis Program Development – later abbreviated to SAP. SAP is pronounced by the letters in the name S. A. P. – rather than sap.
SAP initially courted smart graduates but was later inundated with unsolicited job applications. The stories that swirled around German media meant that SAP didn’t have to worry about attracting or retaining talent. More on that later.
Students often choose courses that are currently in demand, but cycles happen, and because of the lengthy German study period, many graduate 5-7 years after choosing their course. This was the case with Physics for a while, and many Physics graduates and doctors of Physics screwed up the cycle and couldn’t find jobs in physics.
For a time, there was an insider joke that SAP stood for Sammlungspunkt fuer Arbeitslosen Physiker, which translates as a meeting point for unemployed physicists.
SAP was happy to have their brains and redeployed them into developers.
The Story Behind the (Partial) Ban on Company Doughnuts
German business tradition is birthday doughnuts. If it’s your birthday, you buy doughnuts for your colleagues on the way to work. Unsurprisingly, German bakeries love this tradition; maybe they invented it? They have pre-packed doughnuts, I think in units of 6, in their bakeries ready to go.
This was fine at SAP in the early days, up to a point. But when they got to 100 staff, Klaus Tschira said enough. He ruled that you were only allowed to buy doughnuts for your immediate team. That would be good for the birthday person’s budget (the official story), but allegedly, the real reason was Klaus loved doughnuts, and his wife wasn’t a fan of his expanding girth.
Strategy Story: Focus on the Gold
SAP had a strategy, and they followed it. They focused on 300 target clients: the 100 DAX companies, the FTSE 100, and the Fortune 100. Three hundred targets. Their theory was that once all these 300 clients were using SAP, they would have unstoppable momentum and could then turn to Tier 2 clients. It worked.
Flat Startup Management Structure
Rumour had it that Deutsche Bank had 26 layers of management. SAP claimed to have 4. This wasn’t strictly true and I suspect they fudged the numbers a little. In reality I think they had 6. Still incredibly impressive. Especiallly for Germany where status and hierarchies (titles, corner offices, parking places and parking place location, office window count) in large companies is extreme. The startup style was arguably invented by SAP.
Graduate Jobs Goldrush
I was working with someone 1-2-1 in the HR department when a man dropped three post bags outside his door. The bags were large, long, sausage-shaped bags that were maybe a metre long. Hundreds of hand-addressed or typed envelopes were inside. My guy rolled his eyes. I asked the question. He said he would get 2-3 of these bags every day. These were not applications in response to an advert.
SAP received hundreds or thousands of unsolicited job applications every day. They had to hire people to sift through the applications, looking for the gold candidates in the flood of graduates desperate to join the SAP career goldrush of DM 70,000 salaries, great benefits, and challenging roles.
Mad Magicians in Birkenstocks, White Tennis Socks and Lunch-Stained T-shirts
I worked a lot with developers and some people in the marketing teams. They all wore casual clothes. The smarter the person, the less they seemed to worry about what they wore. The only SAP people wearing Hugo Boss suits were SAP’s business development team, who seldom were in the building unless they were bringing curious or sceptical potential corporate clients on a tour.
These sceptical, conservative German businessmen had heard about the magic potion of SAP and were either curious about whether it would work for their business or they were scared of being left behind. SAP was always in the news – there was a real buzz about the company.
SAP ran towards the magicians myth. The BD teams showed off the Matrix Mainframe and brought out the wizards to meet the potential clients. Instead of conforming and making the developers dress up for these meetings they let them come out from their wizard workplaces dressed as they were. Heinz, a senior developer from Austria, would often be the Show Wizard.
Heinz wore Birkenstocks, shorts, and a white T-shirt, which often betrayed what his last meal had been. This wasn’t a charade – he was monumentally clever and so focused on his work that he didn’t even consider what he looked like. The potential clients respected the non-sales approach – only hustlers wear suits? These magicians didn’t even care to put on a clean T-shirt! The Magician mythology worked and enhanced the brand.
The corporate suits left with images that predated The Matrix in their heads, memories of great food and a relaxed work atmosphere – alien to many German companies and conversations with T-shirt-wearing geeks telling stories of how their company could be more efficient and serve customers faster.
Jeans and Hoodies
Compared to corporate Germany, SAP was a bright, young graduate’s dream. It offered great money, free food, bicycle parking, and casual clothing.
Good Free Food and Unlimited Coffee and Meal Breaks
Free food, coffee, and juices were provided throughout the day and most of the evening. It was great food, too. Some SAP people didn’t even cook at home anymore. There was no need.
There were places to eat in the restaurant but also loads of benches and tables in the landscaped gardens where people ate and drank al fresco. I asked the Head of International H.R. why this was provided free. He said it was a no-brainer. People generally spent 15 minutes while eating talking about holidays, weekend events and car purchases – then they usually turned to work topics.
Because you could take as long as you wanted for your breaks (as long as you delivered your projects; the company didn’t care about clock-watching), the breaks inevitably turned into silo-busting work talk about the projects they were working on. These informal inter-silo geek conversations were great for project development, creativity, and breaking down interdepartmental walls.
SAP took the silo-busting benefits of the smokers’ corner and turned their restaurant into a company-wide exchange – sharing of ideas and projects. Instead of issues getting so bad they had to be escalated to a Department Head to take up with another Department Head, issues were addressed faster at lower levels and ideas were exchanged organically. Genius. Great for business.
Development Story: Transforming the Landscape of a Village.
SAP was initially almost the only building on an industrial site that had been a field in the then-small village of Walldorf. Over the years, construction firms boomed, and houses and apartments sprung up. Cycle to work? Yes, please. Walk to work? Yes, please.
Clocking in and Clocking Out. None of that.
Clocking in and out was standard in most German businesses. Control rather than trust. SAP broke that model. There was some controversy about this and some criticism from other companies.
SAP worked on the 80/20 rule and extreme project management. 80% of the people worked longer hours than normal, the 20% were soon noticed and sifted out. People were managed by projects with demanding deadlines. SAP people were believers who cherished their work, benefits and lifestyle.
Most people were in the building 10-12 hours a day. It was more comfortable than most homes, collegiate and focused and the food was outstanding. Bring a friend for a meal – no problem. Bring your girlfriend or boyfriend – no problem. Those who came for the free meals often ended up applying for jobs there. It was an ecosystem. SAP’s environment spawned lots of relationships and marriages. The war for talent – SAP had that taped.
The Story Behind the Design of the Famous Logo
SAP pay great salaries and provide superb benefits, but they are frugal where they could be. Their famous logo was rumoured to have been designed by a local designer who charged them the pricely sum of DM 400.
A Story That Rattled the Board: A Bridge Too Far – Unlimited Commission in the U.S.A.
Commission in Germany was unusual, and where it existed, it was usually limited to a single-digit percentage of the annual salary. Apparently, there were grumblings in the boardroom – despite the fact that they were proud work-practice revolutionaries – when the head of SAP USA introduced unlimited commission structures.
The concept was fine and had slipped through unnoticed until four North American salespeople became the top earners in the whole company – earning more than the founders and other Board Members. The top earner was a lady from Canada. The Board protested. The Head of SAP USA (who my memory says was called Mike) stood firm and is rumoured to have said, “Fire me in a year if you don’t like the results.” He wasn’t fired.
Tales of the Mysterious Mad Genius Nocturnal Professor and his Three PAs
One senior guy ignored the convention of 9-5. He started work between 20:00 and 22:00 and left the building around 05:00. His team kept growing to cope with and carry out the work during the day that he created during the night. Some of them never met him. They all seldom saw him.
The Sinister Cellar That Resembled The Matrix
One of the people I worked with took me into the cellar. The cellar was huge, and the ceilings were high. There were banks and banks of dark computers in ten-foot housings and narrow walkways that ran the length of the building – similar to a library but with blinking green and red lights.
This was the time of R2 – the years of the mainframe. It definitely felt like being in a church down there, in the belly of the brain of SAP. Did the film The Matrix copy SAP aesthetically? Red pill anyone?
What Is The Best Story About SAP?
There is another story, but that is the title of my book on business storytelling.
Do you want to be notified when it comes out? Email me sapstory@peterbotting.com.
