Employees Vote Apotheker Out of SAP

There are several interesting things about the change of guard at SAP. That Leo Apotheker resigned, (or his contract was not renewed) is hardly unique. But for the Chairman Hasso Plattner, to actually apologize to customers, and take some of the blame himself, is refreshing. From the Financial Times,

“Unfortunately SAP has made a few legal and technical mistakes, especially in Germany,” the billionaire co-founder of the 27-year-old software maker said. “This is nothing that can be put into Léo’s shoes. We have made a mistake . . . I was personally involved in decisions about the maintenance fees.”

Then there’s the new organization structure with two co-CEOs. I think much will be made of this but the reality is that neither of them will be the boss – Plattner will. He owns more than 10% of the company, is its Chairman and has two co-CEOs. He won’t be sailing much in the near future.

But the most important takeaway for me was this:

Mr Apotheker had lost the supervisory board’s confidence after an employee survey highlighted dissatisfaction in SAP’s top management.

Only 50 per cent of employees gave a vote of confidence in the executive board.

Am I understanding this right? That Leo Apotheker lost the confidence of the employees of SAP and was shown the door because of that? That would be a shocking development, if it didn’t actually make a lot of sense.

Employees are stakeholders in the company. In fact their stakes are driven much deeper than shareholders who can just sell the stock and be done with it. Employees at SAP also happen to know what’s going on. SAP’s challenges are probably very well understood by employees – a shrinking market for big ticket ERP software, the threat of SaaS and competing with Oracle. If the Supervisory Board (like the BoD in the US or India) doesn’t have its ear to the ground, at least they have the sense to get feedback from the employees.

Would this work in other companies? It wouldn’t work in Walmart, for example. Employees’ own interests there are largely in conflict with the company’s interests. Also, individual Walmart employees wouldn’t have a sense of the broad sweep of what’s happening across the retail market.

But there certainly are many companies in the technology and financial services industries where an employee survey could reveal a lot. If shareholder democracy isn’t taking a hold, maybe we should try employee democracy. But please, no unions.

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4 Responses to Employees Vote Apotheker Out of SAP

  1. Krishna says:

    Leo Apotheker has been more than just the fall guy for SAP. He has been a wrong choice right from the beginning. He had no technical background and was seeped in sales as opposed to the cerebral Henning Kagermann, a former physics professor whom he succeeded. The disquiet amongst the employee ranks is quite natural if you're just an explosive and demanding boss while goofing up on promised deadlines to customers for introduction of BBD and other innovative applications to counter Oracles' strides on those lines. Then he did the unthinkable – hiking license fees during the recession. In fact, he fitted Bob Sutton's definition of *Asshole* pat and got what he asked for.

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  2. varun says:

    For a newbiee, why are organization and employee intrests conflicted at walmart? Thanks

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    • Madhu says:

      @varun – Basab probably means that Walmart pays its employees very low rates, and that they are forever haggling with management and suing them to get a better deal. However, this is a typical principal-agency problem inherent in every organization, and it comes into much sharper focus in places like Walmart that pay low rates.

      @Basab – what's wrong with unions ? Not all unions are blackmailers, they could be a vehicle to ensure a fairer deal for employees. Some Chinese factories reportedly make their employees work for 80 hrs a week under atrocious conditions – isn't this cruel at a human level ? Would this ever occur if there were powerful unions ?

      REF http://www.lrb.co.uk/v32/n02/perry-anderson/sinom

      madhu

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  3. Rajiv Gupta says:

    ” Bhagwan ke ghar mein der hai andher nahi hai ” these thumb rules look outdated but never loose their strength for centuries .

    So trust you me if the employer is doing something keeping in mind general employee benifit wich is hidden or ignorant to emplyee than the employer finally becomes usccuessful but if the only motive is Profit then it doesnt last that long —- If Chinese have cheated their people grossly then the economy will Bomb big big time and in notime .

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