deal architect

The Future of Work: a Rural Sourcing perspective

There are lots of trends converging to influence the workforce and workplace of tomorrow. I have written about new job titles as automation influences every profession, new co-working sites, the demography in booming small towns.

I thought it would be nice time to get a periodic update from Monty Hamilton, Chief Executive Office of Rural Sourcing Inc. (RSI) whose plans include “the launch of 10 new development centers with 2,000 colleagues across low cost of living, high quality of life locations in the United States.” I have previously profiled Monty in several books and blogs.

How his location sourcing has evolved

Our first two centers were in Jonesboro, Arkansas and in Augusta, Georgia, and the third one was down in the Gulf Coast in the Mobile, Pensacola area.

Since then, we've now opened up our fourth one, which is in Albuquerque, New Mexico. And last month we announced opening up in Oklahoma City. One of the things I can say that having gone through the process now four times and doing the site selection work is that we refined that process a great deal. In fact, we've built out our own little artificial intelligence engine to be able to feed a bunch of the data and attributes that we're looking for into that tool and make sure that we're not missing anything, as we canvass the U.S. for our next locations.

One of the things that I finally come to grips with is terminology; I finally found a good term that adequately describes what we look for. I used to use Tier 2 cities or Tier 3 cities, and that was offensive, as was smaller cities. Now we say midsize metros. I think that does encapsulate kind of what we're looking at today.

If you look at Albuquerque, it's right at a million people population-wise, Oklahoma City is about 1.4 million. In terms of the size of the markets where we set up our development centers where our colleagues comes from, that has grown in terms of the population size. I think that's come with some understanding where we fit in the ecosystems of these systems from a technology landscape point of view, the talent pool that we're competing for in those cities and then how we go out and attract the best people within those cities.

Other things that have been added to the list, as we've gone along now is a real focus on the quality of life attributes that we're looking for and are these places attractive to both recruiting and retaining millennial talent. We look for things like, how many craft brewhouses do they have in town, how many coffee shops do they have in the downtown location, is there housing in the downtown location? Some of those things have been added as, I'll say, secondary and tertiary determinants of where we're going to locate.

How his business has evolved

When we started out early, early days, we were doing a lot of .NET development and longer term SAP support work. Today, 80% of our work evolved into leading edge custom app development, either in the Java open source stack or in the .NET world.

Even beyond that or below that, we're looking at doing probably at least half of our work these days in public cloud platforms, either Azure or AWS platforms. And so, I think the evolution of our work has been driven by companies embracing the digital transformation or digital adaptation view of the world, as they've got to be able to compete on that front. Most of the time, they're not staffed to develop in some of the newer technologies, or at least not at a scale they want to be or need to be or at a speed they need to be. That has driven a lot of the tailwind we’ve had in the growth of the business.

I would say it's what I would refer to as recurring work where clients are buying an Agile Scrum team of a dozen people, right? A Scrum master and QA folks and developers, UI/UX and business analysts all packaged within that team. Then, that team will work with them on a project for 6 or 12 months. Then they want to keep that team in place, and so then they come along with the next piece of work. Most of the times, our clients are signing 12-month engagements and then renewing that contract for another 12 months. The clients see the value of keeping that team in place, and now we're going to move them from developing a digital platform for consumers to automating more of what they are doing with their backend suppliers.

The customer base today kind of breaks down into two major categories. On the one hand, we have the large enterprise organizations from a billion dollars up to $25 billion who are trying to get things done and do them faster. A lot of their drive is coming to us to find additional teams of people who can move faster and assimilate quickly, get something done, and then move on to the next thing. That's on the enterprise side.

For the longest time, we didn't do a whole lot of work with software companies, but that's changed dramatically over the last two years dramatically.  They make up a significant portion today of our annual revenue. These are typically either private equity-backed software companies or large, fairly successful, independent software companies. Especially if they're private equity backed, they're looking to do things in a compressed timeframe. And so, that has been a big driver over the last 24 months, for sure, to see those companies coming to us as opposed to going offshore and looking for solutions there.

The talent he is attracting now

I usually get a Monday morning report of the number of colleagues that we have. Last week, it was 470. We've got about 70 job openings on our website today, and so I anticipate by the end of the year we'll be at 500 plus folks, and most likely looking at center number six in the first quarter of next year. In fact, when we went through the site selection process last time, our code name was Project 5-6, knowing that we would pull the trigger on number five and have number six ready to go in early 2019. I do admit we do not get the kind of attention Amazon got in its 2nd HQ search :)

I would say the profile of who we attract is still largely the same. A lot of really great, talented software development folks who have made lifestyle choices not to be in one of the major coastal metropolitan areas. We're seeing a lot of people who are coming back to these great resurgent cities.

We hired our first ex-Googler earlier this year, back in the summertime, who went off, very successfully, had a career at Google for about ten years and then decided he needed to be back where he grew up. Looked around, started looking for work, and found us. And so, I think that's one of the neat things about where we fit in the ecosystem in these cities and the social impact we bring is that we offer those people truly challenging, very leading edge kind of software development work in a place where they probably didn't think that was going to happen. And so, it's neat to be able to attract that kind of talent that have those skillsets, that exposure, and that experience back into our organization and back to their roots.

Also, I think we've done a really great job of opening up additional pathways to get into the tech industry. This idea of integrating in bootcamp hires into our system has become more of an intentional part of our recruiting program. We partnered up with a couple really successful groups to be able to take those folks who don't have a lot of experience working in tech, but they've got the raw talent to be able to be molded into that. And so, they go to these 12-week or 14-week bootcamp, and then they come to us.

We love the idea of giving people their first chance at a second career. Those have worked out extremely well for us. I think, for the people that come out of those programs, they are truly grateful and appreciative. They get to work with some really, as I said before, seasoned, talented people. And so, their learning curve is just on a rocket ship.

Impact of President's America-first, hire more, make more in the U.S. policy

It's probably still too early to tell. There are certainly some growing concern about especially the H1B requirements and what's going on there, and will there be changes? But, there have been no changes to date to that program, or minimal changes I should say.

I don't think there's any direct correlation there, but I think people are beginning to question their workforce strategy. Honestly, CIOs and workforce people are looking at what does my workforce portfolio look like today. How much of that is insourced versus outsourced? If it's outsourced, where is that going on? And, do I have the right balance in my overall workforce portfolio?

We have had a lot of conversations and work around that specifically for people just realizing that they may have leaned too heavily to one side and they're trying to make some course corrections in that portfolio. But, I would say to date still the bigger drive is just that need for good, strong, agile software developers who can get things done, do them quickly, and understand the business problems that they're trying to solve and write code to solve that problem. That's, to me, the biggest thing that allows our folks to really produce quality code quickly is they understand what that end user is expecting and trying to get done. The ability to understand the business problem and then translate that into lines of code makes them super productive, super-efficient.

What his competitors are doing

We're still seeing the traditional either large, India-based offshore firms or the U.S.-based consulting firms. Some of them are making inroads. Some of them have set up in places like Columbus, Ohio or Nashville but those places as it turned out were not that inexpensive But, I still think we're somewhat unique in being able to locate and scale these midsized metros in the fly-over states, frankly, that have just been underutilized and the talent pool there is available. They're just waiting and looking for somebody to give them the opportunity to step up and do some great stuff.

I feel really good about our model and where we are today. The growth over last year, which was 30+%, was awesome but, as we look forward, we think it'll be 50+% in the coming year just based on the demand so far. It's a unique, fun, fun time to be here. That's for sure.

Not your Dad's SAP

It’s been the longest research phase of any of my 7 books but I hope to deliver the first draft of the manuscript for SAP Nation 3.0 to my editor in early January.  As I work my way through over a thousand pages of  transcripts of conversations with customers, executives, fellow analysts, competitors and my notes from several events, the diversity of SAP’s acquisitions and newly developed products and related customer bases is starting to sink in.

The customers can roughly be classified into four categories

Innovators and Transformers

Brand name companies and startups using some SAP tool like HANA or Data Hub as they leverage wearables,  satellites, sensors, machine learning and blockchains. Wide range of industries from retail to sports, wide range of countries, wide range of business processes in my sample. Others are attempting large transformations with S/4HANA as a backbone, but phasing operational areas out several years to time with S/4’s gradual evolution. With my innovation focus, this has been the most fun part of the book. Many of these projects are one-off and it is still too early to tell if SAP will be able to broadly commercialize these experiences.

Modernizers

I am profiling several customers who are implementing portions of S/4, components of C/4 and other cloud products like SuccessFactors. They are moving to more contemporary technology but not always rethinking business processes or business models. What’s striking is the variety of technologies and architectures in this tapestry. The acquisitions have been difficult to homogenize.  SAP’s SI partners are contributing to the diversity by proposing a wide range of private cloud, application management and other services. This group gave me a bit of déjà vu of the out-of-control ecosystem I wrote about in volume one of SAP Nation

Diversifiers

These are customers who have implemented Salesforce, Workday, Plex and other cloud solutions in certain business processes, or NetSuite or Microsoft in two tier mode, and others who have moved to third party maintenance to vendors like Rimini. From SAP’s POV, the really good news is this group has not grown dramatically since I wrote volume 1. Couple of reasons for that. The functional footprint of the cloud vendors has grown only at snail’s pace so customers cannot lift and shift much more to them. If Rimini or other 3PM providers supported Industry Solutions you would see a lot more movement to them. Today they mostly support the horizontal ECC modules and some of the core platform. In reverse, SAP continues to make headway in some of these vendor’s customers as they look to expand in countries where SAP offers better compliance and presence . To me this is a major missed opportunity for the cloud vendors – they could have delivered a knock out punch to SAP if they had verticalized and expanded globally in the last few years. Now SAP may turn the tables on them. Cloud vendors have also tarnished what used to be a significant economic value proposition with their own aggressive behavior during renewals.  

Prudent

This is a group I still have not decided what to label. Some of my friends call them laggards or sleeping dogs but I see them as pragmatic customers who continue to see payback from their previous investment in ECC, IS, Business Objects, BYD and other earlier products. They are in no hurry to move to more modern products. This is especially true of SAP’s customer base in Europe which is  just not that sold on the cloud model and wants assurances against SAP’s Indirect Access charges. The cloud vendors have been successful mostly in N America – another missed opportunity. BTW Oracle and Infor are finding similar resistance in their on-prem customer bases. They have tried with migration packages called SOAR and Upgrade X with limited success. I have interviewed several analysts about this lack of movement. Some feel the muscle memory of the last ERP project is still unpleasant. And the same set of SIs are still hanging around.  One compared ERP to email – as un-sexy and as unattractive to replace. Another talked about lack of functional equivalence in the new generation of products, especially when it comes to industry processes. This group continues to write maintenance checks to SAP but there is not much passion for the company and many could still tilt into the diversifier category.  

In volume 2 of SAP I had pointed out “SAP's runaway success in the '90s came about because its R/3 product dramatically reduced enterprise sprawl.”. Then I asked “Can history repeat itself? Will S/4 replace today's sprawl, this time caused by SAP itself?”

The answer 3 years later is No, the sprawl is actually much worse. If you look at databases, cloud flavors, programming languages, UX, application code bases in SAP World there is no shortage of choices in each segment.  That’s a clear reason to be concerned.

But after talking to customers in Category 1 and 2, seeing a new set of executives rise within SAP, and the relative lethargy in the competition I feel better about the company than I did when I wrote Volume 1.

An SAP executive asked me “how do we work more with innovative customers?” I told him “You already have the most innovative customer base in the world. You don’t always associate with the most innovative segments of those customers.”

Most vendors would happily trade places with SAP.

SAP and Qualtrics: Experiences matter, but how much?

My daughter, Rita is about to embark on what she calls a Gap Quarter. I don’t want to steal her thunder as she plans to blog about it but it is a play on a Gap Year and what us old fogies call sabbaticals, even though few of us have experienced that concept either. It fits in with her view and that of many Millennials that experiences matter - they matter even more than physical assets and wealth accumulation.  And increasingly I hear middle aged folks say let’s try things out while we are physically able to and not wait till it may be too late. So when I heard of SAP’s decision to acquire “experience management” vendor Qualtrics for a whopping $ 8 billion (in cash no less), I was not immediately dismissive.

My reaction to most big enterprise M&A is that of coming to a fork in the road – what are you forgoing by making such a large investment at such an inflated valuation? How is this positioning you in the race to tame the Enterprise Wild West? I had similar questions when Microsoft acquired LinkedIn, when Workday acquired Adaptive and when IBM announced plans to acquire RedHat.

My questions tend to be

Have you run out of development ideas? Are there vertical white spaces you should be investing in? Are you foregoing a better series of small acquisitions? Will the integration distract you? Would your customers instead prefer better value from what they are paying you for today?

I have an advantage in understanding SAP a bit better than other vendors as I am sitting on over a thousand pages of interview transcripts and event notes from my year of research for the next volume of  SAP Nation. I have to chisel than down to a 250 page manuscript due to the editor by early January.

Thanks in particular to my tour guide, Stacey Fish I have seen a remarkably different SAP than I used to know. I have seen a lot of smart, small acquisitions. But I also see how difficult they have been to integrate and homogenize. I see a number of enthusiastic customers who are pushing the envelope. I also see many who find it difficult to navigate this diverse SAP and want to be left alone and not nickel and dimed. I see a new breed of global partners unafraid to make large investments. I see plenty of others who have not evolved much and that SAP will not nudge forward

In balance, I am much more optimistic about SAP that I was when I wrote the first volume of SAP Nation. But every once in a while I will react like Dennis Howlett did this morning

“This is tragic. Empty calories. Zero content. Year old stories. Missed opportunity to address indirect access in a meaningful way. #UKISUGConnect”

Looking at it from my daughter’s lens, SAP has been creating an amazing set of experiences for its stakeholders. As an observer, I am enthralled. Not every customer or investor looks at them like I do.

Now SAP will have a platform to measure all these disparate experiences. Experiences matter - now help us quantify them!

Plex: The Past, Present and Future of Manufacturing

Plex hosted its annual Future of Manufacturing Roundtable in Michigan last week. I was actually as excited about the past and present of manufacturing I saw during the visit. They hosted a dinner at a Birmingham restaurant which used to be a train depot for the Grand Trunk & Western Railroad. In 1931, when the depot was opened it was at the epicenter of a transformation where the nearby automobile industry was starting to herald the end of golden age of the railroad. The city, a century prior, had dreamed of being an industrial powerhouse like its namesake in England – and along with its neighbors did even better.

The present came in 3 parts. Plex’s Customer Advisory Board meeting was co-mingled with the event. It was invigorating to be with 15 customer executives. They represent a microcosm of the strong economy we are living in:  healthy top lines and optimism about US manufacturing, and related PE driven M&A under President Trump, balanced by fretting about confusion caused by his tariffs and a heated labor economy.

Next up was a plant visit at Coastal Automotive in Rochester Hills. Plex has done a nice job over the last few years taking us to plant tours around Michigan. Coastal is a maker of safety, acoustic and energy management solutions (it uses the moniker of “Safe and Sound” ) for automobiles and to a lesser extent to aerospace and sports markets (think NASCAR and high performance helmets). It CNC precision cuts IMPAXX foam and Betafoam AFI – unlike other tours we have taken this one was amazingly quiet and clean. It was quite an education on the material science which results in lightweight, but remarkably strong, energy absorbing composites. In reverse, we found out thanks to an analyst mishap, the densification of the scrap results in a blue rock-like brick you could mistake for an asteroid from planet Pandora. 

It was nice to get an update on Plex’s product progress, operations and new executive hires. There are not too many vendor updates these days where you hear of operational features and 5 9s uptime which makes them hesitate to deploy on hyperscale cloud infrastructure providers whose SLAs guarantee 3. I have heard too many vendors and customers say they don’t believe they can deploy manufacturing in the cloud. This was a resounding – oh yeah?

The future also came in three parts. Plex provided more details on its Platform play and IOT efforts. Every SaaS vendor these days has a platform strategy. And everyone glibly talks about how successful the Salesforce strategy has been. After a decade if you look at the function points and vertical extensions its platform partners have delivered, it is actually underwhelming. So, it will be interesting to see how Plex grows the orange portion of this chart.

Same with IOT which builds on their acquisition this summer of Dattus. They acknowledged “it is a crowded landscape with many well-funded niche players”, but “no winners yet”. Jerry Foster, CTO provided an update of work in the labs. They continue to work on wearables (and related noise cancellation) on the shop floor. He also shared details on a machine learning project. Interestingly, it is something they believe they can be used to examine parameter settings across their customer base. Incorrect settings lead to inefficiencies and errors. 

I am really pleased to see Ben Stewart has joined Plex as VP of Product Strategy. He has been a Plex customer and partner and should balance out Plex product plans with his field perspective. Also, I hope Chris Bishop who heads services at Plex will find ways to use the ML project to streamline implementation projects and service tickets.

Now about the third part - as we headed back to the airport we drove by Ford facilities and I was reminded of their new commercial “Let the other guys keep dreaming of the future. We’ll be over here building it.”  

Another invigorating visit with Plex and its customers.  

Vertical Software: One Industry which has bucked the trend

Readers know I have been hounding software vendors on why they are not investing in vertical functionality. After two decades of cloud computing we have very few choices in books of record for industry after industry – utility billing,  retail merchandising, insurance claims processing, electronic medical records. I could go on and on.

One industry has, on the other hand, seen lots of investment from literally hundreds of vendors. It is the professional services sector in the form of PSA functionality. I reached out to Dave Hofferberth of Service Performance Insight to get nuggets on why this market has bucked the trend. I call him the “Godfather of PSA” – the image below is from a pioneering white paper he wrote on the market as far back as 1999 

Describe the evolution of PSA over the last two decades.

I have seen wave after wave of vendors address this market. In the first wave there were pioneers like Niku, Evolve and Changepoint. Today the names are  OpenAir (part of NetSuite), FinancialForce, Kimble and broader vendors like Deltek, Microsoft and Workday, just to name a few.

The vendors 20 years ago had a concept, but not too many buyers. In theory, PSA made sense. In reality, most professional services providers work their employees hard, so concepts like billable utilization were not something a tool needed to track, as they just worked their employees 60 hours each week. However, as organizations expanded and resources became more scarce, PS executives realized they needed a tool to manage the delivery of services so they could track all of the time and costs against tasks, or at least projects to more accurately calculate revenues and margins. PSA has become a necessary solution, just like CRM and financials. Nowadays, organizations in other industries also use PSA to manage the services component of their product-based business. Many of the PSA vendors took a break a little over a decade ago to concentrate on project portfolio management. PPM was to be the next wave, but most of the vendors realized that PSA was where they should be. There are plenty of good PPM vendors, and that market is strong as well, but PSA is a market unto itself, with different needs.

Describe your personal journey and how you came to be so closely aligned with PSA

At Aberdeen Research, I carved out a niche for myself in the PSA market because I was the analyst who brought PSA out to the market, the vendors knew for the market to thrive, it needed a lot of thought leadership, which Aberdeen could provide. Other analyst firms, Gartner, Forrester, Meta, Giga, AMR and others, continued to change the name from PSA to something else. Unfortunately, those analyst firms didn't give the time and effort to the market the way I did. In the end, I just concentrated on PSA, where other analysts might have had many other markets or technologies to work on, with PSA just being one of them. I would love to say how when I joined Oracle, professional services was Oracle’s fourth largest market, but I had nothing to do with it. It's just the company sold a lot to those organizations. Unfortunately, it was not an area they concentrated on, preferring to go head to head with SAP in all of the manufacturing, retail, and financial services markets.

But as you say you have helped hundreds of vendors look at the PSA market.  Do vendors not have the competitive intelligence to see this market is somewhat crowded compared to other verticals? Is there safety in numbers?

The world is moving to a services-based economy, and there are so many companies that do not fully utilize business solutions to run professional services. I estimate that less than 15% of PSOs use a PSA solution. Our survey shows something like 60%, however, many organizations surveyed I have worked with over the past 20 years, and are focused on improvement. All of the PSA players I know are growing in excess of 20% annually, so it is obviously a good market for them. That is why the ERP players got in a few years ago. to sell a complete suite of solutions, including PSA, to their installed base and future customers.

Why does the professional services sector get the vertical investment when other much larger industries do not?

I am not sure why other industries don't get the software investment. All I know is that I have tried to demonstrate the financial value of PSA over the past 20 years, and it hasn't been too difficult , as you can imagine increasing billable utilization by 5% annually yields an additional 100 billable hours per consultant. It's pretty easy math. I think for the other markets and submarkets to get funding, they must do similar things to justify the value of their investment. I have long considered moving some of my research into other markets, however, the professional services market keeps me plenty busy.

BTW, I am headed up to Detroit to spend a day with Plex - a vendor which is bucking the trend by continuing to invest in another vertical - the manufacturing one. 

 

Tech Marathoners: Rob Enslin - Part 2

We ran Part 1 of the interview with Rob Enslin yesterday. Part 2 below continues with how he sees tech and its impact today compared to his perspective in past decades. He also talks about his leadership style and his mentors who have helped him grow over his career.

“I look at the tech industry in a couple of interesting ways.  First, I think there's never been a time in the last 50 or 60 years where whatever you describe as information technology -  the Internet, software – it’s really important for nations, and really important for global business in a significant way. I don't think we've ever seen the amount of regulators, the amount of time regulators in multiple countries around the world are spending on these topics today, whether it's Russia, China, the U.S., the European Union, the U.K.  It's becoming a very, very important subject and obviously it's going to have a huge economic impact on the world as we move forward.  So, it's a fascinating time in massive ways to be in the industry. 

Secondly, the thing I think is really amazing is what we can do today with technology and with software, and the speed at which we can do it. You can't even look at the past five years without thinking about how software altered and changed business processes or how we can use technology to move things forward at a rapid pace. I think we will see more and more technology doing just incredible things, whether it's AI or ML, big data, and so on. These things existed in some form or shape in previous times, but they were really slow-moving areas, or we rarely used them. The pace of change in the 2000s was incredibly slow compared to the pace of change today.

Why is the pace of change and speed so important? Because, when you think about how companies are quickly moving all of the infrastructure into these cloud-based environments and then focusing all of their efforts on things that they could innovate for their company, it's almost impossible for one company to do what it did 20 years ago, 10 years ago. 

There's a whole model of operation and collaboration that's taking place today in massive ways. I think that is really, really exciting for companies like SAP who have a big stake in the business applications market. I think that's true for multiple areas.

If I look at infrastructure and what's happened to infrastructure platforms, you start to see these mega cloud providers, what they're trying to do in the market, and the combination of services they provide. Why are they providing these services? One is, it's a lower cost. It's faster access. You get to use the latest and greatest innovations with its face recognition or natural language, which previously you had to go buy software to do so. It's at incredible speed and I think that's going to continue to move, so that makes it even more important. 

You also see this at the security layer. There are four or five large security companies in the software industry, but there are thousands of innovators in the security industry. And so, platforms become really important in different layers: in the network layer, in the security layer, in the infrastructure layer. 

I think the same is true in the business application layer. You know the companies that provide a platform with which you can build innovative solutions on top, and not only yourself, your partners, your customers. The world can create value on top of value – it’s the way that our industry is moving and moving at a rapid pace.

I think the winners in all of these aspects are going to be the ones that understand how to operate with competition, how to participate in frameworks with companies that you would perceive to have similar functionality to you, companies that you might be able to share different data models, different data environments, which in previous times, you wouldn't – all for the benefit of driving massive customer value faster and cheaper. I think that's the way the world is going in our industry.

Those that stand by themselves, stand alone. I don't think they will survive. I think they will be out-innovated. They will not be able to deliver at the speed at which the marketplace expects you to.

Now, having said all that, we also have to deal with regulation on top of all of these pieces. I think regulation is going to be part and parcel of our industry for many, many years to come, and we will have to deal with how we operate in these different marketplaces and how we meet the requirements for different governments and the European Union and different departments, if we really want to operate around the world.  It's going to be a fascinating time to be in our industry.” 

You are almost like a colleague to the Ariba leadership, the SuccessFactors leadership and so on. Talk a little bit about where you learned your leadership style and also about your own mentors within SAP and outside.

'My very first mentors that I had in South Africa were folks who I'd grown up with who had gone to work at IBM and had become really successful at IBM - my family. They helped me develop a strong work ethic. From a very early age, I was always taught that you have to work for everything. You put the hours in.  So, that was kind of instilled in me.  You have to know the details of everything.  When you have details, you can make wiser decisions.  And when you want to be really smart, you just have to learn, learn, and learn harder than the next. So, that's kind of how I approached pretty much everything. 

The biggest learning experience for me in a massive way was when I came to the U.S.  There was a gentleman at Coca-Cola who I worked with and I spent an inordinate amount of time designing how the system can function, how Coke should design it, and how I would do it. I had written basically written a white paper on this. It took me about three weeks to write this document. And then, when I handed it to him, and I started to explain it, he looked at it and said, "Can you take this document and put it on one page?"  We went back and forth, and he took the document, and he read it. He came back, and he did a drawing of a house for me.  He put the drawing in front of me and said, "Is this what you're trying to say?" I remember the drawing very clearly.  And, I'm like, "That's exactly what I'm trying to say." 

That diagram became the motto for everything we did, and I always remember the lesson I learned from him was to take things and simplify it so that everybody else can understand it because no one will ever understand your 28 pages, but they will understand the concept. I learned that lesson very early and I live it every day. I must say, "This is too complex," 100 times. Or, I'll say, you know, "The details are missing." It's kind of an oxymoron in a lot of ways, but that was one of the biggest lessons.

I learned a lot from people like Léo [Apotheker] in terms of how to deal with customers and from the founders of SAP on customer focus. I always remember Hasso Plattner in South Africa. I was amazed because it didn't seem like any other company had board members who visited customers. They would take us with into these meetings, so I learned a lot from them in terms of why it was important from customers, why the innovation came from customers, and how you connected with them.  

Léo taught me quite a few things early on around being close to customers.  SAP North America was structured in an industry model in the early 2000s. Léo wanted to go to a regional model because we were too far away from customers. And it really was true. Customers are local, and we had these industry reps flying all around North America spending very little time with their customers. I always remembered to put a focus on your customer and be local to customers. When you think about local, you think about the football teams, the churches they go to, the communities they share, the charities that they belong to, the volunteerism. Those are things that make you closer to your customer, not that you have necessarily the knowledge of the industry. It always stuck with me in a big way that you create a closeness and engagement with customers at that level.

And then, I learned from Bill [McDermott] really how to be bold, how to be brave, how to take on things that are much, much bigger than you, and to just keep stretching for it. When he came into SAP North America, he came with the idea that were going to double the revenue of SAP North America. And, I was like, "Oh, you've got to be kidding me. Who would have a strategy like that?" And, yet, we did it in a year. Always be bold, always go for it, always stretch for the moon.

I learned the most about managing from Japan. When you move into a marketplace, and you have zero understanding of the language, the culture is brand new for you, you don't know who in your team has been failing, you have to learn quickly.  I removed a significant amount of my management team very early on, and I did that simply because I didn't know who was with me and who was against me. I felt that I needed a fresh team to tackle this, so I did something very unnatural. But then, also, I understood that you really have to understand the culture and work with the culture and help and respect their culture first before you try to make changes and live the way that the Japanese live.

I got to really understand how you can benefit from diversity in Japan. In this case, the diversity was me and the Japanese. And, rather than try to make the Japanese like me or the Japanese try to make me like them, we got to understand how both of our cultures could benefit Japan and how to motivate them.

I hired a Japanese woman to run communications and PR for me and everything I did in the first 18 months, she would critique me. After I finished speaking, she would say, "You said that. That means this. You did this. That's how they would perceive that." And so, I learned quickly how to communicate with Japanese media, with press, with customers, and how to respect certain things, what not to respect, where I could stretch the line, and so on. 

I had a lot of guidance from her – she was an amazing part of my success in Japan.  And, I remember all those management principles from Japan. This is where I learned that to be successful, I needed to make certain my management team was successful. 

In a public forum, you'll very seldom see me chew out any of my management team. You will see me take a leadership position if I think the discussion or dialog is going in the wrong direction. I'll step out in front. But, if I think it's going phenomenally, I'll give them all of the bandwidth that they need to be successful, to be the star in the room, to show that they can lead because my belief is that the more leaders that you have, the more opportunities you have to grow your business, the more things you can do with your company and the greater that your company will be. 

It’s a case of, if they've got the talent and they know how to thrive, give them the opportunities to flourish, and they'll go on and do great things. If not, your responsibility is to make the change quickly and put the right people in place. If you are constantly trying to be the leader, forget it. You'll never have a great company because no company, no business can survive on one leader. Everybody has to play a role. For me, that leadership is about seeing how great other people can create their careers."