SAP's co-CEOs: Are two heads better than one?

By Thomas Wailgum , CIO |  IT Management, Business, IT management

For most people in the United States and several million others around the globe, Sunday, Feb. 7, 2010, was a day to sit back on the couch and enjoy another Super Bowl Sunday chock full of overeating and morning-to-night football coverage.

For Bill McDermott and Jim Hagemann Snabe, two rising executives at SAP, it was a day that would change their lives forever: SAP announced on that Sunday that the pair would replace CEO Léo Apotheker as co-CEOs of the enterprise software behemoth.

Though Apotheker's ascension to the top spot was well-planned and lengthy, his tenure as CEO was tumultuous and brief. SAP was taking on water, the crew was restless, and Apotheker ultimately couldn't save the ship-or himself.

It was time for the company that claimed to offer "Innovation without Disruption" to disrupt itself.

"We knew on Saturday, Feb. 7, and by Sunday we were in execution mode," recalls McDermott, who was head of SAP sales and is well-known for his sales prowess. "There was already a lot of trust [between Jim and I] going into Feb. 7."

"Early on, it was important for us to come together on our strategy, the key priorities for the business, a management framework and leadership principles," says Snabe (via e-mail), who was promoted out of SAP's product development side.

The weekend was reminiscent of two college buddies cramming for a hastily called final exam. The end result of the duo's furious strategizing would be a house cleaning in the executive ranks, a change in tenor and energy level from its leadership, and a new mantra for the new SAP: "On premise, on demand, on device."

Does the Co-CEO Model Work?

The co-CEO announcement was greeted with a mixture of curiosity, relief (inside SAP) and skepticism. The Economist, for instance, noted in "The Trouble with Tandems":

"Joint stewardships are all too often a recipe for chaos. Rather than allowing companies to get the best from both bosses, they trigger damaging internal power struggles as each jockeys for the upper hand. Having two people in charge can also make it tougher for boards to hold either to account. At the very least, firms end up footing the bill for two chief-executive-sized pay packets."

Originally published on CIO |  Click here to read the original story.
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