SAP’s co-CEO Bill McDermott has created a pressure-cooker culture for the company’s sales team, according to an insider.The company is so focused on short-term quarterly sales targets that it fired Robert Courteau, president of the North America region, because North America missed one quarter’s goal, a source close to the company told Business Insider.
In its preliminary quarterly report, SAP said that software revenue for the Americas region was €236 million, a decrease of 4% … but this was actually an 11% miss from the company’s sales targets, the source said.
During an analyst conference call after that report, McDermott said this about the decision to oust Courteau: “Rest assured, these issues have been swiftly resolved. [SAP made] some leadership adjustments that were the right ones at the right time.”
Courteau was reportedly ready to leave this culture, anyway, the source said, and SAP reported that he resigned.
“It was mutual,” the source said. “Bob’s a sharp guy. This happened after a quarter. We missed our North American number by 11%. That’s the level of pressure we’re talking about. It’s such a short-term sales culture … gotta hit the number, gotta hit the number. We have so many people selling right now. The pressure to sell there is insane!”
SAP sales people are well compensated, so employees are not necessarily unhappy. But the constant message to grow revenue every quarter is starting to take its toll, particularly on customer relationships.
“The short-term focus on selling is pissing customers off. There’s so much pressure on them to buy and there just aren’t the big gigantic deals — that’s not happening any more,” the SAP insider said.
What’s worse, the source told us that SAP’s attitude is actually discouraging big companies from spending more with SAP over time. Fortune 500 customers that want to map out three-to-five year migration plans for their ERP systems are pressured to instead buy stuff right away and forgo the planning, we were told.
At the heart of it all could be that McDermott is shopping around for another company to lead, one where he wouldn’t have to share the CEO role.
SAP has an unusual setup where there are two CEOs. McDermott is the “rock star” sales guy and Jim Hagemann Snabe is the lead of all things technical.
“When Bill ran North America he had something like 20 straight quarters of double digit growth. I’m guessing that McDermott will not be at SAP by the end of the year,” the insider speculated.