Countering Silicon Valley triumphalism

Thomas Otter, who works for SAP in Germany, provides some reflections on the value of the company’s “Germanness”, at a time when siren voices are urging it become more “American”. His post was provoked by the coverage of possible unionization of SAP’s workers, but I think the import of his remarks goes far beyond the side issue of trade unions.

As SAP continues to globalise though, I think it is worthwhile to pause and think back to what has made SAP the success it is. A big part of that success comes from that very “Germanness” that is now perceived by some as unfashionable and irrelevant. Discipline, debate, deliberation, diligence, a focus on detail, a healthy skepticism of “marketing blah-blah”, consensus, thorough execution, and a strong ability to self-criticise are key to SAP’s success to date.

Many of the world’s greatest industries were founded within 30 minutes drive of SAP. The first car drove from Mannheim to Pforzheim, or there abouts. Soon after that Benz built the first car garage in Ladenburg. Friedrich Engelhorn’s BASF, the world’s biggest chemical firm, is just across the river. Many of the world’s great philosophers and mathematicians were German: Gauss, Reimann, Hilbert, Jacobi, Kant, Runge, Hegel, Marx and so on. More recently, MP3 is a German invention. SAP is part of a long line of German innovation.

SAP’s german roots are part of its success and its long term competitive advantage. We should not ignore them. As we grow as a global company, we shouldn’t forget that innovation and engineering are at the core of SAP’s success. At the same time, we need to be open to new ideas from abroad and from people from other companies, and adapt to those new ideas and ways of working. Other great German brands, although global, leverage their German heritage. Vorsprung Durch Technik, for example. But Max Weber, another famous Heidelberger , wrote of “The passion for bureaucratisation drives us to despair” and the “the iron cage of bureaucracy”.

I know which Germany I prefer. The SAP and the Germany that attracts people like me is the Germany of innovators, not of stagnators. Those that fear globalisation will not find safety in further bureaucratisation. To compete, innovate and grow we need less rules, not more.

Particularly at a time when Silicon Valley triumphalism is on the rise again, I hope SAP stays true to the Germanness that Otter describes. The notion that there is only one way to spur innovation, that there is only one corporate culture that works in the 21st century, is madness. That’s equally not to say that Rhineland capitalism has a unique claim. We need all the different flavors of enterprise and history shows that innovation and creativity can, given the right circumstances, thrive in each.

I find debates about the superiority of one model of capitalist enterprise over another sterile. In the late ’90s I had modest success travelling to conferences and giving my stump speech: most of the world doesn’t want to be Silicon Valley (and, by the way, even if they want it, they can’t do it). I was equally baffled at Will Hutton’s The State We’re In climbing the bestseller lists. His book pressed for British enterprise to become more Rhenish and less Anglo-Saxon at precisely the time when the German economy was heading south and the US economy was in the middle of one of history’s great upswings.

Let a thousand flowers bloom.

One thought on “Countering Silicon Valley triumphalism

  1. Thomas Otter

    Hello Lance.

    Clearly the German model doesn’t have all the answers. The culture that spawned many significant scientific and business innovations has a major “angst” problem at the moment.

    But what disappoints me about much of what I read about US capitalism is a blind faith in the free market as the answer to everything. It seems to have a deity status, and to criticize the free market is blasphemy. Enron and co have only briefly dented this. At the risk of exposing my undergrad economics, the US software industry owes more to Keynes than it does to Friedman.

    I explore this a bit more in my quaero-eurogoogle post.

    I look forward to following your blog. I’m with you on the FAZ comments. Erudition is a polite way of putting it.
    Regards from Germany.


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