The Next Level - Thomas Michael

When Thomas Michael was fresh out of college and living in his hometown of Hamburg, Germany, a stroke of luck put him on the path that would shape his career. His cousin, a partner at a local consulting business, offered him a job—and introduced Thomas to the world of SAP, an enterprise software company that now supports more than 90% of Global 2000. One intercontinental move, two successful businesses of his own, and three decades later, Thomas recently made the decision to partner with Alpine Investors and take his company, Michael Management Corporation, to the next level.

Tell us about your background and how you built Michael Management.

I was lucky enough to start working in the SAP world in the early 90s, when their business was seeing phenomenal growth and there was a global shortage of people who could help businesses use the software. I spent a couple of years as a consultant in Hamburg, where I’m from, and volunteered for an assignment that took me first to Paris and then to Houston, Texas. I thought I’d be there for a couple years and go back to Germany. But SAP America recruited me; I met my wife, Michelle; and we ended up staying.

I started my first SAP consulting company with a partner while I was in Texas, and it grew nicely. In 2000, we sold the business, and Michelle and I decided to move to San Diego, where I started Michael Management. The initial idea was a business similar to the first one—a boutique SAP consulting company. Then in 2007, we started to dabble in training.

At the time, there were no online options, and it was all death by PowerPoint. I’d be leading a week-long onboarding course for a client, and on Monday morning, the bottom of the screen would say “Slide 1 of 680.” It was a slog—and it wasn’t particularly effective, either. Most people learn by doing; just because you show them how to post an invoice or navigate a system doesn’t mean they really know. And of course, it was expensive. Every time a client hired a new team member who needed to use SAP, they’d either have to bring in a trainer, or that employee would have to travel to one of SAP’s classrooms.

So when the first smart-authoring tools came out for producing online content, we thought, “Oh, this could work.” We started creating hands-on simulations, so trainees could actually fill out the fields and click the buttons, just like they would in their jobs. One course turned into three, and fast-forward to today, we now have a library of 650 courses and we’re the second-largest provider of online SAP training, after SAP itself.

How did the partnership with Alpine come about?

Over the past couple of years, our business expanded even more quickly than usual—as you might imagine, the need for online training has grown exponentially during the pandemic. My partners and I decided it was a good time to look for someone to take over and make the investments to not just continue that growth but take it to the next level. But it was very important to us to look beyond the financials; we wanted a partner that was truly a good fit.

Of all the conversations we had, we could tell right away that Alpine was different. For one thing, they already had experience in B2B eLearning—with a different product, so there weren’t competitive concerns, but they had relationships with a lot of the same Fortune 500 and Global 2000 companies we did. And there was a lot of cultural overlap, too. I believe that every company has a culture, by default or design. Michael Management is—by design—a group of smart, motivated people who genuinely like working with one another, and from our first conversations with Liam to everyone we met, we could tell Alpine has a similar vibe.

Tell us more about Michael Management’s culture.

We’ve found a casual, laid back work environment is effective for us. That doesn’t mean we don’t work hard—quite the opposite. We are very, very busy, and we all have high standards. But when our team members are happy, that’s better for everyone. So we delegate responsibilities, not tasks, and empower people to get their work done in the way they see fit. If you want to take a longer lunch because a friend’s in town or just throw in some laundry during the day, that’s fine, as long as your responsibilities are met and the quality is there.

We’ve also been a remote company from day one. Of course that’s much more mainstream nowadays, but our team really thrives on it. It comes with its own challenges, of course. It can be more difficult to build relationships without the watercooler chit-chat you get in an office. But we have in-person team meetings when we can, and we’re intentional about creating those bonds in other ways. We get together virtually every week for a “lunch and learn,” which can be on any topic, work-related or otherwise.  Claire, our senior training manager, once gave us a tour of her van, which she outfitted so she could travel while she worked for several months. Mic, our senior client manager, showed us around the town square in Poznań, Poland, where he lives. We get to know each other as people, not just colleagues. We only have so much time on this earth, and we spend a good amount of it at work, so it’s important to have fun along the way.

What kinds of challenges has the team faced, especially early on?

It took a couple of iterations to get online courses right. The first few weren’t very good, and people didn’t respond. One issue was that we focused on the “how” of using SAP: Click here, then click there, then fill out this field. But it’s critical in software training that you explain not just the “how,” but the “why.” Lots of providers fall short there, I think—you don’t see it in the market much—because of course the “why” is much harder. You have to decide how much to cover and what to leave out. But once we started taking the time to share that context, that’s when our training really took off.

Another challenge for us is that while we’re friendly with SAP, we are their competitors, not their partners—and they’re the 8,000 pound gorilla. If a customer is already buying software from them, why wouldn’t they buy their training, too? But every company has a different learning culture, and we’ve found that in many cases, our approach and format is a better fit. We want to offer an alternative, and that’s taken us a long way over the years.

What has founding Michael Management taught you about leadership?

If you really want to know what I’ve learned, you should ask the team. But I will say one rule has never failed me, in business or in life in general: If it starts hard, it ends hard. That’s something I know from hindsight, through experience and some painful mistakes. When you run into an issue, you can always trace it back to the start.

For that reason, while I generally take a very hands-off approach with established members of the team, with someone new, it’s just the opposite. The first month can be intense; I’ll watch every click in every email! But that’s always with the goal of empowering that person and giving them the information they need, so they can then be assigned responsibilities rather than tasks. I believe people will accomplish their goals if you give them the tools to do so. In fact, they’ll probably find a way to do it better or faster than what you might have had in mind. 

It’s also important to me that someone be in a role because they want to be, not because they have to be. You can’t expect people to stay with the same company for 50 years, and if one job doesn’t end up being a good fit, that doesn’t mean doesn’t mean the next one won’t be great. So I’ll be the first to make an introduction or write a recommendation, to help them find a place where they can really be happy.

What’s most exciting to you about this moment for Michael Management?

There’s a lot of runway in this market, and I know Alpine will help the company continue to grow and realize its full potential. They have a great team in place, and three weeks into this transition, I can already see that they’re putting in a lot of effort and resources. I think the connection with Alpine’s other portfolio companies will be very beneficial, too, in finding other businesses we can help serve.

A few times over these recent weeks, I’ve noticed myself getting involved in the day-to-day operations, then thinking, “Wait. You don’t need to do this anymore!” Letting go isn’t as easy as you might think. I know that’s just because it’s such a routine, though; I am fully confident in and excited about the future of Michael Management. As I told Alpine, I’ll serve at their pleasure—if they want my advice, I’m here. But I will be happy to stand on the sidelines, watching them grow.

What will you do with your newfound free time?

I live in the middle of Manhattan, so I have lots of distractions available to me. One of those is drumming, which I took up several years ago. I saw a Groupon for four weeks of basic drum lessons here in my neighborhood, and I ended up really liking it. So I signed up for a few more lessons, and then got involved in a program that matches up potential bandmates, which is how I found my current band. We actually had a bunch of gigs before COVID-19 put everything on hold, but we’re starting to rehearse again now. We do rock covers, mostly stuff from the ‘80s and ‘90s, and our name is “No Refunds.” We wanted to manage expectations!

I enjoy making my own gin, too, which I drink and share with friends and family. I’d tried my hand at brewing beer, which I enjoyed, but I like gin even more. The first couple of batches weren’t great, but of course I drank it anyway. I’m German—it’s in my genes to let nothing go to waste.

Michelle and I also love to travel. We don’t have concrete plans yet, other than a trip to Cabo in a couple of weeks, but we love visiting big cities like Paris, London, and Rome, and we have some trips on our bucket list, like visiting the pyramids in Egypt. We still have family in Europe, including our son, so I’m sure we’ll spend lots of time there.