This morning SAP surprised us with the news of re-organizing its executive board, largely initiated by the departure of Steve Singh. As often with organizational press releases – you have to read it from the bottom up, but we will follow our customary process of dissecting the press release.


Here you go – the press release can be found here:
WALLDORF — SAP SE (NYSE: SAP) today announced newly expanded responsibilities of key executives. Robert Enslin and Bernd Leukert will shift and expand their portfolios as members of the Executive Board of SAP SE. The Supervisory Board of SAP SE has named Adaire Fox-Martin and Jennifer Morgan to the Executive Board.

MyPOV – Neat summary. Good to see two women coming to the executive board.

The moves underscore SAP’s commitment to customers’ ongoing digital transformation and its effort to foster top talent.

MyPOV – Ok – important – but then how do these appointments support digital transformation?

“I am pleased that executives such as Rob, Bernd, Adaire and Jen are stepping into bigger leadership roles to transform the way we drive innovations with our customers,” said Hasso Plattner, chairman of the Supervisory Board.

MyPOV – Mandatory chairman of the supervisory board.
In addition, two new leadership assignments were announced for current EMEA President Franck Cohen and SAP Cloud Platform President Bjoern Goerke. Cohen will become chief commercial officer and Goerke chief technology officer.

MyPOV – Good to see the next level repercussions, too. I can’t assess Cohen’s impact – but Goerke’s appointment is a good move. A company of the size of SAP needs a CTO, needs the ying and yang between a development leader and a chief technologist… now it’s up to Goerke to show he is up for the job and might become a member of the executive board – some time. Cohen is key to keep the European customers happy from a representation perspective and channels is a key business for enterprise software.
“We have always considered it a privilege to nurture careers and leaders,” said Bill McDermott, CEO and member of the Executive Board. “SAP is a company focused on innovation, scale and growth. I’m proud of this leadership team and know they are poised to keep SAP on the rise.”

MyPOV – Good quote by McDermott. The new setup gives more scale (2 sales leaders instead of one) and has more room to streamline product development and services. I asked what it means for e.g. a SuccessFactors customer – and McDermott’s answers was ‘no change’. But I expect over time the matrix line of SuccessFactors product development to get a little stronger towards Leukert than to the SuccessFactors leader, Mike Ettling. My interpretation here.
The Supervisory Board has asked Enslin, head of Global Customer Operations, to be president of the new Cloud Business Group. He will oversee SAP Ariba, SAP Fieldglass, Concur, SAP SuccessFactors, and SAP Hybris solutions as well as the SMB Solutions Group organization. Leukert, head of Products & Innovation at SAP, will expand his portfolio to accelerate SAP’s platform and digital transformation strategy. Enslin and Leukert will jointly lead key growth businesses at SAP, ensuring that development teams and customer-facing teams are in lockstep with one another from the design thinking and innovation process to customer-facing initiatives.

MyPOV – Enslin gets an entrepreneurial opportunity and also gets out of the grind and pressure of the global sales role, he has done that well for a long time, in a difficult product life cycle stage of SAP. Leukert will add responsibility on the development side, as a lot of innovation e.g. in platform (see Hybris choosing CloudFoundry 3+ years ago) happens in the acquired company’s products. Good to bring it all together… as mentioned I expect the line to Leukert / his team to become more solid – possibly the only one in 2 years or so from now. And that’s the course of all successful acquisitions over time, SAP has run Ariba, Hybris, SuccessFactors, FieldGlass etc. on a long leash on the product side for a long time.
With Enslin’s increased focus on cloud businesses at SAP, Fox-Martin and Morgan will ascend to the co-presidency of Global Customer Operations, overseeing all SAP regions and building on their success in the Asia-Pacific-Japan region and North America, respectively. Fox-Martin will oversee EMEA and Greater China. Morgan will oversee the Americas and Asia-Pacific-Japan regions. As chief commercial officer, Cohen will lead SAP’s channel business as well as assume responsibility for all sales processes and go-to-market initiatives across SAP. As CTO, Goerke will advance the company’s technology strategy and serve as a key external spokesperson.

MyPOV – Good to see two executives in charge of SAP sales, with all the new products and solutions SAP is providing / has provided a good move to have more bandwidth on frankly, a brutal job. One question that was missed to be asked was if Fox-Martin (who is Irish) would move back to Europe. There is a long tradition of managing China directly from Walldorf / Europe – so that makes sense. And Morgan is on ‘McDermott’s track’ as he stated on the call. And of course, good to see SAP adding two women to the board, I hope and expect them to do better than two previous women appointed (and since then left) before. Finally, good to see women leadership in a key, revenue generating function.

All changes will be effective May 1, 2017.

MyPOV – No time to lose.

Steve Singh, president of Business Networks and Applications, will leave SAP SE at the end of this month. Singh collaborated closely with Enslin, and together they transitioned Concur solutions into the SAP product family. Singh built a strong foundation for business networks at SAP and plans to focus on other entrepreneurial interests outside of SAP.

MyPOV – And here we are to the action of the reactio (in Newton terms) – Singh retiring for a more entrepreneurial role. Frankly, I was surprised that Singh stuck around so long, his brother, Ariba co-founder ‘bolting’ right at acquisition time. Writing was on the wall, eg. with McDermott showing up at SAP Ariba Live, not Singh like last year. He will be missed as an outside SAP voice and influence, he probably holds the record (need to do some math) of hanging around the longest as a founder / CEO of a large acquisition (remember Business Objects, Sybase, SuccessFactors leaders leaving quickly).

“Steve Singh’s character and entrepreneurial spirit are greatly admired around the world,” McDermott said. “When SAP acquired Concur Technologies, we knew Steve would play a significant role in strengthening the SAP cloud portfolio. We also knew he would eventually go back to his start-up roots. We could not be more grateful for everything Steve has done.”

MyPOV – Good / nice quote for Singh. Will be interesting what he does next, we wish him a long break to recharge batteries and all the best.


Overall MyPOV

Gravity is a powerful force in organizations, and gravity comes back to the ‘mothership’ of SAP in the form strengthening product under Leukert and bringing all acquired ‘cloud’ properties together under Enslin. The ‘board’ structure under which e.g. SuccessFactors and hybris were gone are now making place for traditional (matrix) reporting lines. So, this comes as no surprise, as acquisitions always get somehow ‘reeled in’ to the mothership – timing is the delicate part here. Moving too early ‘brakes’ the acquired company DNA and unique value proposition, doing it too late leaves enterprise with no talent and customers with staling products. I think SAP got the timing right here, e.g. preluding the whole move with adding ‘SAP’ in front of the brands of the acquired parties, in case of doubt even let this run longer than needed separately.

For customers, it means an easier way to do business. Two sales leaders for one makes it more time with the sales leader, more product under one leader makes sure things fit better together, all acquired products under one leader makes sure synergies are tapped in. The next big organizational piece to watch is how SAP will organize the go to market of S4/HANA beyond the current stage of ‘incubation’ under Leukert. It can’t stay there ‘forever’. A focus on channels is good, as more and more enterprise software will be consumed from marketplaces and partners directly. If SAP does this right – it could mean less friction and faster software purchasing processes. Lastly good to see SAP has a CTO again, an important function for a technology vendor of the size of SAP. So, overall good news for customers, who get more capacity with sales leaders on the top, a more streamlined acquired product experience and more product synergies.

Finally – putting my career coach / succession planning / board power assessment hat on – it gives plenty of room to grow and prove themselves for all SAP leaders involved – a good setup to determine who will succeed McDermott – in a 5+ year time frame.