SAP’s Supervisory Board is a Construction Site

A paradigm shift is imminent at SAP. The legal division of responsibilities between the Supervisory Board and the Executive Board has been suspended at SAP for many years. This has not been to SAP's detriment, and Professor Hasso Plattner has struggled more than once with Germany's strict supervisory board laws. According to insiders, Plattner would have liked to see SAP as an American company and run it as chairman.

In the U.S., the chairman is also the chairman of the supervisory board, but is allowed to participate in the management of the company. German law prohibits the Chairman of the Supervisory Board from actively running the business, and Hasso Plattner has repeatedly criticized this fact at his numerous Sapphire keynotes in Orlando, Florida, USA.

Professor Plattner is the type of person who has precise ideas about how things should be done. Professor August-Wilhelm Scheer, a long-standing member of the SAP Supervisory Board and most recently on an advisory board of the Hasso Plattner Institute in Potsdam, Germany once told me that he knew of no one—apart from Plattner—who could see so far and so precisely into the future. Hasso Plattner has a clearer vision of the future than anyone else. SAP’s history confirms this insight.

Hasso Plattner will leave a gap in the Supervisory Board. The choice of Punit Renjen is therefore the best possible choice because he has a completely different character and will therefore set a different tone. Renjen is not a technology-loving ERP nerd who will quickly start an IT revolution with an in-memory computing database on the side. Punit Renjen will meet with mistrust and rejection due to his management style. The German Manager Magazin has already written: Renjen causes a stir. What happened?

Punit Renjen is a disciplined, success-oriented, and precise top manager. He was elected as a placeholder to chair SAP Supervisory Board. Renjen sees the task as a challenge and will act like an American chairman as far as German laws allow him to do so. He has traveled the world in recent months and visited numerous SAP branches to get a first-hand impression of the global ERP market leader, something quite atypical for a supervisory board chairman. This activism has not gone down well everywhere. Many SAP executives fear for their autonomy if someone is actively monitoring them and giving them binding advice.

German magazine Handelsblatt wrote about the DAX supervisory boards: "As much as financial experts are in demand nowadays, there is still a lack of technology expertise on DAX supervisory boards." The SAP Supervisory Board is no exception. CEO Christian Klein can only expect real advice from Plattner and Supervisory Board member Gerd Oswald, who himself was a member of the SAP Executive Board for over 16 years and knows the SAP business and customers like no other.

However, it is difficult to imagine that in the future the supervisory and advisory tasks will rest on the shoulders of only a few supervisory board members. The actions of Siemens Supervisory Board Chairman Jim Hagemann Snabe seem exemplary in this respect. Manager Magazin analyzed how the top jobs in the economy are awarded today in a report worth reading: "The remnants of the old network career are disappearing, new methods are leading to the top of the company. Supervisory boards and management boards are using assessment centers, psychological tests, and forensic experts." One person who stood out particularly positively in the highest circles of power was SAP ex-Co-CEO Jim Hagemann Snabe. When Snabe joined the Siemens Supervisory Board in 2013, he came up against the kind of hurdles that abound at SAP.

Manager Magazin summarized the situation: on the investor’s side, Snabe mainly met friends of Gerhard Cromme, the Chief Auditor at the time. Jim Hagemann Snabe currently heads the Siemens Supervisory Board, and Manager Magazin quotes him: " I’m looking for skills and not the names of people I know well." Punit Renjen will have a similar task ahead of him if he wants to drive SAP forward and lead it to success beyond Hana and S/4.

Renjen's task is clearly defined: all of Hasso Plattner’s friends must go to make room for competence. If SAP still wants to have a chance in the future, then Punit Renjen must become an activist Chairman of the Supervisory Board and act in the spirit of the word: exercise stringent supervision and give good advice.