Adaire Fox-Martin to leave SAP. A case of musical chairs as SAP refocuses marketing and sales

Profile picture for user gonzodaddy By Den Howlett January 15, 2021
SAP starts 2021 with a refreshed executive board. What does this mean and why does it matter?

Image with the words ‘time for change’ written on a chalk board
(Image by Gerd Altmann from Pixabay )

The old saying: "There's never a dull moment at SAP" rings true today as the company announced the departure of Adaire Fox-Martin as the executive board representative covering global sales and the elevation of Scott Russell into a similar role. In parallel, Julia White joins the SAP executive board from Microsoft as chief marketing and solutions officer. Alicia Tillman, who is CMO leaves at the end of February.

We don't normally report board changes except where those changes have clear implications for strategy as it impacts customers. This is one such occasion. Let's unpack what this means and why it matters.

In the press release, SAP was at pains to point out that Fox-Martin's departure had nothing to do with the Q4 FY2020 results. I accept that on its face because my understanding, as confirmed in the press release, is that she has been mulling this for a while. In any event, it would have been a harsh treatment for a person who delivered on the FY2020 forecast and who, by all accounts, is much loved inside SAP. In my limited dealings with Fox-Martin, I found her to be a persuasive and engaging sales executive who handled the South African crisis with the kind of diplomatic touch that's rare among technology executives. So why the changes?

In our private briefings with SAP board executives, it has become clear that the company wants to shift marketing away from the consumer/brand led approach for which Tillman was hired and refocus on product and processes. That requires a fundamentally different mindset that is much needed as SAP fleshes out a slew of stories around cloud, industries, ERP for the 21st century, etc.

Whether buzzy expressions like the 'intelligent enterprise' remain central to those messages remains to be seen. Personally, I'd drop them as fast as possible because I've always felt that the implication is that if you're NOT pursuing SAP's chosen path then presumably you're unintelligent. Not a good look, especially given the product price premium SAP has enjoyed over many years. 

In parallel, SAP has, in recent years, struggled to articulate the stories which should be central to its messaging from a product perspective. The classic one that springs to my mind is Leonardo, an ill-fated bag of bits that was meant to convey an IIoT message but which ended up mushy and out of focus, to say nothing of out of spec for most customers. Then there's the issue of articulating how the fabled Six Sisters as Holger Mueller likes to call them, hang together as part of a cohesive bundle that customers can consume. Those products are central to SAP's cloud ambitions as is S/4HANA. 

Bringing this up to date, SAP has its RISE event in a few weeks' time. This occurs before White is slated to take up her post but, as I've said before, I see this as pivotal to SAP (finally) getting its cloud story together. This has to be a product and process play or otherwise, it will be seen - as it already is among some I speak with - as HEC 2.0. It takes a product-oriented person to untangle that hairball and fashion it into something customers can understand and consume. How will this happen? For example, does SAP have plans to simplify and perhaps bundle software and services?

On a call today, SAP's CEO Christian Klein responded in the following way:

In the portfolio process we look at how you make sure that we address the right buying centers with the right focus and then on the product that we shift our R&D capacity to the places where we have to win as a company.

Russell added:

A lot of our focus is about putting it into a form that is easy to adopt and consume and then expand as customers gain value, and that's certainly targeted not only as in doing digital transformation, but the CFO might be having challenges that will drive certain outcomes, Chief Marketing Officer, Chief Human Resource Officer solutions. It's about driving real value where it's most needed.

Cloud sales are fundamentally different in nature from on-premises and maintenance sales. Here, I was interested to discover if SAP has specific thoughts and plans around that going forward. Klein said:

We started the change in 2020 by putting together not only sales, but also our customer engagement resources together. So to really also foster this notion about land and expect. In 2021, there is now the next level of that, because we also need to make sure that we focus even more on adoption. We will incentivize everyone on the success of our customers. We will also make sure that our platform becomes the center of the intelligent enterprise we will bundle the platform with every deal. We also have architects in the same team that will make sure we explain to our customers, how they integrate, how they extend their solutions, and also how to infuse AI and other innovations.

Russell added:

When you think about sales but more importantly the entire engagement cycle, our obsession is about customer value. It's ensuring that in every engagement, whether it's a large transformation, or the niche solutions that they're able to gain value. Then obviously the ability to be able to work and expand and create ongoing benefits for our customers. The beauty is, is that with the foundation that Adaire has already put in place, we have all the elements in the customer success organization.

To my specific point, Klein praised Russell's leadership in the APJ region as both a vibrant and healthy cloud market.

Does this all sound rational? It does but only in the context of a restructured board that also includes the recent appointment of Sabine Bendiek as Chief People Officer and who was previously part of the Microsoft transformation team ending up as managing director Microsoft Germany. Later in the year, she takes on the COO role, currently occupied by Klein.

My take

On the call, Klein expressed the view that he now has the right team with which to push forward with SAP's internal business transformation, coupled with meeting the company's growth aspirations. It all sounds right but as always, we have to view this through the lens of execution. Losing Fox-Martin is a wrench that leaves Russell with special challenges. We've yet to see the fruits of what Bendiek brings to the table but then she was only appointed three months ago. 

In essence, and apart from Luka Mucic, CFO, SAP is starting 2021 with a fresh slate of relatively recent or newly minted executive board members. There's plenty of enterprise experience in that team but this is, nonetheless, a new team where the dynamics have yet to shake out. While SAP presents as a team, the fact remains that each board area competes aggressively for resources. How Klein balances that tension against the need to focus sharply on customer imperatives is an open question, as is the need to attract the best talent as SAP transitions to become the tribe it needs to be if it is to succeed. Tweaks will not be enough. 

The next check in comes on January 27th with RISE.