I am the person who posted the youtube link the other day on Punit Renjen's ET interview and also posted some feedback from my team's private call we had yesterday. On some more reflection. I began to think about what we know and don't know about Punit Renjen.
We know from his ET interview that he considers an achievement while at Deloitte he oversaw the transfer of 100K jobs to India ( ~ 25% of total HC). We also know that he already has provided guidance to CK that SAP's current footprint in India is no where near high enough and has directed CK to increase this number. We know that his vision is that this is now India's century.
The role of any Chairman is to ensure that the expectations of the shareholders are met - basically they want good returns on their investments and the CEO runs the day to day biz. Simply put, there are fundamentally only 2 ways to increase the bottom line of a corporation and keep the shareholders happy, either you grow the company and increase revenues and presumably increase profit or you cut expenses.
Leaders who have the skills, knowledge and are capable of growing the company while at the same time increasing profits is an extremely small group of individuals. These best in class leaders must be people at the highest levels of understanding (i) all of the facets of the industry and business they will lead, (ii) where the future business opportunities are and how to be market leaders in these areas and which areas need to be left behind, and (iii) how to motivate of all the employees in one unified direction.
On the other hand, individuals who want to increase the bottom line by cutting expenses are a dime a dozen. This approach takes no skill whatsoever and the people who run on this basis are short timers and leave or get thrown out once the catastrophe is big enough - Elliott Group was one of these.
So does Punit Renjen fulfill the best in class description? Well he has no background in a leading a SW or Cloud company. He has not been involved at all in the Tech industry is not knowledgeable in our technology or our product portfolio. Rather, he is coming to us after 40 years from an accounting company which does tax returns, accountancy & audits. and some consulting such as how other companies should restructure. What stands out is his signature calling card in leading a massive job transfer from high cost to low cost country and he evidently knows India very well.
Our largest shareholders had the biggest say in who would become the next Chairman of SAP. I do not now think this decision was based on growing SAP, but rather on a new direction which involves restructuring aimed at reducing costs.
Friends, If you are in high cost areas like Western European countries, US or Canada, now would be a good time to ring the 5 alarm fire bell. This all about undertaking a massive displacement of SAP jobs. We haven't heard from Renjen because he doesn't want to disclose the reason why somebody who has no experience in our industry but plenty of experience in offshoring jobs was selected by our shareholders to become the next Chairman of SAP. Let us not be fooled by what was announced yesterday regarding this :"restructuring" of 8k positions - this is only the first tranche. None of us knows exactly how many in total will be shifted, but if past experience is any guide, we are looking at tens of thousands of jobs which will be departing high cost locations
And when this is all done in a year or two, Punit Renjen will likely be moving on and so will those who have been displaced - but the latter group will be moving in an undesired and different direction.