- SAP CEO Christian Klein explained the sudden transition in April when his co-CEO Jennifer Morgan stepped down suddenly as the tech giant was reeling from the coronavirus crisis.
- Klein and Morgan were named co-CEOs in October, after long-time CEO Bill McDermott stepped down.
- But Klein said having two CEOs proved to be ineffective for leading the software behemoth, which has 100,000 employees which, like most tech companies, has had to make drastic changes due to the coronavirus crisis.
- “When you are in a co-CEO model, that’s really hard,” he told Business Insider. “In this crisis, you have to make fast decisions. You cannot wait forever.”
- Klein also said that he and Morgan had differences of opinion on how to move SAP forward, but that they’ve agreed not to speak on the matter publicly.
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When they were named SAP’s co-CEOs in October, Christian Klein and Jennifer Morgan pointed to two key ingredients of what they said was a strong working relationship.
“It’s trust and fun,” Morgan told Business Insider then. “Christian and I have that in spades.”
But by April — just about six months later — Morgan was gone, leaving Klein as the German software giant’s sole CEO, after a jarring transition that saw the sudden departure of one of the most prominent women CEOs in tech.
On Monday, Klein explained how having two CEOs simply didn’t work in running a global behemoth with 100,000 employees, as it suddenly found itself grappling with a global pandemic.
“Jen and I went into this co-CEO model with a lot of passion, a lot of energy, a lot of goodwill,” he told Business Insider. “But in such a crisis, it’s so unbelievably hard when you have to make decisions almost on an hourly basis.”
Klein discussed the transition as the company unveiled its latest initiatives at its Sapphire Now customer event, including new software geared to improving supply chain management.
The virtual event was off to a shaky start after the site hosting the event crashed. SAP apologized for the glitch, saying “Once we encountered the issues, we immediately went live on Twitter and LinkedIn to provide our audiences access.”
Having 2 CEOs became a problem: ‘You cannot wait forever’
Klein and Morgan took over after longtime CEO Bill McDermott stepped down and subsequently was named to lead ServiceNow, another software powerhouse.
Their working relationship faced one challenge: Klein is based in Walldorf, Germany, where SAP is based, while Morgan is based in Philadelphia.
Klein did not offer details on why the dual CEO arrangement became problematic. But he said the coronavirus crisis required rapid responses to address the needs of customers and employees, suggesting the dual CEO system bogged that down.
“When you are in a co-CEO model, that’s really hard,” he said. “In this crisis, you have to make fast decisions. You cannot wait forever.”
Klein also said he and Morgan also had their differences on how to move SAP forward.
Klein had served as SAP’s chief operating officer and had been focused on the company’s flagship product, its suite of enterprise applications. Morgan, who has served as SAP president, led the tech giant’s cloud business, which had grown largely through acquisitions.
He also would not offer details about their differences, saying he and Morgan had agreed not to have a public discussion on “who was right and who was wrong.” Morgan could not immediately be reached for comment.
But he suggested their different views on strategy were significant. “Doing compromises on such important questions for our customers is also not fair,” he said.
Transitioning to sole CEO was ‘definitely not easy’
Klein said Morgan’s departure was a tough transition for the company and for him personally. “It was definitely not easy,” he said. “We had always worked well together and personally we have a very good relationship until today.”
Morgan’s exit also coincided with a momentous event for Klein, the birth of his second child, a baby girl. He had to take his wife at 2am that day — four hours before the scheduled press conference on his role as sole CEO. SAP also had to report earnings that afternoon.
“I went to the hospital and went back to the headquarters and went back to the hospital, then back to the office for earnings,” he said. “It’s definitely a day I will never forget.”
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