Professional Firms Do Not Have a Monopoly on Ideas: A Q&A with SAP's Christopher Koch

A conversation with Christopher Koch, an Editorial Director at SAP, on the challenges and opportunities, ups and downs, and nuts and bolts of creating a thought leadership practice at the world’s largest business software company.

Full disclosure: I’ve known Christopher Koch a long time. I met him in 1998 when I went to work for CIO Magazine. He was the magazine’s resident guru on enterprise computing, especially the huge, complicated, breathtakingly expensive ERP software suites that did everything from financials to human resources and were being purchased and installed by every significant company in almost every industry sector.  When Koch left CIO in 2007 to join the Information Technology Services Marketing Association (ITSMA) as Vice President of Research and Thought leadership, much of what CIO knew about ERP left with him. In hindsight, it seems inevitable that he would eventually go to work for the company that invented ERP, SAP, the world’s largest business software company, based in Walldorf, Baden-Wurttemberg, Germany.

Two years ago, SAP hired Koch as an Editorial Director to help it establish a thought leadership capability. The company, Koch told me, had come to believe that too many of its potential customers viewed SAP as a terrifically complex organization, difficult to understand and do business with. In response, SAP’s leadership decided it needed to humanize and simplify its brand, and that thought leadership might be a lever to do so. It also believed that changing times called for new marketing strategies.     

I recently sat down with Koch to ask him about the challenges of generating and publishing thought leadership at a product company in which the high-falutin’ idea-creation process normally associated with thought leadership does not necessarily fit hand-in-glove with the nitty-gritty demands of selling software. Here's what he had to say:

Why SAP Wanted Thought Leadership

David Rosenbaum
I’d hire you to do thought leadership in a New York minute, Chris, but why did SAP hire you?

Chris Koch
SAP wanted me to help start up a group that would publish thought leadership – which I think of as bringing a journalistic style and process to the marketing of ideas – and also do original research on topics that would matter to prospects. The target audience for our thought leadership would be anyone with the ability to influence a purchase decision or buy SAP products – business people at the upper level, director and above, VP level. The directive was that we stop talking about products and technology and start talking about business issues to attract a non-technology audience. Right now, only the technology audience pays attention to us.

Rosenbaum
Did SAP have research indicating that creating an internal thought leadership group to reach out to a business audience was a good idea?

Koch
Forrester, and others, like ITSMA, have done research showing that thought leadership is most successful when you create a dedicated group, a center of expertise within the company that is focused only on that. I believe that.

Rosenbaum
What was SAP’s reason for wanting thought leadership?

Koch
Before we get to that, we have to distinguish between a product company and a business services company. Services companies don’t have a product. The only thing they can sell is their peoples’ expertise, their ideas, the intellectual property they use to consult with their clients. Services companies have long understood that the way they burnish their reputation and gain attention from potential customers is to put smart ideas out into the marketplace – ideas that do not promote the firm but take the perspective of the customer. The result of that thinking was that McKinsey was able to charge people money for its marketing – that was McKinsey Quarterly. They can’t do it anymore because there’s so much out there on the Internet, but they used to get people to pay for their marketing. It was genius. For me, that’s an important signal that thought leadership is a successful marketing strategy.

If anything, thought leadership marketing has become even more important today because the audience is, if you will, spoiled by so much content. It has so many options you have to make your content excellent to get attention, especially now that search is so important.

Rosenbaum
Okay. For professional services firms thought leadership is a no-brainer. But what about product companies like SAP? How do they get to thinking about thought leadership?

Koch
Most don’t. At product companies, the marketing people have come up in the organization learning to sell product. That’s where the revenue is.

Rosenbaum
So why would SAP bother with thought leadership? Why not just advertise and sponsor more golf tournaments?

Koch
Because IT has become so complex. The customer is tired of being approached to buy individual products because he’s confused about how that product will fit into his existing IT strategy and infrastructure. He already has products; he wants to know how he can use them to improve his business. He doesn’t care how fast your new server is. 

If we look at SAP, many customers have had this software installed for 20 or 30 years now. They’re fully automated, so they’re asking companies like SAP, How are you going to make me more profitable? All you’ve given me so far is automation. I got that. I need a vision for what I should be doing next. So they are asking SAP, Okay, you guys are making the next release of the stuff that runs my company, where do you think business is going?

Rosenbaum
Are you saying you’re competing with McKinsey and Gartner and the rest?

Koch
Yes, but we’re also their partners. They strategize with SAP customers, and sell and install the software so, thankfully, some of these companies pick up the phone when our writers call. We’re happy to feature the McKinseys and Gartners in our interviews because they are out there talking to customers and they understand what we’re trying to do. We quote people from Deloitte, Accenture. They’re another source of thought leadership. Some companies are unwilling to publicize a brand that’s not theirs, but we believe the best content is what readers are interested in – not just people inside SAP. But, of course, we also want to feature our own people.

 

The Differences Between Product and Idea Marketing

Rosenbaum
I understand the argument for adding SAP expertise to SAP’s products, but that sounds like marketing collateral. Pure thought leadership still seems as if it would be a hard sell internally.

Koch
Oh, it is. Look. At the end of the day (as they say), products are what people buy. At some point in the sales process, people will still want to know the terms of agreement, how much it costs, how your software compares to the competition’s – all that’s still in place at SAP; at any product company, really – and all that costs a lot of money and sets up a competition between two very different kinds of marketing. Product marketing is all about the product: talking about how good it is. And in tough times, like we’ve just gone through, marketing is typically where companies cut first. So the product side of marketing needs money to continue to provide what are very important and relevant services, such as customer references, tech specs, industry-focused marketing. This is all very expensive. So it’s very hard to argue for diverting some of that money to something – idea marketing, or thought leadership – that doesn’t focus on the primary revenue generator for the company.

Rosenbaum
And hard to show thought leadership’s ROI.

Koch
Yes. However, marketers at product companies are not stupid. They understand that in the Internet world everyone is blogging, everyone is supposed to be more transparent. Everyone is supposed to be helping customers with their business problems. But there’s a roadblock to getting that done at a product company. That’s part of something I call the idea culture. If you’re a consultant at McKinsey, Deloitte, or Accenture, you probably won’t make partner unless you come up with some really good IP, ideas that can get published in HBR or McKinsey Quarterly. You’re driven and rewarded based on coming up with good ideas. You live in an idea culture. In product companies, people who create the products are incented and rewarded based on creating great products. So they’re not thinking that they need to take time out to think big thoughts and come up with what the future holds for the businesses they’re serving; they need to think about next release and how it’s going to be better than the last one. So you have two kinds of tension: How do I spend my marketing budget and how do I get my experts to think more broadly about the business implications of the products they’re developing?

 

The Nuts and Bolts

Rosenbaum
So how do you do it? How do you get the money for it and how do you get cooperation from your subject matter experts?

Koch
It’s a big challenge. One thing’s that helping is that thought leadership has a successful reputation in the marketing marketplace, if you will. There are lots of sources on the Internet that will testify to the effectiveness of thought leadership. And then there’s social media. You can’t just tweet about products; you have to come up with something to engage people. Otherwise, your social media efforts will be wasted. You take this evidence and present it internally and fight the good fight for budget.

Also, our CMO, Jonathan Becher, has said this is a priority for SAP. Becher has said, Humanize the brand. That’s our strategic priority for 2014. So I send emails explaining the mission of thought leadership to our subject matter experts. I reach out to them personally because thought leadership is not a given at a product company as it is at a services firm. I work the SAP network to find out who knows a lot about a certain subject. I ask our marketers, Who is smart about this? Who is going out and giving presentations to customers about the future of business? That’s often the marketers themselves, but it’s usually the ones with line-of-business experience who have credibility with our customers. Often, it’s hit or miss. You contact someone to see if they’re articulate or not.

Rosenbaum
Give me your elevator pitch to your SMEs.

Koch
SAP is a huge company with over 60,000 employees so first you have to tell them who you are, what you do, what your value is to the company, and then you ask them if they would like to be a part of the development of new ideas that will improve the impression of the company among its prospects and customers. And you mention that you have a mandate from the CMO to humanize the brand and, by the way, you are a human, so we’d like to feature you to demonstrate that we have smart people at SAP who are part of building the future, the software infrastructure for companies all around the world.

 

But Is It Working?

Rosenbaum
You’ve been doing this for two years. Do you have success stories to tell them?

Koch
All anecdotal. The ability to measure this stuff is not a muscle that gets exercised at a product company.

But here’s a story. We did a partnership with CFO Magazine to do a survey on corporate treasury for the banking industry. (SAP is trying to sell cloud software to corporate treasury departments.) But we did it differently.

Normally, CFO would send the survey out and we’d be listed as a sponsor. The people who download the survey would be fed back to us as leads for our salespeople to cold call. But this time we did something different. We found our own internal experts on corporate treasury and interviewed them and also interviewed some external experts and created a white paper, a Q&A, an E-Book, and a short highlight piece we call a Brief. We put links to our materials in the “sponsor’s section” of the report where normally you’d write some self-serving stuff about how great your company is.

CFO put the survey with the links to our stuff on its web site. When we looked at the downloads, we saw that more than 50 percent clicked through to SAP materials. The numbers weren’t big (how many people are interested in corporate treasury?) but the percentage told us that people wanted to see what more SAP had to say on the topic.

Many product companies outsource thought leadership. They say to CFO, or the Economist Intelligence Unit [EIU], give us a survey about the future of Big Data. Then they send it out to their email lists. The problem with that is that it only builds credibility for CFO or EIU. It creates goodwill for your company: Here’s this free white paper from a reputable analyst firm or publication, isn’t that nice of the company to pay for that? And it provides lead generation (and that’s traditionally what product companies want) but not demand generation because it’s not your survey, it’s the EIU’s; it’s not your thinking, it’s theirs.

Demand generation is where you build loyalty to the idea that your company is a good source of information for the business person. Rather than just putting out an outsourced white paper, which is something that customers and prospects still want, you also start to offer your own content, under your own imprint, and get people to realize that you have something to say that others in your market don’t.

Rosenbaum
You’re preaching to the choir, Chris. But even with, as they say, tone from the top, and a good story to tell, it still seems that it would be real hard to get your experts’ heads out of the next release. You tell them it’s good for the company and they say, absolutely, I’ll get back to you. Then . . . crickets.

Koch
Well, getting their time is a big challenge. Revenue is what they’re chartered to get. What we’ve found is we get a good response if we approach them in a supportive way, telling them we’ll do the heavy lifting, handle the writing, the nuts and bolts of thought leadership. All they have to do is give us a 30 or 40 minute interview. All of a sudden, it becomes much easier for them. Some people who run thought leadership programs and social media think their experts are going to have all the time in the world to write these things themselves. Most of them can’t. It’s not what they do for a living. So if you ask them to write, they’ll say no. They’re not going to do it. You have to offer them help. So we work with a network of freelance journalists who interview them and do the writing. And we list the journalists as co-authors, just so we’re being transparent about why a German national writes so well in English. The answer is, he or she doesn’t.

We come up with the rough ideas for them ourselves, as a group. We have researchers go out to see what’s hot out there and then match that up with the company’s strategic goals. That’s critical in thought leadership. It may interest you to write about the Red Sox and how they’re going to do this season but it’s not relevant to the business. So we’ve developed five areas of concentration that have received the blessing of my boss, Michael Brenner, VP of marketing: the future of customer relationships, work, resources (supply chain, sustainability), networks and social media. We whittle down the ideas to a list of 12 broad topics and that’s what we’re going to do for 2014. We approach SAP people to talk to those topics and develop a unique point of view. They’re told they may be the only SAP author on the piece or there might be others depending on what good stuff others contribute. And, of course, they have full review rights as do the external experts and companies we interview. They have to sign off. This ain’t journalism. They can correct the piece, add to it, or opt out.

Rosenbaum
What about the SAP people who think they’re great writers and thinkers. They’ve just written something and they say all you need to do is spell-check it? Then you’ve got someone’s ego on the line.

Koch
If you don’t have a culture in which people are rewarded for writing, for having ideas – an idea culture – that’s less of a problem. Still, some experts have opted out after seeing what we do, saying that’s not how they’d say it. But it’s a very small minority. We’ve probably published over 150 pieces in the last two years, everything from white papers to information graphics, and only two people have opted out.

I believe in humility as the key to success as inside provider. The proof is always in the pudding. When the SMEs see what comes out, they’re happy. They’re very happy. Well, two of them haven’t been happy.

Rosenbaum
So, after two years, do you see the concept of thought leadership taking root at SAP?

Koch
Yes. It’s a huge company, but we’re starting to get known. We’re using our experts on more than a one-off basis. We’re humanizing the brand, putting peoples’ faces out there. So if you’re reading this stuff frequently enough, you’re recognizing the lead authors.

Rosenbaum
Do you believe the thought leadership you’re doing is helping SAP?

Koch
I believe it is. But I can’t prove it.

Rosenbaum
Only a matter of time, Chris, I’m sure.

Chris Koch
We’re working on it.

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