SAP marketing: The culture journey from on-premise to cloud (CXOTalk interview)
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As one of the largest enterprise software companies in the world, everyone in technology knows the SAP brand. The company has approximately $25 billion in revenue and 96,000 employees.
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Although tech conversations usually center on products and customer use cases, I am also interested in how large, complex organizations manage people and culture. Culture is the thread that makes business and product innovation possible, so it's a crucial topic to examine and understand.
Along with every other long-established enterprise software company, SAP is undertaking a generational shift in technology from on-premise to cloud. The implications include changes that go far beyond platform and technology. Shifting to the cloud involves new business models, different revenue sources, and a fundamental re-thinking of customer relationships. In short, mindset and culture are fundamentally important to success in today's world.
The stories that marketing shares create awareness externally among customers, partners, press, investors, media, and other stakeholders. However, marketing messages and storytelling also shape the mindset and culture inside an organization. Marketing does possess that profound level of impact.
Because these issues are so important, I invited SAP's most senior marketing leader to take part in the CXOTalk series of conversations with the world's top innovators. Nick Tzitzon, the company's executive vice president for marketing and communications, was my guest on episode 309 of CXOTalk.
The discussion centered on culture and managing a diverse organization to create the right mindset for innovation. The challenge of being customer-centric is also among the key topics we discussed. Nick presents the issue in simple terms: "I think the challenge is constantly to come back to that one thing. Do you have a satisfied customer who trusts the business?"
The short conversation covers a lot of ground. You can watch the entire discussion in the video embedded above. You can also read edited excerpts below and see the complete transcript.
The interview is valuable precisely because Nick offers a candid glimpse into management challenges and his thoughts on addressing them. I hope you enjoy the discussion.
How do you drive change across a diverse company with almost 100,000 employees?
Nick Tzitzon: Do you know what the hardest part is? I think people learn as they grow in their career, that they have to be rigidly prepared for everything. People are always on script. The more that people are on script, the harder it is for people to understand what a leader really wants a follower to understand.
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Our job is to break through that. We have tried everything we can think of, and we have many more ideas that we're going to put into practice, to break a big company, 50 years old, like SAP, out of some of its rhythms.
If you think about a startup, what's the image you have in your mind of when a founder of a startup gets a small team together? You kind of think about beanbags, don't you? Right. They're sort of relaxed, and they're just talking straight. We have to create that same vibe in a big, established company like SAP so that people really can see through some of the things that have been layered on over the years and focus on the business strategy.
Why is that so hard for large organizations?
Nick Tzitzon: Because of expectations - expectations. Everybody is expected to do this or to do that, and they're concerned about who is watching. "I wonder who is watching this and what I should be saying?" It's always that kind of an attitude, so it's hard for people to let loose.
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It's hard for people to trust their instincts. It's hard for people to really make an emotional connection with people as opposed to doing what they're advised to do by all the influences around them. That's an ongoing battle. You never get over that.
The more you can share with people personally what makes you tick and what about that personal motivation connects to what the business is trying to do, that's when progress gets made. That's when guards get dropped and people are more willing to engage with you on an emotional level.
As I said, this isn't something that's easy for people to do, so it's a constant exercise in pushing them to do that. What's the personal story that's going to make that connection? If we can succeed in that area with more leaders and more audiences, we'll have better business results.
Where does messaging fit?
Nick Tzitzon: The first thing is, there's not just one message, one way. I mean ask yourself. How many times have you heard something that was generic, intended for everyone, that resonated with you personally? It doesn't happen all that often.
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When it does, it's like striking gold. It's great. But, if you're an engineer working at SAP and you've been developing software at SAP for 30 years, you're going to look at topics fundamentally differently than, say, someone who comes into the marketing organization in their early 20s.
How can we, again, calibrate? What do we want the message to mean to you personally? How do we want to give you the power as an individual to connect with the message and to act on what we're saying?
These are where you have to push the conversation further than it normally goes.
Putting up a nice, fancy PowerPoint slide and saying, "Okay, everybody has the message," that doesn't cut it anymore. You have to help people connect to the message and then connect to the action that you hope the message inspires. That's not an easy job, and that's why people like me have jobs we have, and it's a race without a finish.
What does that have to do with the culture?
Nick Tzitzon: Everything. Everything. We went through a messaging exercise around culture three or four years ago. We went out to the employee population, and we said, "If you had to put down on paper what are the qualities about the culture of SAP that you think speaks to the kind of company we want to be, what would those be?" We had this exhaustive exercise.
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We had a talented, young, high potential who ran this for us, and the five behaviors that came back as a result of the employees driving the conversation, they speak to exactly what we want people to do in their job every day: build bridges, no silos; embrace diversity. These are the kinds of qualities that are the underbelly of a culture where, if you're giving people the values that you believe the company should stand for, again, you're helping them understand every single day how you connect to those values, how you role model those values.
It's not a top-down exercise. It's not exclusively a bottom-up exercise. It is both because everything about the culture you want has to radiate from the messaging you have.
What are the measures and metrics on which you focus?
Nick Tzitzon: Well, it's maybe the toughest thing. You said culture. I wonder how many people watching us today could sit back after we're done and say, "What should I measure that I'm not currently measuring?" It's a hard thing, right?
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The second you start to measure something, you have to stare the results in the face. Am I doing what I think I'm doing? Is the outcome directly tied to what I invested in it?
In our case, there's only one measure for us that matters, which is ultimately the performance of the business, the way that customers adopt the software. In terms of the content we create as marketers, as an example, are we breaking down walls and reaching new audiences?
I mean it's one thing to measure the volume of activity around the content we create, but you have to go a level deeper. Who is it? Who is reading it? Is it just our 94,000 employees? Because, if it is, I've got news for you. The money we're investing isn't worth what we're creating.
You constantly have to set a goal. We want to reach new audiences. We want to reach this many people. We want to reach them in this specific industry in these specific geographies. At the end of the day, when the CEO and the executive management team of the business get you around the table, you know what they're looking at? How did the business do?
You can't take your eye off the number one measure and the measure that the management of the company is using. How do you get granular where it counts, but how do you tie it to the big picture so that the same company metrics that the management team and the board use, the marketing and the communications team are also using?
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How can CIOs and other enterprise buyers avoid "shiny object syndrome"?
Nick Tzitzon: I think the challenge is constantly to come back to that one thing. Do you have a satisfied customer who trusts the business? If you do, giving them access to that content in a way that makes it easy for them to understand their opportunities is the key.
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Sending off big fireworks displays and getting them excited without a clear path for them to move forward frustrates them, and it often will have the effect of sending them off in different directions to get the information that you weren't able to provide. To me, it's a customer centricity question almost as much, if not more, than it is how you balance hype versus reality.
Who is your customer? What are they trying to do? What are their historical challenges? And, how can you give them information about the new world, whatever the new world is, that takes into account and respects the scenario that you know about who they are? If you can do that as a marketer or as a communicator, then they're going to listen to what you have to say.
They're going to push you and pull at the same time. It'll be a dialog, two ways, which is always healthy. And, maybe, just maybe, there's a business outcome at the end of that tunnel where they'll move forward with the company and experiment with some of the new technology. That's what SAP, I think, tries to do because, if you don't have a long-term customer relationship, then you don't have success.
If you think about how enterprise technology has evolved, if you think ten years ago, 15 years ago, you had the chief information officer, which was the single dominant point of contact inside most businesses for how a business uses technology and then what happened? CXOs, right? Many of whom have been on your show.
Every CXO became a technology buyer. The CXO technology buyer was interested in very specific business outcomes. If you're a chief human resources officer, you buy human capital management software because you want to inspire and retain and train your workforce. If you're a chief marketing or sales officer, you want to grow your business. You want to attract customers. You want to deliver new customer experiences.
The CIO, in many cases, because of their long-term relationships, was stuck in one conversation while the CXOs went into a different conversation. We want to push them together because that's where they belong. The CIO is an incredible resource in companies to be able to tell you, "Here's a business problem and a technology that can help."
As technology is maturing so quickly with AI and all the other breakthroughs that we've discussed, you need the CIO to be a leader in these companies, but the CIO conversation and the CXO conversation have got to be the same conversation. What opportunity are we trying to seize? What problem are we trying to solve? It can't be technology for technology's sake because, if it's that, then the technology vendor like SAP is not relevant. What are we trying to do for the business? That's the question and the conversation that we need to be part of and that our peers want to be a part of as well.
CXOTalk offers in-depth conversations and learning with the world's top business and technology executives. Check out our extensive and free video library. Disclosure: I have done business with SAP for many years, but SAP did not pay for this article.
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