Everyday Influence

Leadership: Making the Tough Decisions

Business leaders and managers at all levels are faced with making 'tough' decisions on a regular basis.  This is especially true in today's economic environment.

I have always been fascinated by the process that leaders (both good and bad) go though in making the ‘tough call.’

As an example, I have worked with some leaders who base their decisions on raw emotion (usually the bad leaders); others are gifted with great insight (based on experience) and let intuition be their guide; others base decisions purely on facts; and most good leaders that I have worked with make decisions based on a combination of facts and intuition.

In today's economic environment, there are very few historical precedents or experiences that can fully support a decision that many business leaders are faced with.  There are certainly good lessons that can be derived from history, but very few business and political leaders today have first hand experience in leading through the type of environment that we are in today. 

What about the facts?  Given the rapid and constant change we have experienced over the past four months, many facts become outdated as quickly as they are presented. 

So what to do?

Below are three basic steps that I have come to appreciate as I have grown in my professional career.  These are derived from both my own experiences and from working with great leaders over the years.

1. First, it is important to understand the 'core issue' associated with the business challenge that you are dealing with and gather as many facts and insights surrounding the issue as possible.   At this stage in the process, it is important to separate ‘facts’ from ‘opinions.’ 

As a leader, you are often presented with 'facts' that are presented to support a specific argument or point of view - which by default make them adverse.  This is not to say that these adverse or 'position-based' facts are not valid, but they seldom represent a fully informed view of the core issue that needs to be addressed.

2. Second, it is important to look at your decision options from all angles and perspectives.   Many tough business decisions will have a broad affect on your business which might include: brand; reputation; relationships with employees, customers, partners, governments, etc.   It is very common to overlook the total impact that a tough decision will have on your business.  This is why it is important to consider many options – as you weigh the impact and trade-offs that most important decisions will require. 

As a leader, this is where intuition and experience play a big role. 

3. Third, it is important to ask a lot of questions.  This will help you to understand the options on the table as you make sense of the facts and sift through potential agendas/motives of people involved.  Asking the right questions also helps you to measure the risk and impact that your decision will have on your business and with key relationships. 

You may even consider speaking with trusted representatives from affected internal or external groups (customers, employees, partners, etc.) to get their perspective.  This interaction will also help secure support and buy-in (by all parties) of your final decision once you are ready to communicate.

The ‘tougher’ the decision the more challenges you can expect to face as you communicate and implement.  You will need to be prepared to help affected parties understand the rationale behind the decision and even share some of the alternatives considered and why you chose a different path. 

These are three ‘basic’ steps that I have found to be helpful in making good and informed decisions.

If all else fails, you can always resort to the good ole’ fashioned coin toss!

Additionally, here is a link to a great paper that I recently found called MAKING TOUGH CHOICES: A SIX STEP PLAN FOR MAKING TOUGH BUSINESS DECISIONS authored by Phil Thompson a business lawyer in Canada.  This paper outlines a good and complimentary blueprint for decision making with a bit more detail and additional perspective.

SAP University Alliances – A Standard for Experience-Based Community Design

Today SAP announced the launch of the SAP University Alliances community.  I am honored to have responsibility for the University Alliances program as part of the larger Industry and Influencer Relations organization, at SAP.

 

The newly launched SAP University Alliances community is an advanced portal (hosted on the SAP community network) designed for the academic population worldwide (faculty and students) to access the latest academic resources that bring real-life SAP knowledge and skills into university classrooms. It provides a forum for SAP to deliver higher education content supplied by SAP and community participants, including interactive academic resources, such as course lectures, case studies, exercises, demonstrations and videos; thought leadership forums; and community blogs. The community is designed to facilitate faculty and student collaboration and contribution, job posting and search, as well as networking with SAP customers and partners. Skills development and career opportunities for university students, professors and other community participants are the central focus of the site.

 

Through this effort, SAP University Alliances member faculty and students now have the ability to collaborate and interact with an active group of 1.5 million SAP customers, partners and employees that make up the larger SAP community network.

 

The new community is a central component of the long-standing SAP University Alliances program that today works with nearly 900 member campuses in more than 40 countries supported by 3,500+ professors and university faculty who provide 185,000+ students first-hand experience with SAP software each year.  Our goal with this community is to dramatically increase the number of universities that participate in the University Alliances program to bring 1,000,000+ students into the greater SAP ecosystem over the next three years.

 

The announcement today represents a great milestone not only for SAP University Alliances but also for SAP’s Industry and Influencer Relations program, as a whole.  As I discussed in a blog post last year (The Evolution of Industry and Influencer Relations at SAP – Part Two), universities play a unique and important role in the global economy and represent perhaps the most strategic component of the larger Industry and Influencer program design.

 

Today’s announcement is the result of tremendous effort and milestone that will benefit not only SAP but also our larger and very much valued ecosystem of customers and partners!

Customer Loyalty in a New Economy

Companies around the world have been working very hard to adapt their businesses to a new market reality that has quickly taken shape over the past four months.  The impact of the recession and the abrupt changes in the economy are forcing companies to streamline their operations to manage cost and control cash.  At the same time there is increased pressure to accelerate sales and revenue through new and redesigned products and services - supported by highly competitive pricing and discount scenarios.   Surrounding all this is the consumer. Companies are fighting to retain and extend relationships with their most loyal customers - where in many cases they derive 80% or more of their revenue from.  It is a struggle on all fronts.

 

Given that I am among the many affected by the economic storm - I have been thinking a lot about the consumer challenge.

 

Current economic factors have reduced ‘wallet size’ for many consumers (corporate and individual) forcing trade-offs when it comes to how and where they spend their precious dollars.  This has disrupted the business models of many companies that manage their businesses based on predictable buying behaviors derived from historical demographic models and customer profiles.  In today’s economic environment, all rules have changed as consumers are defining new criteria when it comes to their views on ‘must haves’, ‘nice to haves’ and ‘can do withouts.’

 

As a personal example, I get my hair cut every 5-6 weeks and have been loyal to the same stylist for the past four years.  Her rates have nearly doubled in the last year and although I can’t do without a haircut on a regular basis – I am faced with a conflict of loyalty vs. a new sensibility in how I spend my money and the value that I receive in return.  After all, it is just a haircut, right?  Now I guess I could go longer without a haircut and see the same stylists (just less often) but vanity and a crazy calic suggests that would not be a good thing.  So I am making a trade-off on loyalty - and will start seeing a new and less expensive stylist.

 

Another personal example is how often my wife and I frequent our favorite restaurants and how often we use other services (gardening, house cleaning, etc.).  In these cases, we have decided to maintain loyalty to our favorite restaurants and service providers BUT have cut our number of visits and frequency of service.  This means loyalty wins…but they still get less share of our wallet (for the time being).

What I am experiencing as a consumer is a shift in priorities that will indefinitely affect my status as part of a ‘purchasing demographic’ that eight months ago would have suggested different behaviors.  Nothing has changed in our month-to-month financial situation (knock on wood).  However the conditions in the market around us and the ‘hit’ to our long-term financial plan (retirement and investments) require short-term changes to compensate for.

In times like this, many products and services are rapidly commoditized as competition drives down price in a world where there is an abundance of choice.  In some cases even loyalty (a primary virtue of customer relationship management) can become a commodity.  As a business, if you operate in a world where you have no price-to-value differentiation and you are loosing loyal customers - chances are good that you have become commoditized!

 

Now back to me.  Is there anything that the businesses that I have been loyal to for so long can do to affect my new purchasing sensibilities?  Sure.

 

It’s all about the fundamentals, baby!  In order to secure my loyalty in the first place, you need to establish trust and value in the quality, consistency, and reliability of your service/products.  Pretty basic, huh? With high trust and value I will continue to spend money on products and services and in some cases spend even more money to support the health of your business.

 

It is completely understandable that businesses must also make trade-offs as they manage their costs.  As long as those tradeoff’s don’t compromise the quality, consistency and reliability that I have grown accustomed to, I will remain a loyal customer.

 

This requires that businesses establish relationships with their customer(s) and understand what is important to them (as a loyal customers) so when trade-offs need to be made (to operations, service, materials/ingredients, price, etc.) the boundaries of trust and value in the social contract that made them loyal in the first place – are not tested.  It also requires good communication and engagement.  Show appreciation and empathy.  As an example, the manager and head chef of our favorite restaurant visits with their patrons twice a night to hello, thank them for the business and sometimes offer a free desert or a drink.

 

Every consumer has basic needs that can be addressed by any number of vendors and services providers.  Maintaining customer loyalty may be the most important thing to surviving this current economic storm.

 

The Society for New Communications Research Recognizes SAP’s Industry and Influencer Relations Program with an Award of Excellence!

I just returned from a quick trip to Botson where I attended the 3rd Annual Society for New Communications Research Symposium & Awards Gala to receive an award of excellence, recognizing the success of the Industry and Influencer Relations program at SAP!

The Society for New Communications Research or SNCR (www.sncr.org) is a leading global nonprofit think tank dedicated to the advanced study of new media and communications tools, technologies and emerging modes of communication, and their effect on traditional communications, business, culture and society.  The membership of SNCR includes the industry’s top practitioners (corporate and nonprofit) and thought leaders in communication research, design and execution.

On behalf of each and every valued member of the Industry and Influencer organization at SAP that I have the opportunity to lead, I want to thank SNCR for the great recognition and for the opportunity to showcase our program and share our experiences with peers and colleagues in the industry.

I encourage all communication professionals to visit SNCR’s website at www.sncr.org to access and contribute to their research and thought leadership. They are contributing greatly to advance the education, design and best practices associated with new communication in the industry.  Membership is affordable and the access is priceless!

In preparation for the awards ceremony I was asked to share a few insights or lessons learned about how communications programs need to change given emerging new channels and blurred boundaries betweens the many roles influencers play today.

Two insights that I identified to be most relevant are as follows:

1. The first is to design your communication and influence programs with a business purpose in mind.

Given the current conditions in the marketplace it is more important than ever before to understand the objectives and business challenges that your company is facing.  How has the competitive landscape changed? What are the opportunities or adjustments that your company is making to become more competitive (e.g. delivery of new products/services; entrance into new markets; etc.)? What issues or trends are affecting the industry and how can your company advance or influence them in an effort to support larger business objectives?

With an understanding of these fundamental issues you can more cleanly identify the right influencers (thought leaders, industry experts, or communities) to engage to collaboratively advance a larger market agenda to support your business and external stakeholder groups.

2. The second deals with managing the sense of ‘loss of control’ when communicating in a Web 2.0 world.

The reality is, if you want to control your message these days, you should advertise.  What is unnerving for many marketing and communication professionals about managing influence in a Web 2.0 world is that social media forces you to play by what I call ‘crowd rules.’ And crowd rules dictate a fair level of transparency, authenticity, agility, honesty [you can continue to fill in the blank] but most important crowd rules require you to LISTEN.  No longer are the ‘house rules’ of marketing and communications effective where you can create a message or position and expect it to automatically resonate or stick in the market.

If we look at Word of Mouth (WoM) as an example.  In the old model of WoM, if a customer has a good or bad experience with your company’s product or service, they might share the experience with a neighbor, friend or colleague at work. In this old model of WoM the collective community experience with your brand would eventually create a community reality in a viral fashion over a ‘period’ of time.

The affects of this in a Web 2.0 world are much different.

In a Web 2.0 world if ‘a’ customer has a bad experience with your company’s product or service and they share that experience in a blog or other form of social media (like Twitter) this experience can reach hundreds, thousands or millions of people overnight – around the world.  This can cause great brand destruction and turmoil if you are not prepared to address it.

Now, even in ‘crowd rules’ not everyone expects a company to be infallible.  You just have to listen.

If you have good sensory awareness and respond to negative issues quickly - if for nothing else than to show corporate humility - and engage with a negative blogger or disgruntled customer/community to understand the issues, you can quickly turn an adverse situation into great opportunity by 1. Fixing the product and service issues that can help to advance greater business opportunities and 2. You have the opportunity to turn a negative blogger or customer into a net promoter – which is the greatest form of advocacy/influence you can hope for.

Social media changes the rules of the game in an era of new marketing and new communications, by forcing companies to be more accountable.  I personally think that this is a great thing.

If you understand and learn to work within the crowd rules of Web 2.0 in an authentic and agile way, you will increase your company’s brand value and overall experience in the industry.

I would like to thank SNCR again for the great recognition!

Marketing and Communication Opportunities – in a Period of Recession

I have received several emails from colleagues and peers in the industry wondering ‘why I have been dark’ on my blog for the past two months.

 

Like many marketing and communications professionals I have been heads down in business - making adjustments to programs and activities for the remainder of 2008 and planning for 2009.

 

To say the least, the affects of the financial crises and daunting uncertainty across global markets has put significant pressure on companies to aggressively manage both the bottom line (expenses and operational budgets) and top line growth (sales and revenue generation).  This intensive thrust to ‘back to basics’ management impacts all departments and organizations.  Managers are required to make adjustments to their operations to become laser focused and efficient AND deliver more value and results (and some cases - much more) with less resources (and in some cases - much less).

 

These circumstances pose a number of challenges for many marketing and communications professionals to adapt to.

 

I personally have an optimistic view of the situation.  Looking back at history, the market goes through a correction once every 10-15 years (e.g. recession in the late 80s; and the dot.com bubble bust in 2001).  Our current situation is definitely the worst ‘correction’ in several decades, but nonetheless a correction it is.

 

Although tough and challenging to go through, what history shows is that numerous product, service and technology innovations tend to emerge out of each market correction or crisis.  All of which fuel new business models and market and career opportunities.  These innovations come (in part) through a flushing of inefficiencies, consolidation of ‘players/companies,’ and a refocus on creating and providing more value. The companies that plan and adapt appropriately will be the big winners (both old and new companies).

 

As a communications executive, I see this as a great opportunity.  The power of thought leadership, relationships and collaborative industry influence that largely extends from programs driven by communications departments is a great ‘currency’ that gains tremendous value in any economic recession or down turn.  As communication practitioners, our role in helping to guide the market renewal process is critical.

 

What do I mean?

 

The results delivered through well structured communication and influence programs do not require huge budgets or mega teams to drive.

 

The effects of positive ‘unpaid media,’ external thought leadership and word-of-mouth and advocacy programs delivered through successful press, analyst, blogger, customer, employee, community and other influencer relations programs costs very little to execute AND generates very high returns for your company.  The benefits can be realized through the advancement of your company’s competitive position; positive reputation management; validation of new market/business opportunities; and 3rd party education, thought leadership and best practices that increase visibility and confidence that your business is a valuable and smart investment (for shareholders, customers, partners and employees).

 

Further to this, the use of existing technologies and social media strategies (among other things) offer marketing and communication professionals a tremendous and low cost way to disseminate messages with great scale and build awareness and maintain relationships with influencers (internal and external) in an increasingly global and dynamic business environment.

 

I believe that 2009 will bring a number of significant and positive changes to the marketing and communication profession.  I predict that we will see greater adoption and more innovative use of social media; new designs of communication and marketing organizations that adapt to a new influence ecosystem; more focus on customer and ‘community’ engagement; new metrics and measurement designs; and increased ‘insight’ programs to support corporate decision making.  These changes will contribute to a much needed renewal of marketing and communications that will help to evolve our profession to become more strategic, vibrant and valued across all industry sectors and geographies.

 

I encourage all of my industry peers and colleagues to take advantage of this opportunity with an optimistic outlook.  Challenge yourselves to better understand your business and industry environment. 

 

Look for new opportunities to provide value. Understand how to better use the ‘process’ of communications and the power of relationships to advance your company’s position in the industry and drive positive awareness, thought leadership and confidence back into the market!  And lastly - be bold, be proactive, and be proud!!!

Office 2.0 Conference: Who Should Own Communities?

I have the distinct pleasure to participate in a panel discussion at the upcoming Office 2.0 Conference - September 3-5 in San Francisco. 

 

The topic of the panel discussion is “Online Community:  Who Should Own It” and will take place on Thursday, September 4 from 11:30AM to 12:15PM.

 

Robin Carey, CEO and Co-Founder of Social Media today will moderate the panel which will include Robert Duffy (Intel), Ross Mayfield (Socialtext), Mark Woollen (Oracle), and me.

 

The question of who should ‘own’ online communities (within the corporation) is a very interesting and loaded question.  I suspect that we will hear some great perspectives and experiences on the issue from the panel that will suggest that ownership is not necessarily a zero-sum scenario (in this case).

 

One of the exciting things about Social Media is that it gives everyone a stake in the game and makes the idea of communities relevant and invaluable to all audiences.  The real challenge is breaking through departmental politics and barriers (within the corporation) to find ways to collaborate on community initiatives where there is shared ownership and success.

 

Here is a description of the session:  “Online communities have become a cornerstone of any corporation's strategy, changing the way it does marketing, customer support, or even product development. This panel will address some of the social, political, legal, and technical challenges of developing and managing large online communities.”

 

I would love to get your perspective on this topic. 

The Authentic Enterprise

I was recently introduced to a whitepaper published by the Arthur W. Page Society called The Authentic Enterprise.  The Arthur W. Page Society is a professional association for senior public relations and corporate communications executives who seek to enrich and strengthen their profession.

The membership of the Page Society consists primarily of chief communications officers of Fortune 500 corporations, the CEOs of the world's largest public relations agencies, and leading academics from the top business and communications schools in the United States who have distinguished themselves teaching corporate communications.

The Authentic Enterprise white paper was published to promote thought leadership and education about challenges and issues that increased transparency bring to managing trust and reputation within the corporation. The paper also looks to define the role and mandate of the communication function and the Chief Communication Officer (CCO) to manage such challenges.

The white paper does a good job articulating a basic and largely realized view of communication challenges today - but falls short of providing a complete perspective that can be used to advance the agenda and the role of communication departments in corporations over the months and years to come.  

 

I assert that ‘authenticity’ is an absolute requisite part of any communication mandate that must be managed BUT in hyper competitive markets (pick one) fueled by a global recession (impacting communication budgets) - authenticity does not pay the bills.  

 

Every communication professional is a steward of brand and reputation, no doubt.  However, the key challenge for communication leaders today is to deliver against increasing pressure to solve bigger problems for our companies.  In the spirit of authenticity, these problems may be associated with managing risk, compliance and transparency, but more times than not it is about helping the company to grow leadership, accelerate sales and increase competitive advantage in our respective markets.  

 

Government regulation of business practices, globalization and democratization of information have certainly made the challenge of managing authenticity more complex, but not to the extent where managing authenticity should be the overriding mandate of the communication department - as the white paper suggests.

 

Much has changed but many things remain the same.

 

In my 14 year career as a communications professional, I have seen marginal advancement in the design and execution of the corporate communication function.

 

Many communication departments today still fight the perception of being mostly associated with the production of press releases and success of the department is determined by the effectiveness of media relations.  This is despite the many other critical areas supported by most communication departments, such as internal communications, analyst relations, investor relations and government relations - to name a few.

 

Business is about people and relationships. 

 

The internal and external audiences that many communication departments are tasked to manage have increased with dramatic scope over the last few years.  Since the rise of the Internet we have gone from the luxury of being able to manage one-to-one relationships with a handful of the ‘most important’ editors, analysts and policy makers, to having to manage relationships with numerous communities, social networks, and crowds of citizen journalists and industry experts of all sorts – which are now starting to blur between internal and external audiences, thanks to Web 2.0 tools.

 

The challenges have grown to be quite phenomenal and formidable for communication departments to manage, indeed.  However, to say that we have lost control (as the white paper suggests) is a cope out.  Communications departments and professionals must adapt to new audience engagement models, practices, technologies, communication tactics, and organizational designs.

 

The industry relationship management component of the communication charter distinguishes the function from all others.

 

Communication professionals (perhaps more than any other function) are best positioned to support a company’s strategic needs in an increasingly transparent and competitive world, based on our innate ability to cultivate positive perceptions and experiences for our company’s products, services, brands, and leadership personalities. 

 

Among other things, the key to managing the scale and unique demands of a growing and dynamic audience (internal and external) requires that we adapt to more interactive programs and strategies that allow for the exchange of ‘insights’ and facilitation of ‘conversations’ that influence both our targeted audiences and the corporation. 

 

Done well, this will improve the valuation of the communication function as we reach and influence vast audiences of shareholders, policy makers, customers, partners, journalists, analysts, and employees in impressive and highly scaleable fashion.   At SAP, the communication department manages relationships with external audiences that have a $54B impact (against a $75B market opportunity) on purchase decisions for business software, annually.  Put into this perspective, the opportunity is ripe and table is perfectly set for communications teams to use the ‘advantage of relationships’ to support company growth (sales and market share) and to advance the competitive position for our companies.

 

The white paper is indeed good work by the Page Society as it provides a level-set of important issues that need to be part of every communications management agenda in today’s world.  However, we must remember that modern day communications (as it has evolved from the innovations of Edward Bernays and Ivy Lee in the early 19^th century) helped to advance companies through the industrial revolution in ways that helped to establish new market opportunities and changed the way in which business was done - well before modern day marketing came to exist.

 

As we enter a sea change among industries, the chief communication officer must play a more prominent role in supporting business growth and market advancement.  If not, the communication function will be marginalized by the ‘business driven’ prowess of marketing and other corporate functions and initiatives.

 

Perhaps the ‘next chapter’ of the Authentic Enterprise series might focus on the Advancement of the Authentic Enterprise, providing tangible examples, practical strategies and tactics to help communication professionals at companies of all size, scope and geography be more competitive and strategic in their roles.

Analyst and Influencer Engagement Cycle

When I assumed responsibility for running the analyst relations program at SAP in 2004 I spent a lot of time with the team to define a framework to design and position the use of analyst and IT influencer engagement in corporate strategy and go-to-market activities. One outcome of this exercise was a simple AR engagement cycle that we used to 'plot' and 'plan' analyst engagements relative to corporate and product initiatives.

The framework is based on an engagement cycle that spans from strategic to tactical execution. We found it extremely helpful in educating senior executives and business and product stake holders on how and at what point in our product development and go-to-market activities to engage with analysts and other industry influencers.

I would like to share this with you as a best practice that helped us greatly to position analyst relations (now IT Influencer Relations) at SAP as a strategic component of planning and execution.  I am certain that there are more sophisticated frameworks out there.  Perhaps readers will share their experiences and models of engagement.

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase I: Early Internal Alignment and Planning (3-6 months before market rollout)

•       What is it? (Identify specific product and corporate strategy/initiative)

•        Market opportunity

•        Competitive position

•        Implications to existing corporate and product strategies

•        Critical success factors

Phase II: Analyst and Influencer Strategy Development (3-6 months before market rollout

•        Strategic and tactical AR planning (engagement strategy)

•       Analyst and influencer identification (firm and individual)

•       Perception audit

•       Influencer ranking and engagement strategy/plan development

•       Internal stakeholder alignment on influencer program goals (define key performance indicators)

•       Secure executive sponsor and buy-in (commitment of time and budget)

Phase III: Strategic Analyst and Influencer Engagements (2-4 months before market rollout)

•        Influencer validation and alignment (with shortlist of key influencers)

•       Market opportunity and challenges

•       Strategy validation

•       Message and competitive positioning

•       Success factors

•       Key outcome: Influence opinions, research agendas and influencer metrics for success

Phase IV: Broad Analyst and Influencer Education (at time of market roll-out)

•       Syndication of Message

•       Additional analyst and influencer outreach and education (2^nd and n-tier influencers)

•       Sales and Marketing support (promote pre-aligned influencers as 3^rd party experts and supporters – from Phase III)

•       Showcase company of product proof points (promote reference customers and partners, and product execution)

Phase V: Program Maintenance (1-9 months after market roll-out)

•        Continued delivery of proof points (customer, product and partner) 

•        Ongoing briefings (less need for strategic alignment)

•        Continued market education

Stanford Entrepreneurial Series

 Over the last year, I have amassed a great source of business, marketing and leadership podcasts that 
 I listen to on a regular basis which I have found to be extremely helpful in stimulating ideas, provoking 
 thought and grounding me on core principles of marketing and business management. I would like to share 
 one podcast that I have found to be among the best. It is produced by Stanford University and is called 
 the Entrepreneurial Thought Leaders Lecture Series.

 On a weekly basis during the spring, fall, winter and summer semesters, Stanford brings in some of 
 their most famous alumni and successful business men and women across a variety of industry segments
 (technology, media,banking/finance, venture capital, bio tech, etc.) to speak to students in entrepreneurial
 studies on their experiences in building and leading companies, in some cases from 'idea' to muti million 
 and billion dollar companies. Yahoo, Google, HP are a few of the highlighted companies. 

 
 The podcast is about an hour long and consists of a 30-45 min presentation by the guest speaker (extremely
 easy to follow via audio) and ends with open Q&A with the live audience. 

 
 Some of my best ideas (influence relations, leadership, and business development) have been stimulated 
 by the stories and experiences of the sage business leaders. I highly recommend to anyone with interest in
 business and entrepreneurship to subscribe to this podcast. You can find information about it at 
 Entrepreneurial Thought Leaders Lecture Series.

 

Voice of the Decision Maker: Influencer Ranking

During the design phase of the Industry and Influencer Relations (IIR) program at SAP (in 2006) we conducted extensive research to understand who the decision makers are in our market when it comes to purchasing business software and more importantly who influences these decision makers.  It was a six month project that returned some very interesting results that supported the decisions made in designing the IIR program and team structure.

I would like to share a nugget of information gathered from our research - based on results for the U.S. market.

The charts below illustrate a ranking of the most important influence channels in four distinct views.  The first column outlines an aggregate ranking (based on 500+ responses) of the most important sources of influence - in priority order. The other three columns provide rankings relative to importance by company size (small, medium, large). In the survey, we asked the respondents (qualified decision makers) the following question: “How influential are the following outside sources of information on your business software decisions / recommendations?”

In comparing the rankings by company size, there are a number of very interesting observations to be made.  To no surprise, the experience, counsel and word-of-mouth of one’s industry peers/colleagues rank among the highest source of influence – across company size. The interesting conclusions come when you analyze the separations in the rakings between the groups of 5-10 and 10-15. Below are high-level observations:

• Small and mid market decision makers rank industry analysts and analyst executive programs much lower level than the large market.
  • Observation: No real surprise here as the business and engagement models of most analyst firms do not cater to the needs and budget constraints of small and most mid-sized companies.
• Mid market decision makers rank press (Tech, Job Function, Gen’l Bus.), business software vendor partners & board of directors, higher in influence.
  • Observation:  One conclusion could be that most mid market companies have ‘just enough’ experience and sophistication with business software that the quality of information and insight reported by the media about industry trends, vendor reputation and best practice provide decision makers enough information to form opinions that require less dependency on 1:1 interaction with 3^rd party experts – such as industry analysts.
• Small companies rank most forms of publications (tech/business press, books, etc.) as low on influence, indicating a much higher level of trust to consultants, peers, and software vendors.
  • Observation: Small business owners either don’t have the time to read or the issues relevant to them (related to business software) are not adequately being represented by media (maybe too high-level or not representative of core issues) so they rely more on peers, consultants and other trusted advisors for insights.
• Blogs were ranked lowest for all decision makers (at the time of the research)
  • Observation: I suspect that this may have changed in the last 18 months as more consultants and industry experts have adopted the use of blogs to syndicate their research and insights to fuel their consulting business models.

You can draw additional conclusions from these rankings.  We plan to update the research later this year to track and analyze trends and changes. I suspect that most of the changes will be in the lower half of the rankings, however.

The comparison of the U.S. findings against emerging/growth markets such as China, India, Brazil, Japan, and Russia are very interesting.  Each of the above mentioned countries have very distinct ‘influence ecosystems’ affected by the importance of relationships, culture and politics.  For global or multinational companies doing business in these countries, it is critical not to over or underestimate the cultural and sociopolitical factors when establishing influencer strategies and programs.