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What surveyors don’t tell you

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The first amendment to the U.S. Constitution begins, “Congress shall make no law.” There are those who think the framers should have stopped right there.

Not me. I especially value the part that says, “Congress shall make no law … abridging the freedom of speech.”

But then there’s the missing part – the part advice givers everywhere should adopt. The part that would read, “If you don’t have anything useful to say, refrain from saying it.”

The part our friends at Gartner should pay more attention to. As evidence, I offer this headline and the content that followed it: 72% of High Tech Leaders Expect to Grow Revenue in 2023, Despite Economic Uncertainty.

How might these high-tech leaders go about it? Through relevance. The press release actually said this: “Lower relevance reduces willingness to pay.”

Now let me get this straight: People are less likely to buy products and services that are less relevant to what they need?

No s***, Sherlock.

This pearl of wisdom was, inevitably, accompanied by the results of a survey – the pundits go-to for putting a gloss of faux authority on their otherwise useless conclusions. Strangely, the survey’s conclusion was that the companies in question are focusing on cost-cutting, not revenue generation. I say “strangely” because while the story’s headline was about growing revenue, none of the reported survey questions asked respondents about the revenue-enhancing strategies and tactics they’re pursuing.

Presumably, that’s because no high-tech leader had come up with any growth-oriented strategies or tactics until Gartner explained the value of relevance to them.

Even ignoring this lapse and taking the cost-cutting measures at face value, the main conclusion we should draw is that many high-tech leaders haven’t yet picked up the digital clue phone. As evidence, here’s a sampling of the most important cost-cutting measures these industry-leading firms have been taking:

Slowing down hiring for new positions: More than half the companies surveyed are doing this. For the most part it’s a money-losing proposition. If the open position will, when filled, have a positive return on investment, filling it earlier is more profitable than delaying. If it doesn’t have a positive return, don’t fill it at all. Delaying new hires yields the worst of both worlds.

Implementing spending cuts across the board: More than half of the responding companies are doing this, ignoring the popular analogy that they’re acting like surgeons equipped, not with scalpels, but with machetes.

Reducing marketing spends or programs: If your ad agency isn’t helping increase sales, by all means switch agencies. If you think marketing spends and programs don’t end up increasing sales, the CEO should replace the chief marketing officer, because … well, duh.

Reduced investments on products or services: Why anyone would think investing less in improving what you have to sell will help you sell more of it is … let’s just agree that the connection isn’t even tenuous. It’s non-existent.

At least none of the respondents said their companies were shrinking the sales force.

Why should a CIO care?

Back in the industrial age of information technology, when cost-cutting wore the business-strategy crown, as CIO you wouldn’t care about these absurdities at all. IT’s job was to help the business cut costs. Period, end of discussion, don’t argue.

But digital-as-a-noun has (supposedly) supplanted industrialism as the business’s strategic centerpiece – not only among technology leaders, but in most companies that are paying attention, including yours. And as CIO you’re at the epicenter of turning digital intentions into digital reality.

And digital strategy is, or at least should be, laser-focused on increasing revenue by achieving competitive advantage. In a digital world, cost cutting takes a backseat to making the smartest products and services on the block while providing customers with a superior experience whenever they interact with any part of the enterprise.

Bob’s last word: Did I write backseat? Go further. To the extent cost cutting survives as a business tactic, it should, in the land of digital, result in reducing the price the company charges for its products and services, thereby making them more attractive. Or, the company might figure out ways to re-invest the savings in ways that provide some other competitive advantage.

Bob’s sales pitch: There are weeks I’m not sure what I should write about. To an extent, it’s due to the dissonance between the roles of consultant vs commentator: commentators disseminate answers, while the consultant’s job is to ask the most pertinent questions.

Regardless, if you have questions you’d like me to write about, I won’t view it as an imposition.

Quite the opposite, you’d be doing me a favor.

Now available on CIO.com’s CIO Survival Guide:4 hard truths of multivendor outsourcing.” If you’re managing more than one or two outsourcers and your aspirin bottle is running low, you might find its advice handy.

Comments (15)

  • Most progressive leaders understand that they don’t generate revenue, it is the employees of the company that create products, generate sales, provide customer service, etc. However, the leaders of most corporations still think that they deserve the “big bucks” based on the revenue that is generated. What a farce!

  • Reminds me of a response to a Small Business Innovative Research grant that said to sex day old baby chicks you needed to know where to look and what to look for. And it only cost $500,000 back in the ’80s.

  • I think you need to consider why is the company in need of cutting costs. Often it is related to cash flow getting interrupted for some reason, perhaps a recession, a pandemic, or a sudden change in the business cycle. If you don’t have the cash, and your credit lines are maxed out, you can’t spend money that you don’t have.

    Consider you have just lost your job, and your paycheck is now unemployment instead of your regular salary. You have to cut your spending somewhere, and none of the choices are good ones.

    • I agree with your point when the issue is crisis management. The survey was purported to be about companies healthy enough that they’re planning and expecting to grow revenue. That’s rarely the case for companies that are in crisis management mode.

  • Here’s a question for you. How do you know when it’s time to retire? Gracefully, or otherwise?

    One of your rivals, Gerry Weinberg, wrote that knowing when to retire gracefully is the ultimate act of the professional.

    • Are you hinting that maybe it’s time?

      Just my opinion: It’s time to retire when you don’t like what you’re doing with your time and can envision something you’d enjoy more.

      • Sounds like a good response! I would just add that your finances should be sufficient, too. I got discouraged enough to contemplate it last fall and at least check the numbers, but I knew that the situation was temporary (it’s back to normal now) and, no, the numbers aren’t quite there yet. Another five years, I think, for me.

  • Cost information is something a business can easily identify and measure. (If it’s not . . .) The short term effects of cost cutting can also be reliably determined: you spend less money. Emphasis and reliance on the information that is most easily available is identified as a systematic distortion by experts in cognitive mechanics. In business, it’s considered to be common wisdom, not a bias.

  • Great article! Only issue with this is that you hit one of my pet peeves with “People are less likely to buy products and services that are less relevant to what they need?” Services ARE products! Definition of a product is a good, service, or idea. 🙂

    • Dr. Yeahbut says, yes, I agree, and I often find myself having to explain that in many situations a service is a product.

      But then, there’s the other side of the situation, in which “services” are forms of product support for which there’s no payment charged or expected – the cost is built into the product price.

      So to disambiguate the situation I use “products and services” as a blanket phrase for everything a company gets paid for, whether directly or indirectly.

      • Would “goods and services” please both of you?

      • I’m not sure it’s all that different from “products and services,” is it?

      • I don’t see a Reply button next to Scott Marley’s reply below, so clicked this one instead.

        Yes, I personally would use “products” or “goods and services.”

      • Regarding ‘services” are forms of product support for which there’s no payment charged or expected – the cost is built into the product price.’ — then it’s both — a good and a service, which equals the “full” product. 🙂

  • Cum se cum sa, tomatoe – tomato, in a product/service based world maybe the powers that be should survey their customers’ and trust that data to lead them into the upper right quadrant of what is wanted or needed, versus trusting the reporting firms that just have skin in the report selling game. Maybe they should concentrate on the delivery of their “product”, and prepare for the instant when something goes wrong, and it always will (Thanks Murphy); and as a non-negotiable process, have someone who owns the solution, delivers it, and does it with compassion and enthusiasm, by contacting the customer in-person. IMHO:

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