All Posts by Bob Lewis

|In: Industry Commentary|Last Updated:

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

|In: Strategy and Tactics|Last Updated:

For all its ambiguity and grammatical misclassification, “digital” as a noun … or “Digital” as a proper noun … has proven more durable than most of the management fads that preceded it.

It isn’t that digital businesses out-perform non-Digital (Analog?) competitors. The fact of the matter is, the definition of “Digital business” varies by commentator, while the definition of “successful Digital business strategy” often fails even such well known logical requirements as not equating correlation and causation.

Speaking of logical analysis, the situation is far worse than even that. As evidence:

According to the definitive source of such things, the Standish Group reports that only about 30 percent of all software projects are successful.

Meanwhile, the often-IT-illiterate Harvard Business Review reports that 70 to 95 percent of all digital transformations fail. Take into account that transformations of any kind are achieved with strategic programs, which in turn are composed of tactical initiatives, which in their turn are accomplished by the collective success of the multiple projects they charter, and you’ll conclude that Digital failures are an example of Sturgeon’s Law: 70 percent of Digital transformations fail because 70 percent of everything a company tries fails.

What’s made Digital as business strategy so durable is (in my awesomely humble opinion) that it has legitimized the pursuit of revenue as a strategic objective, making it more desirable than cutting costs. And, it is rooted in the proposition that information technology can provide a powerful path to more, and more profitable revenue.

In addition, Digital, along with IT’s successful employee-virtualization-response to COVID-19, turned the executive suite’s perception of IT from “where projects go to die,” to “the most important business function in the enterprise.”

Another factor in Digital’s executive suite staying power wasn’t something anyone would have predicted a decade or so ago: Unlike previous IT-driven requests for capital investment, by the time “digital” had acquired its capital D and had been turned into a noun, business executives had adopted Blackberries and loved them, right until they discarded them for smartphones accompanied by a wide variety of handy apps.

Add to that their unavoidable experience shopping for merchandise on Amazon.com and, for many, shopping for Kindle books there too, and strategy discussions didn’t have to start with “here’s what a smart product is” explained to skeptical executives reacting with thousand-yard stares. They started with “how can we make our products and services smarter?”

Bob’s last word: Some 60+ years ago, in his revolutionary Stranger in a Strange Land, Robert Heinlein introduced us all to the word “grok,” meaning to understand something deep in one’s kishkes (I’m paraphrasing).

Last week I wrote about ROI and its flaws, concluding that ROI’s utility is limited when it comes to writing successful project proposals, not to mention evaluating them.

At the same time, what’s been badly underemphasized when it hasn’t been ignored completely is how important it is to write proposals your company executives and governance councils can grok.

That’s because having to convince someone of something they already grok is a lot like having to persuade them that the tall green thing they’re looking at through their window is a tree.

Bob’s sales pitch: Looking for someone to keynote an event? After publishing a dozen or so books and some 1,800 or so columns, it’s safe to say I have a strongly held opinion about just about any subject you can name.

I’ll be happy to share a few of them from your podium.

Think of it this way: You’ll be choosing someone to give the keynote. Why not yours truly?

Now on CIO.com’s CIO Survival Guide: “Why IT communications fail to communicate.” The point? Our tendency to use documentation to communicate, instead of recognizing that its role is to remind everyone of what they’ve already communicated.

Comments