Monday, November 26, 2012

Hierarchical selling or Stop Selling part 3

The number of people who associated with the behaviours I wrote about in StopSelling part 2 brought home the realisation that the nemesis is a lot more widespread than I thought. Even more interesting part is the longevity of the issue; few readers reminisced their younger days ranging from a few years to a few decades when they behaved like that. It would appear that learning on selling IT has not evolved in the last few decades while the roles of the buyers have.

Every encounter in recent times across multiple vendors selling diverse range of products and services demonstrates consistency. In a competitive industry where decisions are not just based on price but also on quality of service or product, the difficulty faced by the decision makers and the CIO is to give a clear and unambiguous decision. Vendors need to learn to accept clear communication and respect the decisions conveyed to them. Eons back having spent some time in sales, I know it is difficult to accept a loss of sale.

When you have spent a long time in the decision making role, relationships between CIOs and Tech Company CEOs are formed. These are leveraged on both sides in difficult times and also to pitch for a good deal or going beyond the contractual obligations. The alignment of objectives creates win-win situations and builds healthy respect between individuals and companies. Conflict arises when multiple relationships vie for the same business and their attempt to leverage this with the team and the CIO.

In Business-to-business engagements, hierarchical selling is practiced by every company. Engagements start with Account Managers talking to IT teams defining the solution, the discussion progresses to involve layers upward until the CIO and someone senior (VP, SVP, BU Head, CEO) agree and sign off endorsing the deal. Companies that do not get the deal make desperate and largely futile attempts to influence the outcome. I am not against this, however when a company overdoes it not willing to accept the verdict, they get the CIO’s irritation and look like bad losers.

More than 5 years back a company had me talk to their sales team on “What CIOs want” or “Selling to the CIO”. I repeated this discussion with many large and small companies over the years with good results acknowledged by the attendees. Recently I had multiple meetings with leaders from the same company who could not accept that the decision had gone in favour of a competitor. Somewhere along the way with attrition the learning withered away. Or is it pressure of difficult times ?

I believe that for things to change collectively we all have to work together; the CIO will have to be consistent in the way they give the message of success or lack of it. Transparency in evaluation, engagement and stating decision making criteria upfront will create a better platform for everyone. Complementing this, the vendors need to not rue over one transaction that did not go their way and work towards bouncing back such that relationships do not feel the strain.

Let me share an anecdote: An Account Manager desirous of his CEO meet the CIO tries to schedule a meeting based on his CEO’s calendar. Attempting to influence the CIO’s Assistant he brushes aside protests on the CIOs unavailability on the proposed time. He pushes her to reschedule other appointments to accommodate his CEO. When that does not work, he calls the CIO to meet the CEO while the CIO is in the general area where the vendor office is located. Even when the CIO declines, he insists and goes ahead. When the CIO does not turn up, he chides the CIO to say he cut a sorry figure with his CEO. No guesses on where this relationship will end up !

Monday, November 19, 2012

Chief Insecure Officer ? You must be joking !

Research Analysts from the industry keep finding excuses to put the CIO down; I have no idea which set of CIOs are on their panel or the ones they interview or poll for various reports that they publish. The data is not available to the audience who may want to challenge the conclusions. These reports almost always end up portraying the CIO in negative light. The effect that these “respected” industry analysts have on me is similar to the red flag in front of a bull and I end up taking the bait almost every time.

The CIOs role is going to disappear; the CIO now has to depend on the CFO for approval of every spend or investment; the CMO is taking away a significant part of the IT budget; the future of the CIO is uncertain; the CIO has not evolved to becoming a business leader; the CIO cannot become the CEO; the CIO rarely gets a place on the management table; the CIO is being relegated to the back office; the CIO needs to give up being a hardware hugging IT manager. You get the point, I got high blood pressure !

In a recent conversation with one such analyst, he joked with the gathered CIOs that they seem to be getting themselves a new meaning to the acronym; he started describing his recent encounter where the CIOs were mortally afraid of letting go their infrastructure (hardware hugging CIOs to use his words). Maybe he made it up, maybe it was true, we couldn’t fathom, a few CIOs surrounding him were red and pink, waiting for someone to challenge him. Questioning did not reveal their location, industry or size of company.

Rechristening the CIO as Chief Insecure Officer, he stated that the CIO in the changing environment should be worried about his/her existence in the future. With the cloud becoming pervasive, the purchase power stands diminished; the licensing is being discussed with business teams he postulated. The CIO has to keep things running he concluded. My reality being different also echoed by most that I know, there was a clear disconnect to his qualified remarks.

What causes this situation ? I believe that it is due to the fact that many CIOs are unable to discuss specifics of the initiatives they are driving for confidentiality reasons. That would be giving away the strategies driving business or profitability growth which would be counterproductive with competitive advantage being lost. It is also that most companies have stringent norms on who speaks to press and the level of disclosure allowed. Whatever the reason the analysts infer what is convenient for them and what makes headlines.

Is it time to unshackle the CIO to provide a better understanding of their contributions and their leadership ? The marquee CIOs have been empowered by their enterprises and they are making headlines with case studies and speaking in various forums. That does not necessarily imply that the rest are not contributing albeit silently. Either way it is time to stand up and not be cowered by the statistical data thrown at us by the industry analysts.

There may be regional and industry imposed differences across geographies on the role of the CIO; those pale on the face of the fact that almost every company today draws its operational and strategic advantage on the foundation of IT. The critics will attempt to undermine the borderline cases and sometimes also cast aspersions on the better ones; the CIO has a choice to take them as distractions or be influenced by them. Go ahead and make your choices and carry on the great work that only you can.

P.S. I just received the E&Y DNA of the CIO report, and that is another story for another time. Keep watching !

Monday, November 12, 2012

Why CIOs don't like Jalebi

Happy Diwali to everyone !

Jalebi is an Indian sweet (also eaten as dessert) extremely popular in the northern part of the country though now available internationally in Indian restaurants. It has a complex circular structure; the photo is one such representation of what a Jalebi can look like. In recent times, Jalebi was made famous by a Bollywood actress with the character named Jalebi bai. I have always been fond of Jalebi though in recent times have reduced my indulgence.

The CIO had great expectations when meeting the team from the most popular tablet vendor in the world who were pitching for an innovative solution. The large team comprising tab vendor, sales partner, and solution provider looked brazenly confident and rightly so considering the aspirational value of their product. Rarely were they in situations where they had to discuss the merits and advantages of their device; everyone justified internally why they wanted their solution and they just made truckloads of money

The internal customers were already sold on the device not the solution despite its shortcomings for the specific business need which required significant internal change. The business head had been aligned to the device (not the solution) and the meeting was expected to be a cakewalk. Despite the iconic nature of the device, the technical team was wary going into the meeting; not many enterprises had deployed on the scale that was envisaged and in challenging environmental conditions.

The meeting started well with a summary of the proposed solution, similar deployment in developed markets though on a smaller scale and how they can change the way business is done. The technical lead started asking a few questions which they tried to brush aside. He persisted as the support burden would fall upon him and he had to be sure. With amazing clarity of thought he laid down the questions that would determine the fate of the project in the long-term.

The vendor sales head started to justify the value proposition by talking about how the device has gained popularity globally and caught the imagination of the consumer. Their dominant market share is a validation of how well their device works. The number of solutions available on the device outnumbers all other competitors put together. They have been continuously innovating on making a better device. He went on and on, on the merits of the hardware sidestepping the pointed questions.

The discussion was going nowhere so the CIO intervened and sought specific answers to the specific questions. He clarified that the decision was contingent on the ability of the overall solution including the device to work as expected. If there are no workarounds or ready solutions, then they will have to explore alternatives. The long stories cut no ice, come straight to the point and stop going round in circles. After moments of silence, the meeting proceeded to its logical conclusion quickly.

In the post meeting debrief, many in the room almost in unison associated the past hour spent to the vendor making Jalebi. He avoided giving straight answers to most questions instead preferring to remain vague in his responses. Any love for the vendor by association to the device soon evaporated leaving everyone impatient to get over with the charade. Business does not and cannot accept the nebulous and imprecise when working to solve a determinate problem.

With tolerance levels reducing and options increasing to solve real business problems, vendors have their task cut out for them; the business and the IT teams are working collaboratively to arrive at solutions.  The discussion is focused on what matters, the scenario is the same internally too; no more beating around the bush or running around trees. The Jalebi is great to eat not considering the calories it adds; go on a diet, keep it away from the meeting room.

Monday, November 05, 2012

Stop Selling Part 2 or how to accept a No

The solution expert across the table looked crestfallen; his manager besides him attempted to calm his frayed nerves while the account manager to his right did not know where to look. The CIO had advised them that the solution was not relevant to his future needs and the discussion was over. Breaking the uncomfortable silence, the manager sought to find a silver lining in the cloud, a sliver of hope that there may be a faint opportunity in the future ? Firmly declined the CIO; then things started going out of hand!

The starting point of the meeting was the aspiration of the incumbent solution provider to retain the customer who had decided to move to a competing solution. Over the years that the company had been using the solution, the relationship was managed by vendors’ partners with the principle staying hands off. Challenges with the implementation and support were largely managed by the partner. As the company started feeling the pinch of a suboptimal deployment and support, they sought alternatives.

The alternative solution was not really an alternative but an industry leader with now a dominant local and global market share. After multiple futile attempts to reach across the teams of the incumbent provider, the CIO gave up and started working with layers of his enterprise to gain their support for a disruptive transformation and go with the market leading solution. As the news reached the incumbent, their leaders started arriving in droves to rescue the situation; this was one such meeting.

Unwilling to accepting “No” to his plea the expert started challenging the decision making criterions’ stating his solution was as good if not better than the competing product which had a higher TCO (Total Cost of Ownership). While the number of customers today may be lower, the new upcoming product would compete head on. All other things being equal, why did the CIO not get this ? Why was he insistent on going with the other expensive solution with significantly higher license and implementation costs ?

The exasperated CIO raised his voice a notch and stated that ROI and TCO were not the primary factors for the decision; the company had lost faith in the incumbent solution and the vendors’ ability to support the new business requirements. The company needed a better and globally accepted solution. Their solution has not found favour within the industry after so many years and neither has the vendor engaged with the company in a way that induces confidence; so no point continuing the discussion.

Desperation defying logic, the red in the face expert could not face the ignominy and wanted to know what he or his company could do to retain the business. How can he prevent the entry of the competing product and solution ? He was now clutching invisible straws. The account manager wished the earth would swallow him, while the boss-man tried to pacify the agitated expert. The amused CIO simply said “I don’t have to answer your questions; this meeting is over” and walked out of the room.

Selling is an art as much as a science. Peter Drucker postulated “A customer never buys what we sell”. The transaction completes when the need to sell is aligned to a need to buy. In the absence of a balanced equation, the relationship sits on a weak foundation; then the possibility of successful execution is reduced leaving everyone vulnerable. Unfortunately an open dialogue is rarely understood or appreciated today in our target pressures driven by monthly, quarterly or annual budgets.

I believe that vendors should learn to accept “No” as much as they like to hear good news. Every time every one cannot get a favourable deal; someone will be deprived of success. Don’t push beyond the break point lest you end up compromising relationships. The CIO too should not be swayed by these tactics, pressure from other CXOs, or end-of-season sale kind of deals. The relationship is based on demand and supply as much as on trust and respect. Any change in the equation will have an impact.