Signs of a Market Slowdown

There are a number of indicators signaling a slowdown in both the general economy and technology products and services:

  • The Gartner CMO Spend Survey showed a drop in marketing spend as a percentage of overall spend from 11.2% in 2018 to 10.5% this year.  The peak in marketing spend was in 2016 (12.1%).  The data is based upon a survey of 340 North American and UK marketing leaders.  However, 61% of marketers anticipate a rebound in 2020.  “While we’re not yet witnessing a precipitous drop in budgets, this year’s downtick presents a counterintuitive scenario,” commented Gartner’s VP of the Marketing practice, Ewan McIntyre.  “You could call this confidence in the face of adversity.  Or you could call it hubris.”

    MarTech budgets fell 3% to 26% this year.
  • The Gartner 2Q19 Global Talent Monitor indicated growing concern about the job market with fewer employees looking to change jobs.  53% of US employees are intending to stay put and only 12.5% are actively looking for other positions.  The US actively looking rate dropped in half in Q2 and the percent looking to stay put rose ten points.  “Over the previous several years, the clear story within the U.S. has been a robust economy, tight labor market and plenty of opportunities for growth and improvement from the employee perspective,” said Brian Kropp, chief of research for the Gartner HR practice. “With this quarter-over-quarter increase in intent to stay, we are now seeing a shift as employees hunker down, indicating concerns around available job opportunities and potential weakness in the labor market.”

    Gartner also noted a 2.4% decrease in global business confidence amongst employees and an increasing willingness of US employees to go “above and beyond the call of duty at their jobs.”  According to Kropp, “Workers appear to be putting more time and effort into their current positions with the hopes of solidifying their roles in case of a change in the economy.  This situation creates an opportunity for organizations to invest in internal training programs that capture this employee commitment to build a stronger, more productive workforce.”
  • Trump’s Tariff War is proving more difficult to win than he anticipated, resulting in inflationary pressures in the US alongside harm to the industrial and agricultural sectors.  Tariff rates are expected to increase at the end of the year.
  • Brexit remains a big question mark with dates, agreements, and new UK elections changing almost every day.
  • The US and UK governments are both very unpopular with Trump facing Impeachment hearings and Boris Johnson preparing for an election.
  • While the US unemployment rate is at a historical low point (3.6%), the economy only added 128,000 non-farm jobs last month and 130,000 per month this year, well below the 223,000 jobs added each month in 2018.
  • The preliminary US GDP Q3 growth rate came in at 1.9% compared to 2.9% in 2018.
  • US Hiring has slowed to its lowest rate in seven years.  A survey of economists by the National Association of Business Economists found that only one in five of their firms grew their headcount in Q3 down from one in three in Q2.  Capital equipment purchasing is at a five-year low and fewer firms are offering pay raises.  “The U.S. economy appears to be slowing, and respondents expect still slower growth over the next 12 months,” said Constance Hunter, NABE president and chief economist at KPMG.

    The NABE also reported slowing sales with only 39% reporting sales growth in Q3 compared to 61% a year ago.

If the US economy tips into a recession, there is little room for fiscal or monetary policy to slow a recession.  The Federal Funds rate (1.75% following three cuts this year) is historically low for an economy at 3.6% unemployment and the Federal deficit provides little room for expansionary fiscal policy.  Trump lowered personal and corporate tax rates when the economy was strong instead of waiting for a recession.

Gartner IT Spend Forecast

Gartner forecasted 3.2% growth in global IT spend in 2019, with turnover hitting $3.8 trillion.  Growth will be driven by Enterprise Software (up 8.5% this year and 8.2% next year) and IT Services (up 4.7% this year and 4.8% next year).  Slower growth segments include Devices (1.6% growth in 2019), Communications Services (up 1.3% in 2019), and Data Center Systems (growing in 2019 but retreating in 2020).

“Despite uncertainty fueled by recession rumors, Brexit, and trade wars and tariffs, the likely scenario for IT spending in 2019 is growth,” said John-David Lovelock, research VP at Gartner.  “However, there are a lot of dynamic changes happening in regards to which segments will be driving growth in the future.  Spending is moving from saturated segments such as mobile phones, PCs and on-premises data center infrastructure to cloud services and Internet of Things (IoT) devices.  IoT devices, in particular, are starting to pick up the slack from devices.  Where the devices segment is saturated, IoT is not.”

“IT is no longer just a platform that enables organizations to run their business on.  It is becoming the engine that moves the business.  As digital business and digital business ecosystems move forward, IT will be the thing that binds the business together.”

David Lovelock, Gartner Research VP

The shift to the cloud and SaaS will continue to benefit Enterprise Software spend with global expenditures hitting $466 billion in 2020.

“Cloud shift is not just about cloud.  As organizations pursue new IT architectures and operating philosophies, they put in place a foundation for new opportunities in digital business, including next-generation IT solutions such as the Internet of Things (IoT),” said VP Ed Anderson earlier this year.  “Organizations embracing dynamic, cloud-based operating models position themselves for cost optimization and increased competitiveness.”

Lovelock warned that companies are failing to upskill their internal staff quickly enough to support newer technologies such as IoT, AI, machine learning, data science, APIs and services platform design.  Gartner was concerned that “nearly half” of the IT workforce is in “urgent need” of upskilling to “support their digital business initiatives.”  The risk for businesses is that emerging technologies “are changing faster than we’ve ever seen before.”

Technology Training Trends

LinkedIn Learning course catalog
LinkedIn Learning course catalog

LinkedIn told CNBC that the top three tech skills in demand are artificial intelligence, big data, and cloud computing.  However, they noted that many technology skills have a market value of only six years, so soft skills such as critical thinking, creativity, and problem-solving should also be honed.  In order for workers to keep up, they should avail themselves of courses from LinkedIn Learning or Massive Open Online Courses (MOOCs).

“It’s important for companies to continue to invest in their people so that they are upskilling and reskilling their people to keep up with the roles that are in demand,” said Feon Ang, LinkedIn Vice President for Talent and Learning Solutions, Asia Pacific.  “But, at the same time, people need to continue to invest in themselves and have a growth mindset,” said Ang.

At last month’s Tenbound Conference Mark Dean, Head of Sales Development-Americas for LinkedIn, noted that soft skills are becoming increasingly critical for employees.  LinkedIn research found that 57% of leaders weighed soft skills over hard skills.  In demand skills include creativity, persuasion, and collaboration.  In short, he asked, “Can they tell a story?”

“In the age of continuous change, global competition, and the use of AI, the employees who will become leaders and visionaries are the ones who can communicate effectively and create connection within the organization.  It is only when employees have a sense of shared purpose and connection that they will do what it takes to help the organization succeed.  The best way to build this connection is through authenticity, vulnerability, and storytelling.  Soft, human-focused skills are the currency of the future.  Employees need to take it upon themselves to grow and learn on a continual basis, whether it’s finding a mentor or continually investing in their growth to hone these skills.”  

Lynne Levy of Arena Consulting

For Salesforce skills, there is Trailhead which the firm promotes at both public forums and on earnings calls.

Gartner Forecasts Robust Growth in Global Public Cloud Services

Gartner forecasted continued growth of global public cloud services.  The analyst firm projected 17.5% growth in 2019 to $214.3 billion.  The fastest growth rate will be in Infrastructure as a Service which will jump 27.5% to $38.9 billion.  Platform as a Service is expected to rise by 21.8% this year.

“Cloud services are definitely shaking up the industry,” said Gartner Research VP Sid Nag.  “At Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organizations.  What we see now is only the beginning, though.  Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three time the growth of overall IT services.”

Gartner research found that a third of organizations listed cloud investments as a top three investment priority.  Thirty percent of technology providers new software investments are shifting from cloud-first to cloud only.  Thus, SaaS and subscription cloud models will continue to replace license-based software sales.

MarTech Industry Grows to 7,040

MarTech Growth Rate chart courtesy of Scott Brinker and Chief Martech
MarTech growth rate chart courtesy of Scott Brinker and Chief Martech

Scott Brinker published his 2019 Chief Martech eye chart and it now spans 7,040 companies, up 211 since last year.  While the industry continues to grow, the rate of growth appears to have moderated.  Between 2014 and 2018, the industry was adding over 1,000 companies each year with the biggest jump for the 2018 chart (1,800).  

The super-graphic is available to the public and may be reprinted at up to 1600 x 900.  Brinker has also made a spreadsheet available.

“That’s not so much a slowing down as a flattening out, a plateau,” said Brinker.  “At face value, it would seem that, indeed, we have achieved ‘peak martech.’ (pause for dramatic effect)”

While industry growth may have plateaued, Brinker admitted that 7,040 significantly underestimates the total number of Martech firms and joked that he may have hit “peak martech landscape.”  Brinker noted five areas where his chart is underweighted:

  • Regionally – When comparing to national MarTech landscapes, Brinker spotted hundreds of companies on the UK, Canadian, Chinese, German, Swedish, and Finnish country charts that were absent on the 2019 Chief Martech chart.
  • Vertical – Likewise, verticalized solutions are also underrepresented.
  • Apps built for specific MarTech platform ecosystems
  • Apps built by services companies (but packaged as products)
  • Apps built with low-code/no-code citizen developer platforms

“Each of these trends — the growth of platform ecosystems, the blending of software and services businesses, and the rise of citizen developer platforms — are birthing whole new galaxies of martech apps.

The major marketing suites have all embraced becoming true marketing platforms, with ever more open APIs and official marketplaces for third-party apps.”

Brinker lists Salesforce, Oracle, Adobe, Microsoft, and G Suite amongst the platform ecosystems, but one would also include browser extensions, mobile apps, and sales engagement platforms (technically, SalesTech, but there is a fair amount of overlap between MarTech and SalesTech these days) to the list.  Brinker noted that WordPress has 54,480 plugins.

Audience / Marketing Data & Data Enhancement (2018 MarTech Landscape)
Audience / Marketing Data & Data Enhancement (2018 MarTech Landscape)

Many of the DaaS and Sales Intelligence vendors covered in this newsletter are amongst the 204 vendors listed in the Audience / Marketing Data & Data Enrichment category and the 457 vendors listed in the Sales Automation Enablement & Intelligence grouping.

TechTarget Confirmed Projects

TechTarget's new Confirmed Project details are collected by their research assistants.
TechTarget’s new Confirmed Project details are collected by their research assistants.

TechTarget added a set of Confirmed Projects to their Priority Engine service.  Projects include company information, project location, project contact name, purchase criteria, and purchase details.  Purchase criteria include top purchase drivers, product feature criteria, and vendors under consideration.  

Purchase details include capabilities being considered, key factors in choice of vendor(s), deployment method, departments where the purchase will be used, and anticipated benefits.

“The integration of Confirmed Project intelligence within the platform provides an expanded view of the Total Buying Team as well as new deal insights and angles – all in one place – to help Sales teams win more meetings, opportunities and deals.  The addition of Confirmed Project data provides a much deeper layer of intelligence on project criteria, specific vendor shortlists and key purchase drivers which enriches and expands insights available within Priority Engine to give sales teams more points of entry into live deals.”


TechTarget Press Release

Confirmed Projects are displayed alongside TechTarget intelligence including Owler company overviews, TechTarget buying teams, DiscoverOrg contacts, and HG Data installed technologies.

TechTarget Confirmed Projects are displayed within Salesforce Account i-frames.
TechTarget Confirmed Projects are displayed within Salesforce Account i-frames.

Confirmed Projects are collected by TechTarget’s “team of skilled in-house research assistants who are responsible for calling active prospects from high-ranking Priority Engine accounts.”  Prospects exchange project intelligence in exchange for TechTarget research.

TechTarget intelligence is accessible from “any browser and imported directly into Salesforce.”


“We saw rapid growth in the use of Priority Engine to fuel inside sales efforts in 2018 as more and more of our customers’ sales teams are using the insights we provide into prospect interests, research focus, vendor considerations, and tech installs. Using this data, leading sales teams have seen up to a 4x increase in opportunity conversion. The addition of Confirmed Projects within Priority Engine will fuel this growth even more.”


TechTarget SVP of Products Andrew Briney

Priority Engine raised revenues 29% in Q4 year-over-year and “bookings remain strong.”  The firm signed an additional 32 customers in Q4 and the firm raised Priority Engine prices by 10% in January 2019 after raising them 20% in January 2018.  The price increase was across all Priority Engine solutions.  As price increases are recognized over the life of contracts and renewals are overweighted to Q4, much of the 2018 price increase will show up in 2019 revenues.

“People that signed up prior to the beginning of the year were protected in their previous year’s pricing, but then we added other add-on bundles and solutions, because…we are integrating a lot of our branding lead generation offers into Priority Engine,” said CEO Mike Cotoia.  “So there is an up-sell capability and opportunity for our customers to…create a greater share of voice percentage within the markets they care about.”

“Our customers continue to increase their commitment to becoming data-driven sales and marketing organizations. This is creating opportunities to strengthen our partnerships with our customers by further embedding our purchase intent data into their systems to make their sales and marketing efforts more intelligent, competitive and efficient.”


TechTarget Shareholders Letter, February 6, 2019

TechTarget admitted that the data subscription business differs significantly from their traditional quarterly marketing campaigns.  Over the past two years, they have learned that service requirements vary greatly by size.  Larger firms “who have sophisticated systems and ample resources” can immediately leverage intent data for awareness campaigns and fueling sales outreach.  Enterprise accounts have revenue renewal rates “well over 100%.”  However, smaller firms require more handholding and renew at less than 100% of revenue.  To assist SMBs, TechTarget has assembled a unified customer success team to offer post-sales service and support.  “We believe over time that this will increase our revenue renewal rates with this customer segment. “

TechTarget described a strong IT spending environment with multiple catalysts for growth: AI, security, data analytics, and cloud migrations.  In the US, accelerated depreciation of capital expenses through 2022 gives “companies a short window to invest in technology with favorable tax treatment.”

Gartner Predicts Increasing Sales & Marketing Tension Due to ABM

Todd Berkowitz, Research Vice President at Gartner, sees Account Based Marketing (ABM) as increasing tensions between sales and marketing in the short-term.  While ABM has long been advocated as a facilitator of departmental alignment, he sees ABM as disrupting sales processes and generating friction:

“Between ABM and adoption of various new technologies and data types, there is a lot of disruption that is happening with regards to sales teams. Even if these changes are going to be beneficial to tech companies in the medium-term, and some of the “A sellers” get on board quickly with the changes, there are many sales reps that will have to be dragged kicking and screaming into the new world. (This is why I always advise trying an ABM pilot with a select set of reps). So even if there is pretty good alignment and agreement between CMOs and sales leaders, don’t expect all reps to magically do what they are being asked to do. There needs to be an adjustment period, along with good sales enablement, before everyone plays nicely.”

So, while ABM will facilitate agreements in process, messaging, and metrics in the medium-term, it will generate resistance amongst sales reps unwilling to adopt new processes and tools or unconvinced of its value.  This friction is probably exacerbated by predictions of sales force reductions due to the implementation of AI and other information and workflow technologies.

WWII Era Poster (U.S. National Archives and Records Administration)
WWII Era Poster (U.S. National Archives and Records Administration)

Resistance to technological change has long been an issue.  Early in the Industrial Revolution, The Luddites sabotaged British plants, particularly cotton and wool mills.  While sales reps are unlikely to sabotage initiatives (or their careers), they may hesitate to learn new platforms or adopt new processes.  As such, the problem may be more akin to soldiering, the assembly line equivalent of reducing individual productivity to the level of the laggards on the line.  Frederick Taylor, the father of time and motion studies, was very concerned about soldiering and recommended piece work rates to create productivity incentives.  But sales reps are very attuned to incentives.  While they may be hesitant to adopt new technologies, they will do so if they help make them more efficient and effective at selling.  So long as sales reps are paid on a commission basis and long-term employment is tied to making quota, the level of soldiering should be minimal.

This isn’t to say that sales reps won’t resist learning new tools.  If they believe the time invested in such training is less than the incremental revenue for the lost selling time spent in training, then they will avoid training and learning new tools.  However, if they see others on their team benefiting from the new tools, they will not hold out long term.  Thus, tool training needs to be visibly supported by management with an emphasis upon the benefits to sales reps (e.g. less time spent on non-sales tasks and more time interacting with customers and prospects, improved account intelligence, improved account targeting and message timing).  With the proper incentives and information, resistance should be minimal.

To help ensure adoption, vendors should be looking to integrate solutions into CRMs, email, and mobile devices so that new tools are integrated into current workflows.  They should also be providing inline tool tips, initial training focused on their capabilities which provide high levels of efficiency and efficacy improvements, tool-based win stories, and usage tools for tracking training, usage, and ROI.  A few gamification elements may also be in order, but they should be organic to the product and not hokey.

Dreamforce Keynote: The Fourth Industrial Revolution

One of the key themes of Dreamforce 2017 was the ability of companies to customize the branding and content within Salesforce clouds via "clicks, not code."
One of the key themes of Dreamforce 2017 was the ability of companies to customize the branding and content within Salesforce clouds via “clicks, not code.”

The theme of this year’s Dreamforce was The Fourth Industrial Revolution.  Following after revolutions driven by steam, electricity, and information technology, the fourth industrial revolution blurs the “physical and digital worlds” creating a wave of “innovation in technology” which is transforming the economy, society, and lives while creating new jobs, industries, and opportunities.  This next wave is based upon intelligence.  Elements include IoT, 3D printing, biotech, robotics, autonomous vehicles, nanotechnology, and quantum computing.

“This is what we call the fourth industrial revolution,” said Salesforce CEO Marc Benioff. “There’s all these amazing new technologies, things like autonomous vehicles and artificial intelligence and nanotechnology and mobile computing and all these things are really hitting at once. And companies are really transforming themselves and bringing all these new technologies in really to connect with their customers in new ways.”

Thus, elevators loaded with sensors now communicate back to the manufacturer and predict failures, calling for service prior to trapping people.  Likewise, with tires, “if the tire blows, nobody knows; but in the future, if the [smart] tire blows, everybody knows.”  So, firms like Kone (elevators) and Michelin (tires) are now B2B2C companies.  In the future, if a tire is about to blow, it will communicate to the autonomous vehicle to pull over.

“Every company is getting closer to their customers.  We’ve been talking about this for years.  It doesn’t matter if you’re a B2B company or a B2C company, everybody’s becoming a B2B2C company.”

Salesforce and its customers are “delivering personalized one-to-one engagement at scale,” said Stephanie Buscemi, EVP of Product Marketing.  This is done “declaratively, with clicks and not code.”  Through the Salesforce Data Management Platform, ads are customized and delivered cross-device, allowing companies to redisplay ads or present new advertisements to their customers and prospects.

Benioff cited a series of companies providing customer service and support through Salesforce platforms including Louis Vuitton, Marriot, Coca-Cola, T-Mobile, Adidas, and Ducati Motorcycles.

“Behind all these things…behind everything is a customer.  And that’s what all of us do.  We are working to connect with our customers in an incredible new way.”

Simplified customization, development, and branding were emphasized during the keynote.  A set of customizable products provide a “smarter, more personalized Salesforce”:

  • MyTrailhead service supports custom branding, content, and learning paths that allows firms to onboard and train employees on desktops and phones.  Tools include quizzes, reference links, trails, and badges.  Salesforce Trailhead content is also available.
  • MyEinstein provides an artificial intelligence layer driven declaratively by “clicks, not code” supporting “smarter capabilities including bots.”
  • MyLightning customization provides an app builder with custom pages, a Lightning theming and design system, Lightning Flow, Components, and Bolts which operate automatically on both desktops and phones.  Designers will have access to dynamic components which are conditionally displayed.
  • MySalesforce branded “mobile apps without code” can be uploaded to the Google Play and App Store.
  • MyIoT supports native integration capturing real-time events, business rule automation, and low-code orchestration.

Based upon customer feedback, SFDC has shifted from IoT as a separate platform to an integrated feature of the CRM platform which also operates “declaratively without code.”

Benioff admitted that the Fourth Industrial Revolution is creating concerns and wondered whether it is “uniting us or dividing us.  Are we more connected or somehow less connected?”

He also asked whether there is more or less equality in the World.

“There is this stress being created by this fourth industrial revolution.  Yes, we have this promise of this new connected World.  But what is it doing to us? And what are other actors doing around the World using these technologies?  Are they changing our society?  Are they changing our elections?  What are they doing with this technology?”

Benioff is looking at the Trailblazers attending Dreamforce as the Customer Innovators, Technology Disruptors, and Global Shapers to ensure that the next wave is directed in a positive direction.  “You have all these new tools at your fingertips, these incredible new technologies, but you are doing some amazing things in the World.  You are changing your companies.  You are steering this technology in the right direction.  I’m so confident in who you are.  I’m so confident in what’s in your hearts and where we are all going.”

Benioff noted that most technology is generally neutral in it effect upon society.  It is therefore incumbent upon technologists, developers, and companies to deploy technology in a socially responsible manner which promotes greater equality.  Benioff called for companies to fight for equality through equal pay, investing in schools, and opposing discriminatory laws.  He also noted that it is the poor who are most hurt by environmental degradation and proudly stated, “we are a net zero cloud.”

IDC CRM Market Share (Courtesy: Salesforce 2017)
IDC CRM Market Share (Courtesy: Salesforce 2017)

Benioff was also proud to have founded and led the leading CRM with an 18.1% market share (2016 IDC) nearly double that of Oracle (9.4%).  Salesforce has the top solutions for sales (34.2%), service (33.7%), marketing (9.9%), and Platform-as-a-Service.  Within the marketing cloud, Salesforce claims to offer the leading Data Management Platform and commerce Platform.

What’s more, the firm is on track to be the fastest enterprise software company to hit $12.5 billion in revenue.  They hit $10 billion this year and have FY19 guidance of $12.5 billion in year 20.

One of the issues facing businesses and policymakers is an increasing skills gap.  Benioff proposed MyTrailhead as one of the tools to help address the problem of workers across many industries and skill levels.  MyTrailhead provides a customized, branded training platform.

TechCrunch complained that this year’s Dreamforce lacked drama as it lacked new initiatives such as the social enterprise, artificial intelligence, and IoT.  “They are a company that embraces the cutting edge, but this year lacked that kind of big announcement,” complained enterprise reporter Ron Miller.  To be fair, though, the company has rolled out a series of new platforms, clouds, and acquisitions over the past few years.  A year with few fireworks is not necessarily a year without forward progress for Lightning, Quip, Einstein, Trailhead, and platform customization.

The conference remains a monster with 170,000 registered participants joining in San Francisco and millions of online views.


This was the beginning of my weekly newsletter coverage on Dreamforce.  Please contact me if you’d like a free trial subscription.

Transformation (Not Digital) is the Key to Digital Transformation

Searches for Digital Transformation on Google
Searches for Digital Transformation on Google (Source: MIT Sloan Management Review)

George Westerman, principal research scientist with the MIT Initiative on the Digital Economy, wrote an excellent article on Digital Transformation titled Your Company Doesn’t Need a Digital Strategy.  His key point was that the true value in digital transformation comes from using digital technologies as the fulcrum for transformation not as the objective.  When focusing simply on a technology for technology’s sake, the return on investment is much lower.

In the digital world, a strategic focus on digital sends the wrong message. Creating a “digital strategy” can focus the organization in ways that don’t capture the true value of digital transformation. You don’t need a digital strategy. You need a better strategy, enabled by digital.

Westerman cautions that technology doesn’t provide business value in a vacuum, but only when fused with a business strategy that transforms a key aspect of your business such as product delivery (e.g. e-commerce), customer understanding (e.g. analytics), “radically synchronizing operations” (e.g. IoT), changing business models (again IoT), etc.  Thus, “technology’s value comes from doing business differently because technology makes it possible.”

For example, sales intelligence isn’t about providing reps with additional contacts or feeding them with business factoids so they sound smooth on calls.  It is about transforming sales and marketing processes by infusing relevant, accurate, and timely intelligence into sales and marketing workflows; aligning sales and marketing objectives; prioritizing activities; and making sales reps more efficient and effective at selling.

Westerman offers four strategies for digital transformation:

  1. Get Away from Silo Thinking — Focusing on a technology strategy (e.g. Mobile, Big Data) can be limiting and ends once the technology has been implemented.  A technology focus results in incremental improvements, whereas a business transformation strategy employs multiple technologies and management interventions.  You begin with the objective and then determine the digital processes and workflows for implementation.  “A customer intimacy strategy, for instance, uses mobile along with other digital technologies to constantly increase personalization, engagement, and satisfaction.”
  2. Don’t push the envelope too far, too fast — Overly ambitious strategies may be very risky while more mundane projects may be ignored.  Cutting edge technology may not be ready or implementation strategies may not be understood.  “Business leaders leave easy money on the table if they ignore incremental steps and pursue risky opportunities that may not be ready to pay off yet.”
  3. Don’t ask your tech leaders to drive transformation alone — This is an old piece of advice, but still relevant.  Early CRM projects often failed due to a top down approach that lacked support from sales and support teams.  The CTO or CIO needs to work with other C-level and mid-level executives that provide expertise in the industry and function.  For example, The CTO cannot transform sales and marketing by fiat, but must work with sales and marketing management for expertise, cooperation, risk mitigation, implementation, and communication.
  4. Build essential leadership capabilities, not just technical ones — Digital transformation isn’t a project but the ongoing development of enterprise capabilities and business value.  Digital leaders should “create a transformative vision, engage their people in that vision, and then govern strongly to chart a course across a whole portfolio of digital transformation efforts — some planned and some yet to be discovered.”

Not all problems require expensive cutting edge technology.  Many problems are still soluble through low tech solutions, small dollar investments into current platforms, and modified processes.  A focus on technology not only brings about silo thinking, but could increase complexity and cost.

I’m reminded of my high school Geometry teacher who said, “there are two ways you can kill a fly.  You can use a fly swatter or you can use a bazooka.”

I suspect the bazooka would be a lot more fun, but costlier and riskier.

That being said, there are also great risks in moving slowly or lacking a digital strategy.  Forrester highlighted the risks of being a Digital Dinosaur.  The author Nigel Fenwick noted that the digital predators are customer obsessed:

While all companies profess to put customers first, it’s clear from the data that executives at digital Predators care more passionately about the customer across multiple dimensions: In every customer metric we measured, these executives rated the importance of the customer higher than peers in transformers and dinosaurs – in short, they are not just customer obsessed, they are really, really customer obsessed.

And consistent with Westerman’s advice, customer obsession is a business objective, not a technology focus.  It is this deep understanding of customer needs that both informs the business and technology strategy and creates a defensible technology advantage.

Mary Meeker: US Technology & Immigration

One of the most avidly anticipated presentations is Mary Meeker’s annual Internet Trends presentation.  This year she had deep dives into India, China, and Healthcare.  The two slides that caught my attention, though, were the importance of immigrants to technology companies.  Specifically, she evaluated the percent of top companies with first or second-generation American founders.

Amongst the top 25 US technology publics by market cap, 60% were founded by a first or second-generation American such as Steve Jobs, Elon Musk, or Sergey Brin.  These fifteen firms employ 1 1/2 million.

"2017 Internet Trends," Mary Meeker, Kleiner Perkins
“2017 Internet Trends,” Mary Meeker, Kleiner Perkins

Even more impressive, the top five global publics by market cap are all US technology firms, of which four of the five have at least one first or second generation founder.

When looking at private technology firms, around 50% of the top firms by valuation were founded by first-generation Americans.

"2017 Internet Trends," Mary Meeker, Kleiner Perkins
“2017 Internet Trends,” Mary Meeker, Kleiner Perkins

US technology firms have benefited from immigrant founders and employees along with access to global markets.  Calls to restrict immigration will result in restricted access to foreign markets combined with a greater outsourcing of development jobs overseas.  While H1-B visas need to be re-calibrated to ensure that the visas are awarded to high-demand, highly skilled positions, immigration is vital to US economic vitality.