Nick's Notes

Leviathan

I was going to start this first blog of 2017 – Happy New Year, by the way – talking about mergers and acquisitions, and particularly the CIOs role in such work. Because of the Brexit vote Sterling declined in value and UK companies look to be very good value to foreign investors. Despite the experts fears following the Brexit vote many companies are doing very well in the UK too, which is now one of the top growing economies in the world. Remember, so concerned was the Bank of England about the Brexit vote that it introduced a stimulus package. Given the underlying economic performance has been maintained in the last six months that may lead to an overheating which would not be ideal at a time when business seeks some degree of consistency and stability in what will no doubt be a politically volatile year or two to come.

Last night I saw a press release that changed my plans. Gartner is to acquire Corporate Executive Board. Well clearly this allows me to maintain the theme of acquisition, but from a very different angle. This merger – costing Gartner an eye-watering $2.6 billion in cash and shares – will create an enormous Advisory and Research company with an annual turnover of $3.3 billion and 13,000 staff. 10 years or more ago, CEB were of great concern to Gartner because their ratios in the market looked so good, they were growing fast and their share price was buoyant. But they faltered and Gartner relaxed.

Meanwhile Gene Hall, who I know slightly – he arrived a few months before my entirely unconnected departure – focused on what previous work in Gartner had called the 800lb gorilla in the marketplace – the vast majority of companies who didn’t take research or advisory services at all. Through a clear vision of sales channel growth, uncompromising execution and unwavering focus Mr Hall has grown Gartner to the point where it has bought CEB.

When thinking of the big American research companies CIOs tend to think Gartner, CEB and Forrester. They are all different – CEB focused across the whole c-suite – helping each executive to be the best in their role; Forrester on the business futures enabled by technology and Gartner on IT. But in the emerging digital world those things blur. In CIO Connect’s work on Everything as a Service we talk about the need for the whole c-suite to be engaged with technology, and we explain why the whole Board needs to be involved in digital strategies. Gartner started to position its research for IT leaders and for other roles; now it will have access to leading thinking about those other roles, and can feed into that its research on how to do IT well. This will be very helpful to global organisation getting to grips with an emerging digital future – where ‘good practice’ has not yet been fully mapped out.

But something will be lost too. I have long said that organisations need a view of the world – both business and technology – which is not east coast American. This merger does little to address that. Gartner Research, which swallowed Meta Group 10 or 11 years ago, and Butler Research more recently will need competitive thinking to keep it on its toes. There are smaller niche players – like us at CIO Connect, and many others. There are the big consultancies with regional focus and local consultants. And there are global players like Conference Board with wider perspectives and others like them. There has never been a greater range of thinking available, and it has never been easier to access that thinking.

It is important for the CIO to seek information widely and not just follow the crowd. It is lazy to rely on Gartner alone, although it is easy to do. Years ago “nobody got fired for buying IBM”, until they did because it was staid and focused on a different age of computing. “Source Gartner” is pretty common in Board level presentations across the globe and carries authority. But make sure you read widely, think and, where appropriate, act differently too. Following the herd is not always a winning strategy.

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