'Mad Men' Has The Answers to Your IT Budget Woes
The New Reality for Customer Engagement
Date: 5/31/2018 @ 1 p.m. ET
This is the first in a series of articles that will explore techniques for how to sell your projects as we enter the final budget crunch phase of the year.
Christine is the CIO of a $400 million manufacturing company. Like you, Christine is about to enter Q4. She is bracing for the final budget approval and crunch process. She knows that this year it's gonna be tough.
So far, Christine has managed to "protect" her placeholder budget of $2 million for a cloud migration project. It's a very important project with a strong business case. but she knows it's going to be a hard sell. No sexy front-end user functionality. This is all about infrastructure. And nobody likes to fund infrastructure.
Christine, like most IT leaders, finds it difficult to "sell" her projects. Her idea of selling is to explain the important reasons and rationales for doing a particular project. She likes to present a compelling case and have the executive leadership carefully weigh the facts and figures and then make a thoughtful, rational, fact-based decision.
Well, the fact of the matter is: That's not reality. Getting the funding you need for important IT projects just doesn't go down like that in most organizations. The executive team needs to buy into your initiatives. And that means that you need to know how to sell. You need to know how to persuade decision-making executives to fund your projects without relying solely on facts and figures. Here's the basic idea: Take a leaf out of the sales book used in the world of advertising. I'm not suggesting you adoptall the antics depicted in the popular TV series "Mad Men" (although a Martini and a spiffy suit never hurts). But there is one tried-and-true method that Madison Avenue has used for decades to move people to take action that you can apply to your own internal sales efforts.
It's not just the CIO who needs to know how to sell. This is a skill that is needed by IT leaders at various levels of the organization. Business analysts need to sell their ideas. Project managers need to sell their approach and plan. Senior IT managers need to secure project budgeting from business lines. And CIOs need to gain approval from the executive team or the board.
So, given the importance of this skill and the time of year, I am dedicating the next several columns to showing you some hands-on, influence-wielding techniques that will automatically position you for success when you go to sell your projects. These are techniques for real hand-to-hand combat in the budget fight.
And to keep it real, we are going to go back to Christine and her specific case.
Back to Christine
Christine's total OPEX project budget is $4 million, so her $2 million placeholder budget for just one project screams out for attention (i.e., cutting). Christine is smart enough to know this, and she has turned to her trusted advisor, Martin, for some help in how best to present the project given the situation.
We'll drop in on the conversation between Christine and Martin shortly after she has fully briefed him on the situation.
Martin: Chris, it's mid-September and you still have the placeholder. That's a good sign. It means that your boss and the exec leadership still want to do the project. They are probably going to lean on you to cut the budget, but the project is pretty safe.
Christine: What makes you say that?
Martin: If they weren't really behind it, they would have cut it already. It's a quick and easy kill. It's large and high profile. And cutting it could make a lot of people happy because it would free up a lot of money for other items. So there must be strong support for the project.
Christine: But I have been in similar situations where I thought just that and then after I went in and did an incredible presentation I was still totally cut down.
Martin: I see. That's unusual. Did you use the Madison Avenue presentation?
Christine: The what?
Martin: The Madison Avenue presentation. It's a very powerful presentation technique for getting a client to say "yes" to your proposal. It's a technique that is most frequently associated with advertising executives who want to sell a client on an idea for a campaign. And it satisfies a number of the key psychological needs a client has when asked to approve funding for an idea or program as opposed to when they are being sold a fixed object.
Christine: Interesting, tell me more.
Martin: The basic idea behind the Madison Ave presentation is that you never present one option. When you present one option you set yourself up for a yes or no. And if things get rough, it's always easier to go with no. So, in place of the single option, you present three options. Mind you, that doesn't mean you absolutely must develop three options. You can have just one real option. Just make sure you present three options. Madison Avenue is famous for that. They develop one good campaign for the client. Then, a few days before the big client meeting, they quickly throw together some crappy ideas to present alongside the really good idea. The client would of course throw out the obviously bad ideas and select the good idea feeling very pleased with himself for his brilliance.
Christine: Very smart. But we can't develop bad ideas so easily. There is really only one idea on the table.
Martin: Not so at all. There is indeed one general project placeholder with one general number. It's now up to you to develop three flavors of the project.In simple terms think:
the large-scale, ultimate version
the small-scale super budget version
the middle-ground version
It's the Madison Avenue presentation customized to IT projects.
And since your executive team is just like the rest of them (trust me, they are) your budget defense presentation will go like this...
You will start off by telling the executive team that this is a very important project and you have therefore developed a few options for them to review and to help decide upon. They will all nod with satisfaction that they are being consulted.
First you will present the large-scale, Rolls Royce version of the project with a price tag of $2.2 million. Gasp. Shock. They will likely find it very appealing but will immediately say that's too much money. It's even beyond the original budget.
Then you will present the small-scale version. It will lack the key things they want to see. It will barely answer the other requirements and it will be painful to do. Its price tag: $1.1 million. This too they will reject.
Finally, you will present the middle-ground version (the one you had in mind all along) for $1.725 million. It will have nearly everything as in the $2.2 million proposal. You will sacrifice only the elements that you know you can.
This version will win nearly immediate approval. But then the CFO will insist that you find another $100,000 savings and will cap you at $1.625 million. You will cry and complain and tell him how hard it will be--that you can't do it.
With a look of satisfaction that he has indeed reached rock bottom and has shaved off $350,000 from the budget, the CFO will relent and say "Fine. Do it for $1.65 million."
Game over. You win. Because, all along, you never planned to spend more than that anyway.
That's technique #1
So, there you have it. The Madison Ave presentation. A solid, reliable old-school sales technique that keeps the buyer's psychological needs firmly in mind.
About the Author
Marc J. Schiller, author of "The 11 Secrets of Highly Influential IT Leaders," is a speaker, strategic facilitator, and an advisor on the implementation of influential analytics. He splits his time between the front lines of client work and evangelizing to IT leaders and professionals about what it takes to achieve influence, respect and career success. Download a free excerpt of his book at http://11secretsforITleaders.com
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