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Michael Fleisher is Chairman and CEO of Gartner, Inc., the worldwide technology research company that boasts a 10,000-company clientele.
Gartner is advising its clients to focus on their strengths during the current difficult economic environment and to invest prudently where opportunities are present. Like its clients, Gartner has been under pressure and its business is off compared with past years. For example, attendance at this weeks annual Symposium and IT Expo in Orlando, Fla., is 6,000—up from 5,000 last year but down from 7,500 two years ago.
Fleisher joined Gartner in 1993 after working as an associate at Bain Capital. He later ran Gartner events, served as CFO and became CEO in 1999.
Fleisher discussed Gartners recommendations and its business practices with eWEEK Executive Editor Stan Gibson at the Symposium.
EWEEK: The tone I get from the conference is not particularly upbeat. Your speech emphasized the value of perseverance in tough times. Is the key message, keep our chin up?
Fleisher: We have to understand the environment were in and operate our companies in the best way we can and not use the excuse of a bad economy or wait for the good times to return in order to move our businesses forward. Companies that dont follow our simple model for what they need to do are going to be in trouble.
Companies must focus on the things that are most strategic and compelling for their highest-value customers. They have to continue to aggressively cut costs and they need to make investments for the future. Companies need to place small and very thoughtful bets—not huge bets like they were placing three years ago.
EWEEK: Are some companies cutting out luxuries, such as their relationship with Gartner?
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Fleisher: That vast majority of our clients have clearly voted that we are not a luxury but that we are a necessity in terms of how they run their business from everyday.
Last fiscal year, our business grew 11 percent and our profitability increased. This fiscal year our business is down 3 to 5 percent, but our profitability will grow. Our renewal rates have remained rock solid. The reason our business is down a little bit is because in this climate its much tougher to sell someone who isnt already a client.
EWEEK: One of your analysts, Audrey Apfel, said there is no big technological imperative right now. For Gartner, that cant be good news, can it?
Fleisher: Actually I think its perfectly fine news. There is not some big huge innovation that is massively changing the way work is done, but there are huge opportunities to be had from implementations of technology at most businesses around the world.
There are business opportunities from the application of technology. But were saying dont be fooled into thinking there is some big innovation around to corner, and therefore you dont need to make the tough bets and spend the money you need to spend today.
EWEEK: But it helps to have a next big thing, doesnt it?
Fleisher: There will always be themes about what our clients need to do to be successful. Right now were talking about the “real-time enterprise” and the business value of IT.
But maybe more importantly, we see our role not as prognosticators of the future, but as guidance givers and advisers with very pragmatic advice for our clients. Our client renewal rates have been unwavering because we dont make money by selling some wild projection but in giving our clients good advice. Some of the folks that sell prognostications exploded positively during the dot-com era but now they have disappeared or fallen dramatically.
EWEEK: Are you seeing a lot of resumes from people who worked at those companies?
Fleisher: Were seeing a lot of resumes from all walks of life. A lot of good people who left Gartner during the dot-com boom now would like to come back. As business gets better, we may be in a position to hire some talented people back.
EWEEK: IBM has been absent for a few years from your keynoter lineup. Whats going on there?
Fleisher: We would love to have them participate. The challenge that all of these guys have is scheduling. IBM historically had conflicts this week in October. Were hopeful that IBM CEO Sam [Palmisano] can join us in the future. We met and chatted recently and he really wants to come and participate.
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EWEEK: What were your impressions of IBM?
Fleisher: The guys at IBM have done a phenomenal job of transforming their business. They have an incredibly mature management model and theyll continue to succeed in the marketplace because of that.
EWEEK: There are no celebrities here this year. Why?
Fleisher: Our goal is to highlight our intellectual capital base. We have used Top Brokaw and Linda Ellerbee as moderators, but we found that our top analysts interviewing the top CEOs is of more value to our clients.
EWEEK: What is your number one priority in running Gartner?
Fleisher: Number one is making the company increasingly client-focused. Our clients, the people who make the technology decisions at the worlds largest companies, are going through a metamorphosis right now. They are having to become business people. They have to make tougher decisions of higher strategic value. Making sure our research is the core intellectual capital is of the greatest value in giving those people the insight and guidance they need. Its not something you can ever let up on.
EWEEK: Do you recruit top analysts from outside or try to develop from within?
Fleisher: Both. We develop our own folks, but we are pretty aggressive recruiters for talent. And we have gotten tough on culling our talent.
EWEEK: Is the top criterion for analysts how much revenue they generate?
Fleisher: Our analysts are not measured on revenue performance at all, for pretty obvious reasons. Independence and objectivity is what our entire business is premised on. Weve seen on Wall Street and other places the danger of tying people too tightly to the revenue streams in those businesses.
Our people are judged on the intellectual capital they create. They are judged by their peers. And we have increased data on what our clients are using based on Gartner.com
And there are client skills. Some clients are great at presenting at conferences like this and others are great at spending time with clients.
It is not easy to become a Gartner analysts because of our screening process. Theres written work and group interviews. Im happy I didnt start at Gartner as an analyst because Im not sure I would have made it through the screening.
EWEEK: Why did it make sense to sell TechRepublic?
Fleisher: The vast majority of our clients receive their information online. We have spent a fortune enhancing that. Clients need to be able to access a huge knowledge base but find whats of value to them. However, TechRepublic is based on an advertising business model and it wasnt the right fit for us, so we decided to sell it.
EWEEK: What technologies excite you personally?
Fleisher: First, the increasing availability of broadband access everywhere. Our children think that high-speed access, rich media, audio and video are part of the experience of interacting with technology. That will shape how businesses, governments and cultures are built over the next 10 or 20 years.
Second, the infrastructure underpinning technologies that make our enterprises work. I tell CEOs to spend time with their kids to learn about new technologies and then spend time with their CIOs and look at the rock-solid technologies that are being implemented to make business more successful.