Dec 182008

The unraveling global economy and its effect on our companies and our lives is about the only thing on people’s minds these days. So we asked the Cutter Business Technology Council Fellows for their advice to IT leaders about how to survive during this financial mess. Here are some snippets of what they advised.

Tom DeMarco: “Take a deep breath and … reduce salaries. There is an unwritten law in companies that salaries can go up but can never go down. Repeal it. If you’re faced with a mandate to cut personnel costs by, say, 10%, you could do that by laying off 10% of staff. That way all of the pain is absorbed by 10% of the people while the others carry on as before. Alternately, you could trim everybody’s salary by 10%. The pain is evenly distributed. As a social matter, this makes good sense: discomfort for all instead of catastrophe for a few. But there’s a much more important reason to take this approach. You and your people take something out of your own hides, but nothing out of your customers’. A side effect of trimming salaries rather than staff is that when things pick up again, you’re in a much stronger position than your competitor who has to hire from a rapidly diminishing pool of resources.”

Lynne Ellyn: “There has been so much ink devoted to the conflict between CFO and CIO in the past. CIOs must step up and do all that they can to help the CFO navigate the treacherous financial waters. Focusing on continuous improvement, efficiency, and strong partnership with all business units is a must at this time. Inventory all applications in the portfolio and review each with senior business partners. Undoubtedly, your applications portfolio includes applications that are of marginal value. Get rid of them now to help reduce costs and improve focus on value-driving technology.”

Lynne also advises renegotiating support contracts and cautions strongly against reducing security at this time:

“Already, criminals are moving more aggressively to exploit cyberassets. The world economic crises will fuel a rise in cybercrime. Do not expose your corporation to this crime wave!”

Tim Lister advises IT leaders to make those hard choices that have always been hanging. He offered up eight examples, including these three:

  • How about building a fully functional prototype instead of building a spec?
  • What about going European, if you are not already European? Give everyone who wants it three or four weeks unpaid vacation, apart from their three weeks paid?
  • How about giving two of your best developers a project to do all by themselves, even though it was estimated at five to six work-years of effort?

And then he challenged IT leaders to come up with another eight ideas right now …

“Or you should not be a leader.”

Strategize or surrender is Christine Davis‘ advice:

“It is important that those in IT leadership positions understand that this is not a time to be passive and wait out the storm. It is about survival. IT organizations will be asked to find ways to reduce costs. If the IT leadership simply keeps operating the same way and merely cuts each line item of the budget without rethinking the overall approach, it is simply surrendering. This is a time to rethink, reprioritize, reengineer, and regenerate.”

How to come out the other side? Keep your head up, says Ken Orr:

“In bad times, there is a tendency to draw inward, to look out for yourself, and to protect what you and yours (family, company, department) has. But this is also a time to think boldly. “What can IT folks do today that takes advantage of this crisis and uses it as a means to attack big problems? (1) We can begin a serious enterprise architecture project to find out what we currently have and project where we need to be going; (2) We can begin a meaningful study of our systems development practices; (3) We can revisit our IT organizational structure and move away from a strictly systems-level focus.”

And, from Mark Seiden,

“Among the best ways to save money is to not waste it. Switching to telecommuting and using videoconferencing for face-to-face contact — “untraveling” — not only saves time and money, but it reduces the wear and tear of travel, is safer, and you’re helping save the planet, too. Telecommuting seems to be one of the benefits that many employees want and are willing to pay for! It might give a company a way to save up to around $10,000 per employee per year in loaded salary through a voluntary salary reduction that employees perceive as improving their quality of life.”

Have you — or will you — consider any of these options?


  4 Responses to “Cutter Fellows’ Advice for Surviving the Recession”

  1. Jason Stamper continued the discussion of Tom DeMarco’s advice that companies reduce salaries rather than staff in his post Tough advice to follow: cut salaries, not people. Jason asserted, “Sometimes getting rid of two senior people (with their somewhat higher salaries) appears to make more sense than losing far more people on lower salaries. But if those senior people will be sorely missed, asking everyone to take a pay cut in order to avoid any forced redundancy might seem an attractive prospect.”

  2. avatar

    The full Council Opinion “The Financial Mess” can be downloaded at (after registering). In it, you’ll find more on the benefits and challenges of Tom’s suggested salary-reduction strategy.

  3. avatar

    Some of these strategies, especially the cost-cutting and portfolio management ones, seem like excellent strategies in times of growth. As a former CEO put it to me, “Why haven’t all these companies been staying lean on the way up?”

    Differences between competitors become magnified in recessions. The stronger organization can more easily overcome the weaker one and size may matter less. IT leaders can take stock of the strategic calculus of their market and adjust their IT strategy fast. Already agile IT shops should have an advantage.

    IT leaders should take a deep breadth, think calmly and get even more competitive now.

  4. avatar

    Eric Armstrong concurs with Tom’s salary cutting suggestion in his post Cut Payroll, Save Jobs.

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>