Information Services Revenues: Returning to Pre-Pandemic Levels 2022 or Later according to Outsell’s Market Survey: CEO Outlook for 2021 – Anthea Stratigos, Co-founder and CEO of Outsell Inc.
Product Portfolio: „In with the New and Out with the Old“- Office Life has Forever Changed:
- From an Acceptable Necessity to an Operating Approach in 2021
Outsell’s annual survey of CEO sentiment provides a glimpse into how leadership intends to approach the year ahead. More than ever before, this collective wisdom — representing well over 1,000 years of industry experience — provides a welcome guidepost in a truly uncertain time.
Key Findings
Outsell surveyed CEOs across our markets twice this year: first in the spring to measure immediate responses to the pandemic and then again in early fall. We received 75 and 60 responses to these surveys, respectively.
Comparing the insight of our industry’s leadership as the pandemic unfolded allows us to determine how these views held up or changed. For the most part, leaders took quick and decisive action as the impact from COVID-19 took hold, which served them well.
Office Life Has Forever Changed
Very few respondents anticipate a full-scale return to the office once the pandemic’s threat wanes. Only 7% of companies indicate that they’ll move back to a pre-pandemic office environment, and nearly three-quarters (74%) expect to use less real estate. More than half (56%) either have no plans for holding large-scale meetings again or are unsure when they will.
Success in 2020 Depended on the Organization
On average, leaders expect 2020 performance to come in 7 percentage points below expectations pre-pandemic. However, very few companies will land at that spot: There is no average this year.
For a majority (65%), 2020 has been challenging, and they anticipate their sales to be an average of 15 percentage points below their original plan. However, the pandemic accelerated success for more than one in ten companies (12%), which anticipate exceeding plan an average of 15 points. Roughly a quarter (23%) of companies anticipate finishing the year as planned, as the massive tumult that hit our globe just didn’t play through into their markets (yet).
This implies that there’s a roughly 30 point spread between those that suffered from the pandemic and those that did not, which means that, as we enter 2021, providers are at very different starting points. For those that contracted, competing for resources against those that rapidly grew will be tough and will happen at a time when they are desperate for growth.
2020 Sales Compared to Pre-Pandemic Plan: Below Plan 65 % – At Plan 23 % – Above Plan 12 %.
Optimism for 2021 Prevails. When asked how 2021 sales will compare to 2020, a large majority (64%) see opportunities for growth, with an average expected increase of 23% (15% median) over the current year. However, we believe this optimism is a bit too profound.
It is important to remember that any growth will be measured against a much lower base on average than companies had at the end of 2019. Again here, the impact will be uneven, as 20% expect 2021 to bring an average 11% decline. We advise those that escaped 2020 relatively unscathed more due to budgetary cycles and revenue models than product portfolio strength to keep their eyes wide open in the coming year.
Growth Remains Priority #1. While shoring up client retention was the number one focus among leaders in the spring, the top priority today is launching new products. Yet, despite this difference, the underlying rationale for each approach was to identify opportunities for growth. Leaders first hoped this would come via upselling existing clients with existing products. Today, they are focused on new.
Radical Reinvention Taking Hold. The top action respondents are taking as we plan for 2021 is to accelerate new products (67%), followed by hiring (49%). In parallel to this push to grow, the number three priority is pruning the current portfolio. Collectively, these trends point to an important pivot among providers that can be summed up as “in with the new and out with the old.”
Top Plans for 2021: Accelerating New Products 67 % – Hiring 49 % – Pruning the Portfolio 30 % – Reversing salary reductions 23 % – Layoffs 12 % – Business as usual 9 % – Cancelling new initiatives 7 % – Salary reductions / furloughs 5 %.
As companies reposition themselves, they’re investing dollars into meeting these goals. Only a very few (4%) anticipate not making any increases next year. A full two-thirds (67%) will invest in product development, and nearly half (49%) will invest in additional marketing, closely followed by investment in sales (46%).
All these trends point to an industry on the move. With swift action to correct course, better results than anticipated, and a focus on accelerating new product development, our industry is on the cusp of change.
Diversity Needs Attention. Amid heightened tensions and anxiety perpetuated by the global pandemic, 2020 saw a rise in social unrest. Underneath much of this was a growing acknowledgment that opportunities remain unequal today when viewed across gender or ethnic lines. As competition for scarce talent continues to heat up across our industry, companies that embrace diversity and inclusion will be in a better position to attract new talent that is more diverse today.
Despite the above, under one-third (28%) of companies have explicit goals for diversity and inclusion (D&I) today. A similar amount (31%) don’t have D&I goals and no plans to implement them. New hires weighing which firm to join are likely to opt for organizations that are making efforts in this area. Companies that do not acknowledge this gap and need will be hard-pressed to stand out in the coming years.
Implications. When the pandemic first took hold, a certain level of tolerance existed among employees, who understood that their organizations had to take drastic action for survival, if not success. Now, as we collectively begin to enter year two of the pandemic, there are signs that this tolerance is on the wane. Studies show a growing impatience with steps required to keep the virus under control, and this fatigue is likely spreading to the workplace as well.
This trend implies that a critical element of success for leaders in 2021 will be to transform their organizations into those capable of approaching old problems in new ways. For example, the ways we engage with each other and with clients is changing. Virtual or hybrid interactions are becoming the norm. So, too, is the way we measure production and success. Measuring output alongside input is increasingly essential.
Essential Actions
Companies embracing the changes outlined above will be those best positioned to succeed. And while each change brings a unique and different set of required responses depending on the provider type, there are common elements of future success that we advise for each.
Plan for a Longer Recovery. While leaders across the industry expect growth to return in 2021, this growth will come off a dramatically lower revenue base. In dollar terms, we do not anticipate most markets returning to pre-pandemic levels until 2022 or later. Planning for this slow return will keep expectations properly in check.
Reinvent. Operationalize the changes underway by focusing on how to organize the enterprise to drive usage of new technologies. Build an organization that embraces new technologies in every step it takes rather than using a one-off product mindset. Align all these processes to maintain trust, and seek ways to foster fleeting physical connections with digital technologies in new ways.
Stand Out. The vast majority of companies across the industry will be competing to do more with less in 2021. Be scrappy in approaches to attracting talent and targeting growth. Embrace diversity and do so meaningfully by tying executive KPIs and compensation to it.
Practice Gratitude. Despite the challenges and hardships that many face, it is an exciting time for our industry. For those of us lucky enough to be on the right side of this moment, it seems clearly a time to be grateful for the opportunities we have.
About the author: Anthea C. Stratigos is a Silicon Valley CEO, wife, mother, public speaker, and writer, among many other passions and pursuits. She is Co-founder & CEO of Outsell, Inc., the leading research and advisory firm focused exclusively on the data, information, and analytics economy.
Anthea draws upon her deep experience in research and analytics businesses, product management, and marketing to oversee Outsell, its brand, and its strategic direction. Anthea is Outsell’s primary spokesperson, identifying, writing, and speaking extensively about key trends and issues facing CEOs and top executives in the industry. She chairs the Outsell Leadership Community, a member service for CEOs and senior executives, and is a trusted confidante and confidential advisor to hundreds of leaders across the industry.
Anthea also actively measures, influences, and improves gender diversity in our industry’s most senior positions. She works with CEOs of startups and aspiring leaders, especially women, who are on their journeys to the corner office, advising these leaders on how to improve their business odds and their own success.
A graduate of Stanford University and Harvard’s Executive Program in Marketing, Anthea has sat on numerous boards, including the Child Care Coordinating Council of San Mateo County, American Business Media (ABM), and Innodata, Inc., a public company based in New Jersey. Today, she sits on the advisory board of NPD Group, Inc. and the Workplace Equity Project as well as that of Outsell.
Anthea is author of Magic in the Mundane, Making Life’s Ordinary Extraordinary, and regularly blogs. When she is not pursuing her love of travel, she designs jewelry, gardens, and takes long walks with her husband Greg and their Labrador, Benson. Anthea can be reached at: astratigos@outsellinc.com
Source: BIIA Co-founder Member Outsell Inc.
