Mark Raskino

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Mark Raskino
VP & Gartner Fellow
12 years at Gartner
27 years IT industry

Mark Raskino is a vice president and Gartner Fellow in the Executive Leadership and Innovation group of Gartner Research. Mark researches CEO priorities and attitudes to IT and major business technology trendsRead Full Bio

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CEOs must invest declining un-digital revenues wisely

by Mark Raskino  |  September 3, 2013  |  1 Comment

Have you ever heard of “Chapter 33“?  It’s a sarcastic Wall Street joke term for a company that has been in Chapter 11 bankruptcy 3 times.  The fact that this has ever happened, serves to remind us of an important fact when thinking about strategic change in business – death often comes very slowly indeed to large companies. One of the main reasons for this, is the longevity of cash cow revenue streams from ageing products that have a declining but loyal customer base.

The un-digital products and services you make and serve today are the dying cash cows of tomorrow. Thankfully, many of them will decline slowly over a long period. This means you should be treating the cash flow they generate now as a means to fund the investment needed to systematically plan, develop nurture and evolve strong digital replacements. You may also be able to cross-fertilize learning and ideas from the emerging digital world back to your aging products, to life extend them a little. That will help make a smoother financial transition.

I was reminded of this observation yesterday when I got hold of the latest edition of my local Yellow Pages. Yes it still exists. Look at the picture below and you will see it is a far smaller, handy size and a lot thinner than the arm-achingly heavy tomes of yesteryear.  Doesn’t everyone look up local services online or on their smartphone these days?  Apparently not – there’s still a niche market for a handy paper guide and enough plumbers, TV aerial fitters and removals firms willing to pay to advertise in it. But also note the advert right there on the front cover for “apps.yell.com” and the QR code beside it.  The company has no hesitancy telling you about its digital future, and it is happy to take you there directly.

What’s your product equivalent of the inevitably  fading paper Yellow Pages – and what are you doing to ensure its inevitably declining revenues are reinvested smartly to grow your digital future? In the mean time – what are you doing to build the bridge-work that will lead your laggard customers to the new world as fast as possible?

Yellow pages

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  • 1 Dave Guevara   September 3, 2013 at 12:52 pm

    nice example Mark, and a good reminder about the appropriate use of cash cows, while building for the future.