It is that time of the year when most Gartner Magic Quadrants are in the facts review and draft stage. A stressful time for all the marketing and analyst relationship folks. It is after all their job to ensure that the companies they work for are featured in the best possible position.
Since its first appearance in the 1990s the magic quadrant, has become the de facto standard for comparing and ranking vendors. For the uninitiated , the very term ‘Magic quadrant’ has a mysterious ring to it. Thankfully Magic quadrants, often abbreviated to MQs are anything but magical.
In its simplest form , MQ is an excel sheet that captures all the attributes that define a firms ability to deliver projects to customers and roll out innovative products. These attributes are assigned different weightage and combined to get the final position on the 2×2 matrix.
The horizontal axis of the 2×2 matrix is ‘Completeness of Vision’ , which is Gartner talk for your ‘Innovativeness’ and the vertical axis is ‘Ability to execute’ which thankfully is just what it says., i.e. your company’s ability to deliver well on projects and scale up to meet customer demand.
Gartner uses an elaborate survey to assess your firm on these two axes. For instance your investments in R&D could be a factor in your completeness of vision and your revenues and geographical presence could be an indicator of your ability to execute. The following mind map captures some of these factors. The weights assigned to them is sometimes tweaked to ensure that they are is no overlaps on the graph.
The 2 x 2 matrix breaks down nicely into four quadrants: Niche, Visionary, Challenger and the much sought after Leaders.
Niche: Companies featured here are low on completeness of vision and low on ability to execute. If you are a new entrant in the market with a very limited product or service offering. you are likely to find yourself here. Don’t beat yourself up. Featuring in a MQ, is in itself a big win for you, you are on the right track. However if you are an established company finding yourself in this quadrant should be setting alarm bells.
Visionaries: This is where you are likely find startups with sustaining innovations. These are companies with an innovative new idea, but lack the ability to scale their delivery across geographies.
Note that I specifically mention innovation of the sustaining type, I make the distinction between sustaining innovations and disruptive innovations. Gartner magic quadrants, in my opinion are terrible in featuring disruptive innovations simply because they listen to customers who are served by the established players. ( Read my blog on disruptive innovations to know more.) This is my biggest gripe with MQs. But then in support of MQs, their target audience are CIOs who are by their very nature conservative and rarely take the risk of investing in disruptive technologies.
Challengers: If you are an established player in your industry, have the scale across multiple geographies, but are old fashioned, risk averse and unwilling to invest and productise new innovations; you are likely to find yourself here. I added productise as an after thought because a number of companies claim to have investments in R&D and will even showcase lab demonstrations of their innovation. In my opinion what separates the boys from the men is their willingness to take these innovations to the market, acquire customers and delight those customers. I use the term innovation loosely, but it includes technology , process as well as business model innovations.
Leaders: This is obviously the holy grail for all companies. A spot in this box means you have great products and solutions, your solutions are innovative, you invest in R&D and productise great ideas. And you also have the scale and breadth to cater to customer demands in every corner of the world.
Now you know what an MQ is, how it is built up and what the various quadrants symbolise.
Who reads Magic Quadrants and Why ?
Magic quadrants are read by a wide range of decision makers from CIOs to Venture capitals. CIOs use it as a guide to short list relevant vendors and validate their decisions. Venture capitals and established firms use it to evaluate potential investments and acquisitions. Companies in the Visionaries quadrant are prime targets. It is even used by some competitors in their SWOT analysis.
What is the best place to be in the MQ ?
This is a tricky one. The best way to explain it is through an analogy. If Gartner ever did a MQ for cars it would probably look like this:
Which one would you buy ? The answer to that question depends on a very particular set of attributes that you value. A young upwardly mobile professional may lean towards a BMW, while a environmentally conscious socially responsible customer may want a Prius and the value for money customer will pick the Toyota. The point I am trying to make with this example is that there is really no bad place to be.
In my opinion the only bad state is if you move from Leaders to Challenges or from Visionaries to Niche , i.e. a move left or a move down is bad.
Now that you know the basics, lets turn our attention to the question we started out with. What is a ‘Fact Review’ and how to go about it. Seasoned AR professionals will be well aware of the pitfalls but for the newbies here are some tips.
What is a fact review and what are you expected to do ?
This is when you get to see the draft MQ with your firm’s position on the 2 x 2 matrix along with a few lines on your strengths and cautions. You have to confirm your acceptance of these statements in writing to the Analyst, you also have the option of scheduling a call with the Analyst.
Some companies try to use this opportunity to drown the Analyst in data in an effort to move the dot further up or right. Even the ones in the leaders quadrant try to jostle their way further up past their competitor. Resist this temptation. Hard sell your position only if you think the Analyst has misread your facts.
Hopefully the information here will give you the basis to get through this phase. But the process of preparing for an MQ starts well before the survey begins. What you need is a well thought out marketing plan to influence the influencer.
My next blog will take you through that process. Write back to me to let me know if this was useful, also let me know any specific area you would like to me address. I don’t claim to know everything , but I will share what I do know. Looking forward to hearing from you.
