Deal or No Deal, that is the question!
“I checked with my champion, deal is still on for Q2”
This might no longer be enough in uncertain times…
One of the first things that happens, especially in mid to large enterprises, is that signing authority begins drifting further up in the org, even for the same amount. This is due to a combination of two dynamics that rear their ugly head in downturns:
- Spend freezes: “need to check with my boss”, and
- CYA: “don’t want this decision pinned on just me!”
Case in point — I spoke to the CIO of a large bank this morning. Normally, he’d only look at spending items above $1M or more… and that’s certainly been true for the past 5+ years that he’s been there. But as of early March, POs as small as 100K require his approval. This change has percolated all the down the org where discretionary budget has disappeared and managers have seen their approval authority shrink to a quarter, or less, from just a month ago. Which means even a smaller, say $20K, deal might require additional approvals.
Dig deeper into the procurement process
Which brings me to the main point of this note — when scrubbing your quarterly pipeline when the macro environments turns suddenly, it’s good to ask:
- Has there been a change to the authorization chain?
- Does your champion still has signing authority for your deal?
- Any additional legal review, MSLA terms, tech reviews, etc that have shown up?
Every outgoing dollar from enterprises will undergo far more scrutiny until the macro situation improves — digging in deep into your customers ‘new’ sign off process now (and every week when things are changing this fast) will help avoid a nasty surprise at the end of the quarter!
