Executives care about operational metrics – a dead idea

Public policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.

Dead Idea: When reporting to executive sponsors, analyst relations (AR) must focus on operational metrics like activity counts (e.g., the number briefings conducted), budget status, and so on because that is what executives want.

Back Story: When a SageCircle strategist conducts an Analyst Relations Diagnostic™ with an AR team he invariably finds the AR program uses operations metrics for reports to executives. Why? It is not just because AR finds operational metrics easier to gather, though there is part of that, it is primarily because that is how AR has always reported to the sponsor because “that is what the executive wants.” Maybe this is true, but probably not.

Problem: The root of the problem is that many AR programs have simplistic goals, often modeled on PR, to “get the word out” and to “get the analysts to say good things about us right now.” This approach is often the right one for PR because PR is rightfully focused on building awareness.  However for AR, this approach leads to a focus on short-term activities that accomplish short-term goals. It is easy to see how this leads to AR reporting on those short-term activities.

AR should be focused on longer-term strategic goals (e.g., influencing revenues during the sales selection process or “moving the dot” over several years).  While some AR programs understand the need for a strategic direction they end up planning highly tactical items such as

Analysts are cynics – a dead idea

Public policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.

Dead Idea: Industry analysts are irredeemably cynical

Back Story: It is common for many vendor executives to think of industry analysts as cynical. And at first glance, Gartner analyst Ray Valdes (bio, blog, Twitter) would seem to confirm this perception by characterizing his reaction to a vendor’s announcement as cynicism in his blog post The Secret Sauce Behind Google Wave. 

“…My initial reaction was colored by instinctive reflex of cynicism, and basically amounted to: Yes, it’s very cool and innovative, but what has Google done for the enterprise lately?

After a healthy debate with Gartner colleagues, spanning a range of views pro and con, I reviewed the Wave video and the documentation, and felt greater excitement than I did during the keynote (where I was one of the few sitting down during the standing ovation). I won’t use this post to make one of those forecasts, such as “Google Wave will kill X”, where X can be any number of well-known vendors or products. That kind of statement is overly glib, because we are just a few days into a scenario that will take 5 years or more to play out, with many twists and turns along the way…”

Although he uses the word SageCircle would not characterize Ray’s reaction as cynicism (def. “An attitude of scornful or jaded negativity, especially a general distrust of the integrity or professed motives of others”) but as healthy skepticism (def. “A methodology based on an assumption of doubt with the aim of acquiring approximate or relative certainty”). Why this different characterization? Clearly Ray had his doubts after the Google announcement, but after conversations with colleagues and further research he moderated his point of view to at least neutral if not slightly positive.  

This is an important lesson for analyst relations (AR) managers to convey to their “cynical” executives – and maybe even themselves. While some analysts are truly cynics and thus a problem (see There are many types of problem analysts), for the most part industry analysts want vendors to

Research is commoditized – a dead idea

Public policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.

Dead Idea: Analyst research is commoditized and thus analyst influence is dropping

Back Story: The other day Carter was chatting with a very smart VP at a major software firm about whether or not analyst influence was waning due to social media. The VP kept mentioning the commoditization of research and its impact on influence almost as if this was a new phenomenon. This was not a unique conversation as SageCircle strategists discuss this topic every week with people holding various positions in technology vendors.

The topic of “research is a commodity with so much free information on the blogs, so why do end users buy it?” is a common question, but the underlying idea is not new. In fact, chatter about the commoditization of research goes back to at least the early 1990s.

Before the World Wide Web, Ziff-Davis was considered Gartner’s biggest threat, not META, Forrester or Dataquest. Why? It owned so many IT and telecommunications magazines and had the potential for huge amounts of content that could be aggregated, integrated and multi-purposed. Because Ziff-Davis could pump this information out in so many channels (publications, consulting, events, and so on) it could quickly commoditize all that Gartner research in those official three-ring binders on so many IT managers’ desks and kill the analyst business.

It did not happen.

Later when the Netscape browser made the World Wide Web a practical tool for accessing magazine content, academic papers, and vendor material, the talk once more was how the industry analysts’ research is a commodity that could not support a business.

This did not happen.

Since blogs came on the scene the talk is now that all the content and commentary available in the blogosphere render the analyst research a commodity and analysts irrelevant.

This has not happened so far.

The “dead idea” in this case is that analysts’ written research is the sole source of their value to enterprise clients and influence. The reality is that written research has always been a commodity. There have always been magazines, newsletters, books, academic papers, management consultant quarterlies, vendor white papers, white-paper-for-hire analyst reports, and such that offered similar content to what were in analyst research notes. Because written research has always been commoditized, the advisory analyst firms have always emphasized on-demand, convenient access to analyst advice. It is those 30-minute phone-based inquiries that sell, not the written research.

Problem: Executives who perceive that analyst influence is dropping because their research is a commodity will be less likely to invest in AR or making themselves more effective spokespeople.

New Idea: Advice – personalized and delivered real time – cannot be commoditized, digitized, and distributed around the Internet. AR teams should educate their executive sponsors and other stakeholders that the analysts’ written research is only a fraction of how advisory analysts deliver business value to enterprise technology buyers.

SageCircle Technique:

• AR should incorporate a formal training strategy into its AR Strategic and Tactical Plan
• Topics for training should include analyst market realities, research methodologies, and business models in addition to spokespeople best practices

Interested in insights into how to incorporate effective training into AR Strategic and Tactical Plan? Check out SageCircle’s STRATEGIC ISSUES: Challenges for AR Team seminar. The next seminar will be held on March 24-25, 2009 in Cupertino in the Silicon Valley. Click here for more information including agenda, registration and future sessions.

Bottom Line: Vendors often follow dead ideas that have long passed their “sell by” date. AR teams needs to attack these dead ideas and work with their executive sponsors and colleagues to come up with better approaches that address today’s challenges.

Question: AR – How many of your executives express the opinion that analyst research has been commoditized? Are they referring only to written research?

 

AR belongs in Marketing – a dead idea

Public policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.

Dead Idea: AR belongs in Marketing

Back Story: In the time before there was a dedicated AR position, industry analysts calling vendors asking for a briefing were often bounced around from one department to another. More often than not, the analyst would end up on the public relations doorstep because what the analyst did sort of sounded like a reporter. Because PR usually reported to Marketing, AR became a de facto marketing function even if it became an independent department.

Problem: Putting AR in Marketing has multiple problems, but a big one is consistency. One of AR’s critical success factors is consistently interacting with analysts because influencing the analysts is a process that takes a long time. AR cannot turn on and turn off interactions and be successful. Unfortunately, Marketing programs in most vendors are the model of inconsistency with resources being changed frequently.  If resources and programs are cut during recessions and restored during good times the damage for AR has been done in terms of:

• Institutional memory is lost as AR staff gets cut or moves to other companies 
• Relationships with analysts go stale due to lack of interactions or the inability to work with the same people
• Sales and revenues are impacted by analysts with outdated or incomplete information providing inappropriate advice to customers and prospects
• Intelligence dries up about analyst opinions and intentions because analyst contracts get cut reducing inquiry access to analysts

New Idea: Move AR out of Marketing and into Strategy. While there are several different options for a new home for AR (e.g., sales, product management and investor relations) each have their own issues. Strategy on the other hand has a number of advantages