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- Sales and revenues are impacted by analysts with outdated or incomplete information providing inappropriate advice to customers and prospects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 and few disadvantages. Advantages include:
- There is consistency in funding and objectives
- The AR staff will be permitted, encouraged and required to take a long term point-of-view
- The AR team has access to top decision makers for analyst interactions that enhance the ability to impact the top of SageCircle’s “Analyst Hierarchy of Needs”
- Planning will include knowledge about confidential activities that permit AR to prepare for “surprise” announcements
- Strategy has established collaborative relationships with other parts of the company
- AR managers should seriously evaluate where AR falls in the organizational structure of the company
- If it apparent that the current location is sub-optimal, then AR managers need to evaluate a better organizational home
- Like influencing the analysts, changing the reporting structure is a long term project so AR managers need to develop a plan to educate executives and build support for a move
Bottom Line: Vendors often follow dead ideas that have long passed their “sell by” date. AR teams needs to attack dead ideas and work with their executive sponsors and colleagues to come up with better approaches that address today’s challenges.
Question: AR managers – Is AR slotted in the appropriate spot in your company’s organization structure?