Inspired By The Lessons Learned From Others Before Me
One day on a family vacation in June 2009, my dad came up to me and said, “Son, why are you working so hard for someone else?” Coming from my father, a “company man” who worked 30 years at the same company and rose from the ranks from staff engineer to General Manager for Technology, I was shocked. He had always talked about the virtues of sticking it out with the same employer, why it was great to have a stable job, and why he sacrificed so much for the kids by sticking it out. But he looked back at me and said it again, “Ray, what’s wrong with you, you need to start your own business. You are working so hard for someone else.” Still in shock, he said, “Tell me what you need and I’ll give you a loan if you need it.” Well, this was enough for me to finalize the decision to leave.
So, I talked to over 40 successful independent analysts, star analysts, and industry analyst pioneers about what they liked and disliked about their jobs. I wanted to know the rise and fall of Meta Group and Giga Group. I talked to Barry Wilderman at Meta. I reached out to Gideon Gartner’s original crew to see if he built out ExpertNet yet. I chatted with some of the early Forresterites. I found some old Yankee folks. I spoke with AR professionals on their observations. I talked to Fred Abbot and Linda Ziffrin at V3 about which analysts were successful and why. For those who might not know, V3 is often described as the Jerry Maguire of the industry for helping to establish many independent analysts. In fact, their advice was so good, I agreed to sign a contract with them. Now, some of you even got calls from me about what made a star talented firms work. And to this day, I am thankful for your great advice and support. More importantly, the validation that the high quality firm I sought to build could be achieved. Finding the right profiles for the first few employees would be hard, but if you did it, you had a shot to make a difference for your clients and the industry.
Star Analyst Firm Best Practices Shared By Over 40 Leading Industry Authorities
The best practices came from a context of how to build the next top analyst firm. These conversations with 40 leading analysts provide insight into this craft industry. However, these tenets apply not only to the industry analyst world, but also to high performing teams of top talented individuals. Here are the seven tenets I captured in July of 2009:
1. Star quality requirement.
Almost everyone I spoke with began by saying, “Start with star talent. Don’t make compromises on B-players.” Then they added, “Most will fail to keep this up over time because the firm gets greedy and focused on leverage instead of client quality. Keep in mind, if you lack stars, you won’t attract stars. Set high standards for recruitment.” The experts are right. Buyers, sellers, and the media have to recognize your team as market leaders. The power of bringing together a collection of 2 or 3 stars can impact the market and rapidly carve a niche with the Big 3 (i.e. Gartner, Forrester, and IDC). The flip side, if you hire non-stars, you will spend too much time trying to build up a brand, train people on deficiencies, and build too much infrastructure to grow. Clients would take forever to sign up with you. You will waste sales cycles. Your sales people would spend too much time trying to explain who you were and what the analysts can accomplish. You will waste a lot of time on managing each other instead of delivering client value. Your clients who wanted you but got a junior person, would feel cheated. The pyramid leveraged model is doomed to failure b/c today’s clients want the stars if you charge star rates. Imagine if you wanted Tom Cruise but got Tom Koos who was studying to be a Chinese version of Tom Cruise. Would you pay those rates? No.
You also want to hit hard with high quality and name recognition off the back. You need to set the bar high for others. You have to earn the right to be designated a star analyst firm. The goal – bring in the top 10% of the analysts in the world together. This is how you command the billing rates. You’ll need to retain stars but that’s what items 2 to 7 talk about, so hang in there.
Now, not everyone’s going to survive the star model. If people do not perform or make it, you help for a limited period of time (e.g. 3 to 6 months) and then cut the losses because they did not make the standards, the timing may be off, or the market will not support them. If you fail to remove those individuals, you immediately lose trust, camaraderie, and respect from the other analysts in the firm. Your firm will be paralyzed with indecision, poor leadership, and constant bickering. The stars do not want to collaborate with the non-stars. The non-stars end up serving as grunts and lackeys to the other analysts. By playing a supporting role, they quickly lose respect. Better cut the losses early and avoid the tension.
Another finding, expect analysts to come and go over time. Build an alumni program because it’s good to have alumni advocates. Make sure you recognize them and encourage them to be part of the constellation of stars in the universe for collaboration. Invite them to your events. Keep them engaged.
Lessons learned: Hire and attract stars or risk spend your time spinning into a black hole. Remove under-performers early or lose trust and collaboration.
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