Personal Log: The 7 Tenets Of Building A “Star Analyst” Firm

Published on July 24, 2010 by R "Ray" Wang

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.

2.  Analyst friendly policies and IP rules.
Star analysts have to own their intellectual property (IP).  A big component of their personal brand manifests from their thought leadership.  The analysts value their IP.   Yet, professionals also know they are building a firm.  But you have to preserve their option to leave and go do their own thing when you need to.  Stars shirk the non-compete.  Almost everyone agrees that you donate what you build to the firm while you are there.  This is a key tenet.  However, analysts should always leave with their work products and the company can always keep what is built.  This policy is the most equitable as you are lending your time to the firm and the firm is benefiting by collecting your IP for future use.  Most agree that blogs, books, and some other areas that drive personal brand provide good carve out exceptions.  If a firm clamps down on IP rules, they are recreating the autocratic Gartner’s, IDC’s, and Forrester’s of the old world.  You’ll hinder the best IP from being surfaced and shared.  You’ll keep people from servicing the clients to the best of their ability.  Your firm may need a non-compete because its so onerous to work for and they don’t know how to retain talent.  (Side note: petition to remove non-compete clauses in your state so you preserve your freedom to choose your employer of choice. Employees in Massachusetts did not fight hard enough.)

The other part of IP is about who owns what IP that’s created.  Star analysts are happy to share IP with those they respect.  They also work with other smart people who recognize that IP is not easy to create and the inventor should be respected.  Rules should acknowledge the creator and designate rights as to how IP is used and accessed.  Yes the firm also owns the IP, but the creator while still at the firm should have full control on who gets trained, how much is shared, and how quickly the IP is commoditized.  The 40 I talked to mostly agree that 18 to 24 months would be the limit to make the money back for the ROI of an idea.  However, we all agree that it would be predatory to take someone’s IP and claim it as their own.  Worse, it would be a lack of integrity to take another’s IP without permission and taking credit.  Grabbing IP that you knew someone else had but didn’t want to present to a client that you have would also be wrong.  Even worse, taking someone’s IP, giving it away to a friend for free, and then asking for forgiveness would be an obvious example of bad integrity.  IP is all we have and we all own it.  But you must respect the creator’s rules and decisions.

Lessons learned:  If you want the best, then no non-competes and analysts should have ownership and control of their IP.

3.  Analyst firm self-ownership.
Star analysts must have autonomy yet ownership.  Analysts should have some form of equity that is based on when they joined and also how well they perform.  No one wants to work so hard and then have the company sold without something to show for it.  If you perform, you should have a chance to gain more stock.  If you don’t, you miss out till the next time you perform.   Stars don’t want a static structure where the founders get fat and then get lazy.  You need a free market model to recognize and incentivize performance.

Analysts have to run the firm, not some management operations weenie.  If you have a management operations weenie, they are picked by the analysts and have to report to the analysts.   At about 10 partners, you need a managing partner to set the direction of the company and be responsible for operations.  Managing partners must earn the trust of the super-majority of analysts or they render themselves ineffective.

Major strategic decisions should require a super majority vote of 2/3’s or 3/4’s depending on the issue.  This is one efficient way to gauge the quality and support for an idea.  That managing partner would receive funding from a small budget by the analysts.  When it makes sense, that managing partner would receive more funding based on the size and maturity of the firm.  If any key decisions requires funding, it would require a super majority, or analysts would chip in to make it happen.  Over time, analysts build trust in how they work with each other and some norms become operational practice, especially those with economies of scale that are accepted by the analysts.  The firm must rely on analyst opt-in interest to gauge the market demand and funding of ideas.

Lessons learned:   The team must own a piece of the franchise in order to align with market driven business development priorities.

4.  Collaborative environment.
High performing organizations must collaborate to survive.  Collaboration drives the best ideas to the clients.  Most analysts interviewed agreed that collaboration serves as a big driver to join a firm.  However, analysts must be selected for minimal overlap in coverage areas.  Why? this keeps analysts from being protective of their ideas.  However, you want to hire analysts who are curious and capable enough to look at the intersections of coverage areas.  These requirements enable analysts to find and create new areas to solve the tough multi-disciplinary client issues.  Analysts can only collaborate in an opt-in manner when they earn each others respect.  Respect must be earned over time and through interactions.  Collaboration can not be coerced but should be encouraged by setting up the mechanisms in place to facilitate the exchange of ideas.

The experts suggest that you conduct weekly research meetings.  Analysts can take turns to share trends among the teams.   Analysts should share their findings once a quarter.   Brainstorming sessions should be led quarterly to lay out a firm’s perspective on trends and predictions.  Face to face meetings and get togethers at partner meetings should mostly focus on thought leadership and big ideas.

Why and when would this all work? When:

  1. Analysts own the IP and can leave with it.  This means people would have minimal incentive to hold back their best ideas.
  2. Analysts feel comfortable when they are working with experts in different fields.  It removes the barriers to trust and it helps inspire new ideas.
  3. Coverage areas do not overlap too much.  No one would feel threatened that their franchise is at risk from another analyst.
  4. Analysts enjoy sharing and teaching.  The good news – most do, otherwise, this job would be a bad fit. Nothing beats the exhilaration of building a new topic area, solving a tough problem, or formulating a big idea is a significant driving reason to come together.

Lessons learned:  Collaboration is built on mutual trust and respect.  Collaboration is by nature an opt in activity and should be encouraged but not forced.

5.  Greater transparency and strong code of ethics.
Every person I spoke with emphasized the need for transparency and objectivity.  This is the core to a firm’s brand.  If you lose this, you are worth nothing. If you choose to compromise this, you lose the privilege to serve as an analyst.  Trust is the key currency in the industry analyst profession.  You are given the responsibility of advocating for your buying clients.  You are given the privilege of confidential information from seller clients to guide them with strategy and advice.  You play a role in evangelizing market leading concepts to the media and public.  There is no other role like this that commands this level of responsibility and respect.  You need to remember this and not stray from this vantage point.

Consequently, analysts have to adhere to a code of ethics that make them an analyst. Analysts must conduct research in a way that preserves integrity, exudes objectivity, and delivers market impact.  The common key values and ethics experts expected from analysts include:

  • Integrity.  If you are told you are under an NDA from a vendor and publish, well you lack the integrity to be an analyst.
  • Objectivity.  If you write a white paper without full editorial control and mention the vendor you are working for in a good light, well, you just broke objectivity.
  • Respect for others.  If you attack another colleague or competitor with baseless claims, then you do not demonstrate respect.
  • Excellence.  If you cut corners on work to achieve a result, you lack the spirit of excellence.
  • Personal responsibility and accountability. If you make a mistake and can’t admit to it or pay for those damages, you don’t have personal responsibility.
  • Honor.  If you promise something to someone and fail to deliver, you lack honor.
  • Humility.  If your are always promoting yourself and not keeping your ego in check, you lack humility.

Lessons learned:  While individuals play the primary role over the firm, you must be guided by a code that sustains both the firm’s and individual’s ability to conduct business.

6.  Lifestyle friendly autonomy.
High performing individuals value the lifestyle flexibility.  The best part of the job is this lifestyle potential. If you want to work really hard, you can.  From a financial perspective, you can probably work very hard for 75 days a year and make a living.  Should you choose to work more, go for it.  if you want to take a vacation go for it.  Want to see a movie with the other half, take the half day off.  You can work from anywhere.  You have the tools to travel more or travel less by choosing what and how you want to work.  The margins are there to provide this freedom so long you set those expectations with your fellow analysts and clients.

So, the last thing you want is someone to tell you when to come in.  What time to work.  Where to go.  This is your own business.  You pay the consequences if the two largest vendors in your space call a merger and you decide to opt out.  But this is an example of how the personal responsibility and excellence values must balance out the need for a deserved vacation.  High performing people can make their own judgments and don’t need someone else breathing down their neck.

Lessons learned:  High performers seek a greater degree of freedom to control their lifestyle and make their own judgment calls.

7.  Performance based compensation and expense management.
The experts all stressed the importance of cost control around expenses.  The surveyed analysts make a profit between 75 to 80% of their revenues.  They maximize personal profit by reducing tax exposure and minimizing internal admin and overhead.  This means a top firm should be able to run on 20 to 30% of the revenues.

Non billable expenses can be kept in check by minimizing the budget for central expenses.  For example, events that pertain to a set of analysts would only be funded by the interested analysts.  No one can force someone to chip in for an event that is irrelevant to them or join out of peer pressure to chip in.  More importantly, you don’t fund an event you have no interest in.  This allows analysts to opt in when the market conditions make sense.  The initiator of the event has to earn everyone’s trust and commitment to move forward.  They should make more for taking on this risk.

On the issue of expenses, it is common for some analysts to seek first class travel, or others to have admins, or others to require large research staffs, or others to invest in personal gadgets.  However, there is no fair and equitable way to allocate such costs.   For example, what do you do when several analysts grow a business to $1M with less than 10k in non-reimbursable expenses and another one takes 24k to do that for 750k.  Is that fair or equitable?  Almost all but three agree that people will always bicker on these areas.  The consensus among the 40+ analysts – pay out more and let the analysts make the judgment call.  Preserve every analyst’s autonomy to spend their money how they see fit to grow the business.  Star analysts are smart enough to make their decisions with their money, at least more so then the firm.  Keep operational costs lean.  Achieve overhead benchmark numbers between 20 to 25%.

Lessons learned: Pay more out to the analysts as way to keep expenses in check.  Trust the power of the purse to provide good judgment.

The Bottom Line – Now’s The Time To Launch A New Firm

The rise of independent analysts, the rapid consolidation of the big firms, the growing impact of social media, and the emergence of outsourced support services provide new opportunities for those willing to take the plunge and start a new firm.  In fact, many of the influencer communities require just enough organization and catalyst to go from solo practitioner to a firm of analysts.  One obstacle to rapid growth, the non-competitive practices by some firms to lock their employees up with non-compete clauses.  California analysts have it easier as non-competes can not be enforced in a court of law.  Stay focused on the 7 Tenets and you will have what you need to break out into new markets.  Look forward to your thoughts.  Good luck and keep me posted!

Your POV.

Want to know how to start your own firm?  Looking for other high performance team ideas?  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.


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  • HI Eval-Source Team, Dylan et. al. – good post for reference. thanks for sharing! – Ray

  • Rob – Thanks for clarifying! What’s do you think the balance should be between processes and reliance on stars? Anyone have any points of view to add?- Ray

  • Ray, You are missing the point! No one wants to hire non-STAR performers, so to simply say Hire Star performers doesn’t make sense (it may sell books and get kudos on a blog).

    In an ideal world, every one would or should be a star performer, but that is far from reality.

    If you want to call yourself an analyst “FIRM” then you need processes and less dependence on “STARS”. Harvard/Stanford University and other IVY league school take best of the best students in the whole world and obviously their output is great (or better than others). for 4 years, let them take all B grade students, and then produce inventors and CEOs – then the institution would all the credit.

    Most analysts give generic advice like this column – that most internal people know – it is just that the C-level people don’t give worth to it as it is free, but they feel they are getting when they pay big bucks to outsiders for giving the cookie cutter advice.

    And looking at the rave reviews, obviously I am wrong and people are looking for common sense stuff.

    BTW, I am an ivy school grad.

  • Rob – thanks for your comments. I do agree with the first part of your message. However, if a “star” doesn’t stay humble, shows up late, comes unprepared, and isn’t professional… well, then they really aren’t a “star”. You have to have humility here as well. Just my 2 cents. – Ray

  • What’s so big deal about this blog?

    Hire the best talent, star players. Duh? Who wants to – in any field/job?

    Performance based compensations, non-competes – every thing is based on the perception of being a star player or not. A star player on a football team comes late for practice, it is not a big deal, but if others do, they are kicked out.

  • Barbara – you are right. client objectives for advisory would be top level and I’d think that the client type would also be a subcategory of what would happen next. – Ray

  • Evan – thanks for the great points. The best plans will change so hopefully the named influencers have some flexibility and intellectual curiosity to meet client needs and stretch into new areas. – Ray

  • There are interesting market challenges here:

    * There can only be so many star analyst firms since budgets pay for these stars.

    * There has to be some chemistry, some role players in any analyst firm. Suppose you had a basketball team of five Ray Wang’s and only one ball? The winning combination is always a mix of talent and motivation. Even the Miami Heat will only have 2.5 stars (Bosh is the .5) – let’s see how they do.

    * Phil focuses on Sourcing, AMR knows supply chain, no matter what Altimeter covers it will always be associated with social media, Nemertes does networking. In short, and perhaps this could be tenet #10 – DO YOUR RESEARCH on what niche or trend you can own – be a specialist. Strangely even Rob Enderle has a specialty, and that is being a generalist that knows everybody.

    Oh, and don’t be shocked that what you thought you were going to be a specialist about turns about to be something else. I thought I was going to be an R&D analyst focusing on the R. I did my market research and was certain there was demand and a hole in the coverage universe, and even validated this with some key vendors. But it turned out there was more demand for me as an expert in dealing with, well, industry analysts and non-media influencers. So instead of being an analyst again, I now have a fresh practice to build at AxiCom for AR/influencer management. “Whatever works” could be tenet #11.


  • Ray, Interesting. Wouldn’t the value / metrics sets vary by client objectives for retaining advisory, rather than by client type (tech buyer, seller)?

  • Barbara – Great suggestion for client satisfaction. I think this works well with buyers of technology. I’m curious as to how to structure the rules of engagement for sellers of technology. Any suggestions? I’mwaiting for 1 more tenet and we can publish the 9 tenets. =) – Ray

  • Andy – many great points. I think if you keep the analysts happy and provide enough collaboration and autonomy points, retention becomes less of an issue. Alumni programs also address some issue as well as strategic alliances with alumni. The bottom line- today’s notion of firm will continue to evolve as individuals gain the ability to gain autonomy. What do you think? – Ray

  • Bob – thanks for your great points. This starts with trust and integrity. I like the “named infliuencer” tag. Might use this more! – Ray

  • Dan – always value your input and opinion. 1. agree that the big guys will have a place in the market. big data is one part of the equation but the larger firms also have a key role in how they server their clients with a different type of scale. 2. your last point of rotating out and coming back is very valuable. The cycle of going from firm to vendor to practitioner and back only strengthens experiences. 3. i was unkind about the operational manager. Operational managers are key. I’d put sales people ahead of all this. We need more Jerry Maguires. Hope to catch up for lunch soon. – Ray

  • Ray, Thanks for expanding on the IP. I see what you’re saying now.

    I do have one suggestion – an addition! If you’re not dead set on “7 Tenets”, perhaps you could a tenet dedicated to negotiating and measuring analyst value delivered to clients. This would bind the 7 tenets to client satisfaction and perhaps put some more teeth into your star analyst thing. E.g.:

    – Negotiate the target values & metrics with each client (even if it’s a matter of giving clients a menu of choices).

    – Measure analyst services delivered against the agreed upon values, and periodically report and discuss findings with clients

    – Hold each analyst, and the collective of analysts and crew, responsible for delivering value as promised. Perhaps tie compensation/penalties to this.

    For clients, this kind of tenet would be a killer differentiation from the old guard (where value is measured primarily in quantity and perhaps turnaround). It would bind the analysts to meeting (or exceeding) customer requirements.

    It could be a riff on an SLA, maybe a VLA – Value Level Agreement.

  • Hi Ray

    In response to your question “what would you do to create the next gen analyst firm? what would you think would attract and retain good talent?”, I would love to write an essay on this but for now I guess I can share with you a few thoughts.

    I think think that you have highlighted some of the key ways in which analyst firms can become attractive places in which to work.

    But, analyst firms need to and often do recognise that they will have annual staff attrition rates of around 20%. Therefore it is very important for analyst firms to ensure that they are not dependent on any particular analyst or group of analysts. If they only employ analysts that can actually analyse as defined in my earlier post, and focus on training staff to provide additional commercial value (that you might describe as thought leadership)the risks associated with losing staff (and IP) should be minimal.

    Another key point in this discussion is that analysts that bring the greatest commercial valie to a firm are the most likely to set up their own business or be offered a position that pays them a lot more than their role within an analyst firm. So, I think one of the key areas is compensation. If analyst compensation is linked to the commercial value that the analyst generates (as you mentioned in one of your tenets), the analyst has a greater opportunity to get rich within an analyst firm and less of an incentive to leave.

    I also think that more experienced or ‘senior’ analysts should keep ‘getting their hands dirty’. A lot of more experienced analysts within the big firms cruise around the world giving high level and cliche-ridden presentations and cease to be deeply involved in research and analysis. These activities are often palmed off to less experienced or ‘junior’ people. This causes two major problems. Firstly, the more experienced analyst starts to live in a very abstract world and becomes too far removed from what is actually happening in the industry/market and secondly the less expereinced analyst who does the hard work doesn’t have the best analytical skills. They need to work closely with the more experienced analyst until their skills are considered to be mature.

    You’ve covered most of my thoughts. Perhaps one other relates to training. I don’t believe that analyst firms offer sufficient or the right training. Often this is because the language we use is so vague and different people have different ideas about what the role of an analyst actually entails. This has an adverse effect on the type of training provided. So, back to my original point. If we want ‘star analysts’ or ‘thought leaders’, the first thing we need to do is define what these terms actually mean.

  • Ray

    Excellent thoughts & tenets. Well done.

    The trust, integrity and ” star power” ( which I prefer to call “named influencer”) is becoming more elusive in our market as leverage, volume and faceless advise prevails.

    There are plenty of forensics within many of the larger firms who may have high market / brand share but now struggle with decreasing wallet share, both in new business and retention. Their churn alone ( 20% of $5bil) defines a very big market.

    This of course is great news for small / new firms with top talent. There is a lot of money to be earned by respecting your clients, your peers and yourself.

    Again, very good work Ray. Thank you for sharing.


  • Ray, a good discussion and great thoughts from you, as always. I agree with some of what you say, and I also support some of the comments that have been made here. So here are my thoughts.

    First, there is a place for the big guys. The one place that they could really provide value is on the acquisition and evaluation of data. We didn’t have a lot of data at Giga, but we had a lot of great analysts. The analysts were always hammering on us for more raw data, and I believe that’s very important, because without it, you get into a rut where an analyst just continues to spread his/her “old” opinions. The big guys have the resources to do that, and that’s a good place for them to be leaders.

    Second, I really support your idea for a firm that has top analysts, and focuses on them as the product. Hiring should never compromise on an individual, and to me every analyst needs to have real experience in the field that they cover. Not learned knowledge from a book, but real experience. That’s the reason why clients will listen to them. I’ve seen both sides, and I know that experience is the key. And in addition, the analyst firm should recognize the value of (and even encourage) analysts to rotate out to the real world with a free pass to return. I have seen that happen very successfully.

    Third, even if you think that analysts can run the company, most of them don’t want to do those other things that were mentioned, like operations and sales. Yes, the analyst is the product, and is needed in the sales cycle, but a good sales person can be a godsend to good analysts, and multiply revenues by allowing the analysts to focus on what they do best. The same goes for operational management. All that said, I agree that the analysts are the key, and the other parts of the company should not outnumber the “product”.

    Again, all good thoughts. Thanks for getting my mind work on this again 🙂


  • As usual, another great post. I think you summed up the tenets correctly. We wrote a post on this very thing about analyst firms driving value and thought leadership and what needs to be changed. THE EVOLUTION OF ANALYST FIRMS –

    As Analysts/consultants we also create thought leadership which is bringing us greater notoriety within the vendor community and with the organizations we deal with for evaluations.

    We thank Ray for having the guts to put this out as that can also open yourself and your firm to vulnerabilities that can easily be attacked – again good job

  • Andrew – thanks for taking the time to provide input. what would you do to create the next gen analyst firm? what would you think would attract and retain good talent? – Ray

  • Hi Ray

    It is great that you are putting some serious thought into ways in which the analyst profession can be improved for those that work within it and for its customers.

    In my view, the analyst business needs more structure than it currently has. It is completely unregulated and there is no common idea of what makes a great analyst or great analysis in our business.

    You use terms like ‘star analyst’ and ‘thought leadership’ but in reality, there is no common view as to what these terms actually mean. We need to attempt to define the terms that we use and make our language as well as our industry much more transparent.

    Let me have a go at defining the role of the analyst and what the best analysts do.

    In my opinion, the role of the analyst is to interpret empirical evidence in a way which is both new and which offers commercial value to customers. An experienced or good analyst takes this further and is able to put forward propositions or hypotheses based on these interpretations. These propositions or hypotheses offer significantly more commercial value than interpretation alone. Some may call this ‘thought leadership’.

    In reality analyst firms should only employ analysts who can do one or both of these activities.

    Alas, this is not what analyst firms do. We are not like other business services. People don’t join analyst firms with a set of educational and professional qualifications and gain promotion based on experience. Many analysts spend too much time listening to marketing messages from large customers and acting as an extension of corporate PR machines.

    Indeed, people from many different walks of life find themselves in the analyst business and those that excel are often not the best analysts.

    Those that excel tend to be people who communicate well, present well, have excellent networking skills, and get a lot of media coverage. In addition to this, they need only be adequate analysts.

    I am not sure that we can say that there are fewer ‘thought leaders’ now than in the 80s or 90s unless we

    a) define thought leadership more clearly that my suggestion
    b) spend a significant amount of time reviewing and comparing deliverables

    I’ve been in the analyst business since 1995 and have always found that most of what was produced was pretty mediocre but it has always been possible to find fantastic analysis. However, this often comes from areas where you would least expect to find it.



  • Kevin – you make great points. So for this type of analyst firm to succeed, you will need Jerry Maguire’s. Great sales people who can broker the large complex deals. You will also need the analysts who can close their own deals, evangelize an idea, wow a client. – Ray

  • An interesting read but skewed by the interviews towards creating a great environment for the analyst. Ludovic is correct about management, and then there is the very thorny issue of sales.

    I was at META Group from ’99 till the acquisition. From an analyst perspective it did well with all these ‘best practices’, however poor management and a mediocre salesforce left the company financially weak and it was finally gobbled up by Gartner

    Analyst are the product, but you can’t just rely on a great product, you need brilliant management and a great salesforce. Ray, how many times have you seen a company with a really great product and saw it would fail because of sales/marketing, management or finance?

    In my experience, while IT analyst are great at IT, rarely they are great business people. Usually they fail to understand the value, indeed the need for management and sales. Often analyst are hostile to the sales and management due to ego or bad past experiences.

    Ray, an interesting start and I’d encourage you to speak to some salespeople to get their POV.

  • Barbara,

    As an independent analyst I realized early on that my only value was my IP. My ideas cannot be sold, but can be licensed.

    All my work is licensed, without restrictions of use in most cases, as long as there are no changes to the content. Any change reverts the license back to me. I retain IP on all products and byproducts of my work (at least what I do, the original content used to create a byproduct by others must be attributed via a CC 3.0 license) and can revoke the license on any byproduct at any time.

    This is the only way I can work and retain control of my work. Will I sell the same product to two different clients? No, I will not. But they may get different evolutions of a concept as it applies to their business — and this is also critical since the applicability of the content to the client is what will make them (and me) successful.

    To think that anyone can own my IP is beyond imaginable. I had ideas before I went to work for Gartner, and delivered on those while there, and extensions and continuations of those ideas are what fuel my practice today.

    Keep in mind that this is also fair for the practice or firm where analysts work: there is no need to track who had which idea when, and there is no need to “own” ideas — rather create byproducts of them to use as needed.

    It is a collaborative, knowledge-driven world we are moving into, and we need to know that we can do both freely without constraints.

    Just my two cents…

  • Ludovic – as always you ask the tough questions =). on #1 – Managerial skills is an art. If you start with better talent, usually you deal with less issues. It’s true, it’s hard to find someone strong in all 3 areas of thought leadership, client facing activities, and operations. However, if the goal is not to build the next 1000 person firm but to build a highly effective and sought after 100 person team, I know it’s possible. On #2 – branding is easy. everyone gets a template and a common blog site. however, this goes back to quality of output. There may be more than written output, including videos and webinars in the future. this is where there will have to be some agreement and alignment up front on at least look and feel. I think at the report level you can do that. On the blog and in video, I’d rather have the personality come out. – Ray

  • Hey Ray,

    Great post really, you’re hitting many on the head (get top talents, etc) -you’re leaving us wanting more on what’s next…

    Two comments.

    While some analysts are great at running operations, my personal POV is that it takes already so many qualities in a single person to be an analyst (public speaking/charisma, subject matter expertise depth, writing skills) that more often than not managerial skills aren’t as well there. Maybe the reason is because thinking out of the box isn’t a operations management requirement (remember creative accounting).

    Branding and deliverables quality/consistency are often a pitfall for independent and middle sized firms. Some large firms also struggle with it, with allowing some poor researching while at the same time great minds publish actionable and thought provoking pieces. How do you solve this?

  • […] are at risk of being swept aside need consideration. As I implied in an earlier piece talking to Ray Wang’s model of new firms, a strong ethics code is no longer something that you can assume but something that needs to be […]

  • Phil – i hope not. i think we can all improve on this. the challenge for the big firms is that most are public and they are working towards public market expectations which do not allow them to innovate that much. Plus, the money machine on pay wall research is so hard to give up =) = Ray

  • If you can’t drive thought-leadership, you end up ranking vendors and playing a PR game to make money. That behavior has left the analyst business in the sad state it’s in today. It has to move back to thought-leadership – the whole business grew up in the 80s and 90s on it, and something went wrong somewhere when the suits took over 🙂

    My fear is if a “star analyst” firm can’t make it in the next year, the analyst industry as we know it will go the way of the print media business….


  • Barbara – you raise a key question about IP. I think in this new world of free agency, a few trends have emerged:
    1. Your employment is “leased” and your time and ideas provide an additive collection and portfolio to the firm you work.
    2. The best talent can leave at any time so you have to provide more than just a financial incentive, though that usually helps
    3. The work products you create can easily be refashioned as ideas can not be copyrighted.

    What this means – IP protections as we know it do not make as much sense. Firms will evolve to create derivative works from your contributions while you are with them and when you have left. The IP creator will be able to do the same. For “stars”, they should demand no less.


  • Phil – great ideas. the key is to build the firm around cutting edge, research. At the end of the day, no thought leadership, no real analyst firm. – Ray

  • Ray,

    Some fresh ideas here! I wonder if you would explain a little more, what unique IP does the firm “own”? If analysts walk away with everything — free to give to any other firm — what of lasting value does the firm retain?

  • […] from my change the world post, colleague and occasional collaborator Ray Wang asked me to look at Personal Log: The 7 Tenets of Building a ‘Star Analyst’ Firm. Anyone who is thinking about restructuring their practice or going for the creative destruction […]

  • Ray – you have summed this up perfectly.

    What would be needed is a true collection of A players, each of whom have the following attributes/values:

    1) are seen as the best authority in their area and tried and tested over time
    2) are passionate – and let it be shown. passion sells.
    3) are constantly pushing the boundaries of thought leadership and unfraid to test the “edges” of their coverage area, unafraid to view the big picture and make a stand
    4) are proud of the common analyst brand and their team, and push that hard at every opportunity (not just themselves). Having A players promote their collective analyst brand, and not just themselves, is paramount
    5) really work the collaboration angle to further the quality and value of their work. they have to be unaffraid to collaborate!
    6) can command very high audiences when they have something to say, and have a frequently updated blog
    7) are truly independent and unafraid to voice opinions that stir up even their own clients
    8) do more than just “pundit” their space – they contribute to common research goals
    9) are unaffraid to take personal accountability and responsibility for developing their business
    10) really “see” the big picture across both technology, services and business issues. we’re in a converging world!

    The key is not to build the next mini-gartner – those days are in the past. it may work for some who like the old model, but the only thing that would excite the industry – is a true analyst entity that raises itself to these values and sets itself apart from the old world. I don’t think it’s been achieved yet – some of us are trying and quickly learning that you need to break from the habits of the past if you truly want to “change the game”.

    Phil Fersht

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