Last week’s launch of Yankee Group’s affiliate network is an interesting response to a number of challenges that other analyst firms face. Certainly the network is a reaction to Yankee’s specific challenges, which Laura surveyed well: it was developed as a mechanism for continuing to benefit from senior Yankee staff (initially four and now three) who were interested in that sort of relationship with the firm after its recent retrenchment. It helps Yankee to deepen its research focus on mobility, and to continue to serve clients with interests either on the edge of the focus area, or in growth areas.
Affiliates are, of course, a popular model but they differ. On the one hand there are organisations like GigaOM Pro, Coleman Research Group, GLG Research and Guidepoint Global (which Lighthouse’s Duncan Chapple is also part of). These are on-demand networks, which will find you an expert on your topic. However their advisors don’t play a highly active role in the organisation outside of inquiries and projects. Yankee’s approach, on the other hand, ties affiliates into core work: as well as advisory and consulting projects, affiliates will contribute content to the firm’s blog and research base. Most firms with that model will probably be giving affiliates some benefits in exchange for contributing content (GigaOm, for example, pays its analysts for contributing content).
There will be real benefits for the affiliates from the association. Moving from employee to self-employee is a big dislocation, and the flow of information to analysts making that change can be greatly disrupted. It also allows affiliates, one would assume, to access the firm’s data and research, allowing the to develop content which is still aligned to Yankee’s overall market view.
Some firms will find it easier than others to make that leap. One that comes to mine is PAC, which has built a highly effective network twice: once through SITSI and then a second time, and on a more ambitious scale, with a partnership involving firms in Italy, central America, south America, Japan, China and South Asia. Unlike Yankee’s network, PAC is connected to companies rather than individuals. However the challenges and benefits remain the same. After investing the effort needed to harmonise data gathering, research methods and the format of deliverables, all the partners are able to gain more content spanning greater topics and more local insight. Since most of Yankee’s afifliates are former staff, one would hope that methodology should be simple for them but, to be sure, Brian Partridge will track their work on a day to day basis.
What will be interesting is to see the way that analyst firms are able to fill their geographical gaps, especially in Asia and Latin America. Analyst firms which demand that partner agencies work in English will find that in many markets, analyst and consulting companies are able to grow quite successfully without needing to master English. As a result, the choice might to be use the same partner as a competitor or place a Spanish-speaking colleague as the liasion manager.
However, the unanswered question is: how far will the affiliate status allow analysts to win more of their own consulting under their own brands? How will firms react if affiliates bind together and win projects that the ‘parent’ firm has decided against doing? What happens when an affiliate wants a non-exclusive affiliate with a competitor?
Needless to say, the key question here is the client experience. Yankee’s clients will still get access to analysts, but the danger is that some affiliates will eventually find themselves with less access and less momentum as a result of their affiliate status. And perhaps not all of them will succeed in self-employment, or might find better offers elsewhere. Needless to say, it will be much harder to replace an affiliate than it will be to replace an employee because analysts tend not to be highly entrepreneurial. So the risk in the model isn’t it how it works, but in what happens when it does not work well (for example, if project management is weak, the ownership of IP becomes confused or if the calculation of compensation is not clear and fair). And, in that respect, that is a new learning opportunity for the analyst industry as a whole.