Are analysts too cool for school?

One of the most stressful events for analyst relations managers is working out what to do when analysts attack. This is a topic we’ve discussed a lot over the past few years. AR managers often find that as well as focussing on the external relationship with the analyst, they need to manage the internal fall-out from an AR crisis.

The approach we blogged about in 2005 has certainly stood the test of time, and it also says a lot about effective AR strategies. Product-based firms seem to be most vulnerable to the impact of an AR crisis, because their faith in their equipment prevents them from focussing on the rest of the business. To paraphrase Tony Friscia, ‘products sell, but relationships resell’. Product-based firms often don’t stress corporate strategy or build deep relationships because they feel their products speak for themselves (and, of course, some analyst firms share that weakness).

But the difficulty in managing the internal reaction is that the firms that react most will be the ones with the most partial awareness of their business environment, and for whom an outside ‘sticking their nose in’ will be a most unwelcome surprise. Because those reactions can be strong regardless of the real significance of the analysts’ attack, AR managers sometimes need to be able to help their organisation to react less, or to be less defensive.

This is especially important when faced with confrontational analyst firms, whose culture involves scepticism that verges onto the aggressive. Some analysts fell they need to take any opportunity to knock the vendor, in order to assert their own independence, and to stimulate greater attentiveness on the part of the solution provider. In firms with a confrontational internal culture, that can get turned up to 11. Analysts sometimes vie to show to each other, and to the vendors, how unconcerned they are at challenging the vendor. As a result, vendors’ staff — and especially spokespeople unused to rough handling — get the idea that they are being persecuted. And perhaps they are. However, analysts might be equally harsh to almost every vendor, meaning that everyone gets the same bad treatment.

So, does that mean analysts are just too cool for school? Not always. Confrontational relationships with spokespeople can be, in the opinion of some analysts, a more effective way to get information and leverage with vendors. When the same analysts speak to the media or to clients, they may not have the same harsh tone.

Finally, this should not mean that analysts criticism should be ignored. It has to be acknowledged, and often points to weaknesses in the way in which firms communicate. Many firms, for example, have great products but don’t feel the need to talk about delivery, market demand, services or strategies. Under those circumstances, some analysts can’t resist the temptation to take spokespeople down a peg or two.

P.S. Thanks to Alan Pelz-Sharpe for this comment:

As somebody who has given out a fair bit of stick to vendors over the years – and been beaten back with even bigger sticks by same vendors – just wanted to say though I think this is a great post (really!) – I think it misses one key point.

Courtesy – every analyst who has worked for or with me has had it drilled into them that no matter what they think of the vendor, they should always be courteous. Even a firm like CMS Watch that has a (probably well deserved reputation) for dinging everyone – we think it important to always be professional, and deliver bad news with courtesy.

Not saying we always get it right – but it goes a long way.

Too many analysts throw out criticisms of vendors products and strategy without sufficient research and validation. I have personally watched some of the lower lives in the industry (you know which firms I mean) blackmailing smaller vendors into buying consulting and services – or risk the wrath of a scathing report. Sadly I think many AR people tar all analysts with the same brush, and a few analysts act so arrogantly (sometimes from the biggest firms) that they again tar everyone. Frankly I feel sorry for a lot of AR folk – but the way forward is for people like Lighthouse to clearly differentiate the pay for plays from the real AR firms, and for vendors to challenge analysts more strongly to back up their criticisms.

Its the job of analysts to point out the flaws – its not their job to throw out sweeping and unsupported insults.

The traditional analyst model of taking money from vendors, and claiming independence when advising end users is so broken it needs to change and be challenged. AR people could help change things – refusing to pay flights and hotels, stop giving out consulting and white papers dollars in return for good coverage, and demanding the system be fixed.

Learning to deal with analysts attacks is all part and parcel of AR work – but separating the justified criticism from the rest is also part of the work.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As SageCircle research director, Chapple directs programs that assess and increase the business value of relationships with industry analysts and sourcing advisors.