Much is being made in our little corner of the world of Forrester’s recent decision to require its analysts to publish to Forrester blogs rather than individually branded and managed properties. So much so, in fact, that I’ve been asked about it more than once. Hence the following commentary.
Please be aware, however, that in assessing the merits of Forrester’s decision, I’m limited by a distinct lack of primary data. It’s also worth disclosing, for those that aren’t aware, that we are nominally in the same business as Forrester. The following, then, should be taken with a grain or three of salt. But in looking at whether this is the right move for Forrester, it’s necessary to first establish what metrics you would use to judge. My own are simple: economic return.
Through that lens, I would walk through what we do know. It’s common knowledge, for example, that Forrester has in recent years seen analysts use personal properties to build their own reputations, which were then used as a launchpad for other ventures. And it seems probable, as has been claimed, that Forrester, as is typical in service based models, extracted a significant margin from those premium employees during their tenure with the firm. Those whose business it is to track such things tell me, as well, that Forrester’s brand benefited significantly from the now departed employees’ tenures.
The transaction accounting then might look something like this: the employer profited first on the margin, second on the additional volume, and last on the less measurable, but no less important, brand awareness. The employees, meanwhile, were presumably compensated at a rate commensurate with their talents, if well short of their premium status. It can probably be assumed that their individual brands profited from their experiences and exposure at Forrester, given how successfully the positions have been leveraged into other opportunities. Setting the departures of these individual brands aside for a moment, the relationship then looks like a win for both parties.
As we know from the defections, however, the alignment of the individual and corporate agendas was a temporary condition. The conventional wisdom seems to argue that this is a win for the employees and a loss for the employer.
But is that accurate? In asking the question, I’m clearly focusing on the latter contention: few would dispute, I think, that the employees would consider their post-Forrester careers anything but a win. Has Forrester lost, though?
The answer to that question seems to lie in the economics, and I think the case can be made that Forrester’s actually better off. Intending no disrespect to the departed analysts, of course, who are uniformly excellent in my experience.
Consider the economics of the analyst business: essentially you’re selling time. You can attempt to scale this through various mechanisms – rich media, webinars, reports, and the like – but ultimately the human asset scales poorly. You offset the asset cost – salary and benefits – via a variety of billing models, whether that’s packaged productions or custom consulting time. But as the visibility and stature of the analyst increases, the cost in salary can grow geometrically. Meaning that your margin on that asset will decrease over time, unless you can either scale him or her linnearly, or grow the analyst pricing at the same rate. Given the economy, the latter seems unlikely. And the former is always a challenge.
Essentially, this means that an analyst’s value as an economic asset should not be expected to grow in a straight line. Paradoxical as it might seem, it’s entirely possible that as an analyst’s experience and visibility grows, his or her value in an economic sense may actually plateau or decline. Because while you can bill him or her for more, you have to pay them at a premium that may eventually exceed the acceptable margins. In other words, your best analysts may not always be your most profitable analysts. Top heavy law firms everywhere illustrate this principle quite adequately.
If Forrester could be said to win via the departures of these analysts, however, the new policy may well be an error.
The point of the above is not that premium talent is somehow to be avoided. Far from it: premium talent must be actively cultivated, because it will in turn command a premium price. More to the point, who gets excited about engaging with a firm composed strictly of average talent? The question, rather, is whether or not premium talent is a sustainable model over time. I would argue, and certainly the history of any number of services businesses – think Law – would agree, that it is not. You need to acquire and grow stars constantly to replace those lost through natural or unnatural attrition.
But Forrester’s policy could well act to inhibit the growth of the next stars, by dissolving them into a larger population of voices from which it will be more difficult to differentiate. As bright and talented as many of the Forrester analysts I know are, it’s difficult to make stars of your people when they’re just another one of your people.
The problem with the no star model isn’t that the stars leave; that’s natural, expected and arguably good for the parent firm. The problem is when you’re failing to produce new ones. It’s not clear that the Forrester plan will, by itself, cause this. But as an analyst, it would make me think twice.
As for RedMonk, while Dennis Howlett and Jonny Bentwood very kindly set us up in opposition to Forrester in this case, the funny thing is that from an infrastructure perspective we actually look a lot like what Forrester is proposing. Our blogs are all centrally hosted, and each one carries a RedMonk brand links back to our other properties.
To Dennis and Jonny’s point, however, that’s where I think the similarities end. We very actively want to cultivate individual voices and invidiual brands – via Twitter and elsewhere, and I think we’ve had some modest success doing so. Our view is that value that accrues to one of us will inevitably accrue to RedMonk, whether the connection is direct or otherwise. I can’t imagine policing our employees personal blogs, podcasts or properties for work related content, because it’s a negative for the employee and unlikely to be of benefit to us.
Of course it’s somewhat easier for us to be ourselves, given that our target audience are themselves individuals. The developer communities that we exist to learn from, advocate for and agitate on behalf of would be unlikely to welcome a more homogenized, corporate brand-focused approach.
But to each their own, because what works for us may play poorly for the big guys, and vice versa. Either way, it will be interesting to watch how Forrester’s plan plays out over time.