Public policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.
Dead Idea: When reporting to executive sponsors, analyst relations (AR) must focus on operational metrics like activity counts (e.g., the number briefings conducted), budget status, and so on because that is what executives want.
Back Story: When a SageCircle strategist conducts an Analyst Relations Diagnostic™ with an AR team he invariably finds the AR program uses operations metrics for reports to executives. Why? It is not just because AR finds operational metrics easier to gather, though there is part of that, it is primarily because that is how AR has always reported to the sponsor because “that is what the executive wants.” Maybe this is true, but probably not.
Problem: The root of the problem is that many AR programs have simplistic goals, often modeled on PR, to “get the word out” and to “get the analysts to say good things about us right now.” This approach is often the right one for PR because PR is rightfully focused on building awareness. However for AR, this approach leads to a focus on short-term activities that accomplish short-term goals. It is easy to see how this leads to AR reporting on those short-term activities.
AR should be focused on longer-term strategic goals (e.g., influencing revenues during the sales selection process or “moving the dot” over several years). While some AR programs understand the need for a strategic direction they end up planning highly tactical items such as briefings, summits, and responding to analyst questions. Unfortunately, giving executives reports that focus on operational metrics only reinforces the perception that AR is tactical, a meeting scheduler, and cost center.
New Idea: It is our experience with executives, and our reading of business literature, that what executives really want are performance metrics that measure outcomes. Whether an AR team does x or y briefings really does not matter to an executive. What the executive wants to know is what outcomes have AR generated whether opinion movement, leads generated, or sales deals closed by leveraging analyst commentary.
Focusing on outcomes for reports to executives does not mean that AR should not collect and analyze operational metrics. Rather it repositions activities measurement as a tool for AR managers.
- Develop an AR strategic and tactical plan that puts as much emphasis on results definition and measurement strategies as it does on activities
- Cross-link desired results with the ability to measure progress. If a result cannot be measured then delete or change the desired result
- Review current measurement and metrics to determine whether operational metrics are given more emphasis than performance metrics. If yes, refocus the measurement efforts on performance
- Develop a multi-level reporting approach in your executive sponsorship program that permits you to update executives on a regular basis about your progress on achieving desired outcomes
Bottom Line: Executives assume their AR teams know the mechanics of analyst relations’ day-to-day activities and do not need to be micro-managed. As a consequence, AR can then change the focus of its measurement and reporting for sponsors toward outcomes rather than activities. This will naturally lead to a shift in thinking and change in process that focuses on the desired outcome and value of each activity the team undertakes. By focusing on outcomes, AR can then start its transformation from a tactical cost center to a strategic business function.
Question: Do you have an AR measurement program? If yes, does it distinguish between performance and operational metrics? If yes, is it an integrated part of your overall AR plan?
Since 2000, SageCircle has helped analyst relations teams to focus on business value by encouraging innovative thinking that leverages insights and drives revenue.