Late yesterday, Phil Fersht and Ollie Donoghue pushed out a meaty if inflammatory rant about industry analysts as nodding dogs. It’s not the first time and it won’t be the last. This one was critical of what the authors see as uncritical acquiescence by industry analysts – or as I prefer to call them anal-ysts – at corporate analyst events.
The authors talked extensively about the way in which analyst firms suck up vendor hype but seem not to do the basic research that acts as a check and balance against marketing messages.
Today, when you go into a vendor briefing packed with analysts, you’ll be confronted with row after row of nodding dogs, passively absorbing the hype, marketing drivel, and outlandish ‘thought leadership’ that has no bearing on reality today, let alone the future.
Yes folks, let’s face reality: vendor executives deliver lovely fluffy cotton candy the analysts and advisors gratefully inhale. No one seems to want to give anyone a hard time these days… it’s all PowerPoint bullshit being delivered to plastic smiles and nods of universal agreement, even though no one really has a fucking clue what reality is versus bullshit anymore.
Strong stuff? Read on:
At a recent event on the “future of work” (yep… that old chestnut), a room jam-packed with senior analysts listened and nodded intently to a vendor expert proselytizing on the business benefits of pushing 70% of enterprise employees onto the modern equivalent of zero hour contracts. It’s scalable; enterprises can tap into talent whenever they want, reduce costs, all of the good stuff businesses have been desperate to do. Eventually, a couple of HFS analysts broke ranks and said ‘what on earth makes you think the labor market will accept that deal?’
I mean, honestly, it’s weighted so heavily in favor of the enterprise that if government regulators and unions don’t kick it in to touch, a massive disenfranchised labor force almost certainly will. But the simple act of challenging this line of thought was almost enough to cause the immediate ejection of the analysts. The look on the faces of the professionals from the vendor told the whole story – they hadn’t been challenged in such a long time they didn’t know what to do with it. The other analysts in the room stopped their nodding briefly with dazed confusion across their faces. I can imagine it was the same reaction a courtier would get if in the middle of a banquet they told Henry the Eighth he should stop eating so much and think about his cholesterol… or his gout For once, the nodding dogs stopped nodding and looked up in amazement…
Is Fersht & Co right about the analyst torpor?
Where is the critique correct?
I’ve attended analyst events where the above characterization is familiar. I recall several occasions during which none of the major firms asked a single question at what felt more like a press event than an exposition of forward strategy. There are many reasons why this is the case, not least is the issue of business models.
I know for example that one of the firms has a policy of not soliciting questions from vendors because those might lead to answers of a consulting nature which, in turn, is a separate line of business requiring a separate deal.
But I equally know that much of the really great talent the major analyst firms once had has gone, often replaced by product marketers from the vendor community. Today, I almost never come across analysts who have done primary research, who have implemented software or understand a single line of code. How can those same people claim credibility?
And yes, I have attended analyst sessions where rival analysts have engaged in near shouting matches both with vendors and among themselves. It’s not a pretty sight. Even today, if you get certain individuals in the same room at the same time, then I want to be the popcorn seller.
Equally, some vendors are very much in command and control mode where they believe that because they pay X to Y then they get to control what Y says even though they both equally know that’s a corrupt way to do business.
So to that extent, Fersht & Co are correct.
Can it be different?
But then about 10-12 years ago (I’ve lost track of time) there was a change amongt some vendors. Here’s what happened.
It all started with SAP creating a blogger programme designed to get highly knowledgeable and often vocal critics around the table with the company’s top executives. This was the direct result of a chance meeting ‘in the halls’ between then CEO Henning Kagermann and a couple of folk who attended a SAPPHIRE. Kagermann enjoyed the meeting such that he wanted to formalize it. The rest is history as the programme was expanded to include SAP Mentors and others who know what it means to run SAP technologies and systems.
Those meetings became gold for those of us that wanted to make sure SAP leadership understands pain points because guess what? Most of the time they have no idea since they, like many other large companies, assume that when they say ‘Let’s do this’ that it gets done. And very often it doesn’t.
That program took on fresh nuance when, at one event, an SAP leader challenged us and said (I’ll paraphrase)
Instead of bitching all the time, why don’t you come up with some suggested answers?
I’m sure that was meant in good faith but the reality is that making change at any company is hard and at a company as large as SAP? Culture eats strategy goes the truism.
That blogger program still exists and those of us who are part of it also know we get preferred access to SAP’s board at major events and at other times. But as we know and as Phil & Co should also understand, we can only ever be one point of influence. That makes ‘saying it as it is’ even more important, if sometimes ineffectual.
Moving on, when Workday ran its first analyst day, it invited some of the ‘Usual Suspects’ from the HR analyst world but it also invited a few of us from the then blogging world. Within 15 minutes of starting that day, the program fell apart as we peppered then co-CEO Aneel Bhusri with a barrage of questions, some related to the topic at hand, some not so much. We got through the day and Bhusri told us that he felt it was an incredibly valuable experience for him as leader of a then small privately held vendor.
The Workday programme continues and has developed to include customer representatives telling us the good, the bad and the indifferent. Crucially, the same idea of free flowing interaction is an integral part of the overall conversation.
Plex was next, following a similar programme to the one started by Workday. That should not be surprising given the AR person at Workday switched to Plex and wanted to re-do that same experience. Result? The same as occurred at both SAP and Workday. Leaders heard, for the first time perhaps, the reality of what we see on the ground, not the AR/PR massaged to death fluffy messaging.
Critically, few of those who attend these types of session hold formal analyst arrangements with the vendor concerned although there are plenty who undertake one off or periodic consult projects with the vendors. We, as readers know, are transparent in our dealings with the vendor community.
The curious side effect of these kinds of activity is that when we do see good things, then I sense that we are all the more interested in making sure those stories get out into the public domain. It’s called ‘Being Fair’ while also being prepared to loosely hold strong positions. But what most of us are yearning for is to see the vendor succeed when it is in the interests of customers.
Both Fersht & Co and our own Brian Sommer rightly make the point that the supremacy of keeping Wall Street happy plays heavily in the minds of vendor leadership. We like to remind vendors that Wall Street can only be sustainably kept sweet if customers are kept sweet. Whether you believe it or not, there will always be times when the vendor should take a Wall Street hit because the strategy needs level setting and always at a cost. Sadly, few are prepared for that.
The human angle
I believe that one of the greatest challenges for the next decade comes in how the future workforce shakes out. To that extent, Fersht & Co’s question is absolutely the kind that should be raised at every opportunity. I’ve done so on several occasions with Workday and not always received a fully considered answer. Check this from November 2017 when I sat with Leighanne Levensaler of Workday:
I am yet to be convinced that Workday (and every other vendor) has come to a place where they weigh the alternatives as a method of discovering the right paths. Ms. Levensaler, for instance, while acknowledging a bumpy road, is informed by her belief in an optimistic view of the future. That is perfectly valid. But what if that’s wrong?
For example, as I was rounding out this story, an email came in drawing the analogy between current impacts with the introduction of ATMs. The argument went that ATMs displaced many bank workers but that the resulting cost savings allowed for an expansion of bank networks and the resultant increase in bank branches, including a fresh influx of staffing needs. That was true – until the call center emerged and then bank branch networks shrank in favor of low-cost service operations. As a side effect, customer service levels fell off the proverbial cliff and, I would argue, have never fully returned among some banking groups.
Yesterday, our own Derek duPreez welcomed a report that directly reflects the concerns to which Fersht & Co allude, but from the workers’ point of view. duPreez says:
Too often we get drawn into the excitement around the potential of automation, the opportunities that could be gained, without thinking about the people that could be left behind as a result. Let’s hope that this new commission can apply real pressure to the government to come up with an effective strategy and some new practical policies around addressing the forthcoming changes – working with citizens, employees and trade unions, rather than against them.
I’m not holding my breath, especially when I hear that people are limping from one zero hours contract to the next and medicating the times in between with a mixture of booze and drugs.
But then as I have said before, I am much encouraged by the emerging conversations among enlightened customers who understand all too clearly that introducing AI, RPA and all that goes with it has a profound effect on the workplace. Oddly enough, those conversations were had at an HfS event I attended. And yes, there were a lot of nodding heads but no, there weren’t any nodding dogs.
Let’s not forget that regardless of whether a vendor is talking to me, Fersht or anyone else, there are agendas in play, some of which are not always clear and are rarely spelled out to the vendor or customer.
The supremacy of short term thinking, most of which is driven by the demands of keeping The Street or activist investors happy is not sustainable. As Good and Upworthy have discovered, when management is all over the place then really bad things happen. As Google, Facebook and others are discovering, purpose and meaning matter to the people who work in these firms. Now, we see professional groups raising concerns about critical peer reviews in AI:
In my first ever AI class, we learned about how a system had been developed to automate something that had previously been a person’s job. Everyone said, “Isn’t this amazing?” — but I was concerned about who did these jobs. It stuck with me that no one else’s ears perked up at the significant downside to this very cool invention. That scene has repeated itself over and over again throughout my career, whether that be how generative models — which create realistic audio and video from scratch — might threaten democracy, or the rapid decline in people’s privacy…
…A sizeable population in computer science thinks that this is not our problem. But while that perspective was common ten years ago, I hear it less and less these days. They more had an issue with the mechanism. A worry was that papers might be unfairly rejected because an author and reviewer might disagree over the idea of a negative impact. But we’re moving towards a more iterative, dialogue-based process of review, and reviewers would need to cite rigorous reasons for their concerns, so I don’t think that should be much of a worry. If a few papers get rejected and resubmitted six months later and, as a result, our field has an arc of innovation towards positive impact, then I’m not too worried. Another critique was that it’s so hard to predict impacts that we shouldn’t even try. We all agree it’s hard and that we’re going to miss tonnes of them, but even if we catch just 1% or 5%, it’s worth it.
I’ve never heard that debate among vendors – have you?
Image credit - via andiafaith - fotolia
Disclosure - SAP, Workday and Plex are premier partners at the time of writing