Gartner: Early Research Process, Part 3 (80/20 Rule)

Gartner’s Research Meetings

Gideon Gartner on Methods for Increasing Productivity

When VCs Neill Brownstein and Chris Brody convinced me to leave Oppenheimer to found Gartner, they demanded a document  that would guarantee their receipt of Gartner research, indefinitely! This  led me to realize the importance of  terse written research, and we structured  our research meetings  to enhance our research process, which would then presumably lead to important written output!

Over the years not all analysts played the game according to my rules, and several sharpies got away with publishing less, but we plugged away with a net increase in productivity; and overall, the research meetings catalyzed production of our essential research notes, built teamwork, and enhanced our top researchers’ status as role models. The meetings also served as vehicles for announcements and corporate discussions, a much more personal approach when compared to management memo-writing.

On those occasions when our meetings served as marketing oriented ‘theater’ for visiting clients and prospects (and occasional guests), we toned things down. On other occasions analysts seemed to love challenging others (and not always constructively). Many of us still recall those Gartner scenes, some of whom have documented  their experiences when I sponsored our 25th and 30th reunions for early Gartner-ites  (in 2005 and 2010).  Here’s an  abridged version of one such memory from Bruce Rogow, our senior research officer for many years:

“These people were absolutely out of their minds; they spent over an hour talking their brains out and throwing them at each other. Nobody was intimidated by anyone, it was like mental jackals feasting on each other but we did face each other the following day, get things done, and we changed the way an industry functioned.

The intensity, humor, passion, confrontational style, and strong-willed  brilliance of our players, somehow kept the pointy end of the Gartner boat pointed forward. We should face the reality that nearly everyone who was hired  was fit for his or her specific purpose. Very few people were fungible.  The analysts were a mix of passionate, world-class experts, but some were  borderline organizational sociopaths who would not necessarily bond with the organization, but with ideas. (parenthetically, the sales force was a brilliantly sculptured group, they would not come back without the order, and even the supporting professionals were the best I’ve ever seen).

The group interviews, craziness of the process and vetting rituals delivered a hot, spicy gumbo of over-achievers. It was  the DNA of the firm that was a fine balance between what the customer wanted/needed and what they didn’t know they had to have. Gartner invented a market and then took it to the bank.

Poor customer service and not taking the initiative (or being a dumb-ass) was one of the few ways to be shown the door.  Where else would you find a fellow in the mail room take it upon himself to hand deliver a set of research notes to a client in Philly when the FedEx truck had missed. Gideon meant it when he drew the org chart with the customer at the top.

There is no way to thank or reward all the players who made Gartner Group happen. I can only personally savor the memories of the craziest, brightest bunch of whatever the hell we were. Oh, and we did change the way the world does business.”

Our Research Productivity

I was neurotic  about the productivity of our research staff.  Because Gartner enjoyed low variable costs but suffered high fixed costs, any leverage we would obtain from improvements in productivity (per analyst) was significant;  and the best way we could measure pure productivity (ex  quality) was by the output of each analyst, measured by such variables as pages written  and  client telephone activity, and weighted as best we could by  our conclusions with regard to quality.

Like a kindergarten teacher, when I trained new analysts I would often draw a table on a flip-chart mounted on our easel, demonstrating the following: Assume that average analysts spend 70% of their working  time collecting information (reading the trade press, going to meetings, attending IT shows, traveling, attending GG conferences, and so forth),  and 20% of their  time on processing what they learned, in their heads… before spending the last 10% of their time  devoted to producing written output and initiating out-calls to our best clients (as analysts on Wall Street did).  To me, these numbers seemed to be reasonable approximations of reality.

Next, assume that through stronger discipline (woops, a dirty word), the overhead could be reduced from 70% to 50%, and that the savings would be distributed equally between research and output. Result? The amount of original research (thinking, writing drafts, working through spreadsheets, proactively collecting information from sources…) would increase by a full 50%, and the visible output would improve by a full 100%!

I clearly placed a high emphasis on teaching, with new analysts hopefully  learning our ‘tricks of the trade’ (in working smart).  With cooperation from our managers I succeeded in cutting our analyst travel schedules somewhat. And after I became  convinced that there comes a time when marginal effort does not produce significantly higher quality, I actually  argued that analysts should spend less time writing each research note, and occasionally told the story about a student asking an elderly painter how long it took him to produce a certain painting; the painter answered: “40 years to learn how, and two hours to put on the paint”.   Certainly, one of our differentiating factors was our experience, now we had to emphasize  productivity!

Nevertheless, we found that emphasis on our analysts producing more written product seemed like an eternal duty. This may have confused some, but for me it bordered on being a fetish; after all,  our written product was all that many  clients would see of us.  Phone communication should obviously have been critically important, but many clients didn’t bother to use their call-in privileges…. Continuing to use the 80/20 rule, I estimated that 20% of our analysts (the most senior ones) dealt with 80% of the phone inquiries or discussions, leaving 80% of the analysts to communicate predominantly via the written word!….and if the ratio was 30/70 or whatever instead of 20/80, I kept pushing both media. The ‘excellence ratio’ of top analysts to the rest seemed to me to be similar to the ratio at Wall Street’s Oppenheimer, where during the 1970s I was told by the sales force and management that only five of its twenty-five senior analysts  were the real commission generators (i.e. ‘producers’) within its research department!

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