Friday, 14 October 2005

Reacting to an analyst attack

Interesting points from Duncan on How to react to negative reports: [Analyst Equity] “When analysts attack”.

We’d add two points to his analysis:

  1. Vendors need not to over-react to negative reports; it has often unwanted consequences like the analysts sniffing a sweet-spot.

  2. A fair criticism is often not a bad thing, as it positions the research note as truly independent. If you want marketing brochures, write them yourselves.

He however assumes one’s always dealing with rational, unbiased and honest analysts. Quite unfortunately, this is not always the case, as we’ve seen analysts verging on the sanity engage in passionate and irrational arguments with vendors for the sake of having an intellectual contest.
We believe those are actually a small minority, but most vendors quite rightly do not react well to this treatment. Seeing an analyst spitting out a competitor’s FUD year after year probably also falls into this category.
In those extreme cases, we suggest escalating to management level, to cut funding (at least temporarily) and ignore deliberately the analyst for a while…


Duncan Chapple said...

Yes, the realisation that not every 'negative' report is a problem, let alone a crisis, is important.

However, you mis-interpret my motivation. I don't think that all analysts are any more rational than the business executives they meet ;-) However, it's important to approach them as if they should be, and as if they want to be. In the world of Transactional Analysis, that means it's important to approach them as adults.

james governor said...

deliberately ignore an analyst because they said something negative? thats not good advice, imho, and feeds into the large company "punishment" culture we see far too much of. vendors should act like adults. so should analysts, to duncan's point.

ARonaut said...

Good points James and Duncan.

Treating analysts like adults? Some vendors indeed adopt heavy handed approaches, using bribing and menace. This approach usually denotes short termism and we believe it is detrimental to credible independent coverage of that vendor.

However, some analysts seek bribing (often analysts for hire in greater Boston) and others react emotionally or can't substantiate their point of views.

Our recommendation? If one can't have a rational discussion, ignore them -their credibility is usually low anyhow.

PS: and by rational discussion, we don't mean agreeing with vendors!