ETL 33: Brent Adamson on How Great Research Drives Change

Transcript: Brent Adamson and Bob Buday

Bob Buday: Hey, Brett, great to have you on our show, “Everything Thought Leadership.nWe have so many questions for you. We will probably run out of time before I hear the answer to Question No. 3.

Brent Adamson: That’s only because I talk a lot. But it’s great to see you. For what it’s worth, I have lots of questions too, but they’re about boring things like life and the meaning of it.

Bob: There are many places we can begin. I would like to start with your career at the Corporate Executive Board. How did you learn about that organization? What was it like back in the early days when you were there? 

Brent: We can come in for two angles: the history of the company and the history of me and how they intersect. The Corporate Executive Board, for those who don’t know, eventually was a publicly traded company that was bought by Gartner in 2017.

We grew it to just over a billion dollars in top-line revenue. It was a pretty big publicly traded company. Our job, as we saw it ,was to create what you would call thought leadership for the heads of functional areas such as sales, procurement, marketing, and HR. We had research teams deployed against each of those different seats that surrounded the CEO, as we used to say.

 Our job was to go out every year and identify their biggest challenges and biggest opportunities they were facing. Then we studied those challenges with both quantitative and qualitative research to get a deeper understanding of them – the root cause of the challenges. “Where does the problem actually lie for you,” as we used to say. We wanted to “penny out a solution.”

That is, if you take 100 pennies and distribute them across root causes, which ones are actually the ones where you get the most leverage if you [solve] them? What would those solutions look like? How have companies begun to solve those already?

We then profiled those companies and took that entire thing, and packaged it up in a story. And then we presented that story to our what we called our members, because the model was that you bought a membership into this set of activities that give you the access to the research.

When I came to CEB in 2003, the company had started as an outgrowth of a different company called the Advisory Board Company. It is still around, although it’s now owned by one of the big insurance companies. The Advisory Board [focused on] the healthcare sector. All of their work today is in healthcare.

Someone on the team long before I got there – in the late 90s – said the firm should do a study on HR professionals in healthcare organizations. And then the finance function. And then they stood up financial services. The momentum started rolling and they realized they could do one for corporate strategy, and so on. Then someone woke up and said, “This should be its own standalone company; we should spin it out. And so Corporate Executive Board was born in Washington, DC, because that’s where The Advisory Board Company was born.

I landed there in 2003 after a 15-year career as an academic. My PhD is in applied linguistics in German. I was a German professor of all things. Two years on the tenure track at Michigan State University, I realized I was never going make a lot of money doing this. And there’s was a question about my audience: Who’s going to see my research, and what impact is it going to have in academics? It’s pretty limited. So for a number of different reasons, I chose to get a business degree.

I got my MBA at the University of Michigan. I was teaching during the day at Michigan State and studying at night at the University of Michigan. And the day my students found that out, they almost killed me.

How Brent Came to CEB

One day I was in the recruiting office talking about different options — and there’s a longer story here that is not interesting — but I came across CEB. The way they talked about their business was, “We research the heck out of stuff. We go teach the heck out of stuff.” I said to myself, “That’s literally what I do.”

It took some convincing because [while] I did all that, it was in German linguistics. But they were open-minded enough to at least have a conversation. And that led to an opportunity and so I interviewed at CEB. It just so happened that the research position that was open and the best fit was in the sales practice. It could very easily have been in the learning and development practice for HR execs, or the recruitment practice or the supply chain.

So for the last 20 years, I’ve been working on building pretty deep expertise and incredible access to heads of sales. Eventually, that group broadened into head of marketing, sales, customer success, customer service — anything kind of on the commercial [side of companies].

Brent’s Research Approach

I’ve spent the last 20 years of my life researching, writing, publishing, and teaching on those topics. By the way, what eventually became my role at the company in the sales and marketing practices had a name: the “headliner role.” I never liked it because it sounds arrogant. The headliner role was to take a team of people, usually somewhere between five to 10 … and spend the better part of eight months researching one of these topics.

We started with [defining] the problem, and [continued] all the way to this whole process of coming up with insights, ideas and best practices. And as a headliner, my job was then to plug into that process along the way – especially toward the end of it. My role was to help the team turn that body of incredible but still a little amorphous research and turn it into a story with results. Then we had to figure out how to take results and turn them into a compelling story– one with language and metaphor and presentation skills.

I would literally write a script, as the role was with the other headliners. The whole idea of quality control in thought leadership was that once we [finished a study], we would write a script. The first time I heard them say “script,” I asked, “What do you mean? They said, “If you were to take eight hours in a day-long retreat and present this research to a group of sales heads, what words would you say?”

They were about 25,000 words, and I’d knock them out in about 10 days. Some of my colleagues could do it a lot faster.Then that script would be distributed to other content deliverers, as we used to call them. And our job would be to travel all over the world and present the findings to executives in what we called retreats, meetings, one-off workshops — you name it. This was toward the end back end of the process, into production and distribution.

But one more thing, because it’s something we should talk about. The thing that made it different to me was the DNA of the research project. The research we strove to create was new-to-the-world ideas that no one ever thought of before, that were specifically designed to reframe your thinking. That’s how we were all trained.

“Disagreement Research” and the Challenger Sale

People in the sales world may have bumped into the book that came out of this: “The Challenger Sale” and “The Challenger Customer.” That book is a step-by-step instruction manual on how we did research at CEB. It’s about understanding the status quo, understanding the under-appreciated insight that no one’s fully understood, coming up with enough evidence to show that an alternate perspective is compelling, building a case for action and then making it tactical, so you know what to do.

So it was all about what we called “disagreement research”: Everything we did was to disagree with the world. I can’t think of a better place to be. That’s perfect.

Bob: It’s so important to be able to say something fundamentally new, something that nobody else has said. On just any topic, there has been a ton of research done over the years — much of it good, some of it groundbreaking. But if you’re coming to market and saying something that’s incrementally different than what so and so has said, you’re not going to get much traction in the marketplace.

Brent: I agree, particularly in today’s world where … everybody’s saying smart, there’s plenty of research, whether it’s high-quality research or not, if the methodology isn’t sound. There’s just a lot of people with very strong opinions, particularly in the world we live in today.

Even if you get past these people spouting opinions to well-grounded research, a lot of that research nonetheless is confirmatory. It’s designed to either confirm what we already believe and doesn’t really add a lot to the discourse. For me, the litmus test has always been to produce content that gets you to say, “Oh, I never thought about it that way before.” If I can’t get you to say that, I’ve failed in my mind.

That’s a pretty high bar. But when it happens, it’s magical.

By the way, if I can get you to say, “I’ve never thought that way before,” chances are pretty good that six months earlier I said the same thing to myself. That’s what I geek out on. I just get so excited about things that make your own brain go, “Whew, I gotta rewire this. I got to think about this differently.”

That’s why I love talking to lots of different people with diverse experiences. Anything in my life that gets me to say, “Huh, I never thought about it that way before,” sounds exciting and intriguing. To other people, it may sound threatening and awful.

Bob: Would it be fair to say that when you and your team at CEB came up with the big “ahas,” it was not one of your original hypotheses going in? That you discovered this island that nobody else had discovered?

Brent: Totally. That’s a good place to be. It can also be a very precarious place to be because people are going to take potshots at it unless we have the proof to say, “You know, the sky is really black, not blue.” I’m just a contrarian at heart. If you told me to zig, I’ll do neither. I’m always looking for that third way out — that different perspective.

I like to learn. If you said, “The sky is blue” and I took the opposite position, I want to hear your position. I’m on this quest for better certainty, a little bit more knowledge. But the only way to do that is to create an irritant so that you ultimately create a pearl of wisdom.

You have to engage in this kind dissonance, in this smashing of ideas together. And you’ve got to be willing to live in that discomfort — to find a place that gets you to a bigger idea. A lot of people don’t like that because it’s hard and exhausting. And it’s frustrating, and it’s uncertain, and it’s unsettling.

But that’s the world I’ve lived in. If you’re going to make a business out of reframing people’s thinking, you better come to the gunfight with a gun. Sorry for the martial metaphor.

We talked a lot about the burden of proof. The simple rule is, the bigger the disagreement, the higher the burden of proof. Eventually, which CEB got right about the time I got there, we made this transition from qualitative to quantitative. And as we built our quantitative research muscle to generate numbers data, [CEB’s] ability to rise to higher levels of disagreement rose significantly. We could say, “Look, we’ve got the data.”

People love to challenge your work. But we were the only ones who put data on the table for this. This is where my chops as a researcher, training to be an academic, came to be important. My co-author [on “The Challenger Sale” book], Matt Dixon, also has a PhD. His is in economics. When you get a PhD, you are trained in research methodology. So if you’re going to go to the world and argue a case and say it’s because of the data, the next thing that will happen is some people will argue with you about the quality of your methodology. You’ve got to be able to back that up and [defend] your methodological approach.

Who Will Fund Such Research Today? Anyone?

The interesting thing, and would love to talk to you about, is that everything I just laid out is hard. More importantly, it’s expensive. This is why the CEB model worked. To create one of those studies, if you go all-in a budget, it can cost between $700,000 to just over a million dollars. Nobody wants to spend that kind of money. The only way you can is to spread it out over lots of people—to syndicate it.

We do that in academia. Professors take the cost of really expensive research and break it out over millions of millions of people called taxpayers. CEB broke it down into roughly $30,000 to $60,000 increments and spread it out over lots of companies.

This is one of the struggles I have today. To try to do this on your own is really hard. You can’t walk up to someone and say, “For $700,000 I’d love to go study this thing.” I’ve tried that and it didn’t work. It takes a lot of time to find enough people and pool their resources.

You have to find someone who’s willing to find them, manage them, and make sure they’re happy. That’s called account management. If you can do that, now you have a business. But I just want to go study stuff.

Bob: Back in my days at CSC index, we had a research program with Michael Hammer, the father of the concept of “business reengineering. That program, by CSC Index and Michael Hammer, was called PRISM [which stood for Partnership for Research in Information Systems Management]. At its peak, it had about 120 corporate sponsors – Fortune 500 companies from around the world, each paying about $30,000 to belong. You do the math: It’s a $3 million program every year, doing three to four research studies a year.

The way I look at it is this: It is client-funded thought leadership research. That business did not make a lot of money for CSC Index. It probably made more money from Michael Hammer. But neither party was losing money by doing that research.

At CEB, what were the economics of the research program on corporate sales organizations that you were involved in?

Brent: The HR practice by far was our biggest research program and our oldest. It had thousands of heads of HR all over the world. The sales and marketing practice had about 450 to 500 at its watermark. It might have gotten to 700 in 2008, and then we took a haircut (in The Great Recession), like everybody else.

2008 was tough for everybody. But it’s also where we were doing our best research because the pain that companies were feeling was the most acute. They needed help. In some ways, it was our time to shine.

My goal was always to drive up new members and renew members. We used to call it “The road to 90”:  How can we get to a 90% renewal rate. We never quite got there. In a good year, we’d renew easily over 70%. That was based on the quality –and more importantly, the relevance — of the work we were doing.

But as you get bigger, the costs go up because now you need an account management team to make sure those members are happy, and are getting and using the research they bought. We had a customer success team long before there was ever anything called “customer success.” We had to make sure they were using what they had access to — the webinars, the content, the retreats, the meetings. We had to constantly remind them not to forget about things they had asked for.

And we sold on an enterprise level, not a seat level. When a division of company bought access, they bought it for their entire team. One of the big shifts when Gartner took over in 2017 is they sell a seat-based model — a membership to an individual rather than to an organization. While that may sound like a small difference, the economics of that model are completely different in a lot of ways.

It all comes back to the marginal cost and marginal returns. When you have lots of humans creating artisanal research like we did at CEB – and, again, we did very well as a company — the margins are [still] horrible relative to software companies. They could just stamp out software with no incremental cost from producing more and more product. For a lot of people, the economics of a research business aren’t super-attractive.

But for people like you and me, the business is super-attractive because we geek out on that kind of work. We think it’s important and exciting. But if I’m a shareholder, why would I [invest in] this for that return when I can [invest in] something like AI software and get 10 times the return? Anyone starting a [research company like CEB] today is facing an uphill battle.

Bob: Nonetheless, I remember looking at the financial reports of both the Corporate Executive Board and its sister company, The Advisory Board. Both were doing over $1 billion in revenue with profit margins in the good years of 15% net after tax.

Brent: Yes. They were solidly profitable businesses. But were they going from $10 million to $30 billion like Salesforce.com over a period of time? No. They might go from zero to a billion in revenues.

Bob: But they were still solidly profitable businesses.

Brent: Well, again, as an investor, if I can get that kind of return in the [software as a service] space, particularly in the time of “blitzscaling” — the crazy times we just went through post pandemic, where the returns are just astronomical …. And of course, now with AI, it’s like a shiny object versus my dad’s Buick. In terms of its economics, the research organizations look like my dad’s Buick. It’s a nice car. But investors want a Lamborghini.

By the way, if you believe in the quality of this kind of research, it’s become the classic idea of a public good — something that we all benefit from, but no one’s willing to [pay for] … because it’s really expensive. And the return is long term and sometimes unclear, and sometimes not there at all.

Thought Leadership Research Within a Larger Corporation

Bob: I look at it differently. This research program that CSC Index had with Michael Hammer helped fuel that consulting firm’s growth from $40 million in revenue when I got there in 1987, to $200 million by 1995. That $3 million-a-year thought leadership research program drove revenue of CSC Index from $40 million to $200 million. The research program itself was not very profitable. So if you look at it just as a standalone research business, it’s not going to generate the shareholder returns that a SaaS company can, as you pointed out. But it can sure help grow a professional services firm grow.

Brent: I’m with you. You’re preaching to the choir. I have thought for at least the last 5-6-7 years that it would be cool to set up a CEB-like research team and do the kind of work we did back then – but in the context of a Xerox PARC or AT&T Laboratories. If you attach yourself to a company that can absorb the hit to the margin, it’s just a blip on their radar screen.

But you’re spitting out research and insights that are so valuable first to that company, and then ultimately, hopefully to the world. But those blank-sheet-of-paper research groups at AT&T and Xerox PARC … seem to have largely gone by the wayside.

If anyone’s out there listening, sign me up for that. I think it’d be really cool … and that the impact could be huge for that company.

But as it stands right now, Bob, I had someone approach me a while ago saying, “That thing you did with Challenger where you turned this one insight into a series of books, which launched a $60 million a year business…” It has made careers and a whole lot of people other than me a whole lot of money.

That sounded bitter. I didn’t mean it to be. But when you write research for other people, you don’t own the research. That’s just the way the game works. I knew that going in. But nonetheless, you had this huge impact. People come to me now and say, “Can you do that thing again?” I said, “I don’t know because that was lightning in a bottle. But we could certainly try. I know the steps and the muscles it takes to increase the likelihood of that happening. But I can’t guarantee it.”

We put a proposal with a budget together, and the budget was $800,000. [The prospect] literally looked at us and said, “What can I get for $100,000?” I said, “Well, not that.” I wasn’t trying to be rude. I said if you’re going to generate new-to-the-world insight, this is what it takes. And he said, “But Brent, you already have so much insight, you’ve got all this cutting room floor stuff that you never published. Can you just talk about that?”

[This conversation] was like [the book “Men are From Mars, Women are From Venus”]. It’s just not the same thing.

My good friend and co-author on the Challenger work, Matt Dixon, is well on his way. He and his two company co-founders have a company called DCM insights. DCM as the initials of the last names of the three founders. Because of his scrappiness and hard work and incredible business acumen, he … got funding to do this kind of research, which became a book called “The Jolt Effect.” That then led to … some more money. All of a sudden, he’s hiring people. Slowly but surely, he’s building something for this space of partner networks.

I’m trying to do something very similar. I’ve got this body of research and I’m writing a book right now, which we can monetize … sufficiently to fund the next research project. If we can publish and do training and consulting off the back of that, it creates money that can be funneled into the next project. But it’s hard to. It’s like starting your car in the Midwest in 1972. On a cold winter day, it’s really hard to get the thing going. But once you get it going, you’ve made some momentum. The only problem with that Bob is I’m not getting any younger.

Bob: I’m older than you. I’m certainly not getting any younger!

Why CEB and Its Sister Research Company Sold for a Combined $5 billion+

Bob: How would you sum up the keys to the enormous success of Corporate Executive Board? It sold for multiple times revenue to Gartner in 2017. I assume The Advisory Board used the same research model. What were the keys to success of these $1 billion-plus [revenue], highly profitable, publicly held companies for a time?

Brent: That’s a really good question. If you’re asked different people, you get different answers. If you ask me, I would tell you it was the quality and the design of our research. I’d like to believe we were one of the few shops that was creating anything quite like that. I call it the “Jazz Age.”

You sit in a room for with us six incredibly smart people and beat the heck out of an idea. You do that so you can burnish it into a diamond and go to your people, your clients, your members and say very diplomatically, “I think you’re wrong. And here’s a different way to look at it.”

That’s incredibly valuable. What we eventually found, though, is the curve has a diminishing return on growth because there’s a subset of executives out there who absolutely value that kind of insight and that kind of research. They want it and will pay for it. That can get you to about a $350,000 to a $400,000 business. At some point, if you want to go from $400,000 to $500,000 to a billion [dollars] in revenue, all of a sudden you start bumping into companies saying, “I just want to know what to do. Just tell me.”

We call them “the doer” community. They didn’t want these breakthrough insights. They’ve got this … one little tactical thing in front of them. Such a research company would reach a growth ceiling.

Then you start thinking “What else can we acquire?” Or “What other practices can we launch?” So you start looking for other growth opportunities. At some point, you run out of steam and you have to decide: “Am I okay with it? Am I okay with being a $350,000-$400,000 company?”

If you’re a publicly traded company, the answer is almost inevitably going to be “no” — you can’t be okay with that because you have to drive a return for your shareholders. You start making decisions about who else you can acquire, what else can you do. Over time, you start losing your way and your focus. All of a sudden, you get acquired.

That sounds a little unfair to CEB. But that’s a little bit of what happened. There’s so much pressure to keep growing because we were a publicly traded company. It constantly put our underlying core research model under pressure: Do it faster and leaner.

Eventually, when Gartner took over, it has brought a different way of looking at it. Gartner, which is a $5 billion company, found that the way to generate insight at that scale is to process the heck out of it. I used to tell people I feel like a jazz musician playing in a marching band. If you like John Philip Sousa — and that’s not a criticism — then you’re a pig in slop. You’re the happiest person in the world. The Texas A&M Marching Band is all about precision.

But if you want to hang out with people and bounce ideas off the wall at 11 o’clock at night in a room smelling like Chinese food because you got takeout for the fifth night in a row … [that’s a different research model].

Dissecting the CEB Research Model

Brent: We got into really aggressive arguments, which are never about the people but always about the idea. When new people joined our research teams, we had to say, “Look, it’s going get a little heated, and you have to understand it’s not about you.”

A lot of people couldn’t handle it because it made a lot of people were very uncomfortable. They felt like when I attacked their idea, I was attacking them. They had a hard time separating the cognitive from the personal, which is really hard. It takes years to get at this. You didn’t ask this, but I’ll throw it on the table if I may, the thing that made this work in the end, and why I miss it so much, is because as a team we had trust. And it was at the deepest level of personal trust.

We didn’t always love each other. Sometimes we didn’t even like each other. We’d go into these rooms and argue because we knew that how you create diamonds. You had to put everything under pressure. We’d walk out of there and still at least be able to talk to each other most of the time. But it would get pretty heated sometimes. You had to separate the personal from the process. That was my job: to be a professional devil’s advocate.

In my first job [at CEB], as a researcher, I was on the other side. But imagine you have a team of 20-somethings who just spent the better part of six months pouring their heart and soul into this idea. They’re trying to get promoted. They’re trying to feed their young family. There’s a lot on the line personally, they’re trying to get more recognition. They’re trying to climb the ladder. They’re trying to show that they’re good at what we do.

They bring these ideas to these checkpoint meetings. My job was, to put it bluntly, to tear the idea down — find its holes, to dismantle it. If I didn’t do that, it was going to happen in the marketplace with our clients, which would be a disaster.

It took me years to figure out how to do that without doing collateral damage to the person. That is so hard. And I’d be first one to raise my hand and say I didn’t always get a right. And I live with that today. But what I learned is very early on, particularly with people new to this, whether young or not young, it didn’t matter, is to sit down and very transparently explain to them how this works, why it works that way, what we’re trying to do.

What I told them was that “If you come to me with ‘The sky is blue,’ and I come at you with ‘The sky is every color but blue,’ I don’t want you to give in. If you give in, I’ve lost. I want you to win. And I’m going to make you win.” I wanted nothing more than having them win these arguments. But I made them work hard for it.

That was my job. You don’t have to like each other, but you have to trust each other. And sorry, you got me all reminiscing. Does that make sense? Do you buy that?

Bob: It does. What were the three keys to not disenfranchising them? They came to you with what they thought was a big idea. But now someone has just stepped on it. What are they keys to not stepping on somebody’s ideas, but moving in a much better direction?

Brent: What we’re really talking about here is human interaction. The same principles here apply in marriage and friendship. It’s about how you can engage in a debate about ideas without feeling like you’re engaging in a personal argument with each other? If I could figure this out … Well, I’m still married after 30 years, so maybe [I’ve figured out] a little bit of it. I’m married to a German who loves to argue.

In these research things, the way you use pronouns, for example, becomes really important. Really subtle stuff like this. I’m not a neuro linguistic programming guy at all. I’m still not sure how I feel about NLP, because it’s got this weird, manipulative aspect to it that’s kind of creepy and scary. But it kind of works at the same time. So “The way you say things” as opposed to “I hear what you’re saying.”

Trying everything you can with language, with the phrasing, with tone, with body language – all about making it about the idea. Sometimes you just have to stop and remember, “It’s just about the idea.”

I liked to tell people things like “You got us to where we are right now because you busted your butt for the last six months to get us here. And we’re about to have a debate that we could only have because you [nailed] it. Now let’s have the debate.”

Just make sure that people feel seen and affirmed and appreciated. Then go after it, and that they understand the rules of the game. At 55 now, I find that the one thing we all crave more anything else in life as humans is affirmation. When I when I go after your idea, if feels like I’m going after you as a person, that’s the opposite of affirmation. I tried to separate those two. Let me affirm you as a person.

I think that resonated with a lot of people. It didn’t resonate with everybody. Some saw it as cynical. But I always meant it.

Bob: I’ve interacted with people over the years and haven’t interacted in all the right ways, and so I had to learn by doing things wrong. One of the key things I’ve learned is not attacking somebody for some idea they have and are excited about but which I’m not so excited about.

And so I’ve learned to say something along the lines of “Listen, there are no dumb ideas. There are only insufficiently developed ideas.” If look at ideas on a spectrum of 0% developed to 100% developed, you’ll never be 100% developed. If you say, “I think your idea on the spectrum of development of the idea is like 20%-30%, and you think it’s at 90%. But right now, I think it’s more on this side for this and that reason. And you can move it this way but you’ve got to do this, this and this to make hold water – to be novel, supported by evidence, clear, et cetera, et cetera, et cetera.

I think it has helped defuse this notion of “Well, Bob thinks the idea is dumb.”

Brent: The other thing about I found is that in these debates, sometimes there’ll be some cuss words thrown and it would unfortunately get a little personal every once in awhile — even including with me. I found that when I did the post mortem to understand why it spun out of control, more often than not it was I was just tired. I didn’t get enough sleep, I see where we are, where this needs to go, how you’re pushing back, or the evidence we need that we don’t have. But I don’t know how to get there.

You just get frustrated. You get cognitively exhausted and worn out. I used to tell colleagues in every single study we ever did that we’re going to the dark place. There’s going to be a moment where we’re all going to say this thing’s broken; we just spent six years or six months on nothing. At that point, when the exhaustion hits, it’s better if people just go home, take time off, and get some rest. Come back look at it with fresh eyes.

Let’s put CEB behind us. I could talk to you all morning. I miss that world. It was such an incredible company.

A New Venture

Bob: So where are you today? You and Matt Dixon are the gurus of the Challenger sale and everything that’s evolved around that and beyond it. Where do you want to go now?

Brent: So I’ve got two big projects I’m working on now. I’ve been self-employed for about six months, at least for the time being, until the money runs out. I’m with two companies, including the one I talked about earlier. The other one is a software company. It’s using a lot of AI and a lot of software, and just really great design work. I work with a couple other people to build a company that boils down training into micro bursts of learning and deploys that learning into the flow of work. And we’re starting with sales content, because that’s the expertise that I have. Imagine if I could take sales training out of the classroom, where it’s once and done and no one remembers anything, and actually put these little micro bursts of content right at the right in front of the seller right at the exact time it’s needed in the flow of work. We believe that would be pretty powerful. So we call the company Cues. We’re working on that right now, and anybody who wants to invest in it should let me know!

At the same time, there’s a body of work that I was involved in producing with a lots of really smart colleagues at CEB and mostly at Gartner. I’m coalescing my mind around this bigger set of ideas and pulling in research from other places. Looking at this from a higher level — which I didn’t have the luxury to do when I was still at Gartner — it’s become pretty clear to me that this is a body of work on sales and marketing that has potential for huge impact. And that’s ultimately what led me to a the great job with a great company making great money. I want to spend the next eight months or so writing that book. And then my long term goal is to build that software company into something amazing and get it out into the world where it belongs.

I’m at that age where I just want to do cool things with cool people and still have a lasting positive impact on the world, to help us all just understand things a little bit better. I’m working my hardest to get this flywheel going that we talked about before. It will start with a book, and hopefully we can use that book to do some keynotes, some training and workshops. And then we’ll take that money and just pour it right back into the next research project, then create the next set of IP and so on and so forth. I don’t need to build a billion-dollar company in answer to publicly traded shareholders…I just want to produce research that changes people’s lives materially, because I’ve had a taste of that and I kind of want it again.

Thought Leadership vs. Insight

Bob: Brent, you had mentioned that you’d love to talk more about thought leadership. Let’s end with that.

Brent: In the Challenger books, we spent a great deal of time differentiating between what we call thought leadership and insight. There’s a definitional problem. I first encountered thought leadership back around 2008, from a global general manager of a huge company. We were talking about the Challenger work that we were rolling out, and he was kind of dismissive. He told me, “I just need this to be a thought leader. Because if we can be a thought leader, then we can demonstrate to the world that we have cutting-edge ideas that are far out in front of everyone else, that we’re smarter and we’re better, and that’s going to build trust, and our companies are more likely to trust us. Then they’ll be more likely to come to us first with their mission critical priorities and tough challenges.”

This took place right around that time when content marketing was coming up, and everything was all about thought leadership. My reaction was that this wouldn’t get him what he wanted.  I was reacting to that conventional definition of thought leadership, which is deeply supplier centric. This means it’s focusing on customers’ perceptions of us, which becomes problematic. It’s like dating in high school…Do you think I’m smart? Do you think I’m pretty? Do you like me? We demonstrate our smartness by saying, look at all these things that we know…we did research; we’ve got data. Look at this interesting idea, or look at the five reasons why you should do this.

In contrast, the Challenger work that we did is all based on a different idea, which is: If we’re going to sell, if we’re going to grow and expand, we have to sell change. One way or another, every company sells change. I may want you to stop buying this and start buying that; stop buying from them, start buying from us; stop buying the small amount or start buying this big amount; or stop using our old technology and start using our new technology. We’re trying to get our customers to change their behavior. But change is the one thing that customers will want to avoid at all costs. It’s hard, risky, expensive and unknown. The key thing to consider is, what kind of content do I need to put in front of customers to drive change? And that can’t just be content that says how smart you are.  No company is going to say: “Man, you guys are so smart. Take my money.” It doesn’t work that way.

For a company to give you their money, you’ve got to have convinced them to do something different. We have to start thinking about thought leadership content, or insights, designed specifically to drive behavior change. It’s about a current state and a future or a preferred state. And the whole idea is not just to talk about that new state or the preferred state, but to talk about that current state, to break that down. I call it the A state and the B state. Before you build up the B, or future state, you’ve got to break down the A; you’ve got to show your customers why what they’re currently doing is costing them money and exposing them to risk they haven’t fully appreciated. Otherwise, they’ll say that the B state is amazing and they want some of it…but it’s expensive, hard and unknown. So for now, while the B state may be better, my state will have to be good enough. And this is why we keep losing over and over again, not to the competition, but to “good enough,” is because we haven’t we haven’t knocked them off the A state. We haven’t shown them that the pain of same is greater than the pain of change, as our friends at ADP used to say.

“Insight” is a specific flavor of thought leadership that breaks down As, builds up B’s and drives change and doesn’t simply to say, “Hey, look at my smart thinking.” Around 2015, every CEO in the world, woke up on the same morning, looked in the mirror, and said “I’m going to become a thought leader.” They all decided they were having a hard time differentiating, standing out in the marketplace, and getting premium pricing for their solutions. They all kind of woke up with the same mandate at the same time. By the way, this was around the time Challenger hit, so we just hit the market at the perfect time. Then all the marketers in the world woke up and said, “I can do something about that” and they build a strategy called content marketing. And all of a sudden, a company out of Boston called HubSpot woke up and said “I’ve got software for that. It’s called marketing automation.”

The result was that we started creating massive amounts of content in the name of thought leadership and just started spamming the world with how smart we are. I call this the smartness arms race. And just like the actual arms race, the smartness arms race ended in a tie, where everybody was saying really smart things, backed by data and research. But the whole point of going on the journey in the first place was to create differentiation, and now it’s 10 years later, and we all look smarter, but the same. An article we wrote for HBR, called sensemaking for sales, breaks this idea down: the way you stand out in a world in this world isn’t to be even more thought leader-y or even to say even smarter stuff, but  to help customers just make sense out of all the content that’s already out there. Customers are  overwhelmed with so much high-quality information. The problem isn’t the quality; it’s the quantity of the quality. Today if you show up with an insight, even if it’s well-designed, your customers will say, “Great, I’ll put it on the stack of the 13 other videos and the five other white papers I got to read and I’ll get to that some point. But I’m just kind of overwhelmed. If someone could just help me make sense at all that that would be so much better.”

This is a limitation of thought leadership today that wasn’t true 10 years ago. The book that I’m currently writing says that the single biggest challenge and opportunity that we have today in b2b is not customer’s lack of confidence in you, the supplier: It’s the lack of confidence in themselves and their ability to make a large-scale decision on behalf of their companies. We have a lot of data and a lot of research that shows that they don’t trust themselves. They are navigating their ability to define value, and to get agreement with their colleagues. If you come into this situation just talking about how smart you are, it’s not even like carrying a knife to a gunfight; it’s literally that you’ve shown up at the wrong party. This is so not the problem to solve right now. When we start concentrating not on customers’ perceptions of us but addressing their perceptions of themselves, the original definition of thought leadership starts to wobble pretty significantly as the right answer. So there, there’s my answer to your question of what I’m doing today —  I’m writing that book.

Bob: Well, that sounds really exciting.

Brent: You’ve got a company called thought leadership, and I don’t want you to feel attacked. If you start with a different definition, then a lot of problems go away. But what if you look at common practice of what’s being done in the name of thought leadership?

Bob: Most thought leadership content is not thoughtful or leading, but if you put that label on it, then you get funding from the corporation to go ahead. Ultimately the value of thought leadership, as I look at it, is doing the research that will lead to a totally new way to solve a very complex problem. But its true value is in the development and delivery of a service – a new consulting service, legal or accounting practice, or training practice. Thought leadership research is really the fuel for service innovation in professional services and maybe even in tech and tech services. For the Challenger sale, you guys had a training company that you spun off before Gartner. Reengineering turned into a consulting service: Michael Hammer ran a couple of research companies but didn’t do the consulting himself.

Brent: In the early stages of CEB we started really getting good at this. We presented these powerful, valuable new ideas, and when companies asked if we could help them do it, we had to tell them that we were just a research company. So we walked away from hundreds of millions of dollars of implementation support because we taught them that they need to do things differently, but didn’t provide the support to do that. That’s when Challenger hit. Someone on our team pointed out that we shouldn’t be walking away from this; that we should be the ones that actually follow on with training, so we built a training business that eventually did $60 million a year in revenue by the time we spun it out.

Bob: My definition of thought leadership is, it’s the eminence that a company achieves by

developing the kind of research that you did, and marketing it, whether it’s organizing the sales force to sell a new way, or changing the operations of a business, like in reengineering. But the most important part of is delivering it with a consistent level of quality so that you don’t burn through the Fortune 500 because your consulting team, like the one that you built around the Challenger sale, is killing it at every other company that brings you in.

Brent: I totally agree. And this by the way is my personal challenge. Once you get into that part of the business, Bob, I’m kind of bored. I need to surround myself with other people who are good at that and want to do that and find value in that so that I can get back to creating the next new thing. So it takes a village. It takes a team to do this well.

And then someone’s got to sell it and someone’s got to renew it. And that can’t all be the same person because people have different peaks and valleys in capability. It’s challenging to consistently be delivering and renewing, while also doing the hard work of being in conference rooms vigorously debating ideas. At some point, you just run out of time and capacity and you realize that you need more people. And that’s where it starts getting expensive and becomes a real catch-22. I think that’s why sometimes these businesses aren’t super sustainable at larger scale. Moreover, some of the skills they need are pretty rare. Few people really geek out on just finding these big ideas and want to do that in the context of business as opposed to academics.

Bob: I wonder if it begins with asking why we are doing thought leadership research. It’s not just to throw big ideas and open up doors and hopefully sell them. We’re doing it for service innovation – developing new consulting services, legal services, or tech services, or getting people to rethink how they should use generative AI.

We can define our goal as helping companies to implement these new ideas that are proven through the research. To do that we need to codify it into a method and deliver it as a service. Our goal is to move companies from where they are, to where they could be, not just to deliver a breakthrough concept.

Brent: It feels like we just landed in Clayton Christiansen’s “The Innovators Dilemma,” because what you’re describing is kind of a skunkworks to create the next brand extension, capability, or product, and the margins by definition are lower than just stamping out more of the thing we’re already doing. You and I may wonder why there isn’t there more of this, because we love it. And I think Christiansen just nailed it.

Bob: Most consulting firms have not connected thought leadership to service innovation. They may have a thought leadership institute or research institute. We the consultants might think of thought leadership as marketing content. If you want to know how a big firm views thought leadership, look at who the thought leadership head reports to. If it’s to the CMO, the focus will be on marketing content, which will be looked upon by consultants, or the lawyers or whatever, 100% a bunch of fluff. But if the head of thought leadership reports to the top of the company — but has good relationships with the CMO and head of service delivery and service innovation — then thought leadership is positioned the right way.

Brent: And that’s super interesting. And I agree with you. By the way, my goal right now in my life is to never work for someone again, but if someone’s got that job, I’ll take it.

I think I ultimately figured you and I are pretty aligned on these kinds of topics. But I think as a result, you must be that much more frustrated to be seeing what’s being done in the name of thought leadership, because a lot of it is not what you’re talking about, is it?

Bob: And I’ve seen that most of it, even the great stuff, doesn’t lead to service innovation. It leads to an HBR article orwriting a best-selling book or getting keynote speeches, but not to other people in the firm adopting this new and better way to do whatever and and delivering a breakthrough consulting.

Brent: Cool. We’ve solved the world’s problems, Bob.

Bob: This was terrific. We have to bring you back, because I think there’s so much more we could talk about. Thank you, Brent.