Several years ago, I had a frustrating conversation with a respected colleague. I was strongly advocating we get more “journalism” into our business analysis.
To him, we were having precisely the wrong conversation. It had become too easy to find information on the Web or by networking. Our business clients were asking for hard data, and validation of their strategic path. A focus on “journalism” (or investigative reporting) suggested low value, commodity-like information they wouldn’t pay very much for.
But here’s the problem: in a new industry segment, there usually isn’t a lot of consumer data/usage data/sales data/investment data. What data there is can easily be misinterpreted or flat out wrong. To paraphrase Steve Jobs: When confronted with new concepts, people really don’t know what they want.
In these situations, old fashioned, journalistic shoe-leather often begins to move the needle, and ultimately, leads to deeper analyst knowledge rather than today’s standard of a mile wide and an inch deep.
Here are some of the journalistic best practices I think about:
1. Talk to everybody: Industry analysts cut too many corners and rely on just a few sources, if that. A dozen or more sources provide a richer, more complete picture. And one source will lead to three more.
2. Build Files/Create a Program: We often have a one dimensional view of a company or industry segment. Creating a file with standardized information about companies helps track an industry’s development and status. Start with “about us.” Read their blog, video and news releases. Cross check the information on a search engine and in discussions.
3. Cut the hype: Most of the data that is gathered in a new segment is spin geared towards investors. Here’s a challenge: rewrite a press release, double check the validating “data,” toss the noise, and see if you can save more than 3 or 4 sentences.
4. Write the Lede: What does it all mean? Can it be summarized in two or three sentences? A lot of analysts fail this test, relying on an obfuscating infograph or a series of broad PPT bullets.
The difference between a journalist and an analyst, of course, is fairly subtle. But unlike journalists, analysts don’t have to be interesting. They presumably take the time to gather and weigh all the information they get; reject the chaff; reach conclusions; and sometimes make recommendations. That’s what we’re ultimately shooting for.