The Diaz Research story ...

by founder, Iain Smith

The idea of sharing costs

How did Diaz Research start?

After 12 years consulting on HR and people and organization issues to IT, telecom and similar organizations, I realized that clients could benefit greatly if, instead of each separately commissioning consultants to answer their questions, some kind of sharing could be organized. Why couldn't the expertise we had as consultants be captured in 'best practice' guides, for example, and made more widely available? The big investment of time could be funded if lots of clients agreed in advance to share the costs.

I knew that syndicated research was commonplace in the IT sector, but that it would not be a familiar one with HR managers ...

Y2K: opportunity knocks...

The opportunity to test this concept arose in the run-up to the Year 2000 (Y2K) conversion crisis. This crisis arose when people realized that most information systems had been built in such a way as to allow only years starting 19XX to be processed. Result: panic! In 1997 all our clients at the Hay Group in London, where I worked, wanted the same questions answered: Will there really be a major shortage of IT skills to do the conversion work? What skills will be most in demand? Should we pay our IT staff loyalty bonuses to stop them deserting us?

After accepting a client brief to report on the level of usage of IT loyalty bonuses (in one week's time!) we struggled to deliver much, apart from an invoice that reflected a considerable time spent on the phone without much luck. Coming back to the office from presenting to the client I realized that if we asked a number of companies to share the considerable costs of some decent research, we could deliver something much better - and costing less - and make a profit. Within 48 hours I had written a one-page flier that described the research we would do, the questions we'd answer and the half-day conference we'd host.

Clients loved the idea: four weeks later we had signed up no fewer than 40 blue chip companies. And after two months we produced the definitive piece of research into Year 2000 skills issues and loyalty bonuses. And all for a fee of just 1.5 days' consulting time per participating company.

Most satisfying of all was the quality of the research: solidly based on interviews, quantitative data collection and analysis, it presented surprising but definitive answers.

Benefits: six figures ...

One company told us later that our research, which we'd faxed through minutes before their IT Executive Committee meeting, had saved their company around a million pounds. The Committee, believing that everyone except them were introducing IT loyalty bonuses, had been on the point of agreeing to pay around £1,000 to each of around 1,000 IT workers. Our research showed that of the forty blue chip participants only a minority believed loyalty bonuses were necessary. So that particular Executive Committee halted their plans - and suffered very few IT resignations in the run-up to 2000.

This demonstrated something that all IT Directors know: investing in better information can yield spectacular returns.

Over the following years we followed this initiative up at the Hay Group by designing an e-people pay survey (focused on dotcommers) and an SAP survey (focused on the specialist SAP skills that were then in great demand). These were each best-of-breed products that saved participants large amounts of money while generating very respectable profits and lots of positive publicity for Hay.

Something more?

Despite these successes I felt the world needed something more than occasional forays into the area of shared HR research. In 2000, I and a couple of others within Hay started developing a proposition to launch a premium service for HR Directors that would give them access to first-class research on key HR issues. This proposition was given the unwieldy label of Valued-Added Business Information Services (VABIS). The VABIS proposition was risky: there is a great deal of competition for mind-share in the general HR space. It also looked expensive: the opportunity cost of a management-consultant-year was even then over £250,000. It became clear that the risks and costs were too high to warrant proceeding with the proposition.

Diaz Research is born ...

It was then that I decided to redirect the VABIS proposition towards just the area that is of most interest to me: the IT HR space. Whereas general HR management issues are addressed by professional bodies and a host of other organizations, and IT management is well served by Gartner, Forrester and the like, IT HR is tucked in the middle - too specialist to have attracted much proper research.

Knowing something of the complexities of stakeholder management in large companies, and the difficulties of positioning oneself as a source of independent analysis from within an HR service provider, I decided in 2000 it was best done by an independent company. So I quit the Hay Group in 2001 to set up Diaz Research.

The Diaz vision ...

Diaz quickly established a solid following among large IT functions, where we continue to focus. Six years after its foundation Diaz clients include the majority of the largest IT functions in the UK and Ireland. And we have good working contacts with a range of IT HR managers elsewhere in Europe.

The principle on which we operate is that of complete independence: no acceptance of sponsorship, or ads, no suppliers at meetings except in the most special of circumstances. We rely totally on subscribers and purchasers of research to survive: a healthy situation because it keeps us focused on meeting the needs of our clients.

The vision for the future is to consolidate our position as the leading provider of information and insight on IT HR management and on "people and organization" issues. This means extending our research and extending our reach into more markets.