The Advisory Board Company is a multi-national research and consulting firm that helps hospitals and universities tackle their most pressing strategic and tactical challenges. Their business model depends on understanding and prescribing solutions for a wide range of strategic, financial, and operational problems. As such, they have designed an operating model that mandates near-constant market interaction with everyone trained to always be listening for the issues – and solutions – most critical for executives. Once they understand the issues, they have a variety of ways to monetize their knowledge.
The work begins with research, the core of the Advisory’s Board’s offerings. The company’s research team regularly engages with hundreds of executives around the country, both customer and non-customer, and they start with one simple question: “What keeps you up at night?” The answer to this question then informs the research agenda for the year. Once the research agenda has been defined, they reach back out to the market to understand how they are tackling these issues and again to vet proposed solutions. Put another way, they don’t attempt to guess or predict what executives will be focused on, they just ask them, and then they find solutions to those problems.
Non-researchers get in on the action, too. The consultants who help implement these best practices and the teachers who train a client’s staff all spend a considerable amount of time working with and talking to leadership. While these conversations are not directly related to discovering new challenges, Advisory Board staff are trained to listen for new and emergent challenges that might start to interfere with sleep patterns. And of course every now and then they do just ask the million-dollar question.
Even sales representatives spend countless hours at the boardroom table discussing priorities with executive teams. In fact, the Advisory Board’s sales model explicitly requires sales meetings to be in-person, for the purpose of building strong relationships with hospital executives in the hopes of not just making a sale, but uncovering new areas for research.
So how does this operating model complement their business model? Well, not only does the client pay for all of these activities, the uncovered insight into the most pressing issues is the basis for all new product development at the Advisory Board.
Clients pay for the research through an annual subscription entitling them to as much intelligence as they like (via books and meetings, more face-to-face interaction) along with a suite of experts and technology tools to help guide decision-making. Consulting, training, and business intelligence tools are additional value-added services.
What’s more powerful, though, is the ability to bake this knowledge of the customer’s mindset into new products and services. For example, at one time nursing leadership was a critical challenge for hospital executives. You would likely see a book or two written about it that year and a breakout session at a conference devoted to it. But you would also see a new offering in the consulting division – “Identifying Future Nursing Leaders” – and a new training module – “The Nursing Leadership Academy.” Finally there’s Nursing Compass, a business intelligence tool designed to monitor critical metrics of nursing quality and efficiency to equip these new leaders with the data needed to do their job.
In fact, it is possible (and common) for a hospital executive to learn about a best practice at an Advisory Board meeting, hire the company to lead a consulting engagement to implement that best practice, hire the company again to train her staff to maintain the new change, and buy a technology solution for ongoing monitoring and management. Each of these steps puts the Advisory Board back in front of the customer, delivering a solution to a pressing problem, and listening for the next one.
And it all starts by getting front of the customer and asking “what’s keeping you up at night?”.
NOTE: The source for all information in this post is my recollections from my time working at the Advisory Board.