Michael P. Connors | Crain's Philadelphia

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Michael P. Connors

Background:  

Information Services Group is a global technology research and advisory firm founded in 2006 and based in Stamford, Conn. ISG employs more than 1,300 professionals in more than 20 countries, serving well over 700 clients, including top global enterprises.

The Mistake:

In the latter half of the ’90s, "internet fever" was a full-blown phenomenon. Every business with a stake in the game was rushing to lay claim to their piece of virtual real estate. Amid that frenzy, many business leaders learned hard lessons about the intricate relationship between growth, balance and success. I was certainly one of those people.

In 1999, as vice chairman of ACNielsen [now known as Nielsen] I led the development of the first global internet audience measurement business. Nielsen, famous for its TV ratings, was well-positioned and certainly had brand permission to own this emerging piece of the market. Back then, the internet was even more like the Wild West than it is now. Every company that sold something, and many that really had nothing to sell, wanted a piece of the crazy growth and breadth of the web. It was up to us to validate the power of the internet by measuring eyeballs and clicks.

Never mind that the need for this information was still in its infancy. Nielsen, like most businesses, was focused on gaining vital market share—and doing it fast. Being a first-mover was an important goal in and of itself. "Planting flags in the ground," as quickly and in as many places as possible, was a legitimate business strategy. It was even more important than turning a profit.

We knew we had the technology and experience to measure internet audiences, but it guaranteed us nothing. As with so many ventures, we focused on building the plane while we were flying it; we drove ourselves and our teams hard. This approach inevitably led to some organizational challenges. Looking back at those exhilarating days, it is clear we should have recognized the downside of speed. I learned that paying attention to mitigating risk while moving quickly is of utmost importance. This means taking the time to emphasize sound business decisions focused on long-term goals, not just speed. In any era, having the right talent in a place, supported with the right tools to succeed, must remain front and center.

The other great lesson I learned during this period was the importance of flexibility. Sound planning is important, but business conditions change so rapidly that a good leader must be ready to call a change in direction with confidence and purpose. As we moved to quickly expand our ACNielsen eRatings coverage to more than 30 international markets, I concluded we needed a course alteration. I had a gut feeling that dramatic change was coming and that it wasn’t going to be all good. Just as the frenzied growth seemed to peak, anyone who was watching closely could see the bubble bursting. I called Bill Pulver, who ran our operations for ACNielsen eRatings and said, “Bill, I love what we’ve done, but it’s time to pull back, and fast.”

Mitigating risk while moving quickly is of utmost importance.

The Lesson:

We retrenched nearly as quickly as we had pushed ahead with our growth phase. We withdrew from the markets we knew were unsustainable, including some 15 or so countries where we had operated for less than a year. It hurt to take apart what we had worked so hard to build, but the writing on the wall was all too clear.

While many businesses rode that same roller coaster and made similar mistakes, I was determined to learn something from the process. The lessons I absorbed, and still use today, were about balancing the demands of growth, quality and the careful use of human capital.

Over a period of two years, the ACNielsen eRatings business went from "survive" to "thrive." The initial business still exists, through a series of mergers and changes inside Nielsen, and remains a leading player in internet audience and retail measurement, validating that our original vision was on target.

The valuable lessons I took away from that experience helped me as I founded and grew my current company, Information Services Group, a global technology research and advisory services firm. Many of the lessons about business and leadership I rely on today were sown in the mad dash to build ACNielsen eRatings: Focusing on smart growth, both in size and markets, putting the right people in position to succeed and remembering that building a profitable business needs to be front and center. I’ve since demanded that any new venture turn a profit in its first year. Lessons in the business world can be hard, but if you grow as a result, they are also invaluable.

Photo courtesy of Michael P. Connors

Follow ISG on Twitter at @ISG_News

Do you have a good story you’d like to share, or know someone we should feature? Email jfisher@crain.com

And be sure to sign up for your local newsletter from Crain's.