Mark Gerson: Chairman and CEO of the Gerson Lehrman Group

This week, Stephen Ibaraki, I.S.P., has an exclusive interview with Mark Gerson, Chairman, and CEO of the Gerson Lehrman Group, the world’s leading knowledge services provider, facilitating customized research by deploying the world’s best experts to meet their client’s specialized needs.

A graduate of Williams College and Yale Law School, Mark is also the author of several books and numerous articles and essays. His work has been published by the Free Press, Addison Wesley and Madison Books, and in newspapers and magazines including The New Republic, Reader's Digest, USA Today and the Wall Street Journal. Mark currently serves on the boards of the American Friends of the IDC, Manhattan Institute, Student Sponsor Partnership, Yale Chai Society, and Imentor.

Discussion:

Q: Mark, considering your busy schedule, we are most fortunate to have you do this interview. Thank you!

A:  It is my pleasure, Stephen – thank you.

Q: You co-founded the Gerson Lehrman Group in 1998. Can you share its history? What prompted you to form the group? What are your vision, mission, and goals?

A:  Alexander Saint-Amand, Thomas Lehrman and I co-founded the company when he recognized some significant inefficiencies in the communication and sharing of business knowledge.  All manner of businesspeople (corporate trainees, fund managers, venture capitalists, management consultants, investment bankers), need to get up to speed quickly regarding companies, industries, sectors, technologies, regulations.  In the dynamic economy that we inhabit, these needs arise frequently and their fulfillment is important for people to make the right business decisions. 

We learned – through our various previous experiences – how most businesspeople go about this learning process: by reading chapters of books, hunting down articles on the Internet, calling friends of friends.  We decided that we would help to solve this problem for customers of business knowledge by publishing guides that explained how industries functioned.  That way, someone who needed to know about, say, the pharmaceutical industry, could learn its basics in two hours from a trusted source.  So we spent around a year and half putting together these primers before we were ready to begin selling them. 

As we began talking to potential customers – primarily those in the institutional investment business – we heard the same response time and again: we don’t want to read the books, we want to talk with the authors.  These potential customers explained that while our primers might be an innovation over the then current system of assimilating business knowledge, it would be far better if they could get their unique and specific questions answered by those most qualified to do so.  We realized that this was the real solution to the need we identified at the outset – we realized that a conversation was a superior way to communicate business knowledge over a publication – and so we began to recruit more people like the authors of the books, with the intention of connecting them to firms who would become our clients.  Hence, the Councils of Advisors, which now have over 125,000 members, was born.

Q: You have a remarkable board of directors and management team. Can you comment?

A: Thank you.  We are deeply fortunate to have a team of people with great integrity and intelligence – who believe deeply in our commercial mission, and are eager to work hard to help carry it out.  And we are equally fortunate to have the guidance of a group of directors and other investors who are always willing to provide us with wisdom, advice and introductions.

Q: Where do you see yourself and the group in the future?

A: We think that we have created the world’s first, by far, leading business knowledge exchange – and are excited to go to work every day to think of new ways that we can build on it and then execute.  We see an enormous amount of growth among both institutional investors and corporations domestically and globally, and look forward to growing this into the massive enterprise we are all convinced that it will be.

Q: With more than 100,000 of the world’s experts, how do you manage the logistics?

A: It is very complicated and intricate – so much so that some people in the company refer to us as a “knowledge logistics company.”  Because we invented the business model, we have had to create all of the requisite technology and systems on a proprietary basis ourselves in house.  They constantly develop based upon the learnings we garner from the hundreds of thousands of projects we facilitate and help to create an insurmountable competitive advantage for us.

Q: Your coverage includes: Healthcare & Biomedical; Technology, Media, & Telecom; Energy & Industrials; Consumer Goods & Services; Financial & Business Services; Legal, Economic & Regulatory Affairs; and Accounting.  In which sector do you see the most and the least activity?

A: Around two years ago, we made the strategic decision to cover every industry as well as we cover any industry.  It was bold and ambitious at the time, but we were confident that the systems and processes we developed for the exchange of business knowledge were relevant to every industry.  And it has worked – we see a lot of activity in each industry, often with the most growth from the industries we have launched the most recently.

Q: Will you be adding additional sectors in the future and what would be your reasons for adding these new areas?

A: We now cover every industry, and will consistently build them out domestically and internationally so that we can continue to connect our clients with the most appropriate people to answer their questions in the right forum.

Q: You are in a good position to predict the winners and losers in the medium and long term. What/who would they be?

A: Our company doesn’t make predictions – we don’t provide product recommendations, nor do we offer buy/sell recommendations.  We just connect our clients with the best experts who can educate them on business topics.

Q: What lessons have you learned since 1998?

A: We have learned a tremendous amount and one of the most enjoyable aspects of our jobs is that we continue to do so every day.  Fundamentally, we learned that all manner of businesspeople constantly have a variety of business subjects on which they need to be educated – and that the platform that we’ve developed can provide it for them with stunning effectiveness and efficiency. We are fortunate to have a customer base that is deeply invested in our success, and consequently our customers provide us with most (if not all!) of the new ideas that we turn into products and services.

Q: Let us turn this interview around. If you were doing this interview, what three questions would you ask and what would be your responses?

A: Q1: How do you deliver your services?
A1: Primarily, in three ways.  We arrange for consultations (one on one between a client and an Advisor), surveys (a client commissions a survey of anywhere between 10-300 Advisors) and events (typically between an Advisor and 6-8 clients).  We anticipate facilitating well over 100,000 consultations, 5000 events and 2000 surveys this year, with enormous growth in each.  This scale is essential to the quality of the service we provide.  As we do more projects, we are able to increase our understanding of our Advisors’ capabilities, our clients’ needs – and what is needed to consistently improve the systems we have developed to connect these two communities.  So an increasing number of projects feed our ability to consistently develop our products and the consistent development of our products keeps customers using us for more and more – and working with them to develop innovative new products and services.  

Q2: Where do you have offices?
A2: Our headquarters are in New York – and we have offices in Boston, Chicago, New Orleans, Los Angeles, San Francisco, Sydney, London, Shanghai, India and imminently Hong Kong and Frankfurt.  These offices perform sales, service, recruiting and Council management functions to different extents.

Q3: How do you distinguish yourself from traditional research companies – particularly those serving investors, the investment banks?
A3: Most other research firms – whether they are affiliated with the sell-side of investment banks or are stand-alone research firms – work primarily through a publication model.  The problems with the publication model of communicating business knowledge are the inherent lack of customization and the fact that the specific and unique questions of customers cannot be answered by it.  Moreover, those doing the analysis do not have current and first-hand expertise themselves: they are full-time analysts.  We have the model – and the systems, processes and information on each expert – to have our clients’ individual business questions answered in the most efficient way (through one on one communication).  Nonetheless, investment banks do some things very well that we don’t do at all: providing overview publications, hosting large conferences, trading and financing those trades, among other things.  We think that our mutual customers are now better served as they can use us, other young independent research companies as well as the traditional sources.

Final:
Mark, with your remarkable achievement in building the Gerson Lehrman Group into one of the foremost “knowledge services” in the world, we appreciate the time you have taken in sharing your valued wisdom with us. Thank you!