Forrester captures this paradox in something that it calls "proactive destruction." The notion is that companies must be willing to anticipate demand and to change rapidly, without sacrificing the core mission and values. "We're destroying and building at the same time," says Colony. "On one hand, we want to keep our core culture sacred and constant. On the other, if you are not a catalyst for change in this company, you probably won't last long. It may look chaotic to outsiders, but we're doing all of this in a very planned way with a long-term outlook."
Last year, for example, Forrester completely transformed its business model, changing the way that it delivered its current product to clients -- moving largely into an electronic format -- and introducing a series of new products. Despite all the tumult, the company not only managed to increase revenues from $61 million to $87 million compared to 1998, but also grew net profit from $7.5 million to $11 million.
In the race to the future, Forrester balances sprinting in bursts with a recognition that the race is ultimately a marathon. It's the company's way of avoiding the get-rich-quick orientation of so many startups. Colony made this point in an especially blunt position paper that he sent to Forrester's research clients this spring. "Many Dot Coms," he wrote, "are about to be exposed for what they are: vapid, shallow, hollow companies." The problem, he went on to say, is that too many Internet CEOs have short-term vision and commitment, a "fanatical" focus on stock-market valuation at the expense of providing genuine value to the customer, and insufficient patience and resources to withstand sustained competition in the long run.
Forrester struggles to balance short-term and long-term visions. "You can't just burn people out," says Modahl. "What we're trying to say is that when you have a high priority, sprint as fast as you can. When it's not urgent or critical, take a pause." Colony is even more direct: "Clients pay us for our thinking. The more balanced your life is and the more diverse your interests are, the better your thinking will be. If you work 20 hours a day, your product will be crap."
Inspired by his prep-school headmaster who knew every student by name, Colony did the same with every Forrester employee until recently. This year, however, the company will hire 300 new employees, and open two new research offices. While Colony can no longer keep up, he still makes it a high priority to get to know people one-on-one. The first week that Mariko Zapf, 30, came to work at a mid-level job at Forrester last year, she unexpectedly found herself sitting next to Colony on a bus ride to a company outing. "He introduced himself as George," Zapf says, "and for the next hour he just asked me questions about my family, what movies I liked, what books I read. I was blown away."
At the same time, Colony is firmly committed to getting bigger -- and not primarily to please stockholders. (The company went public in 1996, and its stock has jumped 631% since then.) "I wouldn't be here if we stayed at 100 people because it just wouldn't be challenging enough," he says. "Every step we take is a whole new menu of challenges and stuff to work out. As we have scaled, things have gotten more interesting."
For Colony, the challenge is to maintain a sense of humanness and intimacy in the sort of large company that he has long avoided joining. "The pods are one way that we mitigate size," he says. "It's like being in a squad of 8 or 10 people in the military. You get so that you're willing to die for the guy next to you." Colony is also determined to keep the scale of Forrester's new research offices modest. "In The Tipping Point, Malcolm Gladwell writes that the human brain is wired to have no more than 150 relationships," Colony says. "That feels about right to me. It's probably not coincidental that we've designed each of our new research offices to have no more than 150 employees."
Forrester is known internally as the land of the mavericks. "We want people who think in counterintuitive ways," Colony explains. "There are a couple of dyslexics here who are great analysts. They're what I call jumpers, because they'll take a wicked leap to an entirely different place." Indeed, Forrester is renowned for defying the conventional wisdom. It was the first research firm to suggest, for example, that Internet retailers were severely overvalued and were headed for a fall. "When I see someone who has done something unusual," says Modahl, "it suggests that she can think independently, isn't following a script in life, and won't be afraid to go against the pack. Three times out of 10 she'll be wrong, but that's okay as long as she's done the work."
If Colony is a visionary, he is also a pragmatist. He understands that the old rules don't work in the new economy and that the retention of valued employees is the key growth engine for today's companies. Forrester's turnover is under 20% -- unusually low in the dotcom world. "If we keep people for at least five or six years it's a big win for us," Colony says. "We're living in a world where every employee is a free agent. People can get money anywhere. Jobs are everywhere. Why do people stay in any one place? It comes down to a company's environment. That's where we focus our sights."
Tony Schwartz (tschwartz@fastcompany.com) is the author of What Really Matters: Searching for Wisdom in America (Bantam Books, 1996).
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