Getting a seat at the top table…

… David Hulbert, director at Ravensbeck, explains how market researchers can help business leaders make the right decisions in uncertain times.

In theory, the need for business leaders to base important decisions on robust and informative market research can never have been greater.  However, in practice, this is often not the case.

So how does the market research industry force its way to the top table, and improve the future prospects of the businesses we work for?  In my view, what is needed is to put the “research” back into “market research”, and to act more like scientists, predicting the future, and less like journalists, telling plausible but often wrong stories about the past.

Now, it is something of a cliché to say that the current business environment is the most uncertain and changeable that anyone has seen for many years.  In fact, the industry that I work in – electronic media, especially television – has been undergoing constant change for at least the last two decades.  Broadcast to multichannel; analogue to digital; linear to multiplex; standard definition  to high definition; scheduled to on-demand;  real time to catch-up, walled gardens to the open internet, and so on and so on!

There is, however, a good argument to be made that the nature of change that the media industry, and other similar industries, are currently going through is different from that of the recent past.  Many of the advances in the 1990s and early years of the 21st century were about improving the range, efficiency and scope of what was pushed to consumers – a sort of “expanded broadcast with a bit of choice around the edges” model.

In recent years, however, the emphasis has been much more on expanding usability and usage occasions, putting viewers much more in control of what they watch, when, where and how they watch it, and how (or in some cases whether)  they pay for the privilege.   Although some of the technologies involved have been around for some time, we are really only at the start of changes as they affect actual viewers and consumers in the real world.  This poses two significant problems for business decision makers:

• Since the future consumer models are unclear, and in many cases have yet to be properly worked out, how do we manage our current business while, at the same time, best position ourselves for the many, varied and poorly understood market structures that could possibly emerge over the next 5 years?

• How do we cope with the blurring of lines between traditionally separate product groups, distribution channels and operating business units?  For example, now that mobile overlaps with fixed line, release windows change constantly, and my Satellite, Cable and Telco customers are all selling each others’ products, who do I provide which products and services to, at what prices and under what constraints (if any)?

In situations like this, pure intuition, or reliance on “the way we’ve always done things” are poor, if not downright dangerous, tools for making big directional business bets.  In times of uncertainty, when new business norms are evolving, the good information is incredibly valuable, and since many of the changes I have outlined relate to how consumers are changing their consumption habits, market researchers should have a major role to play.

The challenge for the market research industry is how to specify, gather, analyse and present data in ways that business managers can use to make the tough decisions.  As has been pointed out by, for example, Stan Sthanunathan of Coca Cola, the challenge is to move from “explaining the past” to “predicting the future”.

I like to think of this as changing from being journalists to being scientists!  It has been my pleasure to work with a lot of journalists recently, and I have observed how good they are at taking fairly random collections of facts and observations and quickly working these up into perfectly plausible stories.  They follow this up by selecting new facts, which reinforce the stories they have chosen to tell.  They remind me of Mark Twain who, when asked whether what he had described had actually happened, said “Well it could have done”.  The trouble is that there are many stories that “could have been” true, but actually weren’t.  To be fair, in settled times, this approach is only mildly dangerous, but at times of upheaval picking the wrong (albeit plausible) story about how the world works is a recipe for disaster.

Scientists, by contrast (well good ones, anyway) are meant to go about their business somewhat differently.  The ideal is that they should generate ideas about how the world may work, go out and find the data, which tests these ideas to destruction, refine their theories in the light of these tests, and, finally, put them to the ultimate challenge of predicting unseen future events.  Theories and models which have jumped these hurdles are valuable indeed.

I suppose that all I’m really saying is that the word “research” should mean what it says.  In my view, if market researchers can find ways to make their research more “scientific” and less “journalistic”, they will find no shortage of nervous senior business managers desperate and grateful for their input and guidance, and willing to build them fully into top table decision making.

David will be speaking at this year’s MRG conference in Malta from 3rd to 6th November. Click here for more information or to book your ticket.