The price of perfection

Editor’s note: Brett Hagins is the senior partner of Research Innovation and ROI Inc., Plano, Texas. Additional information on the study mentioned in this article is available at www.researchinnovationandroi.com.

In partnership with Quirk’s, Research Innovation and ROI Inc. conducted a study called the Four Rs of Research: Revenue, Risk, Results and Return. It involved an online survey, 75 in-depth telephone interviews with corporate research executives and a literature synthesis that included adapting best practices from other functional areas, such as sales, to the corporate research function.

The broader study had three aims: maximizing the business impact of research; reducing unnecessary costs; and more explicitly quantifying the economic value of research. (Information about the full scope of the study is available at www.researchinnovationandroi.com.)

The focus of this article is on the performance criteria used to evaluate the research function and how researchers should not be afraid to take a risk now and then.

Will be protected

In our study we asked researchers which metrics were used to evaluate their department and on which metrics they would like to be evaluated. In general, respondents said that in order for research departments to take more risks, they need to know they will be protected - it has to be a win-win for the research department and for the organization or it will not work. Researchers would like to be able to take more risk and focus on driving impact but they need to know senior management has their backs in the evaluation process.

Have you heard any of the following sentiments about marketing research? We believe they are common fallacies.

•  “It is better to do one study perfectly than five studies well but imperfectly.”

•  “We have no control over whether they use the research or not - we just have to accept that all we can do is present the information.”

•  “It is better to address one research objective exhaustively and save others that cannot be addressed      exhaustively for future studies.”

•  “These are good questions, but they don’t belong in this study. Save them for a future study. This is not what this study was designed for. Everything has its proper place.”

•  “We will share nothing at all, no results of any kind, until everything is totally and completely buttoned up. I know they need the results now to make a decision, but they should have come to us earlier. Next time they will know.”

•  “It’s better not to share anything at all than to share something that might be misinterpreted.”

Some research departments are doing a better job of minimizing risk to themselves than they are to their company. If the research department is not willing to take small risks with research, then others end up taking much bigger risks with far greater dollar amounts. Let’s look at the consequences of each of these views.

“It is better to do one study perfectly than five studies well but imperfectly.”

There are different degrees of mistakes. Senior management needs to hold research accountable for mistakes of omission as well as commission. Almost 40 percent of respondents in our study said they would like to be evaluated on a willingness to make mistakes to drive innovation or achieve more important goals.

“We have no control over whether they use the research or not - we just have to accept that all we can do is present the information.”

While it is true that researchers have less control over whether information is used than that PowerPoint slide that they have redone 30 times, it is not true to say they have no control.

As part of our study, we conducted depth interviews among people in leading research departments who had truly driven substantial value to their business, with an eye toward developing specific case studies on how to overcome common problems that hurt research’s impact. Out of the interviews emerged a broader set of business skills that have to be mastered in addition to technical research skills. They include such things as:

Business problem diagnosis. Going from stated research objectives to underlying business issues.

Prioritization. Have screening processes in place to make sure departments are focused on areas with the most impact to the business. The top-performing research departments do fewer studies and waste less time on lower-value requests.

Marketing skills. The best researchers are also more talented marketers and strategists than the people they are supporting.

In-depth knowledge of products, services and industry trends.

Integration of research knowledge with financial metrics. The ability to translate research findings into strong business cases that will drive action.

An entrepreneurial spirit and drive. Always looking for areas of opportunity.

Sales and persuasion skills. If all world-class salespeople out there handed someone a piece of marketing collateral and then did nothing to close the sale, the economy would come to a grinding halt. This is analogous to a researcher presenting a study, having everyone thank them for the “great data” and then thinking that they have done all they can do.

Let’s look at the next two sentiments.

“It is better to address one research objective exhaustively and exclude others that cannot be addressed exhaustively for future studies.”

“These are good questions, but they don’t belong in this study. Save them for a future study. This is not what this study was designed for. Everything has its proper place.”

Here’s the problem with this thinking: No one has unlimited budget or time. A lot of these subsequent studies never get done. People will continue to make decisions with or without the involvement of research. Throwing a few non-traditional questions in a survey, even if they are a bit unconventional, is better than doing nothing - research is not an end in and of itself.

When I was on the client side, I would occasionally ask some very difficult or thought-provoking questions in surveys. Many of my colleagues likely wanted to say, “Respondents are not going to understand that! It’s too much!” And while some respondents admitted they did not understand these questions, among the segment of the respondents who did understand, we got better insights from that question than we did most others. The results-oriented people in the organization deeply appreciated the effort.

Many researchers simply are not willing to take these kinds of smaller risks. In an odd way, they would prefer that their organization take much larger risks without the benefit of guidance.

Now, let’s look at the last two fallacies.

“We will share nothing at all, no results of any kind, until everything is totally and completely buttoned up. I know they need the results now to make a decision, but they should have come to us earlier. Next time they will know.”

“It’s better not to share anything at all than to share something that might be misinterpreted.”

The benefit to the business of having a bias toward sharing information should outweigh the occasional misuse or misinterpretation of data. The problem is, research departments are generally held accountable for what they do share, not for what they fail to communicate. This is why performance evaluation criteria are critical to protecting the research department and aligning its interests with the company interests.

Leadership attributes

One of our interviews was with Sandy Kelly, a market research manager at St. Paul-based 3M. She was kind of enough to share some of the leadership attributes used at her firm to evaluate the research function. While each organization is different, the following list can serve as a solid framework around which to build a similar set of guidelines more tailored to your specific situation.

Thinks from the outside in. Creates and executes flexible, results-oriented strategy based on comprehensive understanding of customer, competitor and other outside interests and events relevant to the business.

Behaviors demonstrating this leadership attribute include (but are not limited to):

•  Understands and anticipates market trends and customer needs.

•  Demonstrates the ability to create and execute a strategy based on customer and client demands.

•  Maintains flexibility to adjust if customer requirements or economic conditions change.

•  Knows and anticipates the strategies, strengths and weaknesses of competitors.

•  Knows how to be successful in the industry in which the business competes.

•  Thinks “right to left” (results first).

Drives innovation and growth. Expands revenue by encouraging sound analysis and development of novel approaches to opportunities and problems related to customers, products and markets.

Behaviors demonstrating this leadership attribute include:

•  Redefines and stretches a market’s possibilities when setting goals.

•  Drives an entrepreneurial mind-set through the organization.

•  Cultivates an atmosphere in which revenue growth is accelerated via novel approaches to customers, products and markets.

•  Asks questions and challenges the status quo in ways that lead to new and better ideas and processes; confronts reality.

•  Ability to identify all options through sound analysis and innovative approaches.

Develops, teaches and engages others. Inspires other employees to take responsibility for company and unit performance in a way that compels employees to stretch, create and take risks to contribute fully to corporate and unit strategies and plans.

Behaviors demonstrating this leadership attribute include:

•  Inspires, influences and motivates individuals and organizations about corporate and unit strategies, goals and plans; ensures alignment.

•  Creates a winning atmosphere where people understand and are excited about the business.

•  Fosters an environment where all employees can stretch, take risks, create, contribute and learn.

•  Personalizes approach when developing employees.

•  Celebrates successes and acknowledges disappointments in a way that motivates an even higher level of commitment and performance.

•  Coaches and teaches others to grow their knowledge and skills.

•  Develops and executes a succession plan that ensures a strong group of future candidates.

•  Engages others through simple, consistent and candid communication.

•  Leads inclusively, but decisively, in large-group settings.

Makes courageous decisions. Manages ambiguous, complex or challenging situations with intelligence, speed and courage while holding oneself and others accountable for decisions, actions and performance.

Behaviors demonstrating this leadership attribute include:

•  Proactively navigates internal and external ambiguity and complexity.

•  Manages assertively through unforeseen difficulties.

•  Clarifies the risks and opportunities inherent in the competitive landscape.

•  Holds people accountable with meaningful and clear metrics and addresses performance issues.

•  Acts with intelligence, speed and courage to make tough business decisions even when data is limited.

•  Confronts issues, takes responsibility and is accountable in words and actions.

•  Forces change when necessary.

Leads with energy, passion and urgency. Contributes to an environment where teams can quickly respond to changing circumstances and are highly motivated to succeed and win.

Behaviors demonstrating this leadership attribute include:

•  Quickly responds to internal and external changing circumstances.

•  Conveys a sense of urgency.

•  Creates a vision of winning that captures the imagination of others.

•  Speaks with energy and expression that engages others.

•  Demonstrates confidence and relentless optimism.

•  Is passionate about supporting and leveraging change.

Lives 3M values. Acts with uncompromising honesty, integrity and professional ethics in a way that constructively challenges processes and behaviors and encourages the inclusive behavior of others.

Behaviors demonstrating this leadership attribute include:

•  Consistently earns the trust and respect of all 3M stakeholders.

•  Actively encourages and rewards inclusive behavi or.

•  Constructively challenges processes and behaviors.

•  Enhances 3M’s reputation and acts as a corporate ambassador.

•  Actively supports 3M’s corporate values, human resource principles and business conduct policies.

Undergo a transformation

While no one company has a monopoly on galvanizing researchers to take risk and get outside their comfort zone, this is one set of criteria that may help. If research departments are to undergo a transformation from data providers to catalysts of improved business performance, metrics must be designed and enforced that encourage this transformation.