Views from the Hills by R. E. Stevens, GENESIS II (The Second Beginning) E-Mail

What is Wrong with Corporate Market Research Organizations?  Two words:  Corporate Management

Naturally it is a personal point of view.  But it is a view based on years and a large number of company exposures.  It has been my experience that Corporate management expects a lot from the Market Research Department but are unwilling to invest in the organization and development of the Group.  Given the expectations that Corporate Management has of the Market Research Departments, we as investors should expect a 20% to 30% return on our investments in the Company and not just eh 1% to 3% dividends they allocate.  We should expect profit returns in the 20s and 30s and not in single digits.

Over the years, I have been writing about the problems with market research that existed within the specific market research departments and the agencies they utilize to execute their studies.  I have written and talked about the "Four Root Causes" of poor research.  All four dealt with the execution of the research.

As I am more and more called upon to work on solutions for better research, I am faced with the fact that it is not, as a rule, the actual market research department that is the direct source of the problem.  It is the Corporate Management and the limitations that they impose on their research groups.

From my perspective, the most important restrictions have been the result of down-sizing and budget cutting.  Groups have been stripped to the bone.  One of the most obvious reductions has been in the skilled researcher areas.  The skilled personnel have left many companies as a result of management encouragement to do so or in an effort to go where they can do work that meets their personal standards.

Budget reductions have not only resulted in the loss of skilled (experienced) personnel but it has also resulted in budgets that do not allow for training of the lesser skilled.  There does not seem to be funds to hire experience, train the lesser experienced, develop resources, research methods, gain first hand experience, get involved with the consumer, etc.  All of this leads to "Cookie Cutter" research.  Cookies are easy to make and taste good, but they do not do much for the development of the mind and body.  As a matter of fact, cookies may be detrimental to your health (as well as the health of your Company).

Reduced staffing has led to researchers that function as order takers as opposed to researchers.  Many staffs have been reduced in operating procedures to identifying the problem and then calling an agency to design, execute, analyze the data and in many cases report the results and draw the conclusions.  There is something to be said for gaining the input from someone (agencies) not involved in the day-to-day operation.  Their assessment, however, should be used as input, not conclusions.  Conclusions should be left to those involved in the consequences of the actions.

A pointed question:

"Management, what have you done to help me today?
 I know what you have done to hinder my effectiveness."

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