How to take your in-house research practices to the next level

A road map to increased relevance

Editor’s note: Ian Lewis is director, research transformation consulting practice, at Cambiar LLC, a research consulting firm, and is based in Weston, Conn.

Company and marketing executives want to see greater marketplace impact from research, while researchers want to be the most sought-after providers of advice and counsel. The Market Research Executive Board (MREB) reports that 69 percent of senior executives want research to be a strategic partner but only 29 percent of them currently view research as such. Furthermore, execs who view research as a strategic partner are much more likely to have changed decisions based on research than those who view research as an analytic resource (57 percent vs. 33 percent). (Source: MREB Business Alignment Survey, 2008.)

Our firm has identified 10 key performance indicators (KPIs) that we feel can help research teams within today’s corporations increase their internal standing and achieve strategic, consultative relevance:

1. Driven by impact

2. Brings leadership to strategic priorities

3. Creates departmental intellectual property

4. Recognized as a business partner

5. Innovates

6. Integrates and collaborates

7. Develops rich consumer and market insights

8. Communicates for impact

9. Optimizes internal and external sourcing

10. Continually raises the bar

1. Driven by impact

Market research professionals typically spend their early years mastering the technical skills needed to design, execute and analyze a project. The focus is the project; the end point is a finished report or PowerPoint deck. Success is defined by a project well-executed - a questionnaire that the client is happy with, fieldwork that’s done on time and on budget, a report or presentation that often summarizes “all the news that’s fit to print.” Then the researcher moves on to his or her next project. Performance reviews focus on quality of project management skills.

Contrast this with what the company’s senior management wants from research. The company is investing substantial dollars in research, so it wants to see marketplace impact as a result of its investment. And senior management’s time is increasingly precious, so they just want to know the key insights and how the company should act on the insights. If there is little or no marketplace impact as a result of the research investment, why should they keep investing?

Ideally the research department would be able to demonstrate ROI for the function to the CFO’s satisfaction. In our experience, analysis to determine ROI is often very nebulous and we have preferred to rely on client feedback in addition to a departmental log tracking marketplace impact.

Marketplace impact doesn’t happen automatically from identifying insights. Insights must be integrated with business economics and organizational strengths and weaknesses, then communicated and subsequently acted upon by the appropriate internal function.

Research departments need to provide an environment in which marketplace impact is integral to the department’s vision and mission, an environment that makes provoking impact part of the research culture and that rewards impact. Departments also need to provide support in the form of coaching, mentoring and training. Researchers must be oriented to the need for impact from the beginning of their careers. When hiring, it is critical to select researchers who will have both the mind-set and the ability to develop the personal and professional skills needed to create impact. Finally, research departments must document and communicate their marketplace impact.

2. Brings leadership to strategic priorities

Researchers often complain that they spend too much time and money researching tactical issues while major strategic issues struggle to get budget. When this happens, it speaks “opportunity” and is a clear indication that research programs and budgets are not reviewed at a high enough level in the organization. It may be that the research budget is controlled by a brand-level marketing person and that the rolled-up departmental research budget is never reviewed with senior management. Or it may be that senior management doesn’t believe (or isn’t aware) that research can help with the major strategic issues.

This four-step research strategic plan process will create thought leadership opportunities for research:

Step 1: Identify the major strategic issues facing the company/brand.

Step 2: Evaluate the current level of knowledge about these issues company-wide and the key knowledge gaps.

Step 3: Build a research strategic plan - a program addressing the key knowledge gaps for the strategic issues - and review it with clients, including senior management, to gain their commitment. If the company is highly decentralized, the idea of company-wide research planning will need to be sold to corporate senior management. It may require addressing the best funding mechanism for research (e.g., within brands or SBUs vs. centrally, or at least having central funding for major strategic issues).

Step 4: Anticipate and adjust to changing strategic priorities. (Remember Churchill: “Plans are of little importance, but planning is essential.”)

3. Creates departmental intellectual property

Research needs to be proactive and provocative, seeking opportunities to bring thought leadership to major strategic issues. One mechanism is for research departments to identify a small number of topics (usually one or two) for which they can develop intellectual property for the company’s benefit; this can then be used to surprise and delight senior management. It also provides research an opportunity to showcase that it is future-focused (note that a future-focus isn’t intended to be limited to just this KPI).

This “above the brand” knowledge can be obtained by synthesizing internal and external information that is currently available but has not been leveraged. It is best to also establish a discretionary research budget that the department can use to create its own intellectual property.

4. Recognized as a business partner

The research relationship with clients runs all the way from being an internal vendor to a capable resource to a trusted advisor to a partner. One definition for a true partner is the first person you call when you have a problem and the last person you call before making a decision. Being simply an internal vendor is unacceptable; being a capable resource limits you to a reactive role. Today’s research departments must attain trusted advisor or partner status in order to drive impact. Research departments must achieve these consultative relationships with clients and with top company executives.

Attaining the desired relationship requires the researcher to have the right mind-set, the right collection of personal and professional capabilities, an understanding of the business and of the company’s capabilities, a way of working that fosters identification of business solutions from research, and the ability to get solutions implemented. The opportunity to develop trusted advisor or partner status will vary by client, so there needs to be client-specific planning. Coaching, mentoring and training are needed to help researchers become successful consultants.

5. Innovates

In an environment where resources are scarce and everyone is working long hours just to complete assignments, it is challenging to find the mental space, time and resources to innovate. In our experience, it is difficult to get senior staff’s attention to explore innovative approaches because they are so immersed in their day-to-day assignments. In addition, innovation is challenging for risk-averse researchers. However, if the research department wants to be seen as proactive and a leader it must innovate.

Innovation must co-exist with best practices. Best practices are extremely valuable and increase in value over time, but there must be openness to considering alternatives for which it may not be possible to bridge from the old to the new. A future-focused research department will have a culture that is open to considering disruptive change. In our experience, researchers can be more risk-averse than their clients.

Following these steps will keep a focus on and build recognition for innovation:

• Build innovation into goals for senior research staff. Don’t delegate innovation to just one person.
• Have a regular, ongoing program for the department to be exposed to innovative approaches.
• If there are different research groups by SBU, assign innovation areas to different groups according to fit with SBU business objectives.
• Identify and partner with clients who are open to utilizing innovative approaches.
• Reward researchers who innovate.
• Get management commitment to a discretionary budget.
• Communicate innovation accomplishments to the organization.

6. Integrates and collaborates

Researchers have traditionally focused on projects, with skills development targeted to becoming self-sufficient in handling projects. Researchers tend to “own” projects, and in our experience do not usually reach out to others for input when developing insights. Timelines are typically set for the project without consideration for integrating information that is external to the project. The researcher may also not be well-versed in information from sources such as consumer trends services, studies for other brands in the category, studies from other countries, mining of consumer conversations, industry studies, etc. Complicating things further, in our experience many researchers don’t enjoy taking time to sift through other sources. Hence they tend not to focus on integrating multiple sources of knowledge, missing an opportunity for richer insights. However, researchers enjoy the opportunity to add value by participating in collaboration sessions; making collaboration part of the culture will have a substantial payoff.

Challenges to address in order to enhance collaboration and leveraging multiple knowledge sources include:

Training and orientation. Researchers need training so that they evolve to become consultants. They still need to learn project skills but they need to learn a broader perspective - where the end game is creating marketplace impact from insights, and knowledge from projects and/or other sources is the fuel for discovering insights.

Collaboration. Working collaboratively within the research department can be a powerful asset. Other colleagues may be well-versed in information sources that could be helpful for a project or bring a different perspective. Working collaboratively needs to become part of the research department culture, to better leverage multiple knowledge sources and to develop richer insights.

Time and resource management. There may be an opportunity to leverage outsourcing and/or offshoring for integration of additional knowledge sources. Priorities need to be set so that additional resources are used where potential marketplace impact is high.

7. Develops rich consumer and market insights

What is an insight and how does research increase insight productivity? We like a definition that includes discovery together with marketplace impact: “Insight is new knowledge that has the potential to create significant marketplace impact.”

The toolkit for identifying insights has expanded in recent years. Online research capabilities have made segmentation and other quantitative techniques much more affordable, and enabled virtual shopping capabilities. Ethnographic research has become mainstream. Neuroscience, eye-tracking and facial-coding methodologies are evolving. Hosted online panel communities provide an opportunity for dialogue with consumers, and among consumers, over time. Listening to social media is gaining importance.

The challenge today is in unearthing insights that lead to competitive advantage, that can be leveraged to trigger an emotional consumer response and that ultimately provide the opportunity for significant marketplace impact.

It would be unwise to suggest that a simple formula exists to achieve high productivity for generating rich insights, but these pointers will help:

• A curious mind is an important starting point. If your research staff lacks curiosity, you have a problem.
• Research departments must create environments that support creativity, use of judgment and risk-taking; this is more conducive to generating rich insights.
• Put processes in place that facilitate collaboration with colleagues to develop richer insights. “Going it alone” is sub-optimal.
• Integrate knowledge from a range of sources to increase the chances for identifying rich insights.
• Focus energy on insight-generation that can have significant business impact.
• Building insight-generation into goals and making it part of ongoing, informal feedback reinforces the importance of the process.

8. Communicates for impact

The richest insight in the world doesn’t add value unless some action is taken. Research needs to take responsibility for making change happen as a result of insight development. Communicating for impact is critical. MREB annual themes in recent years have included “driving insight adoption” and “from insight to action,” underlining the importance of this.

In my corporate and agency lives, it took a long time just to get our researchers to stop putting a methodology chart at the beginning of a presentation, and to get them to believe that they didn’t have to show everything they learned. The job of the presentation is to create impact - period. Anything else is superfluous.

The following pointers will help create impact:

• Tell a story with your presentation, and tell it succinctly.
• Leverage visual storytelling, incorporating video where possible.
• Know your audience and their ingoing beliefs. Address potential minefields individually before delivering the presentation.
• Your audience wants to know what they should do, not what you did.
• Your job doesn’t end when the presentation is given. Take responsibility for making action happen.

9. Optimizes internal and external sourcing

A key strength for research departments is that the available resources go well beyond the internal staff, and now is a good time to reassess the best combination of internal and external sources in order to develop the ideal research capability.

Research departments have traditionally outsourced to “suppliers,” a term that - to the increasing army of procurement officers - unfortunately places market research companies in the same bucket as office products firms and other commodity purveyors. In some client companies, cost pressures placed on suppliers have inhibited innovation and threatened quality.

Offshoring has been another recent development, providing the opportunity to either reduce costs or undertake assignments that weren’t possible with stretched internal staff.

In recent years consulting companies such as McKinsey have been increasingly retained for major strategic assignments that include a research component. While research suppliers (who lose lucrative business) and client researchers (who don’t make the hiring decision and usually don’t lead the assignment) are often unhappy about consulting companies being retained, the good news is that top management will pay for research that it believes will have a major impact. The opportunity is for research departments to earn their place as consultants to top management.

Factors to consider in developing the optimal internal and external sourcing plan include:

• What capabilities and knowledge must be retained internally?
• What adjustments, if any, are needed to the existing department structure and talent pool?
• What is the right partnering model with market research suppliers?
• Does the department have the best market research suppliers for its needs?
• How is offshoring best utilized?
• How can client self-service be expanded for low value-add services?
• What can the department stop doing?

10. Continually raises the bar

As the saying goes, “What gets measured gets managed,” so a key component is a performance measurement and feedback process. Tied to this is goal-setting. All of this must be designed to fit with the desired transformation for the research department.

Here are some things that we have found helpful:

• Look for “quick hits” to demonstrate to staff and management that the transformation is making progress.
• Set up an “impact log” for researchers to post successes with creating marketplace impact; use this to communicate successes with senior management. The log is also a great mechanism to share successes with research staff.
• Discuss progress toward transformation goals frequently, individually and with the department - don’t wait for the annual review!
• Build mini-360 evaluations into the annual performance appraisal process. Have confidential conversations about senior staff with their direct reports, key clients and sometimes with other colleagues and suppliers, prior to the performance discussion. All managers should be required to follow this process.
• Client surveys about key aspects of department performance are helpful initially but can become repetitive and should be replaced by one-on-one conversations.
• When setting goals relating to consulting relationships, select key clients and client-specific goals (e.g., “Achieve trusted advisor status with Marketing V.P. Joe Smith by mid-2010.”).
• Provide coaching, mentoring and training support.

We made progress

When I joined my previous company, the expectations from the research department were fairly low. We began the journey from number-crunchers to internal consultants, utilizing many of the tips given in this article. And we got some outside help from an experienced management consultant, who made us feel quite uncomfortable about the journey ahead. We made progress, and client expectations rose. The better we became the higher the expectations became. I believe this is axiomatic, and that it is essential to have a continuous improvement process in place.