Every management strategy is a best guess, never perfectly clear or fully confident. Every best guess benefits from insights that challenge, confirm, or contradict existing beliefs. I share the conviction of those who believe one of the key functions of research is to dissent from the popular when it is necessary, important, and warranted by the data.
Most CEOs get too much good news.
The bad news, which is always opportunity in disguise, is something they usually don’t see because someone hides it from them. What the C-suites need is the rare combination of research expertise and a genuine curiosity with how things work and how seemingly unrelated things fit together. They also need someone willing to identify the problems, not someone who is worried about career or promotions or a pension.
Most executives are not happy with the success of their marketing and product development initiatives despite very significant spending on research that is supposed to assure them their efforts are on target. This lack of achievement often leads to heavy consequences for those downstream of the research (firing the advertising agency, replacing new product development leaders, etc) when the real issue is that decisions have been based on research that hides the bad news AND the opportunities in disguise. The output of the research function must be information and insights that produce meaningful results for the business – especially in the face of denunciations of insider experts. <A senior department head of the company you’re going to read about below was shown research that reported consumers of all types said his baby was ugly. Red-faced and sputtering, he accused the fact-finding team of deliberately sabotaging his idea.>
Once upon a time, there was a well-known, well-respected company.
At a crossroads, they made some very different strategic moves that generated $100 million dollars of bottom-line profits in the first year. Eighteen months prior, every senior manager but one believed the ideas would ruin the company.
The CEO asked outsiders to provide a fresh look at customers, competition, and markets. Two things happened:
- Key findings overturned dearly-held assumptions.
- The new strategic direction made a lot of money for the company.
Among other things, the new fact-based insights had shown millions of potential buyers were unaware the company even sold these products. The results after one year:
- A doubling of market share and more than $100 million to the bottom line.
- Dramatic increases in sales through existing channels and of existing products.
- Ninety percent of the hundreds of thousands of new buyers were new to the brand.
The result after three years? Total revenue from the new strategy-driven products increased by $1 billion. Quite different than ruining the company, wouldn’t you say?
The open-minded CEO in this story boldly chose to ignore his naysayers because he was convinced by the hard scientific evidence the outsiders showed him about customers, competition, and markets. Few strategists have this kind of courage in the face of an angry mob. Are you one of them?
Outsiders who dare threaten insiders’ thinking get one of two reactions: burn them, they’re witches – or – thank goodness they brought us some light. I’ve seen more of the former than the later, so maybe it’s just me. What do you think?
Take a Closer Look, Volume 2, is free to Kindle Unlimited customers. The best way to protect yourself against the manipulations, distortions and fabrications that are more and more prevalent these days is to learn how to see through them.