Reward ‘Persistent Bloody-Mindedness’, Not Luck – Part 2.

In my last post I argued that reward systems in market research need to focus less on broad generic financial targets (whose achievement at local level may be more luck than judgement), and find more subtle means of assessing local performance.  One big reason for this is the fact that the success of an established market research business is much more about protecting existing contracts and driving incremental business from current clients than it is about gaining new clients. I’m not saying getting new clients is easy (or unimportant!), but over most of the past 30 years the market research industry has been in expansion mode (especially in developing markets).  Most years (possibly excepting our last one!), most half decent companies will get at least a few new clients wanting to try them. (See David’s blog on how this impacts your sales planning). When we analyse why a local company is under-achieving in any given year, it’s more often about losing a key client or failure to generate extra revenues from clients they’re already working  with than about failure to win new clients.

While we all love to gloat over new client wins, and our cleverness in obtaining them, in many cases they came to us for reasons of price, specific method/product offering or dissatisfaction with the incumbent.  Yes, a good senior executive can contribute significantly in making the conversion more likely, but a good deal of most new wins comes down to good fortune.

Gaining extra work out of an existing client, or retaining your tracking study contract for another year, is also impacted by luck of course. But ultimately these require senior executives to show initiative in identifying  possible future needs, to overcome the natural complacency of incumbency, to stay on top of client issues on a long-term basis and generally to demonstrate those virtues of diligence and persistence that I mentioned at the beginning of my last post.

Put simply,  much of our revenue is derived from everyday decisions of local executives, and a huge chunk of our successes are derived from customer retention and incremental development over several years.  But is this what we celebrate with our reward and recognition systems? In my view, not nearly enough. As MR has globalised, and more and more companies have listed on the stock market, the trend has been towards more centrally driven objective setting and targets based on a few macro level financial measures. The result, in many cases, has been that local managers have had less and less discretion, and executives too often feel that they can do little  to influence the factors that drive their remuneration.

One of the biggest consequences of this is that it is harder to reward the kind of “bloody-minded persistence” that turns a crisis on a major account around, or the quiet diligence that builds a strong relationship over several years. This is a particular issue in developing markets, where the chances of quality and delivery problems are higher, and developing major local clients often requires an ability to quietly mature a relationship, rather than to make “sudden conversions”. It’s hard enough for local managers to see and recognise these kinds of efforts,  but getting them appreciated at global and regional headquarters is even harder – the temptation is always to focus on year-on-year change in a couple of numbers, a big new win, or the deal with the global MNC whose HQ is near yours.

Ultimately if – as Sir Martin Sorrell has suggested – market research companies need to drive more business from “local giants” in growth markets, then they will need to get better at recognising such “fire-fighting” and long term relationship building skills. This does not mean giving local managers complete discretion over reward and bonuses. It does imply more local input and more sophisticated (not to be read as bureaucratic) mechanisms for assessing bonus and remuneration. While this takes planning, it is is actually easier than it sounds. It will, however, require a change in mind-set among some senior managers and their HR partners. It will be interesting to see which companies pick up that such changes are actually an essential part of driving sustainable growth.

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