Running a Market Research Company: What I Learned Over Lunch

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Many years ago now, I was taken out to a long ‘relaxing’ lunch (as was the custom of those days) by a senior industry player. I was just starting out on my managerial career, and I suspect his major motivation was to fish for competitive intelligence, or perhaps to see if I was wanting to jump ship. But, as he poured the second glass, he seemed to decide I was worthy of mentoring and so started to give advice on how to manage a market research company. One bit, in particular, stuck with me. Leaning over he intoned: “look Alastair, making money out of MR is a lot simpler than most realise: all you need to do is hire the best people in the industry, pay them 20% more than they’d get anywhere else, then work them twice as hard as anybody else would.

A little while later, I was about to head off for my first overseas assignment, and at a far more genteel lunch our company chairman also offered some advice. I’d been probing him for clues on cultural factors that might impact my work and he’d been politely indulging me with helpful tips. Then he said “But you know, Alastair, that while all these things are important, there are two more important things in running a research business” . The first he said, was to know enough of finance and accountancy so your finance director could not pull the wool over your eyes (he put it more politely than that!). The second thing was to “recruit a team that is not like you, that compensates for your weaknesses, and will argue with you in an intelligent, rational way. If your team are all like you, and always agree with you, then sooner or later the company will be in trouble“.

Rehearsing the details of my ancient lunches is relevant for a number of reasons. Firstly, neither piece of advice is quite what it seems. To take the second first. At initial glance it seems like the now common plea for “diversity”, a safe and politically correct piece of guidance. Yet, this was no plea for introducing random and superficial variation among the people I was to hire. That was not the meaning – instead I was being advised, in the politest way possible, to carefully consider my own weaknesses and then to recruit people who could cover up for the gaps in my personality and skills.

Neither is the first bit of advice quite so completely Machiavellian as it seems at first glance. The point here is that the best MR people are seldom so mercenary that you need to pay them  a lot to get them to work hard. Almost by definition they enjoy their job. But they want to be acknowledged, and they want something to symbolize and justify (to themselves, and their spouses) why they are working so hard. Nothing is quite as good as money in this regard. So getting  them to work twice as hard (or at least twice as efficiently) than the norm is the easy bit. The hard bit is taking the risk on offending others, breaking HR relativities or whatever is required to pay such people the extra 20% it takes to recruit and retain them.

Putting these two bits of advice together has served me well. In recruiting people, I’ve often tried to think about both; are they better than most in the industry? and, what can they do that I can’t? People who deliver on both of these criteria will also deliver massively both in terms of company results and, on a more selfish note, in helping drive your personal career.

The other thing I’d like to point out about the above advice is that it is very straightforward, and delivered free of jargon in an intimate and personal manner. They stuck in my mind  because a couple of industry leaders took  the time to tell me personally what they really believed. Compare this to some of the so-called “Executive Leadership” programmes that now abound, programmes that for instance promise that:

“During the Forum [the trainers] will talk to a series of actual value pools and use real life examples of strategic staircases detailing growth opportunities.”   (All too typical executive training programme example quoted by Don Watson in his excellent book on management jargon: “Bendable Learnings”).

The simple fact is that a two day seminar on strategic staircases or management “value pools” is not what most young managers need. They need senior people to take them seriously, as people with potential who it is worth taking the time to share experiences with.

Market Research is an odd industry, in many ways unique. Executive development programmes do need to encompass generalised  theories, management techniques and good working practices, but unless they also convey the tips and experiences of those who have ‘been there, done that’ they will be sterile and ineffective. There are ways to do this that do not involve the more festive lunches, but they all require senior professionals to take a more personal approach to mentoring and training.

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2 Responses to Running a Market Research Company: What I Learned Over Lunch

  1. Deepika says:

    Hi David/Alastair,

    On the same context, what are the set of questions should a start-up( or any) market research firm ask its potential clients?

    thanks,
    deepika

  2. Sean says:

    Great advice.

    I’m busy starting a research firm from scratch and I really appreciate you posting such an article. It is almost intuitive but much of what is ‘intuitive’ lies in an imbrication between “is this me talking nonsense to myself in a narcissistic fashion?” or “are these indeed the ways of the MR world?”; especially for young management. So delineating the realities from the jargon and assisting young people in this very idiosyncratic world of MR is valuable.

    Thanks!

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