Is Market Research a Waste of Time?

People have been attempting to predict the future for at least 2500 years. In the beginning, they would trek to an Oracle who would guide them on how to best position themselves to capitalize on future events. Today, the Oracle has been replaced by market researchers.  

Predicting the direction of a market has become more sophisticated and more expensive. But it remains a mainstay of innovation strategy. Companies and novice entrepreneurs alike insist on gathering data through surveys, feedback sessions, and focus groups. And our clients still don’t feel prepared for the future. These are the most common complaints we hear:

  1. Market research takes too long. By the time we get the data and the analysis, our priorities or market conditions have shifted so it loses its relevance.   

  2. The data is often not actionable. We get a lot of interesting insights, but not a lot that we can put into practice.   

  3. The data we get is often conflicting. Different things are heard from different sources. This perpetuates our management indecision internally.

How are companies addressing these complaints? Often, their solution is to hire another market research group with new tools who promise faster, better data. And nothing changes.

If you really want to develop game changing innovations, stop trying to predict a future that cannot be predicted. Truly new and market changing advances are not inevitable or predestined. They are not found or predicted. They are formed, shaped, and created.  

Predictive tools only work when outcomes can be predicted. This seems obvious. Yet managers continue to rely on traditional predictive tools while acknowledging that they are facing unprecedented market uncertainty.

Traditional management theory has taught there are two future states. The known and the unknown. Thanks to the work of Nobel Prize laureate Herb Simon, we know now that there are three future states: the known, the unknown, and the unknowable.  

How do you know if your organization is facing an “unknowable” future?

  1. The path forward is ambiguous or unclear. There are multiple possibilities that seem equally advantageous.
  2. There is a lack of data available.

  3. The data that is available is contradictory.

If one or more of these conditions are present, you are in the realm of the “unknowable”. In the face of this radical uncertainty, Effectuation is the toolset to use. It is how market makers create valuable new products and services when facing a future that is not just unknown, but unknowable.

What is it about Effectuation that enables innovators to create rather than predict the future? The key to getting control in unknowable situations is to co-create. Invite others to participate in building the future with you. Whether you refer to these parties as collaborators, stakeholders, partners, etc. doesn’t matter. What does matter is how you work with them. Base your co-creative relationships on commitments.

Commitments are when both parties put skin in the game to advance an overall idea. Commitments are deeper than feedback and more relevant than data. All who commit to the idea become vested in its success. As a result they will pull their resources into the venture. This expands the accessible means for the venture. It also widens the visibility and support as each party brings their networks and social capital to the venture. Whereas a feedback session is one to one and a finite transaction, a commitment-based relationship is multi-party to multi-party and presents infinite opportunities for growth based on the interests of all parties.

If market research is failing to give you the answers you need, consider giving up. Stop trying to forecast the unknowable. Instead, shift your resources towards crafting a future where you can succeed. Spend your time Effectuating rather than searching for a sign of things to come.

If you don’t create your own future, someone else will.

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC