Editor’s Note: It’s been awhile since we had a post by Kathryn here on the blog, but good things come to those who wait. Kathryn remains one of the foremost advocates for training and operational excellence in market research, while also being a great strategist who understands how solid execution is vital for the success of any research undertaking, whether it be using traditional or emerging techniques. That may seem like a no-brainer, but the past is littered with the husks of companies with great ideas that failed due to poor planning and carry through. In this post Kathryn uses the recent challenges Facebook has faced as the latest example of the lesson; flawless execution is table stakes. Enjoy!
By Kathryn Korostoff
The events and media coverage surrounding the Facebook IPO have been fascinating. After about the fourth day, as I read yet another article that seemed fueled more by speculation than actual facts, it dawned on me: the lessons from the blundered Facebook IPO hold true for market research project managers as well.
Facebook IPO Blunder #1: Trading was delayed by at least 30 minutes (a virtual lifetime in the world of electronic exchange systems), and many clients didn’t get confirmation of their trades for more than two hours. The result? Loss of trust. Yes, it was a NASDAQ issue—but it still cast a shadow on Facebook.
In market research, we have suppliers or systems we rely upon to get the job done; but when they fail, it casts a shadow on us. Even technical problems that may be outside of the market researcher’s control can impact perceived credibility. The client wonders: did the researcher have a back-up plan in place? Did the researcher test all systems thoroughly? Was my project the “guinea pig” for some new tool? These are all legitimate questions.
Facebook IPO Blunder #2: Facebook and its IPO underwriters are accused of not sharing the same information with all players; and because this information related to lower forecasts, that would have had an impact on trading decisions. According to Reuters, “Facebook Inc and lead underwriter Morgan Stanley were sued by shareholders who claimed they hid the social networking company’s weakened growth forecasts ahead of its $16 billion initial public offering.” The result? Yet again, loss of trust. While the exact veracity of the claims is still unknown, publicity about them has added to the downward spiral of trust. The underwriters should have communicated consistently and equally with all parties; by only sharing certain information with select analysts, they created a nightmare.
The lesson for market researchers? People hate insiders, and companies that favor insiders. Whether residual angst from being left out of middle school insider jokes, or the association with illegal insider trading, I don’t know why. But I do know one thing: most people hate “insiders.” In market research, projects work best when all stakeholders have an informed, transparent experience. Do some stakeholders want more information than others? Sure. But it is the job of the market research project managers to communicate equally with all stakeholders and make it easy for them to have clear and realistic expectations. This is especially critical for high visibility projects that will need to be socialized throughout an organization (which is sometimes the case with customer loyalty and market segmentation studies, for example). If only a few select clients were “insiders” on project planning and updates, those from other functional areas will likely have less trust in the process—and as a result, will be less likely to use the research results. It’s a fact: lack of inclusion fuels mistrust.
Facebook IPO Blunder #3: Facebook leader Zuckerberg is MIA during the storm. Sure he has a cadre of experienced executives on his team, but being absent during a time of high-profile negativity will strike some people as uncaring or disinterested. Don’t get me wrong, of course it is sweet that the young CEO is on his honeymoon. But the timing could not be worse. Facebook portrays itself as a bit of an anti-establishment, caring provider—yet a CEO who makes his billion dollar payday and leaves for vacation while investors are left concerned, seems more like the behavior of an over-confident, eat-the-poor, bureaucrat. The CEO’s absence and apparent lack of communications at this difficult time further exacerbates the loss of trust. The leader needs to communicate, and to do so clearly and consistently.
In the market research world, a consistent communications strategy is also critical to maintaining trust. As market research project managers, it is our job to set client expectations correctly, and adjust if needed. If there is a problem that may impact project success, we need to be clear: what the problem is, why it occurred, and how we are mitigating the fallout. Recall the adage, “In the absence of information, people assume the worst.”
The Facebook IPO Lesson: A Matter of Trust
Losing trust is a lot easier than gaining it. At the start of a market research project, clients (whether internal or external) typically bestow a fair amount of trust in the market research team. Now it is up to the market research project managers to maintain, and perhaps even enhance, that level. And while it might be frustrating, some really simple things can diminish trust quickly: poorly handled technical glitches, inconsistently applied inclusion, and poorly managed communications.
With trust established and maintained, market research project managers will enjoy a smooth, professionally rewarding experience. In contrast, once trust erodes, there will be increased demands for detailed updates, more frequent status meetings, and even new oversight. We can’t blame the clients for these demands—they are reasonable once trust has been fractured.
Let’s take a multi-billion dollar lesson from Facebook; effective leaders, whether of newly public companies or of market research projects, need to follow some common sense best practices.
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