By Ellen Woods
There’s always been a paradox in economies where the times that generate the best opportunity for risk takers become the times that companies are least likely to take risks. Young, entrepreneurial thinkers often advance because they usually have the least at risk and the most to gain. In almost every modern day post- recession economy, risk taking has driven recovery and recovery has occurred within 20 months of the recession. That’s not the case in today’s markets, and the complicated nature of dis-assembly has contributed to both a sluggish recession and a lack of job recovery.
Although a number of theories have recently been put forth, there’s no doubt that a combination of risk aversion and Fed actions have influenced the recovery as is discussed in this recent article by Hussman Funds (http://www.hussmanfunds.com/wmc/wmc130624.htm).
The article provides an assessment of the impediments within the financial market as they relate to calculated risks that normally result in strategic opportunity. There are a few exceptions, both in sector and geographical performance, but by and large the markets just aren’t moving. Their lack of action might actually have a deeper root as consumers globally, and specifically in the US, become less likely to try new products and services. Investors have been slower to back new ventures, and in some cases have become, at least in the short term, bond dependent. That is very bad news for young entrepreneurs, who are unlikely to be granted funding from traditional financial sources and its very bad news for an economy that needs job creation.
Consumers habits have changed as well as many have become very mission oriented in their purchases and are much more likely to stick with brands and products they know and trust because they have less disposable income. That coupled with the recent trending toward a more heath conscious society and the recent outbreaks of food borne illnesses and import of tainted products, as well as the foreign outsourcing of food crops, primarily fruits and vegetables, have also impacted consumer trust. Buying local isn’t just a trend.
The other piece of the puzzle is job creation, which is lacking in all sectors. When jobs are created, risk aversion is a very prominent factor in the hiring process and those hired are often screened to mirror, or at least be very similar to those already employed. That, in turn, fosters a lack of creativity and limits the disruptive thinking that might be gained through at least the debate on a fresh approach.
The result is that individuals who have the ability to lead new growth have opted for safer choices (http://online.wsj.com/article/SB10001424127887324031404578481162903760052.html) and are less likely to drive innovation, even within larger organizations.
Market research firms have followed suit and are further impacted by a fundamental and permanent shift toward interactive marketing. Past history has shown that simply doing nothing is not the answer. Even in modern day markets, the emanate demise of such iconic brands as Kodak and Sears should be a lesson learned. These companies were heavily invested in market research, and in the case of Kodak, were using interactive techniques, such as communities and mobile research far earlier than most organizations.
So what happened?
They failed to generate insights that created change within the organization. Because both organizations were largely dependent on internal sources for the development and management of their insights, they heard what they wanted to hear.
The problem for market research vendors is that for many years, they have largely stayed away from insight delivery because of the fear of losing the client. The very thing that would have given them an “all access card” was not delivered because of the industry’s risk adverse nature. Now it’s market research that’s shedding jobs. Some bright folks are trying to shift the market research business model from services to products. The problem with that is that research “products” are techniques that exist only as intellectual property and therefore only matter when there is a need for a specific market application.
So what’s the answer?
Take a chance. The value isn’t in the technique; it’s in the intellectual capital. If you know how to create a methodology, there has to be a corresponding set of answers that support the technique’s validity. If your organization can integrate those answers with an organizations data stream, you can deliver insights that foster innovation…and there is no limit to profitable growth for your organization and the organizations you support. Jobs will return with innovation and, in turn, so will consumer confidence. Be a part of the solution.