Facts or alternative facts? How to get insights you can trust
Disruption. It’s the word on all of our lips so often – what disruptions are occurring in our industry, and how? Who is ahead of the curve? What do we need to do to make sure we’re part of the disruption?
There’s only one way to answer all of these questions, and that’s through research. Staying on top of new developments in your sector, particularly in fast-changing fields, can mean the difference between using a new innovation to your advantage, or being left behind.
This is true of companies at every stage. Well-established, large companies can’t afford to rest on their laurels, as they’re a slow ship to turn. Startups need to have a distinct competitive advantage to win customers from bigger brands. Scale-ups need to be aware of both.
So, what’s the most efficient way to keep an ear to the ground in your market?
Good research begins at home
The first place to start is your own company. It should (in theory!) be easy to access and interrogate financial data in order to analyse margins and how cost buckets might be shifting due to market pressures, operational KPIs to understand how internal processes are improving over time, organizational data to find out how your staff are doing, and customer data to track conversion and satisfaction.
Of course, these are all useful to compare with past internal data, but they’re only really useful when you can compare against industry benchmarks: competitor equivalents and customer expectations. The problem is, while you can fairly easily satisfy yourself as to the reliability of your own data, finding external sources you can trust the reliability of can seem like a bit of a minefield.
Don’t be Michael Gove
Contrary to the infamous quote during the Brexit campaign, it’s senseless to say we’ve “had enough of experts”. In almost any research process, talking to a handful of people who know the topic inside out is a good start. If, for instance, you’re exploring new market opportunities, you’ll need to talk to people who’ve been in that industry and geography for a long time who can explain the state of play and trends to be aware of. If you’re looking to improve your current operations, an expert who has experience of lean and supply chain in multiple organizations can give you an idea of benchmarks and how to spot costs that are unnecessarily high. They’ll help you get up to speed quickly, understand the gaps in your knowledge, and point you in the right direction of where to do more digging.
Speaking of digging, get out into the field
Primary (field) research is always going to be the highest quality, so do as much as you have time and budget for. This can be as simple as making your own observations – as long as you keep adequate records – for example watching shoppers’ behaviour within different stores. You might want to try some test marketing, for example placing a promotion in a certain part of the store and observing how many shoppers slow down, pick up or put the product in their basket. (It’s usually possible to devise equivalents of these for more service-based or online businesses.)
Then, there are a number of ways to ask direct questions of customers: surveys, in-depth interviews, and focus groups. But be careful with participant selection: if you’re trying to get a cross-section of the entire potential customer population, then you need to make sure your sample demographics are representative. If you’re looking to hear from your most valuable customer segment, then you need to identify what those customers look like and sample from that group.
There are some companies whose access to IoT and big data is transforming the way they do primary research – getting a window into the homes, behaviours, even thoughts of their customers or the customers of those who share data with them. They are blurring the lines between company and customer data, between information and influence. This can make field research and product testing at a large scale dramatically quicker and cheaper. For the rest of us, there is a limit to how much resource you will want to dedicate, so we venture into the bewildering world of secondary information.
Google is your friend… but an unreliable one
Articles from newspapers, magazines and journals, analysing public data sets yourself, and internet sources are often free and as easy to find as a simple Google search. But in this era of alternative facts, how do you know what to trust? Sources may frame a topic in such a way to mislead you, use genuine facts out-of-context, impersonate a more reputable source, or be entirely fabricated.
When Oxford Dictionaries announced ‘post-truth’ to be 2016’s Word of the Year, the International Federation of Library Associations and Institutions (IFLA) and FactCheck.org published eight simple steps to verify a source and spot fake news:
- Who produced the content?
- Where is it published?
- How long ago was this published?
- Does the content match the headline and conclusion?
- Do the references support the claims?
- Could this be meant to be a joke?
- Might you have biases which affect your own judgement?
- What are the experts saying?
The last one is important – no matter how much information you consume to try and get a handle on a new topic, you’ll never beat the perspective of someone who’s been immersed in the field for twenty years. So go back to those experts you talked to at the start of your research, or find new ones to test your hypotheses, to make sure you haven’t put 2 and 2 together to get 5. However, (here we go again) the problem is knowing who to trust.
When is an expert not an expert?
It’s tempting to go through your personal network to find someone to talk to – we’re all more likely to trust someone who’s been recommended by a friend than a stranger. The problem is, your friend may not actually know the depth and breadth of their friends’ expertise that well, so while they might be lovely people who want to be helpful, they may not be the best qualified. In addition, someone who is a true expert in their own field asking to comment on a topic slightly tangential isn’t an expert in that topic at all.
The answer is to do two things. First, define what an expert really looks like for you: keywords of expertise, academic or industry focus, what kind of roles they might have held, geographies of experience and so on. That will stop you from trying to talk yourself round into thinking someone you happen to get introduced to is right for what you need, if they don’t fit the profile you’ve outlined. Second, go to a source of experts you trust: a closed community (like PathFinder4!) or a provider with a good track record.
Photo on Foter.com