The perils of groupthink

August 2019, Written by Sholto Lindsay-Smith
Does market research help or hinder innovation?

Remember the BlackBerry? That game-changing little piece of technology that allowed us to email from just about anywhere. Tech giant RIM owned the market, with sales topping $1 billion in 2005 and $10 billion just four years later.

So what went wrong? When Apple launched the iPhone in 2007 and took smartphones to the next level with an advanced web browser and third-party apps, suddenly BlackBerry was under pressure to respond. And it failed catastrophically.

Human beings tend to make bad decisions when operating in groups, particularly if the group is made up of people who are all alike with shared perspectives and goals. The people in the group are focused on themselves, a shared mission, their own needs and desires, rather than those of the market they are trying to serve. The group’s desire for harmony and conformity is stronger than its desire for accurate analysis and critical evaluation. This phenomenon is known as Groupthink and it can be incredibly dangerous, particularly when the group is a company Board.

Groupthink often gives companies such unquestionable confidence in their product and market that they fail to spot or react to emerging trends and technologies, just like BlackBerry. An RIM insider afterwards revealed that, “We believed we knew better what customers needed long term than they did.”

So how do we find out what our customers need? Ask them, right?

Henry Ford famously said: “If I had asked people what they wanted, they would have said faster horses.” This refrain has often been used to rebut the need for research.

But done the right way, market research offers an array of techniques to help provide insight. So, to some extent, Henry Ford missed the point. Market research is not about asking people what they want. Rather it is about observing how they behave, identifying what troubles them and what pleases them, and finding ways to make their lives easier and better. It highlights people’s dissatisfactions with current norms, and can help companies spot opportunities to satisfy people’s needs in new ways.

The digital revolution has also injected speed and efficiency into the once laborious process of market research, allowing companies to dip easily into the minds of consumers. Social media and online discussion forums can be used to identify market needs, stimulate ideas and provide quick feedback. Statistically robust results and in-depth insights can be gleaned from surveys that blend qualitative and quantitative questioning.

The most successful product innovation companies today use a test and learn approach typified through the rapid prototype engineering process. This allows the innovator to pursue a vision, whilst gaining valuable insight and feedback that can be used to modify the concept, enhancing features and avoiding pitfalls.

The line of communication between a company and its consumers is a lifeline, the difference between being a market leader and a has-been. Assuming or misjudging their insights can be fatal.