The DNA of Research
At the heart of every decision lies research.
It flows through every choice we make, infusing them with the lifeblood of data and insights. Research is the vital organ that nourishes our decision-making, guiding us towards a path that allows us to flourish and grow.
Research isn't just reserved for big decisions; we rely on it for our everyday choices as well. Whether it's selecting the right toothpaste, choosing the perfect Airbnb for your trip to Positano in Italy, or finding the best route to an unfamiliar suburb, research helps us make informed decisions.
The business world is no different. Every strategy, whether it pertains to market entry, product development, branding, pricing, marketing, or sales, requires a deep understanding of the customer, the market, and the internal workings of the business. Research provides us with the necessary insights to assess risks, identify opportunities, and make informed choices that drive growth.
Strategy is a living, breathing being
Now, I know what you might be thinking - “Strategy? Strategies don’t sell products… we need real actions to get to outcomes!” This reaction is a common one, and stems from a lack of clarity on what strategy really entails. People often dismiss strategy as an outdated and old school approach to business planning - one that doesn’t quite work in today’s day and age.
And if that's how you view it, I get it. When we only focus on the "what" of strategy, rather than the "how," we lose sight of its true value. You can have a brilliant strategy devised by smart people, but if you fail to gather insights from your team, customers, and the broader market before implementing it, then all you have is a lifeless PDF. There’s no point following a hypotheses-based strategy if you fail to test and adapt through action (research and experimentation), particularly if the hypotheses are derived from opinions and not actual data.
In her book "The New How," Nilofer Merchant points out that this top-down approach to strategy can lead to what she calls the "Air Sandwich." The Air Sandwich consists of the top layer of bread, representing the strategy with a clear vision, and the bottom layer of bread, symbolising day-to-day execution…but no ingredients in the middle. No meaty research or key decisions that connects the two pieces of bread, no cheese oozing out the sides to bring the vision and execution together. The entire substance of the business is missing - the most valuable part that enables it to function at its best.
Creating a good strategy means we need to “let people think and create strategy everywhere” - whether your company is large or small, you should be involving your team and customers at every step of strategy creation (and recreation). What we need to remember is that strategy, like most of us as humans, is a continuous work in progress. It’s like a living breathing organism, constantly evolving and changing - and research is the heart that keeps it alive. It pumps knowledge and feedback throughout the entire organism, ensuring each organ (or team/department) works together to evolve and thrive. Without all its vital organs working in unison, the organism will shut down.
Of, if you prefer the sandwich analogy - without the key ingredients, like meaty research and cheese that permeates every part of the business, it's barely a sandwich. It’s just bread - a bland and uninspiring creation.
And what is an organism without a heart? (or a sandwich without ingredients…)
In the world of business, strategies can fail for various reasons: fierce competition, technological advancements, lack of engagement within the company, and more. But many of these risks can be mitigated through proper research across three critical areas: the market (including competitors, substitutes, trends and disruptions), our customers and our internal business (but more on this later).
It's easy to get carried away with new ideas or neglect the need to test business viability or customer desirability through research. This can lead to the dreaded "Air Sandwich" for scaleups and established businesses, or a “false start” for startups and new businesses.
Let's take a look at Quibi as an example.
Despite raising $2 billion and being led by industry veterans, Quibi, a shortform paid video streaming service designed for mobile, failed within a year. The leadership's vision was disconnected from what their end users actually wanted and needed. They failed to assess their product against competitors like TikTok and YouTube, which offered better content for free. They failed to conduct market research and problem validation prior to launch - Quibi had no idea what their customer truly wanted, and was essentially conducting a very expensive and risky real-life experiment.
Another example is Target's expansion into Canada, which ended in failure in less than two years. Target struggled to adapt its U.S. concept to the Canadian market - they overlooked crucial factors and overstated the pull of the Target brand. Without conducting proper research into the Canadian market and customer, and the IT and supply chain capabilities required for international expansion, Target’s aim to scale Everything Everywhere All At Once (IYKYK) in the Canadian market fell short.
Rushing into strategic decisions without proper research is not a sustainable survival plan for businesses, regardless of whether they are B2C or B2B, new or old, big or small. As mentioned before, an organism can't grow and thrive without a beating heart: thorough and continuous research.
The DNA of good research
At Tightrope, our approach to research encompasses three core areas that form the DNA of our strategy's heart:
Differentiate: What are the current market, technology and industry trends? What are competitors doing better or worse than us? Who are the differentiators, and what can we learn from them? How can we differentiate to stand out?
Nurture: How can we best nurture our relationships with customers and the wider ecosystem of stakeholders? What are their needs, wants, and problems? How can we validate our assumptions about the problem space?
Adapt: How can we adapt our ability to execute the strategy? How can we best leverage our strengths, and weaknesses? How can we quickly test a strategy, do research and experiments to validate our hypothesis? How do we rapidly pivot if we see things don’t go as planned?
These core areas contribute to the development, functioning, and growth of a business's strategy. By exploring these questions through robust but efficient research, we ensure that your strategy remains dynamic, relevant, and responsive to the ever-changing business landscape.
Let’s explore the DNA of research in a little more detail…
Differentiate
Stay in sync with market, technology and industry trends. To outshine your competition, you need to dig deep into what sets them apart. Take inspiration from the true differentiators and game-changers in the market. Learn their strengths and weaknesses, and discover how your business can gain a competitive edge.
Desktop research: set the stage by exploring market, technology and industry trends, broad customer needs, and the macro-economic landscape.
Competitor scan: conduct research to identify your main competitors and assess them through a strategic and feature-based lens. Identify the differentiators and map out what leaders are doing differently, and why.
Sign up for competing products: experience your competitors’ customer journeys firsthand and get an understanding of their user experience and functionality.
Nurture
Dive into the needs and desires of customers and other key stakeholder groups (community, partners, the society we operate in, etc). Your customers and broader stakeholders are the reason your business exists, so nurturing your relationships with them is crucial.
Quantitative studies: gather data on market trends and customer behaviour through surveys and conjoint analyses. Both in your current market and across other opportunity markets.
Qualitative studies: get detailed insights via 1:1 interviews or focus groups to delve into customer (and other stakeholder) preferences and needs.
Case studies: uncover successful strategies implemented in your industry, review adjacent industries, and gain valuable insights that you can learn from.
Remember, this is an ongoing process (not a one-off research piece). Nurture your relationships and continuously develop strategies and products alongside them - design with them, not for them. If you do this well, this is where you will start to see opportunities pop up. Areas where your customer needs remain unmet by the current supply.
Adapt
Get a 360-degree understanding of your business, align everyone on the same page on where we are at and where we want to be, and assess whether you have the right tools and capabilities to reach your goals.
Desktop review of internal documents: peek into your business's history, current state, and future plans through valuable internal documents, including financials, technology architecture, current offerings, and teams.
Stakeholder interviews: tap into the insights of key stakeholders to identify strengths, weaknesses, opportunities, and threats. Get a glimpse into employee perspectives and concerns.
Workshops and deep dive sessions: dive deeper into specific areas/departments, and gain a comprehensive understanding of complex topics.
Testing product demos: test the product and gather feedback to fine-tune the offerings.
Adaptation is key. Stay agile and ensure everyone is on board with the strategic vision to propel your business forward. Great strategies are aspirational but are grounded in the reality of what a certain business does well - what is your organisation uniquely well qualified to succeed in?
Defining your strategy DNA
We believe that strategy should be grounded in an understanding of where we are, how we can capture the opportunity to differentiate, and how we can better meet the needs of our customers. Our DNA approach ensures that your strategy isn’t missing the most important part - the “how” and the “why” behind your “what”.
I want to reiterate that strategy is ever-evolving and requires constant testing and adaption. Whilst a typical strategy vision and refresh is important (where we look at the 2-5 year horizon), it is essential that businesses are “always on”, taking a proactive approach to the DNA of research. It’s important to:
Have a constant feedback loop of how customers are using your products or services
Conduct regular reviews of the competitive landscape and broader market, macro and micro trends
constantly experiment and test concepts, products or features prior to launching new changes
constantly be collaborating within and between teams in your business. Have clear KPIs or OKRs that connect the daily operations to the overall strategic goals.
…ensuring that your strategy is thriving, and not just surviving.
Remember, strategy is a living breathing being, and research is its beating heart - it's essential for making informed decisions. Balancing thorough market and internal research with flexibility and speed is key. Embrace valuable insights whilst staying nimble and open to iteration.