It seems like just last week we were coming back from the holidays and revving up for a pretty normal 2020, doesn’t it? However, things have certainly changed a bit since then, with the biggest macro-disruptor being the COVID-19 virus and its impact on, well….everything at the moment!
We’ve been doing a lot of thinking about what this could mean for the insights industry and how suppliers can step up and help clients succeed despite all the challenges we are all facing. The combination of budget restrictions, travel bans and quarantines, declining use of in-person techniques and in general the need to do more with less, is going to be the trend for the next few months (at least).
Anyone who was working in the industry during the Great Recession will remember similar pressures at play, and the massive business disruption that occurred to both supplier and client-side organizations. For me personally, as the CEO of a full-service agency that took a 60% revenue hit due to canceled projects and slashed budgets, I remember vividly the challenges of trying to find an edge that would mitigate against the circumstances we were dealing with and give the business a path to recovery. Alas, I did not find that edge, and Rockhopper Research eventually had to be wound down; we just couldn’t adapt fast enough.
A big lesson for me was that I was so occupied trying to keep the business afloat, it was challenging to think strategically, let alone to look ahead on the potential opportunities that were also beginning to materialize. I was so busy working IN the business, I couldn’t work ON the business, and it was that lack of foresight that actually doomed the business before the shock of the recession was even felt.
In a very real way, it was that experience that started me on a wholly different career path I have been on since. As the business declined, I did find the time to step back and look at the bigger picture. I started analyzing what went wrong, what was happening as the world adapted to a new set of circumstances, what changes in technology, business drivers, and socio-economic trends might mean for the insights and analytics industry and for founders and CEOs like me. As I was going through that process I started sharing my thoughts publicly, and that was the very beginning of the GreenBook Blog, GRIT, IIeX, and my roles as an industry analyst, consultant, and advisor. Looking back, the Black Swan event (I at least didn’t see it coming!) of the Great Recession ended up being utterly transformative for me personally as well as for our industry and unleashed a wave of innovation that we have been riding since.
Think about it: virtual qual, MROCs, DIY, social media analytics, mobile research, Big Data, and the overall digitalization of research all started to become forces in the industry either during or shortly after the Great Recession. The needs of clients forced the industry to adapt along with the “Cheaper, Faster, Better” rubric. Simultaneously, whole new categories started to emerge that created new business opportunities.
And now, the potential is for it to happen again, with COVID-19 being the new Black Swan event that could be the harbinger of massive change.
McKinsey has done good work in outlining the macro-implications in 3 different scenarios.
(Source: https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business)
As we look at the scenarios they have laid out, it is clear that changes due to this event are unavoidable. The question is, will that change be a short-term adaptation or longer-term transformation? None of us know the answer to that yet; as a species, we are simply trying to arbitrage against the spread of the virus and optimize health outcomes for those most at risk, and that is where most of our attention should be.
That said, life continues relatively normally for most of the global population and although not as pressing, there are still other priorities in play too. We don’t have a handle on the scale and outcome of COVID-19 yet, but we are absolutely already seeing business impacts in our industry, and have some glimmers of what it might mean, at least over the course of the next few weeks or months. As we work to deal with the virus, we also have to deal with the myriad of follow-on effects in our business and personal lives. We have to look for what we can do today to adapt, and maybe, just maybe, how we can even prosper during this uncertain time.
With that in mind, my partners and I in Gen2 Advisors put together some basic guidance on what this means for the industry, and we are sharing that here in the hopes that it might help folks navigate this challenging situation from a business perspective.
We’ve broken this into 3 big takeaways:
1. Insights & Analytics Business Impacts:
It is likely that the COVID-19 situation will force short to mid-term market changes due to economic and travel challenges that will impact insights suppliers. This will increase budget pressure and demand for virtual solutions, especially in the Qualitative segment of the industry.
It is a good time to get ahead of the curve and double down on virtual solutions to mitigate against F2F declines and ensure you have offerings that can compete in the era of automation and DIY.
2. Potential New Growth Categories:
Some categories are already being hit hard and will take time to recover, but other categories have an opportunity to grow in response to new market demand and would be reasonable targets for new sales and practice area expansion. It is never wise to have all your eggs in one basket, so looking for developing relationships with companies in these (and other) sectors could open up new opportunities.
3. New Positioning for Insights & Analytics Organizations:
Suppliers are likely sensitive to not being perceived as opportunistic, and clients may be struggling to adapt to new organizational pressures, but being helpful during times of stress is always appreciated. We think both suppliers and clients can be aligned in new messaging to key stakeholders that your role, now more than ever, is to help provide clarity on business questions in ways that are aligned to business realities. Here are a few thoughts on what that messaging may look like.
This is pretty high level, but our hope is that it can be a springboard for a deeper discussion on the specific implications for your business, and strategies you can develop to not just mitigate risk but to actually thrive during these challenging times.
Hopefully, over the course of the next weeks and months, we will all learn some valuable lessons we can share with each other so good can come from a tough situation. In the meantime, we wish you and yours health, peace, and prosperity.