What Market Research Project Managers Can Learn From the Facebook IPO

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The events and media coverage surrounding the Facebook IPO have been fascinating. After about the fourth day, as I read yet another article that seemed fueled more by speculation than actual facts, it …

The events and media coverage surrounding the Facebook IPO have been fascinating. After about the fourth day, as I read yet another article that seemed fueled more by speculation than actual facts, it dawned on me: the lessons from the blundered Facebook IPO hold true for market research project managers as well.

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  • 1. What Market Research Project Managers Can Learn From the Facebook IPOThe events and media coverage surrounding the Facebook IPO have been fascinating. Afterabout the fourth day, as I read yet another article that seemed fueled more by speculation thanactual facts, it dawned on me: the lessons from the blundered Facebook IPO hold true for marketresearch project managers as well.Facebook IPO Blunder #1: Trading was delayed by at least 30 minutes (a virtual lifetime in theworld of electronic exchange systems), and many clients didn’t get confirmation of their tradesfor more than two hours. The result? Loss of trust. Yes, it was a NASDAQ issue—but it still casta shadow on Facebook.In market research, we have suppliers or systems we rely upon to get the job done; but when theyfail, it casts a shadow on us. Even technical problems that may be outside of the marketresearcher’s control can impact perceived credibility. The client wonders: did the researcher havea back-up plan in place? Did the researcher test all systems thoroughly? Was my project the“guinea pig” for some new tool? These are all legitimate questions.Facebook IPO Blunder #2: Facebook and its IPO underwriters are accused of not sharing thesame information with all players; and because this information related to lower forecasts, thatwould have had an impact on trading decisions. According to Reuters, “Facebook Inc and leadunderwriter Morgan Stanley were sued by shareholders who claimed they hid the socialnetworking company’s weakened growth forecasts ahead of its $16 billion initial publicoffering.” The result? Yet again, loss of trust. While the exact veracity of the claims is stillunknown, publicity about them has added to the downward spiral of trust. The underwritersshould have communicated consistently and equally with all parties; by only sharing certaininformation with select analysts, they created a nightmare.The lesson for market researchers? People hate insiders, and companies that favor insiders.Whether residual angst from being left out of middle school insider jokes, or the association withillegal insider trading, I don’t know why. But I do know one thing: most people hate “insiders.”In market research, projects work best when all stakeholders have an informed, transparentexperience. Do some stakeholders want more information than others? Sure. But it is the job ofthe market research project managers to communicate equally with all stakeholders and make it 1
  • 2. easy for them to have clear and realistic expectations. This is especially critical for high visibilityprojects that will need to be socialized throughout an organization (which is sometimes the casewith customer loyalty and market segmentation studies, for example). If only a few select clientswere “insiders” on project planning and updates, those from other functional areas will likelyhave less trust in the process—and as a result, will be less likely to use the research results. It’s afact: lack of inclusion fuels mistrust.Facebook IPO Blunder #3: Facebook leader Zuckerberg is MIA during the storm. Sure he has acadre of experienced executives on his team, but being absent during a time of high-profilenegativity will strike some people as uncaring or disinterested. Don’t get me wrong, of course itis sweet that the young CEO is on his honeymoon. But the timing could not be worse. Facebookportrays itself as a bit of an anti-establishment, caring provider—yet a CEO who makes hisbillion dollar payday and leaves for vacation while investors are left concerned, seems more likethe behavior of an over-confident, eat-the-poor, bureaucrat. The CEO’s absence and apparentlack of communications at this difficult time further exacerbates the loss of trust. The leaderneeds to communicate, and to do so clearly and consistently.In the market research world, a consistent communications strategy is also critical to maintainingtrust. As market research project managers, it is our job to set client expectations correctly, andadjust if needed. If there is a problem that may impact project success, we need to be clear: whatthe problem is, why it occurred, and how we are mitigating the fallout. Recall the adage, “In theabsence of information, people assume the worst.”The Facebook IPO Lesson: A Matter of TrustLosing trust is a lot easier than gaining it. At the start of a market research project, clients(whether internal or external) typically bestow a fair amount of trust in the market research team.Now it is up to the market research project managers to maintain, and perhaps even enhance, thatlevel. And while it might be frustrating, some really simple things can diminish trust quickly:poorly handled technical glitches, inconsistently applied inclusion, and poorly managedcommunications.With trust established and maintained, market research project managers will enjoy a smooth,professionally rewarding experience. In contrast, once trust erodes, there will be increaseddemands for detailed updates, more frequent status meetings, and even new oversight. We can’tblame the clients for these demands—they are reasonable once trust has been fractured.Let’s take a multi-billion dollar lesson from Facebook; effective leaders, whether of newly publiccompanies or of market research projects, need to follow some common sense best practices. 2
  • 3. Author Bio:For more expert tips on market research subscribe to Research Rockstars free newsletterat http://www.researchrockstar.com.Have a market research question? Kathryn Korostoff is president of Research Rockstar, acompany that delivers online and in-person training to busy professionals seeking marketresearch excellence. Kathryn is a market research professional with a special interest in howorganizations acquire, manage, and apply market research. Over the past 20 years, she haspersonally directed more than 600 primary market research projects and published over 100bylined articles in trade magazines. http://twitter.com/ResearchRocks 3