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Faster Horses Didn’t Help the Automobile Industry and They Won’t Help Your Business Either
As a researcher, one of the favorite questions I get asked relates to a comment typically attributed to Henry Ford about faster horses. The story, as it is supposed to go, says that Henry
Ford once proclaimed “If I would have asked my customers what they wanted they would have told me Faster Horses.” This saying is supposed to offer justification for not doing research. After all, if a great mind such as Henry Ford didn’t believe in asking his customers what they wanted, why should anyone else?
I have to say, as the former Lead Quality Analyst for the Ford Explorer Vehicle line and as a bit of a Ford history buff I absolutely love this story. As the founder and president of a market research and data analytics company I love it even more.
So let’s start with the facts and look at the first misstatement. Henry Ford didn’t actually make this statement. There was an interesting article on the Harvard Business Review blog that explores the statement and confirms that it was not made by Ford. So step one, even though most people give Ford credit for this statement we should probably acknowledge that it was really made by someone else.
Regardless of who said it though, there are some important points about this statement that should be considered by anyone trying to understand their marketplace or the world in general.
Furthermore, there is likely some truth to the literal interpretation of the saying. In the early days of the automotive industry vehicles (horseless carriages) were competing with horses and horse-drawn carriages for share of wallet and also share of the road. Had someone asked the typical non-vehicle driving, horse owner what (s)he wanted, a likely response may have been “faster horses”. So that part we can assume is probably true.
The real question becomes what is meant by “faster horses” ?
Taking the answer literally provides very little information and brings about a unique set of problems. For instance we would need to consider:
- What are the safety concerns of faster horses?
- Will the carriages have to be changed to handle the increased speed?
- Will wider roads be needed?
Good research would also go on to explore the challenges with the current process. This could include questions like:
- Why are horses currently going slow?
- Have you tried to go faster before? What happened?
- What things worked when you did try to go faster?
- What are you feeding the horses?
While interesting, none of those questions or answers really provides a deeper insight into the problem than what was available before asking the question.
As researchers and as consumers of research, we need to go farther. To really understand the needs of the marketplace we need to focus on the meaning behind the words. We hear the words the consumer is using but what are they really saying? What does the consumer mean by faster horses?
In this case, we may infer that faster horses really means that the respondent wants to get from point A to point B more quickly or even more to the point, in less time. If we focus on the end goal of the consumer (getting from point A to point B in less time) then our whole way of thinking can change. We can begin to explore why the user wants to go faster. This could include questions like:
- What are the benefits of going faster?
- What losses are incurred by the inherent slowness of the current process?
- What compensation methods does the consumer currently use to cope with slowness in the current system?
- What opportunities could be realized by going faster?
- What is the opportunity cost of going slow?
- Is the desire to go faster or just take less time?
These questions allow us to fully understand the customer’s problem and help put their proposed solution (faster horses) into context. But without these questions, we are forced to work within a linear framework for problem solving.
It is true that consumers are typically not able to describe the ideal solution to their problem. However, they are often very capable of telling us about the problem itself. When research focuses on the underlying problem then the potential solutions can be more fully understood.
By the way, if you really want to read some interesting information about Henry Ford, I recommend looking into the Oscar II. As a professed pacifist Mr Ford was strongly opposed to the war and the Oscar II was part of his plan to help bring it to a close. But that is for another post.
Straw Polls – Should we listen to them?
As a researcher, I absolutely love election season. While I could say that the reason for this is that I am simply living up to my obligations as a citizen (partly true), the real reason I enjoy it so is because of all the polls that are released. And because so many polls are released, it can become difficult to decipher which ones are good and which ones are political nonsense. That is what makes it interesting for a researcher!
There has been a lot of talk in the recent Republican primary race about straw polls. And each of these polls seem to declare a different victor. Mitt Romney won the New Hampshire poll, Rep. Ron Paul won both the Washington, D.C. and the California polls, Herman Cain won the Arizona poll, Michele Bachmann was victorious in the Iowa poll. So many polls, so many different winners. This begs the question, what exactly are straw polls and should we as potential voters listen to them?
Let’s begin with the first question – what is a straw poll? There are two broad categories of polling: scientific and unscientific. Scientific polling uses random sampling controls so that the results from a sample that is drawn is statistically representative of the population. Previous posts have discussed this greater detail. Unscientific polling, on the other hand, has no systematic sampling controls in place that would allow for representation of a population. Historically, a lot of straw polls in the United States have been political in nature, and are usually fielded during election season by a particular political party. The very name “straw poll” alludes to their nature – it is thought that this idiom alludes to a piece of straw being held in the air to determine which direction the wind is blowing.
Most straw polls are very targeted, very narrow surveys of opinion. Their main purpose is to take a “snapshot” of a general opinion during a particular point in time. This seems valid enough, but the difference between scientific and straw polls exists within the methodology. Most straw polls use a form of convenience sampling that is a bit unorthodox, and the selection bias associated with can be extreme.
It is hard to assign a broad methodology to all straw polls (as each one is different in its own right), but many of them have candidates, such as in the Ames Straw Poll in Iowa, attract voters to cast their vote on who they believe should be the Republican candidate. If it sounds like political grandstanding, it’s because it is to some degree. It uses somewhat of an “honor system” whereby anyone can vote (within the parameters), which opens up a whole argument regarding the validity of the polls.
This brings us to our second question – should we pay any heed to the results of these polls? I previously stated many of the recent straw polls and their victors. There have been many polls, and there have been many different winners. But to answer this question, we only need to look at the candidates themselves. And they certainly place weight on these polls. Tim Pawlenty dropped out of the Republican primary because of the lack of support the Iowa poll showed for his campaign. Entire strategies are formulated based on results of straw polls. That is because these polls show the weaknesses of particular candidates. And for this reason, candidates are perhaps wise to take caution to what the polls are telling them.
However, are they good predictors of ultimate outcomes? In answering this question, we are reminded of the 1936 presidential election. The Literary Digest conducted its own straw poll, which showed Franklin Delano Roosevelt being defeated by a large majority. We all know this was not the case, and the reason for this catastrophic (as it led to the downfall of the Digest) miscalculation was in the methodology of the poll, which is the main criticism of any straw poll. The Digest used their mailing list to administer the poll, which consisted of motor vehicle registries and telephone books. The problem here? It was the Great Depression – many Americans were too poor to own a car or telephone, and thus a large sector of the population was neglected in this poll (selection bias at its finest), the very sector that was more likely to vote for FDR and his economic reforms.
The point of this post is this: take what you hear from these straw polls with a grain of salt. They do little to predict outcomes, but can be very valuable to the candidates themselves in adjusting and fine tuning their campaigns. Although there is a vast expanse of difference that exists between a lot of straw polls and scientific research, it can be surprisingly easy to muddle the reliability of each. However, knowing how to digest the results of research, both good and bad, will help you to avoid unsettling surprises.
The Affect Heuristic – How we can use data to overcome our own bias in our decision-making
Oftentimes, our current situation of progress and success blind us to what is approaching on the horizon. It is very hard to avoid this, considering partly what makes us human is this ability to become comfortable in a present state, even if that present state will become harmful to us in the future. This is known as the Affect Heuristic, a way in which human beings show bias in making a decision, taking action that may be contrary to logic and objective thought.
Look at the financial crisis of 2008, where our lavish expenditures and comfort led to our own demise in many respects – a perfect example of how our society was blinded by the comfort we had come to inhabit.
We have seen the effects of what can happen when we let our guard down – when we start ignoring the signs that may be staring us in the face. Instead of letting the data or trends tell us what to expect and how to prepare for what may be approaching, we continue on our path of neglect and foolishly act surprised when the situation hits us hard.
Let’s take a look at a specific example from the recent past – the decline of sales in the U.S. auto market. The 1990s was a time of great economic success and excess. People had more money to spend, and they spent it on lavishly large vehicles such as SUVs, which the auto market in America was providing plenty of. One could argue that the events of the past decade were not foreseeable by the U.S. auto industry, and thus their inability to react was excusable and understandable – hence the bailouts. However, it was less than 30 years ago that the industry suffered much of the same declines as they did in the past decade.
A report released in 1980 by Natural Resources and Commerce Division of the Congressional Budget Office indicated that the auto industry in America was suffering unprecedented decline. The reasons cited for this decline may sound very familiar:
- Jump in gasoline prices
- Rise in interest rates and enactment of credit controls
- Economic recession
The impact that followed may also sound familiar – consumers switching to compact cars that met their needs which were more readily available by foreign automakers. The suggestions and predictions of the CBO stated that in order for the U.S. industry to become viable and competitive again, they would have to produce more compact cars. Perhaps it is just me, but I think there is not a clearer example of “history repeating itself” than this.
You may ask yourself how this affects you and your own situation. The U.S. automakers failed to listen to the data that was undoubtedly available to them. Are you in tune with what the data are telling you? Are you listening to it to make decisions for the future? Or are you blinded by perhaps recent success and letting that bias your decisions and direction for the future.
This isn’t a situation where ignorant people made foolish decisions. More so, it is simply a lack of understanding of how valuable data can be. Decisions can’t simply be made on gut instinct; and while we should all listen to our gut, using it as a sole means of direction can be misleading and dangerous to our own condition.
If history tells us anything, it says that it will visit us again – and the only way to overcome those reenactments is if you stay in tune with what has happened. A good consumer of research has the ability to take in is happening and be proactive in addressing it. Use the data to recycle what has succeeded and reevaluate what has failed. In short, don’t fall victim to your own comfort bias – but be objective and deliberate in your approach.





The Storytelling of Political Polls
The Republican Primaries begin next month in January. This post continues our discussion of how to accurately gauge the political polls out there. We previously wrote about the dynamics of Straw Polls.
If you have been keeping up with the Republican primary race, then your head is probably spinning. I know mine certainly is. We have already seen the rise, shine, and fall of several political stars – Michelle Bachmann, Rick Perry, Tim Pawlenty, and the latest of whom is Herman Cain. As quickly as they come into the national spotlight they fade away into those dreaded side positions at the debates.
To preface this, I am not taking political positions, but rather am trying to show how understanding polling dynamics can lead to a more accurate reading of what is going on.
So let’s begin by tackling the question of “why.” Firstly, why are there so many polls? Secondly, why should we be skeptical of a single one? To understand why there are so many polls, we must place the question in the context of sensitivity. Wouldn’t it make sense then, to have so many polls if the political climate did indeed change so frequently? Because the climate is indeed so sensitive (as public opinion often is) this makes sense.
The chart below shows the high frequency at which these polls are conducted. Each different color point on the chart represents a separate poll; clearly there have been hundreds since this race started. Most of the polls here are indeed scientific. I have filtered out the ones more open to respondent bias, such as pop-up polls and straw polls (to see why such polls are not scientific, read a previous blog post).
There are two primary reasons why the polls are so plentiful. First is more of a PR thing. Different polling agencies and news stations will conduct polls to promote their own “expertise” on the current political climate. The second reason is a bit more to the point – that polling is conducted so frequently because the political climate shifts so suddenly. Here is where that sensitivity I previously mentioned comes into play. In order to keep up with the political zeitgeist, polls are conducted regularly and often to capture what is going on.
This frequency in polling answers our second question of “why.” Namely, why should we be skeptical of them? If a CNN poll is conducted on Monday of this week and a Rasmussen poll is conducted the very next week and we see that results are very different, then we must ask ourselves if this change is real. Or perhaps we are only seeing a response to a hot political topic that may have made news in between.
For instance, if Candidate A has an immigration policy that strikes a chord with voters based on a recent news story on immigration reform, then we may see a surge in that candidate’s numbers. But this does not necessarily mean that Candidate A will withstand the test of time. Herman Cain’s 9-9-9 plan, for example, was appealing because it was so simplistic. But that simplicity eroded away over time, and we saw his numbers begin to drop (even before the misconduct scandals took hold). In this sense, we see that time can eventually tear down a candidate if that candidate’s campaign is not built upon a solid foundation.
To put this sway into more detail, let’s take a look at the various front runners and their ratings: Herman Cain (gray), Rick Perry (purple), and current front runner Newt Gingrich (red). Interestingly enough, looking at the chart below, we can begin to understand where “flavor of the month” comes from in this context. Rick Perry’s demise was followed by Cain’s rise, and Cain’s demise followed immediately by Gingrich’s rise. The question now becomes can Gingrich sustain his recent rise in popularity?
I cannot answer that question, nor do I want to. As a researcher, I am more so interested in these spikes we are seeing in popularity. But let’s now look at the more middling performing campaigns. If we look at their poll performance, then we see a much more consistent picture. The chart below overlays Mitt Romney’s and Ron Paul’s performance in the polls onto what we have already looked at.
In light of this, we see that these two additional candidates have been holding steady over the course of time. Granted, one could argue that Romney has seen spikes and drops here and there, but these are only blips on the larger radar, and he has always seemed to level out over time. Perhaps this is evidence of a more attractive message that he is offering, one that has gathered a very loyal cohort of followers. The same can be said of Paul. Between these two politicians, we are not seeing evidence of a star studded performance as with the others, but we do see that their campaigns are sustaining.
Reading polls can be an interesting and challenging exercise; their storytelling is both revealing and elusive. Only when we take them all into consideration, the poll of polls per se, can we really begin to understand what is happening in the field. I am not trying to make predictions here, but rather attempting to show how research must be placed into context to fully comprehend the big picture. A single poll taken in such a dynamic and changing atmosphere is not as powerful as looking at the aggregate results of all of them. These polls indeed are telling us a story, and we only need to step back and look from afar to capture their narrative.
Polling charts taken from Pollster.com dashboard