Insights Engine Tips

You need data to accomplish this. Yet having troves of data is of little value in and of itself. What increasingly separates the winners from the losers is the ability to transform data into insights about consumers’ motivations and to turn those insights into strategy. This alchemy requires innovative organizational capabilities that, collectively, we call the “insights engine.”

The vital role of the insights engine was revealed in a global market-research study led last year by the strategy consultancy Kantar Vermeer. The study, called Insights2020 (i2020), involved interviews and surveys of more than 10,000 business practitioners worldwide. Of the factors that were found to drive customer-centric growth, none mattered more than a firm’s insights engine, embodied in its insights and analytics function. (While these go by many names—including “I&A,” “consumer and market insights,” and “customer intelligence”—for simplicity we refer to them as insights functions here.)

About the Insights2020 Research

In this article we describe the elements of the insights engine and show how it works at consumer goods giant Unilever. The firm’s 400-plus brands, which include Dove, Knorr, and Axe, generated $60 billion in revenue in 2015, propelling underlying sales growth of 4.1% for the year. Performance at that level requires the full engagement of the company’s 169,000 employees, who span functions from supply chain and R&D to marketing and finance. But as we’ll show, it’s the insights engine, manifested in the firm’s Consumer and Market Insights (CMI) group, that underpins Unilever’s customer-centric strategy.

A New Strategy

When Unilever released its first-quarter results in April 2016, CFO Graeme Pitkethly, addressing analysts, announced a major new initiative to shift resources to local markets around the world. He noted that consumers are increasingly seeking brands and products that align with their cultural identity and lifestyle. The result is that local firms, particularly in emerging markets, are growing fast and strengthening their competitive positions. The new program, he explained, would clarify accountability and make Unilever’s marketing teams more agile both globally and locally.

Country business heads had recognized the rising popularity of local brands, and the implications were being discussed separately at many levels across the firm. A presentation to the operating board by CMI’s head, coauthor Stan Sthanunathan, drew on this intelligence and on CMI’s own review of what was happening. Sthanunathan walked the board members through an analysis of why local brands were growing, what threat this posed, and how Unilever could compete. The presentation focused attention, catalyzed the conversation about strategy, and ultimately led to changes in both organization and mindset.

Unilever’s new initiative showcases the type of high-level advisory role that leading insights functions are increasingly taking. A decade ago, this sort of strategic involvement by a customer intelligence operation was almost unheard of. The market research department typically was a reactive service unit reporting to the marketing function, fielding marketing requests, and producing performance management reports. Over time, however, market research departments have been shifting from merely supplying data to interpreting it—distilling insights about consumers’ motivations and needs on the basis of their behavior.

Driven by the imperative to become customer-centric, leading firms are now completing the transformation of market research groups into true insights engines with a fundamentally strategic role. At Unilever, CMI’s prominently communicated mission is “to inspire and provoke to enable transformational action.” Note that the word “insight” is missing—intentionally. That’s because insights merely provide a means to the desired end: action that drives business growth.

In the text that follows, we describe 10 characteristics of superior insights engines, gleaned from the i2020 research and our experience at Unilever. We divide these into two broad groups: operational characteristics, such as functional independence and experimental orientation, and people characteristics, such as business acumen and well-balanced analytic and creative thinking styles.

Operational Characteristics

Seven of the key characteristics relate to the way insights engines operate.

Data synthesis

Until recently, large firms had an advantage over smaller rivals simply because of the scale of their market research capability. Today research that once took months and cost millions can be done for a fraction of that price and in mere days. What matters now is not so much the quantity of data a firm can amass but its ability to connect the dots and extract value from the information. This capability differentiates successful organizations from less successful ones: According to the i2020 research, 67% of the executives at overperforming firms (those that outpaced competitors in revenue growth) said that their company was skilled at linking disparate data sources, whereas only 34% of the executives at underperformers made the same claim.