Exploit? Or Explore? What’s the True Goal of Your Research Project?

What does your brain have in common with such things as beehives, weather patterns, urban centers, and free-market economies? Each of these can be classified as a “complex adaptive system” – a system in which even a perfect understanding of the individual parts still won’t allow you to predict what the whole system will do. You can follow a honeybee around constantly, for example, and never deduce that a beehive would be produced. Such a system’s actions will result in a set of specific observable outcomes – beehives, hurricanes, feelings, or textile mills, for instance – but these outcomes simply cannot be predicted by following the actions of the system’s components, whether those components are bees, winds, neurons, or independent businesses.

A complex adaptive system is organized in such a way that it has a high likelihood of persisting (i.e. surviving) over some time. That’s why there are so many of them. But such a system, to be able to persist over time, must be able to adapt to changing circumstances in its environment. Whether it’s an ant colony or a large business enterprise, it must be able to fuel and replenish itself to maintain its energy and vitality and not simply deteriorate into randomness. Beehives persist from week to week and month to month because the individual bees balance two fundamental survival tasks:

1. They explore their environment to discover more resources, i.e., blossoming flowers, to sustain their system; and
2. They exploit the resources they discover, i.e., by bringing nectar back to the hive so they can make and store honey.

Efficiently exploiting available resources while constantly exploring for more of them are the two activities that characterize virtually every sort of biological or organic system, including a business. Every business must have a supply of resources with which to create value, and if the business wants to continue it must also constantly discover additional resources to replenish itself. But, just as is the case for beehives or ant colonies, in order to prosper over the long term a business must constantly strike the right balance between the two. Too much exploitation and it will soon run out of supplies; too much exploration and it won’t yield enough profit to operate. Exploitation involves production, distribution, and the fine tuning of everyday processes, tasks that for most businesses are easier to manage than exploration, which involves innovation, risk, and uncertainty, with results that can’t easily be predicted and are often difficult to quantify.

This exploitation-exploration dichotomy represents a simple method for understanding the difference between quantitative and qualitative research: 

1. Qualitative research, involving narrative, interpretation, and judgment, is akin to a business exploring its environment, so as to discover additional resources that could be used to create value, while
2. Quantitative research, involving calculations based on surveys of statistically representative customers, is more akin to a business trying to exploit its existing resources, so as to create value more efficiently.

And as with any other complex adaptive system, a business will need each type of research on different occasions, if it is to persist in a changing environment. But it is your immediate goal that should determine the type of research you choose. If, for instance, you are trying to monitor, maintain and improve your customer experience, then quantitative research (including VOC surveys) will likely do the job, because your primary goal is to boost the efficiency with which you are exploiting your resources. Use quantitative data to prioritize the issues raised in your VOC surveys, in terms of their importance to different types of customers.

If, on the other hand, your goal is to design a customer experience from scratch, or perhaps to uncover creative ways to enhance the experience, then you should probably lead with open-ended, qualitative research, because your primary goal is discovery. And discoveries cannot be predicted or quantified in advance (or they wouldn’t be “discoveries”). You don’t know what you’re looking for, and you need to maintain openness to new and different ideas about your customer experience.

Exploration. Exploitation. Both functions are essential to a business’s survival, and both kinds of research, qualitative exploration and quantitative exploitation, will be useful to a business on different occasions. But what is the business case for employing qualitative and quantitative research together? Might a business, for instance, be able to use qualitative research to discover the right proper kinds of questions to ask in a quantitative survey? And under what circumstances might a qualitative research effort be improved by quantitative analysis on the front end?

That’s a topic I plan to address in an upcoming article. Because, in light of the rising importance of research in a world that has become awash in an ocean of customer data, striking the right balance between exploration and exploitation may be the single most important strategic problem faced by any company’s research director today.