Alumni Association Update

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You launched FasterCures / The Center for Accelerating Medical Solutions in 2003 as an "action tank" to save lives by saving time in the discovery and development of new treatments and cures for all serious diseases. What have you achieved, and what are you working toward?

I believe we've instilled a sense of urgency that I feel is extremely important. There's a new realization in medical research that things need to be done quickly, and that they can be done quickly. For example, a university can forgo the grant process and technology transfer paperwork and simply get funding for research from donors and in the process, possibly save a few years.

Another things we've done is to take the best practices, whether they be in multiple sclerosis or lung cancer, and apply that to other disease categories. We do this by having meetings with what we consider to be the strongest, most focused groups in disease specific areas, and then open ways for them to share with each other. This has led to advances in digitizing medical records, which makes data available across disease categories. It also helps get patients into clinical trials in a more collective way.

We've also been looking at the economic effect of curing a disease. Forget the emotional effect. The pure economic effect of what it is worth to a society to eliminate a disease is tremendous. For a minor disease it's measured in the billions, a major disease in the trillions.

The last area we've been working toward is the internationalization of this effort. There are enormous financial and research resources outside the United States. It's quite possible that India can do clinical trials more efficiently than we can here. They have a great medical care program in many parts of India today which rival the United States. So whether it's Japan, China, India, Norway, Sweden, Finland, Netherlands, Australia, the United Kingdom, all of these countries are involved in the process of finding cures. I'm actually quite optimistic that what is going to occur outside the United States is going to couple with what we do here.

J.D. Power III: Consumer Research Pioneer

Once upon a time, market research was a fairly straightforward endeavor: questions were asked, answers tabulated and then reported. The Internet has changed all that. Today's research-hungry corporations want instant answers, and a slew of online upstarts are happy to promise those answers—for less money.

No one knows this better than J.D. "Dave" Power, WG'59, known as the customer satisfaction guru by the business press. After 37 years as an independent, Power this spring decided to sell his information-services business for an undisclosed sum to The McGraw-Hill Companies, parent of Standard & Poor's, McGraw-Hill Education, and Business Week. The 73-year-old statistician, whose name has become synonymous with automotive-quality rankings, vows he'll stick with the rapidly growing company that still bears his name. Power gave up the CEO title a few years ago, but he remains founder and one of the most influential figures in the global auto industry.

Power began his career doing market research for companies such as Ford and General Motors. Bored and frustrated with the way management massaged his research to justify their decisions, he left the auto industry in the mid-1960s for chainsaw maker McCulloch Motors Inc., which was having trouble cracking the consumer market. Power advised the company to expand its product line of lumberjack saws to include lightweight models for do-it-yourselfers after spotting a basic flaw in McCulloch's operations: The company forecast chainsaw sales based on the number of lumber trees it could find. "I said, 'You don't sell to trees, you sell to people,'" Power told McCullough executives. Power's research also showed that the saws needed to be smaller, less expensive, and able to tolerate long periods of idleness. McCulloch listened, and sales took off.

Power set off on his own in 1968. Toyota was his early client, initially asking Power to survey the forklift market and begin his long relationship with Japanese carmakers. Today, Power is often credited with accelerating the popularity of Japanese cars in the United States. "At the time, Detroit didn't think Japan could produce anything other than motor scooters," he says.

Though he's best known for rating auto companies based on surveying tens of thousands of consumers a year, Power today rates companies in categories as diverse as cellular communications, satellite and cable TV, hospitals, banks, home builders, hotels, and airports. And as competition has heightened, his firm's services have expanded to include proprietary tracking studies, media studies, forecasting, and training services, as well as business operations analyses, and consultancies on customer satisfaction trends.

Based in Westlake Village, CA, JD Power and Associates today has 750 employees in 12 offices worldwide and generates more than $190 million a year in revenues, according to published reports—a fivefold increase over the past decade. The firm has expanded in China, India, and other burgeoning economies. The cost of this expansion, Power admits, is a major reason behind his decision to sell.

During a recent interview with the Wharton Alumni Magazine, Power offered some thoughts about the future of his industry, the wisdom of the consumer, and becoming an employee again after nearly 40 years.

What are the biggest issues facing the market research services industry?

The biggest issue is that as we move into the information age, we're finding a lot of questionable information out on the Internet claiming to be research. Lots of people are able to do surveys, but the industry has developed over the years with certain standards that, these days, are often not adhered to. There are many people conducting surveys who don't understand sampling methodology or statistics. A research firm might put out a quick survey on the airline industry, for instance, interjecting personal opinion into the analysis. We've never done that. There's a lot more information going out that's often misinterpreted. Everyone is an expert now. It's the Wild West when it comes to surveys. Can we stop that? No. It's only going to increase.

One way we've responded is by teaming up with McGraw- Hill. They will help us move into the information age faster than our competitors while still living by the standards that we originally developed. Our industry is entering a new era. Globalization, technology, and information—and using them strategically—are the issues defining the future.

In your industry, how do mature companies stay innovative?

That's a very good question. I believe that the standard marketing research survey company of 30 or 40 years ago is obsolete today. We see this with the consolidation of the industry, with major companies from Europe swallowing up smaller research firms here to get into the U.S. market. That will likely continue.

But companies like ours need to get out of the survey research business and move into the solution business, the information business. When we merged with a much larger organization, we looked for a company that would help us change, allowing us the ability to still do the work we like to do, but also take us into the information age.

We see today that what we've done in the U.S. is now being accepted on a worldwide basis. The automobile companies are looking for the same information in all of their markets. And because they are all becoming global, opening up markets in places like China and India, they are looking for global information on an instantaneous basis. That's what we want to provide. If other market research firms are to survive, they too will have to adopt this instantaneous mindset.

In a global environment, management has to have the information across all of their markets. Until recently, they might have a distributor in a particular market handle the market research for that market. But these days that won't allow managers to make decisions on a global basis. Each market is different. We have to use different but complementary techniques. Our clients are changing. We have to change too.

As it grows ever larger, how will JD Power and Associates stay in touch with the little guy, the consumer?

Technology will help us with that, but we must embrace the technology. More surveys are done on the Internet, and we have to manage the language differences and other challenges. Our Consumer Center (found on the JD Power and Associates website) also keeps us on-mission by allowing consumers to check our ratings on everything from homes to health care and to voice their opinion online. We also offer Consumer Center websites in Germany, India, the U.K, and Canada.

When we started, my vision was that we have to give the right information from the eyes of the consumer. In Detroit, where I got my market research baptism, I found that the data was changed as it passed up the line of the organization. We used to say that they tortured the data until it confessed. I felt that they weren't listening to what we were presenting. And so I decided that the only way to tell it like it is to be independent.

We found that the customer is a lot smarter than the automobile industry gave them credit for. We started feeding the information we gathered back to the industry, and some companies listened and modified what they were doing, especially the Japanese companies that were coming into the U.S. market and eventually took it by storm. They listened, and when I would go in with results, they wanted more. The more information they got, the more they requested, and that's a mindset. Industrial companies that have been around for 100 years or so are the ones that are the slowest to change.

Even today, we see this. But managers are waking up. The domestic companies today want our information and they don't want it massaged before they get it.

Wharton faculty also work with local and national governments across the world, helping to draft economic policy, advising on policy implementation and training top leaders.

Recent faculty projects have included work with the United Nations, China, South Africa, India, Israel, Chile, Bolivia, Peru, Ukraine, Kazakhstan, Uzbekistan, Poland, Indonesia, Turkmenistan and Turkey.

Wharton’s research is supported by the world’s leading companies. This academic-industry partnership combines scholarship and best practice analysis to promote and advance small business development and entrepreneurial ventures; ethics and corporate governance; the financial services industry; health care; insurance, risk management, and pension and retirement plans; the real estate industry; retailing; and the development and commercialization in new technologies, ranging from information management tools to biotechnology applications.