Finding the right balance between market research and innovation is a key challenge for businesses, Laura Slattery reports.

When the director general of the BBC, Mr Greg Dyke, announced earlier this month that any BBC employee could get a yellow card carrying the slogan "cut the crap - make it happen" to flash during meetings and speed up decision-making, it was intended as "a joke".

But it was a joke that reportedly led to 3,000 frustrated employees making enquiries about the cards, designed to help producers push creative ideas past risk-averse managers, who keep one eye on the programming budget and the other on research data telling them why an idea is likely to fail to win audience ratings.

An over-dependence on the opinions of focus groups is viewed as one of the main barriers to creativity at the organisation, where staff see meeting rooms as the place where valuable time that could be spent actually making programmes is wasted, while the results of audience research is pored over and often used to reject new ideas.

Using focus groups is a popular and extensively used method of researching the merits of a potential product, service or idea, usually before it is developed. Another use is when the company behind the product or service is considering a re-launch and wants to know why product sales, numbers of clients or audience ratings are flagging.

Focus groups typically comprise between six and 10 randomly selected people, who are asked to discuss the idea among themselves, while observed by a chairperson - called a moderator - who may prompt certain responses by asking carefully worded questions.

"If focus groups are properly managed and the people properly recruited and there is the right mix, then there should be a free-flowing discussion that is unstructured," says Mr John Farrell, director of a market research company called Catalyst.

"It's more creative that way; good ideas tend to emerge more often," he says.

"But although it appears to be a loose format, there is a moderator there to keep things moving forward," he adds.

"If there is a dominant member of the group, the moderator will look at how the other people are reacting and try to bring them into the conversation."

As well as confirming existing assumptions, it is also hoped the interaction in the group will spark new angles the product developers had not considered - in other words, they should be an aid to creativity rather than a barrier.

The yellow cards may never actually be waved in the air during a meeting or even make it as far as the printing press, but the idea behind the BBC's "make it happen" campaign remains the same: to encourage risk-taking.

Market research, on the other hand, is about reducing risk, even if it means bored employees have to attend more time-consuming meetings in airless conference rooms.

"Research can take a bit of risk out of a project, but you need to have a healthy balance and make sure the amount of research done is in the right proportion to the budget," says Ms Aldagh McDonogh, director of Alternatives, which provides marketing services to businesses on a contract basis.

Ms McDonogh believes large organisations sometimes develop an "everyone is involved" culture or a perfectionist approach that slows down decision-making processes, undermining productivity.

"Market research has an extremely valid role in grounding ideas so that money is not wasted. But there can be situations where no decision is ever made until it is validated by everyone, and paralysis sets in," she says.

Although clients will usually ask market researchers to run a number of focus groups, the numbers of people involved are still quite small, meaning that the results can easily be skewed in a misleading direction that does not accurately represent the tastes of consumers on the whole.

According to Mr Andrew Johnson, director of market researchers MORI/ MRC, companies should avoid taking individual comments at face value and instead use focus-group research in conjunction with large-scale quantitative surveys.

"Focus groups are different from opinion polls because they are more in-depth, they scratch beneath the surface to discover what underlies people's perceptions and attitudes. But the results need to be interpreted carefully and thoroughly," he says. Statements gathered from the focus groups may identify how questions should be phrased in any follow-up surveys.

Mr Farrell agrees that focus group discussions simply add flesh to hard data; a negative reaction to a product from a handful of focus groups shouldn't be used as the reason to reject an idea outright and go back to the drawing board. "You can't really make any assumptions from what a relatively small number of people say when they sit in a room for about an hour," he says.

Some entrepreneurs like Mr James Dyson, creator of a successful brand of vacuum cleaner that tested negatively during market research, and Mr Tim Waterstone, founder of the bookshop chain Waterstones, believe that manufacturers and service providers should try to stay ahead of consumers instead of constantly looking to them for ideas and answers.

According to Mr Waterstone, entrepreneurs regard themselves as one-person focus groups with the courage of their convictions to believe that their idea will work. Their unwillingness to consult anyone else is why entrepreneurs set up their own businesses, instead of becoming "intrapreneurs", who attempt to produce innovative ideas within the confines of large organisations.

"Of course, market research is not foolproof," notes Ms McDonogh at Alternatives. "There's a history of great successes that researched badly and products that researched well but failed on the market." But they are "rare enough", she adds.

While market research should be used by businesses as a tool rather than a restraint, a lukewarm reception from a focus group can and should make at least some difference to whether or not a project is given the green light.

"If you get negative results, you should go back and probe why, but research is expensive. There's absolutely no point in doing it, if you're going to just ignore it," she concludes.