Innovation and the 2010 Honomichl 50

The full version of the 201 1 Honomichl Top 50 Report was released earlier than expected last week. First off, a hearty and well deserved congratulations to all of the firms who made the list, especially those appearing for the first time! Second, thank you Jack Honomichl, Larry Gold, the American Marketing Association and all others involved with putting this together every year!

We had previously looked at the Top 10 about 2 weeks ago, but I think it’s useful to look at the full list and contrast it with the GRIT 50 Innovative firms to understand the relationship between innovation as a driver of revenue growth.

I looked at the two lists and looked for overlap; we have 15 companies in common between the two:

Two things jump out at me:

1. Larger organizations are engaging in innovation work as a driver of growth either through acquisition of smaller firms that bring new offerings to the market or through bringing down business unit silos to allow for cross-pollination and more integrated offerings that meet client needs more effectively. Ample recent examples of this shift populate industry news sites.
2. Smaller firms that have specialized in new approaches (Gongos with mobile communities, Affinova and concept optimization, Communispace and MROCs) are growing rapidly driven by market demand for their innovative offerings.

When looking at the remainder of the Honomichl list, the vast majority of the firms have achieved their position through a combination of syndicated products, tracking initiatives, and segment specialization.  That is not to say that innovation is NOT occurring in those firms, but their revenue streams are largely protected for now by offering industry leading products that are mission critical to their client-base and are not easily duplicated by emerging methods. Whether that remains the case is to be determined, but for now the imperative to innovate is not as pressing for them as it may be for other firms that have new competitors breathing down their necks or shareholders to answer to who expect continual growth and diversification.

Here is the complete list of the Honomichl 50; tell me if you agree with my analysis or not.  I realize this is a little hard to read due to size, so you can click on each image to enlarge them, or you can download the complete Honomichl report here:  Honomichl Top 50 2010

As a counterpoint, below is the GRIT 50 list with the 15 overlapping firms highlighted. Clearly those firms that are not on the Honomichl list fall into three basic categories:

1. Non-US centric firms
2. Under $15M in annual revenue
3. Companies that do not meet the definition of “research company” used by Honomichl due to niche offerings, primarily as technology providers

It is the third point that concerns me the most. As I’ve questioned before, despite the great work done by Jack and Larry at Inside Research in compiling the report, is it truly reflective of the industry since it confines itself to a definition of a market research firm that may not be inclusive enough to accurately reflect the market today? If we assume that innovation is a key driver of revenue growth, then isn’t it reasonable to expect many of the firms listed on GRIT might now, or certainly may in the near future, qualify to be included based on annual revenue alone? The missing ingredient is a broader definition of what constitutes a research company, and without that the picture of the market will be incomplete.

What do you think? How can we reconcile the great work of the Honomichl list with an ever expanding and changing industry landscape of innovative new players in the market research industry?