Dave Power is the founder of the well-known, company, J.D. Power And Associates, whose brand is synonymous with significant market research that created deep change and improvement in overall automobile quality. His work allowed the auto industry finally to hear the voice of the car-buying consumer for the first time. Dave and his team of market research associates documented complaints and praise of drivers, analyzed and presented that data to automobile manufacturers so they could act in the best interest of their customers.
Now in his early eighties, Dave, his close associates, and leaders in the auto industry reflect on his impact on the auto industry as well as the legacy he will leave behind. Dave shares his memories, wisdom and insights in a new book, POWER: How J.D. Power III Became the Auto Industry’s Adviser, Confessor, and Eyewitness to History (Fenwick Publishing, Sept. 2013). I recently interviewed Mr. Power, and discussed the history he witnessed, and how he helped the auto industry understand the importance of the voice of the consumer.
Pursuitist: It is hard to believe that before 1968, the customer’s voice was not clearly apprehended as an important source and guide for the auto and other industries. Could you discuss your growing awareness of the power of the consumer voice, and how you have helped it gain power and clarity within the past number of years?
Mr. Power: Yes, it is hard to believe, as the consumer has such a voice now. But back in the late 60’s – at car companies in the US and elsewhere, the perception of the consumer was that he or she did NOT know what was going on, did not understand their own needs or wants. Actually the engineers ran the companies; they listened only to each other, as the CEO listened only to the engineers. It was such a closed system!
Pursuitist: The awareness of this closed system and how to deal with it and what emerged as crucial – the voice of the consumer — were two of the great themes in your book. Can you comment on these?
Mr. Power: Well, I did have a few AHA moments, moments of real insight, but not in the way others did. I always saw things a little differently, and I knew early on, after I graduated from Wharton with an MBA, and wanted to work for General Motors, and wanted to do market research, how complicated it would be breaking into that world, into that system. My first interview with a GM representative did not go well. He was brusque and abrupt. Asked me to call him back, and when I called he did not remember my name. There were other instances, but I became aware of the deeper and often darker meaning of bureaucracy back then. Anyway, I got a job with Ford, and that is when things started to happen!
Pursuitist: Like what?
Mr. Power: Well, my training as a financial analyst was put to use and in a way I did not exactly expect. I started out being a tractor sales auditor. I was sent to Birmingham, Michigan, far from the East Coast! Back then, Ford was really the only successful tractor sales company in the US. Tractors were initially built in 1938 to replace the mule! And it was Ford that created a great tractor – a machine that really helped save the family farm, and Ford could not built them fast enough — which became a problem in itself, because their perspective was on production, on building as many as possible, but it was someone else’s problem about getting them sold. And of course, what happens with that is that if production takes priority over selling, as I said in the book, there are inefficiencies that will eventually corrode the industry.
Pursuitist: But you did stay at Ford, and helped them streamline their services, but you still wanted to do market research, which you eventually did when you went to the advertising side of the car business, and worked in market research at Marplan, which was the market research side of the famous ad agency, McCann-Erickson. What were a few lessons you learned there that helped you in your later career?
Mr. Power: Well, as I said in the book, there are two lessons I learned – probably a lot more, but these are very important: first, that market research was most effective if it got at the motivations of respondents. That required digging for information and not being satisfied with superficial results. The second lesson was fearlessness: never second-guess yourself; if you have the facts derived from data, use them. But other lessons stood out also — a lot of market research is skewed toward preconceived conclusions. This is a problem also. You have to define what you want the research to do.
Pursuitist: But little by little, and with many diverse international automotive giants — your research methods allowed the consumer voice to be heard. When were you really aware that the power of your research could actually change entrenched processes, so that you could start your own company?
Mr. Power: After McCulloch Chain Saws. They came to us wanting to know, essentially, why their chain saws weren’t selling well. Our research showed that they wanted basically a lighter, more usable chain saw than the ones McCulloch was used to making. When we presented these results, and McCulloch started to use the data to create lighter more efficient saw, sales grew. Ad it was around then, I decided we could see both the forest and the trees with good research. Our focus was on the needs of the consumer, on customer satisfaction, and not the needs of the corporation. This was a real turning point, and a major reason why we launched J.D Power And Associates.
Pursuitist: I believe there is a subtext to your book that deals with both evolution and revolution: the evolution of your business based on a revolutionary, though extremely common-sense idea. When you graduated from Wharton, did you ever see yourself as a revolutionary thinker, someone whose groundedness would allow the concept of the importance of listening to the consumer, emerge?
Mr. Power: No, I never considered myself a revolutionary! I just saw, through the work I do that people who bought products weren’t being listened to. And that producing products took precedence over listening to people who bought them. I think a balanced perspective is always needed – in everything! — And an imbalance like that had severe consequences that that needed correction.
Pursuitist: There are many fascinating stories in your book — could you let us know which of the stories as regards your dealing with hesitant, and somewhat obtuse, car manufacturers — is a favorite, and explain why?
Mr. Power: I can think of one, that started out badly, and because I had some luck, had an excellent outcome! I have a tendency to believe the old saying about fortune favoring the well prepared, and I think this is one of those stories. I was trying to get a meeting with one of the heads of Toyota, to discuss some research I wanted to do with Toyota Automotive. I called but he wouldn’t take my calls, so I went down to Torrance where they were located at the time, and called on him personally. BUT I could not get past the receptionist, who called her boss, and he said he didn’t want to see me, and I knew as much. I thought this was useless, so I was just leaving when I saw some literature and magazines near one of the couches in the reception room. One of them dealt with Forklift tractors – something I knew a lot about with because of my Ford tractor experience years before. It turned out that Toyota was just getting into that market. I went back to the receptionist and asked if I could speak to the head of that department, and she put me through. He actually came to meet me in the lobby. To make a long story short, we did some research for this new branch of the company, and I was eventually introduced to Tatsuro Toyoda, the head of Toyota, who became one of our best customers.
But then again, conversely, one car company who really had issues with us was Mazda, and it was because of something our market research showed.
It was around 1970 or 1971 – we had done many market surveys with Mazda owners, and my wife had tabulated the results. She came to me and said, “ There’s something wrong with the Mazda O Rings. “ And I said, “What is an O Ring?” I looked at the surveys and it showed that at 30,000 miles, the O Rings became faulty. When I took the findings to Mazda, they were not interested. But other members of the auto industry certainly were, and when the press became aware of the story, Mazda had to announce a recall.
Pursuitist: I think you must have some ideas as to what the future may hold for the auto industry both here and abroad as regards future growth and stability. Could you discuss some of your predictions?
Mr. Power: Well, as you probably know, everything is becoming globalized. As an example, Volkswagen now owns Porsche and Audi. The global market does indeed now listen to the consumer, and do their own, hopefully good, market research. But I remember some words that Peter Drucker, a famous business author, said at one of our seminars where he was the Keynote, “When the Gods want to get even, they send them (companies, people) 40 years of good fortune.” I have read all his books, and I don’t know if he ever said it anywhere else. And what it meant to me was that those who put strength and passion in a company often die or retire. And those who come after become arrogant or lazy or both. We’ll see what happens. I have not retired yet.