Getting CI Customers Excited About Intelligence

2003 SCIP European Conference“The Intelligent Use of Business Analysis”

Arik Johnson – Aurora WDC

10 Step Plan

1. Expect Respect2. Determine Objectives & Hidden Agendas3. Scope the Project4. Become the Expert in your Subject5. Tailor the Report to the Objectives6. Summarise the Recommendations First7. Make it Look Compelling8. Place Value on Insight; Back it up with Data9. Present Your Research Yourself10. Follow-up – What Actions Resulted, RoI

1. Expect Respect

• Respectful assertiveness• Better interaction with your project commissioner

will result in a better result for them – convince them!

• Meet face to face – book time with them• Understand boundaries of confidentiality• Extend level of trust/shared information• Briefly explain capabilities, sources, methods• Agree a timescale that respects your commitments

2. Determine Objectives & Hidden Agendas• ‘I just want an information pack on…’• ‘Give me everything we know about…’• ‘I need to know about the competitor’s

pricing…’• ‘I need a copy of their last accounts…’…but….WHY?

• who is actually going to analyse this information?

• what insight do they hope to get from it?

• what decisions will this information drive?

Finding Hidden Objectives

“I want to know all about ACME Microwidgets. Especially whether they are making any international investments.…Oh, and I want to know what their balance sheet looks like.”

Example: …a request ‘on the fly’

Actual Objective

Objective:

To determine the quickest route for international expansion.

Real Q:

Is ABC Company a good acquisition candidate to expand our operations overseas?

If you don’t know objectives you won’t answer the right question...

Key Intelligence Topics (KITs)

• Process of Interactive Dialog with Decision-Makers through KIT Interviews; with 3 Protocols:

1. Strategic Decisions/Actions

2. Early-Warning Topics

3. Key Marketplace Players

• Source: Jan Herring, 1999

Examples of Strategic Decisions & Issues1. Provide intelligence inputs for the company’s strategic plan to create “our” futurecompetitive environment.

2. Formulating “our” global competitive strategy: Assess the role of competitors inachieving our business objective(s).

3. Globalization of (Our) Industry: How/with whom should we proceed? What are ourcompetitors doing? With whom?

4. Asian/South American/etc. market development: Assess current competitive situation;describe the most likely future situations.

5. Strategic investment decisions: Identify and assess changes in the competitive environment, including:Key/critical industry investments by others; Cash requirements of other industry companies; Involvement/role of investment community;Possible alternative sources for future investments, including alliances, acquisitions, etc.

6. Should we expand our present production capacity or build a new plant with a morecost-effective manufacturing process?

Examples of Strategic Decisions & Issues (Continued)7. What plans and actions must we take to maintain (our) technological competitivenessvis-a-vis key competitors.

8. “Product” development program: Identify and assess the programs of our leading competitors and assess the status of other competing technologies.

9. New product development and roll-out: How and when will the competitors respond?How will they affect our plan?

10. How will our new distribution/sales/marketing strategy be viewed by the industry?Our competitors? Our distributors?

11. Protection of “our” proprietary information/technology: Competitors efforts to acquire it?; Others interested in it?

12. Human resource issues: Hiring and retaining key employees.

Examples of Early-Warning Topics1. Areas of possible technological “breakthrough” that could dramatically affect ourcurrent and future competitiveness.

2. Technological developments, affecting either production capabilities or product development and their uses by competitors and others.

3. Status and performance of Key Suppliers: Their financial “health”; Cost & quality problems; Possible acquisition and/or alliances

4. Possible disruptions in supplies of crude-oil/components/etc.

5. Change in (our) industry procurement policies and processes.

6. Change in customers/competitors perceptions of us/our services.

Examples of Early-Warning Topics (Continued)7. Companies and/or combinations of companies, considering possible entry into ourbusiness or markets.

8. Changes in international political, social, economic or regulatory situations that couldeffect our competitiveness.

9. Regulatory Issues: Near-term changes; deviations in long-term trends; other govern-mental changes that could impact current regulatory regimes, e.g. people, policy, etc.

10. Intelligence on Alliances, Acquisitions, and Divestitures among our competitors, customers, and suppliers: Reasons and forces causing them; Objectives and purposes of completed deals

11. Financial Initiatives by major competitors: Changes in current financial strategy(s); Alliances, acquisitions, divestitures, etc.

12. Interests and efforts by others to acquire our company.

Examples of Key Players in the Marketplace1. Provide profiles of our major competitors, including their strategic plans, competitive strategies, financial & market performance, organization & key personnel, R&D, operations, sales & marketing, etc.

2. Provide in-depth assessments of Key Competitors, including: competitive intent vis-a-vis us and our major customers; strategic plans and goals, including international objectives; Key strategies (Financial, technological, manufacturing, business development, distribution, and sales and marketing); Current operational and competitive capabilities

3. Identify new and emerging competitors, particularly those coming from entirely different industries and businesses.

4. Describe and assess our current and future competitive environment, including: customers and competitors; markets and suppliers; production and product technologies; political and environmental; and the industry’s structure, including changes and trends.

5. New customers, their needs and future interests: What are they and how are our competitors trying to satisfy them?

6. Industry and customer views, attitudes and perceptions regarding “worth” of our branded products, services, etc.

Examples of Key Players in the Marketplace (Continued)7. Identify and assess new industry/market players, including: Suppliers, major distributors, customers and/or competitors, that are considering entry into our business.

8. New technology/product developers: What are their plans and strategies for competing in our industry?

9. Need significant improvement in marketshare and growth data, including that of our competitors.

10. Management and operations need better intelligence concerning regulatory and environmental activities for planning and decision making.

11. The investment/financial community: What are their views and perceptions of our business and industry?

12. What are the interest and purpose of various suppliers and industry observers in gathering information about our company?

3. Scope the Project

• Be clear on what is and isn’t in scope• Understand any boundaries set by confidentiality• Agree deliverables, including format• Negotiate timescales and resource requirements• Define the communications plan• Set milestones• Book review meetings

• Be prepared for the scope to change!

4. Become the Expert in Your Subject

• Swot!• Immerse yourself in as much of the context of your

research subject as possible.• You will need to convince your audience that you

have grasped the bigger picture

• Tips:– Seek out any internal resources that can give you a

potted history/overview – get off the ground running– Register online with useful alerting services– Use SCIP chatroom forums!

Know Your Subject Matter

You

Be the Expert

AnticipateQuestions

ThinkBroadly

UnderstandImplications

5. Tailor Your Report to the Objectives

• Don’t be tempted to use a ‘standard’ format or to ‘recycle’ an old report

• Let the ultimate decisions and/or actions drive your report structure

• Where possible, directly answer the core questions behind the project

• Even use these questions as headers in your report summary

Keep It Ethical & Legal

• Feel comfortable with the information sources you have used; only use sources you are willing to reference

• Don’t make recommendations that:– Breach SCIP’s code of ethics– Suggest blatant anti-competitive behavior

• Ensure your report/presentation confirms your professional status – staff, freelance, consultant

• Confirm level of confidentiality, and authorised circulation list at time of issue of any written report

6. Summarise the Recommendations First

• Focus on the answer!

• Recommendations

• Supporting Ideas

• Data and Methodologies (briefly!)

• Questions/Discussion

• Archive data in well-ordered appendices

Examples of Recommendations

There is opportunity in the widget industry. ACME is a competitor with excellent infrastructure and distribution systems. However their weak management and low growth makes them a take over candidate...

Examples of Recommendations

We should consider an acquisition to enter the widget industry and ACME Microwidget appears to be a likely candidate.

7. Make it Compelling• Deliver in the format most likely to benefit your sponsor/audience

• Balance use of text, data and graphics

• Consider how the report will be used in further work– Will your sponsors want to reuse the graphics?

– Will they need to reprocess or reassess raw data?

• Choose graphics that give the data the most clarity

• Get the level of technical content right

Deliver What Saves Them Time

For Sales Team:

• May want to develop your presentation into various competitor mapping tools for use in the field

• Use matrices and charts that can be adapted/built on

• Low emphasis on raw data and ‘proof’; audience likely to take your recommendations on face value

•Limit the heavy stuff!

For Exec Board:

• Will probably want to take away insight that will help form a strategic decision.

• Need a succinct overview now

•Use clear graphics to get ideas across

•BUT…have back-up data available and highly ordered; may need to come back to this as part of a due diligence process if recommendations lead to actions

A Graphic Can Be Worth 1,000 Words, But….• It has to be effective!• What makes a graphic good…

– Simplicity– Consistency– Impact– Telling a story– Sourced

• Make sure you think about whether something will be printed or projected.

Rules of Thumb for Data

Use the same dimension

0102030405060708090

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

East West North

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20

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1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

East West North

Rules of Thumb

• Use the same color scheme– Use uniform colors – Change the colors to fit your presentation or

match your branded template– Be careful of backgrounds

Challenge: Market Saturation

78.0%75.4% 76.3% 77.5%

79.9%

84.2%82.0% 82.6% 82.1%

80.8% 81.9%83.4%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

General Purpose Card = Visa, MasterCard, American Express, Discover

Percents Based on All US HouseholdsSource: NFO Worldwide

Household Penetration of General Purpose Credit Cards

Rules of Thumb

• Don’t put too many graphs on a page– Don’t overwhelm your audience– Keep the same ideas together

• Make it easy to read!– Use easy to read font– Don’t use too many grid lines– Make scale easy to read

Industry GrowthProjected Growth in Industry Level

Outstandings

7.8%4.8% 3.1%

6.3%

35.0%32.0%

20.0%

25.0%

9.0%4.5% 4.3%

7.8%

2000 2001 2002E 2003E

Prime Subprime Total

Source: Analyst Reports, Internal Estimates, WEFA

Projected Industry Level Volume Growth

25%

23%

12%9% 9% 10% 10%

7%

-1%

9%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

% Growth Active Accounts

-4%

-3%

-2%

-1%

0%

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Inudustry Risk Adjusted Revenue

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$6,500

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1996 1997 1998 1999 2000 2001 2002E 2003E

Industry Direct Mail Volume

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Direct Mail Volume 1997 - 2001

Another way to show an ideaMarket Penetration of ABC Drug

doctors

dentists

vets psychiatrists

My company

XYZ company

LMNOP company

Differentiation is Critical

Competitors are spending money on their brands to enhance customer receptivity to their products.

There is a direct correlation between those competitors who have been adding more accounts and those who have been spending on their brands.

There is also a direct correlation between low prices and account growth.

Source: Competitive Media Reports

Capital one Advertising Spending and Account Growth

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

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Gross Account Growth Advertising Spending

Innovation is a Market Force

CustomerFocus

Innovation Focus

Citi

Low High

Low

High

MBNA

AmexCapOne

FUSAFleet

Chase

Our competition is out-innovating us; however, there is still a distinct lack of innovation within the industry as a whole.

There is opportunity to bring something new to the market, a revolutionizing product that will change the landscape of the industry.

Prices Drop

ConsolidationBegins

Refocus on Service

Alliances are Formed Life Cycle of

Near-CommodityIndustry

Build Brand

Increase Value

The industry has reached a point of commoditization, all competitors will have to move from price based strategies toward service oriented, customer focused, differentiated products.

The Lifecycle of a Commodity

You are here.

8. Place Value on Insight; Back this up with Data

– Delivering insight is the ultimate goal– Data will still be required– The mix depends on your audience

\In"sight`\, n.

1. A sight or view of the interior of anything; a deep inspection or view; introspection; -- frequently used with into.

2. Power of acute observation and deduction; penetration; discernment; perception.

Insight or Data ?

“Tell me what you know..”

“Tell me what you think…”

“Give me the hard data….I’ll draw my own conclusions…”

“I don’t have time to sort through any data…just tell me what it means…”

DATA INSIGHT

• Sometimes down to personalities, and what people feel comfortable with…

Insight or Data ?

• Fact: Some of your audience will value the data over your take on it– Especially if they do not have full confidence in your

grasp of the subject/situation– Some managers simply relate better to number-crunching

• Overcome this by– Thoroughly researching your subject– Having the data to hand– Anticipating and openly welcoming questions– Justifying assumptions

9. Present Your Research Yourself

Presenting your findings in person has the highest impact because:– It lends itself to discussion, which actually facilitates decision making– It makes the intelligence real

• It is no longer just words on a paper– You can get immediate reaction

• You can pursue follow up questions• You can derive follow up questions from the discussion

Keys to Presenting

• “I have the right to be here and say this…”

• Take the time you need to facilitate discussion

• Concentrate attention on WHY and HOW, not on what, where, when and who.

• Be an internal consultant, project an “entrepreneurial” mindset, evolve into a “trusted advisor” to one’s clients.

If you can’t present in person…

• Know the culture of you organization– E-mail– Voice mail– Intranet– Paper

• Ask your client how they want the information• Give clear contact details with suggestions for future

discussion forums

10. Follow-Up

• Critical feedback• Be positive about this• Question & learn from your ‘clients’

• Value feedback• What actions (direct/indirect) resulted from your

work?• What decisions were made?

• RoI• Find out if it is possible to put a tangible benefit to

your work• Has there been any financial or strategic benefit?• Map and document this against the cost of your

project

10 Step Plan

1. Expect Respect2. Determine Objectives & Hidden Agendas3. Scope the Project4. Become the Expert in your Subject5. Tailor the Report to the Objectives6. Summarise the Recommendations First7. Make it Look Compelling8. Place Value on Insight; Back it up with Data9. Present Your Research Yourself10. Follow-up – What Actions Resulted, RoI

Contact Details

Arik Johnsonarik.johnson@aurorawdc.comAurora WDC+01.715.720.1616