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Keith Prather is Managing Director of Armada Corporate Intelligence, a corporate business intelligence firm that functions as outsourced members of corporate strategy groups and consults with companies of all sizes on strategy and implementation. Armada is sponsoring this week of posts on getting ready for 2010 planning.

I’ve known Keith for nearly a decade and have worked with him closely on a variety of strategic and market planning efforts. Today, I’m excited he’s sharing his professional perspectives on getting a better understanding of your external environment during this period of dramatic global change in business and consumer markets:

A critical component of a successful strategic plan is a well-established strategy foundation – a compilation of information and intelligence covering your industry, global markets, customers, and the environment. Particularly relevant this year is the need to produce an accurate economic forecast with meaning and relevance for the business. And given the uncertainty surrounding the global economy, this can be a daunting task.

Following the most basic tenets, forecasters need to identify the supply and demand drivers for an industry, and capture meaningful data describing the condition and outlook for them. Sometimes though the most impactful elements on a business are not what we think. Going to the expense side of the income statement and understanding the biggest cost items in your business will help determine the real key elements of supply – those you rely on.

For instance, one client believed steel (which was one of the company’s top expenses) was the primary input for its business, with countless hours spent monitoring, forecasting, and negotiating steel prices. Energy costs, on the other hand, were not considered to have a material impact, and were lumped into utility and overhead costs. In 2008, however, consumption of oil-based resources drove prices up significantly. As a result, oil costs had to be factored much more directly into forecasting models to improve their accuracy. By not anticipating this significant change to the company’s business mix, however, it was caught flat footed.

On the demand side, the challenge is more complex. While providing future economic insights for clients, several fundamental items seem to be driving things developments. First, everything ultimately circles back to consumers. You and I, spending money, drives more than 70% of the nation’s $13 trillion in GDP. Watching consumer spending, consumer confidence, housing, and several other metrics tracking consumer activity are useful in helping gauge future activity. One great aggregator site for basic economic information is the US Census Bureau’s Economic Indicator page.

There are some other great free aggregator sites providing solid current economic news and explanations of some of the items driving current activity. One of my favorites is the RTTNews Daily Market Analysis. We also pay a lot of attention to the Financial Times, CNBC, Wall Street Journal, and Global Insight for forecasting information.

For manufacturing, the Institute for Supply Management publishes one of the most accurate gauges of manufacturing activity, the Purchasing Managers’ Index (PMI), on a monthly basis. You can read about the PMI in simple, easy to follow prose at the ISM website.

Calculating risk is also an important component to a well-done strategy foundation. With a wave of new legislation floating around in Congress, it is important for companies to use scenario planning in considering impacts of various regulatory actions on the company. From health care to energy legislation, companies will be hit with direct and indirect risks as a result. Using a system such as the Lockwood Analytical Method for Prediction (LAMP) can help in gauging which scenarios provide the greatest risk – and the greatest likelihood of occurring.

It can’t be said enough, a solid strategy foundation is the underpinning to a successful strategic plan. Woodrow Wilson once said: “We should not only use all the brains we have, but all the brains we can borrow.” If you can’t build the strategy foundation in-house, it’s worth getting help to make sure that the business landscape is being accurately portrayed. Otherwise, you might be building a ship when what you really need is a bicycle. – Keith Prather

Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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Too many research reports are train wrecks of charts, arrows, and statements that simply play back the graphics, or even worse, regurgitate the detailed methodology with no forward looking implications.

For senior executives, it means a confusing (and at best, boring) jumble of information – pointing in all kinds of directions without really saying anything.

If you have research responsibility, apply this maxim for great strategic thinking from Gary Singer, a wonderful strategist and former Chief Strategy Officer at Interbrand. His comment to me was:

  • Good researchers go to the edge of the data and step back – to be cautious & statistically sound.
  • Good consultants go to the edge of the data and stop – to be sure they’re on solid footing & that the client will buy off.
  • Great strategic thinkers go to the edge of the data, formulate a sound next set of assumptions that the audience can comment on & agree to, and then keep going to expand understanding & get to revealing insights.

It’s a simple statement and hard to do, but done successfully, it promises incredible business results. Use it as your new strategic hurdle to clear! – Mike Brown

Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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Using secondary research techniques was our starting problem-solving approach at Kansas City Infobank to be able to get smart fast when tackling a new project or industry assignment. We informally defined secondary research techniques as “ways to find what you’re looking for among answers to questions already asked and answered by others.”

Secondary research was ideal for me since it was similar to school (which I always enjoyed) and required a strategic, problem-solving approach that’s been valuable not only in business, but in many other situations.

5 Keys to Getting Smart Fast

There are several keys to effectively using secondary research techniques including strong skills in anticipation, visualization, detecting clues, and making sound assumptions.

Here are 5 keys to getting smart fast through secondary research techniques that Bill McDonald taught me that I still use all the time:

  • Start by anticipating what your ultimate answer will be. Approximate the answer and its form: If it’s a prediction, what’s it likely to be? If it’s a recap of something, how extensive will it be? Approximating what you’re looking for helps you know when you’ve found the answer and aids directly in step 2.
  • Anticipate what components that could make up the answer will look like and where they might be found. Rarely do you find the exact answer; instead, you need to piece it together as you would a puzzle. Start by thinking through what the “puzzle pieces” look like: quotes, number, expert names, trend information, news, etc., then map out where the pieces will likely be located.
  • Armed with hypotheses on the answer and its pieces, begin quickly searching and scanning information sources. Having imagined the information upfront allows you to get through a search more quickly, i.e. if you need numbers to develop a forecast, it’s easy to look at articles online and see right away if numbers are included. The key is grabbing as much information as appears relevant early on and leaving heavy analysis for later.
  • When you’ve captured these first sources, review them for more clues on where other information may reside. Are there sources or experts mentioned you haven’t explored but need to? Where are they located and how can you get to them?
  • While scanning sources, start piecing the answer together. Ideally, you should be able to begin constructing the answer in parts, even if it doesn’t look like the final form. Doing this effectively means making sound assumptions to start filling in the answer. This is where your initial hypotheses come in handy as a springboard for constructing the answer and providing a check on how the pieces are fitting together.

Secondary Research Techniques – Just the Start

There’s certainly more to be written about secondary research techniques, but these five keys will help you be more successful whenever you have to find out an answer online or in printed material. – Mike Brown

Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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It’s always great to solicit and consider expert opinions. It’s not so great, though, when qualified experts don’t agree, and you have to decide and act.

Being confronted with this situation recently (4 physicians, none of whom agreed on the appropriate course of action) caused me to reflect on decision factors to be considered when this happens. These issues seem applicable in comparable situations you may face:

  • What are the experience levels among dissenting parties? Are they generalists and/or specialists?
  • How long has each expert been involved with the situation? Does more tenure translate into greater expertise?
  • Are there differences in the risk/benefit perspectives among the experts?
  • Do any of the experts have a personal or vested interest in a particular outcome? Does a preference create disproportional bias on a particular expert’s perspective?
  • Is there a more solid logic behind one point of view vs. another?
  • How do the relationships among the experts play into the difference of opinion?
  • How willing is each expert to consider and learn from new information?
  • Are any experts in roles that create a disproportionate bias?
  • If assistants are involved, how do they react relative to the experts they are or aren’t affiliated with?

In the situation I faced, it appears we made the right decision.

We took the most experienced expert’s point of view; he also had the most tenure and personal interest in the situation. The medical specialist, who was newest to the case and most reluctant to act, demonstrated role bias, made an illogical risk assessment, and had a wonderful P.A. who gave ample cues that she wasn’t fully in support of his position. He was willing, however, to accept new information, and went ahead with the (successful) surgery he was initially reluctant to perform.

So, what questions or criteria do you use to figure out which expert to believe?  – Mike Brown

 

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Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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Ted Williams voice as a baseball expert was unparalleled. As a kid, I was a huge baseball fan, reading anything I could on baseball strategy and how the game could be played better. One of my favorite books was “The Science of Hitting” by Ted Williams. As one of baseball’s greatest hitters (and the last person to hit .400 for a season), Williams had plenty of innovative advice and strategic insights to pass along.

The lesson that’s stayed with me to this day was depicted on the book’s original cover. It was a photograph of Ted Williams in the batter’s box with the strike zone depicted as 11 baseballs high and 7 baseballs across. And each color-coded baseball had a batting average listed on it corresponding to Williams’ expected batting average for pitches throughout his strike zone.

Belt high and over the plate, and he was a .400 hitter; low and away, and even the great Ted Williams knew he’d only hit .230. Williams’ point was he knew in what situations he’d be great (his “happy zone”) and in which he’d be less than average. As a result, his strategy was to only swing at pitches where he had a high probability of success.

That’s a great strategy well beyond baseball. Do you actively evaluate your strengths, your areas with the highest probabilities of innovation success, and strategically concentrate efforts on those areas? If not, maybe now’s the time  to make sure you’re only swinging at good “innovation” pitches day in and day out. – Mike Brown

Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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A previous post on Powerpoint talked about covering a slide image and seeing what the headline says, then covering the headline and seeing what the image suggests to look for message agreement between the two.

The same approach is valuable in analytical work as well.

If you’ve created a chart or table, cover it and see what the explanatory text or headline conveys. Then cover the text and ask yourself if the chart backs up your point. Ideally they’ll match. Often though, unless you’ve really pushed the analysis supporting the table/chart, it will show irrelevant or misleading data that compromises or confuses your main point.

Using this technique recently showed that instead of showing a long timeline to depict daily fluctuations, the key point was made much more directly with a stacked bar chart demonstrating a month over month change.

Another twist on the technique is to actually describe aloud the primary message of the analysis as a further check to see if you really agree with and support everything you have on the page!


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Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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There can be great reassurance in surrounding yourself with expertise during a difficult situation.

On a flight from St. Louis to Kansas City, we were experiencing “moderate turbulence.” We knew this because a Southwest Airlines pilot was sitting in the aisle seat and weighed in on the degree of turbulence, based on his trained expertise. He shared the various levels of “chop” and “turbulence,” letting us know despite our impressions of the flight, it could get MUCH worse. He reassured us he had only seen EXTREME TURBULENCE once in his career.

That information helped make what seemed to be a VERY BUMPY flight much more tolerable.

Next time you’re in bumpy creative skies, look for an expert to help get your bearings, understand why you’re experiencing turbulence, and realize that even with EXTREME TURBULENCE your creative plane won’t break apart.

Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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