Quadrant Crunching

Quadrant Crunching has proved to be a highly efficient and effective technique for generating an extremely broad set of alternatives when faced with very little data and high degrees of uncertainty. The technique is adapted from Alternative Scenarios forecasting and is extremely useful for discovering “unknown unknowns.” The primary benefit of the technique is that it helps analysts, policymakers, and military decision makers set priorities and generate specific sets of field requirements in response to highly ambiguous threats. The technique helps analysts think through how such an attack would be launched, what the most likely targets would be, and what signposts or indicators would suggest that a specific attack is in the early stages of implementation.

(Image source: Glogster.com)

The Delphi Technique

The Delphi Technique was originally conceived as a way to obtain the opinion of experts without necessarily bringing them together face to face. It was developed as a forecasting methodology. Later, the U.S. government enhanced it as a group decision-making tool. In recent times, however, it has taken on an all new meaning and purpose.

The Delphi Technique can be used to:
 Develop a number of alternatives.
 Assess the social and economic impacts of rapids community growth.
 Explore underlying assumptions or background information leading to different judgments.
 Seek out information on which agreement may later be generated.
 Correlate informed judgments on a subject involving many disciplines.
 Educate respondents on the diverse and interrelated elements of a topic.

The Delphi begins with the initial development of a questionnaire focusing on the identified problem. An appropriate respondent group is selected, and then the questionnaire is mailed to them. Each participant answers the questionnaire independently and returns it. The initiators of the questionnaire summarize responses, and then develop a feedback summary and a second questionnaire for the same respondent group. After reviewing the feedback summary, respondents independently rate priority ideas included in the second questionnaire, then mail back the responses. The process is repeated until investigators feel positions are firm and agreement on a topic is reached. A final summary report is issued to the respondent group.

(Image source: Boundless.org)

Predicting the Future

An interesting article been recently published in McKinsey Quarterly on how the strategy is getting redefined now.

Predicting the future is arguably the most important and hardest task facing strategists. One way of loading the dice in their favor: scrutinizing the demographic, technological, environmental, macroeconomic, and other long-term forces constantly shaping the global economy. The most eye-opening implications typically lurk at the intersections where multiple trends interact with one another, often in complex and not-so-obvious ways. Moreover, to analyze trends successfully, executives must develop a fine-grained understanding of the potential impact for specific geographies and industries.

How can company strategists spot the next big opportunity or looming threat in their industries before it’s apparent to everyone? There is a four-step methodology for making global trends part of a scenario-based strategic-planning process. By bringing together trends and their interactions, industry-specific insights, and problem-solving techniques, this approach helps create quantitative, actionable, and unbiased scenarios for what might happen in the next five to ten years. Better scenarios, in turn, can help companies challenge conventional wisdom, pressure-test existing business models, identify market opportunities, and develop more innovative products and services.

Four-step methodology
• Establish the reference frame
• Expand the solution space
• Define scenarios
• Quantify industry impact

(Image source: Memebox.com)

There is a difference between 'knowing someone' and 'knowing of someone'

There are companies who maintain an internal system where employees can create an on-line profile and be automatically notified of jobs that match their experience and interests. This system encourages not only internal promotions but lateral moves as well. Hiring from within requires a disciplined and thoughtful approach to internal interviews. Those companies encourage their managers to do substantive interviews with all internal candidates. Selecting a job candidate is often the most critical decision a manager can make. For this reason, HR team supports hiring managers to conduct rigorous interviews that include exploration of past experience, behavioral-based questions, and a discussion of the candidate's vision for the role.

There is a difference between 'knowing someone' and 'knowing of someone' and one such company who is following this principle is McGraw-Hill.

(Image source: Genexconsultants.com)

Value-Leakage

While many companies may view the sale of a business as an important strategy for increasing capital or refocusing the organization, very few have mastered the complex procedure of executing a divestiture. An abundance of private equity capital and a robust debt market may have created an ideal environment for sellers, but nearly half of all companies still believe that they're selling businesses or product lines for below their true worth.

Findings indicated that the key factors behind not achieving the full potential of their sales were related to post closing issues, a lack of control over the sale-process time frame and purchase-price and closing-balance sheet disputes. While maximizing the return from a sale is the leading measure of success or failure, there are many other factors to examine when determining how to improve the sale process. Because value leakage continues to be a significant issue for sellers, even after a deal is closed, it's vital to address the largest potential exposures before contacting buyers.

The Value Leakage Model is an assessment tool for finding the opportunities within a company and thus improving the business processes. This Value Leakage tool balances the ‘hard’ measurements in financial values in terms of market difficulty and the ‘soft measurement of competence management, process maturity and corporate coherence characteristics. The Value leakage tool enables prioritization of the action plan for continuous improvement of business processes, using Procurement as point of reference. With this tool each company can develop a set of clear transparent objectives to work on from the business perspective and from the human, competence management and maturity management perspective. The latter will leverage its results by increasing the opportunities for improvement, cost savings and new revenues.

The value leakage model has proven to be a perfect instrument to better promote, control and develop the procurement function. After the necessary changes the model helps to explain the added value of procurement.

(Image source: Emeritor.com)

Call Centers Use Behavioral Economics to Sway Customers

I came across an interesting article by Matt Dixon and Nicholas Toman on using Behavioral Economics while Calling Customers.....

Next time you're on the phone with a call center, listen carefully to what the rep says. Chances are you'll hear your name several times, hear a tone of empathy, maybe an "I'm sorry." It would be nice to think the rep really cares — but of course she's probably just following a script. That can be a bad idea, we've found. In a recent HBR article "Stop Trying to Delight Your Customers", they explored how customer service drives loyalty, including the role of managing the emotional side of customer interactions. Here's some further insight about that delicate dance.

Most companies still suffer from the checklist mentality when it comes to managing how their reps engage with customers. Use the standard greeting...check...say the customer's name three times...check...show empathy...check...ask if you've fully resolved the issue...check, check, and check.

Most companies will tell you it's all about consistency. But, let's face it, consistency breeds robotic interactions which fail to result in a tailored, low-effort customer experience. We've seen companies move away from this "one-size-fits-all" approach and creatively teach their reps to use simple word choice — and in some cases, approaches founded on behavioral economics —to radically shape how a customer perceives an interaction.

Take Osram Sylvania for example. They teach reps to simply avoid negative language (e.g., "can't," "won't," and the show-stopping "that's our policy") in their most common service interactions. This has helped them net a Customer Effort Score that is 18.5% below industry peers (the less work a customer must do to get a problem resolved, the lower the customer effort score. The lower the score, the greater the customer loyalty).

Recently, a series of experiments carried across two separate groups of customers to better understand the impact word choice can have on a customer interaction:

• In one experiment, the rep had to authorize a customer banking account before the customer could transfer funds. But the rep explaining "you can't transfer funds until you go through these steps to authorize the account" scored significantly lower than the rep explaining "let me walk you through these steps to authorize the account." While the language is subtly different, customers rated the latter as 82% higher quality and 73% lower effort.

• In another experiment, customers were told they had to bring their new bicycles to a certified repair shop. The performance of the rep who simply stated "you're best off bringing it into a repair shop" was rated significantly lower than that of the rep who noted that they'd "pass the customer's feedback to the engineering department," "check the database to see if a simple fix is possible," and "recommend the customer bring the bicycle to the shop." The latter scored 67% higher quality and 77% lower customer effort.

Such approaches go well beyond traditional soft skills. Instead, these rely on careful language choice to frame answers in the best possible way. This isn't simply being empathetic — it's calculated and anticipatory. They call it experience engineering.

Beyond simple word choice, other experience engineering approaches work well. For instance, LoyaltyOne practices an idea called 'alternative positioning'. This approach is premised on learning some basic information about a customer during the interaction, and then using that information to reframe a not-so-great option as an acceptable option.

Alternatives positioning isn't revolutionary — in fact, sales reps have been framing product features in light of customer benefits since commercial interactions began. But, applying this method to service scenarios is quite innovative and generally defensible.

For instance, imagine your 11:00 AM flight is cancelled and you need to be in Cleveland tomorrow morning. There's an evening flight that's open. Where most reps would simply say "I can put you on a flight leaving at 9:00pm" other reps, knowing full well the 9:00 PM flight was available but seeking to manipulate the customer's reaction, might say "well, I know I can put you on the 7:00 AM flight tomorrow, but let me see what I can do to put you on the earlier flight, which is at 9:00 PM tonight." This technique of experience engineering is more commonly called anchoring. A less-desirable option creates a mental anchor, making the best alternative seem more acceptable. Rather than be irritated that the 11:00 AM was cancelled, you'd probably be pleased that the rep has secured a seat for you on the evening flight.

Customer manipulation or savvy service…..what you think about using techniques like these in customer interactions?

(Image source: Greek-islands.us)

The Strategic Control Map

Lowell Bryan, a director in McKinsey’s New York office, describes the strategic control map, a framework that tracks the dynamics of market capitalization within industries.....

The strategic control map uses market capitalization dynamics to help companies identify their biggest opportunities and threats, as well as to boost their odds of hunting for acquisition targets rather than being hunted themselves. Developed in 1996 by McKinsey’s Vijay D’Silva, Bob Fallon, and Asheet Mehta, the framework tracks the relationship between the two dimensions of market capitalization by plotting a company’s size (measured by book value) against its performance for shareholders (measured by market-to-book ratio).

Companies mapped in this way fall into four groups, each with its own challenges and corresponding strategic imperatives. The large, high-performing companies in the upper-right quadrant are the least likely to be acquisition targets. Their challenge is to maintain a strong position by pursuing fresh opportunities without watering down returns. Companies in the lower-left quadrant, the most vulnerable to takeover, must improve the performance of their existing businesses or reinvest in others and divest losers. Companies in the upper-left quadrant often possess proprietary knowledge or skills that enable them to earn high returns from intangibles. They can largely maintain strategic control unless their performance drops, making them vulnerable. Finally, if large companies in the lower-right quadrant don’t improve their performance, they could become inviting cost-consolidation targets for even-larger, better-performing industry leaders.

The enduring power of the framework lies in its ability to visualize how changes in market capitalization affect the market for strategic control. You can see at a glance which companies in a given industry are likely to be acquirers and which are likely to be acquired. When companies map their or their competitors’ performance trajectories, they can get a sense of the combination of size and performance that will enable them to remain competitive and independent.
(Image source: Wildmanandassociates.com)

Inflated Bandhs

I was reading an article by Deepak Shenoy and after reading that article I could not resist myself from penning down by view points…….......

Last Monday was "bandh", railing against the fuel price hike and 'mehengai' (rising prices).

We all know that the three basic necessities of "aam aadmi" - the common man are Food, Cloth and Shelter. The frustration seems to be over what we are seeing in the agricultural markets - prices of agri-products have risen tremendously over the last two years and that seems to be affecting the sentiment of the common man. Increase in rent or property prices every year and even for increase in clothing prices should have elicited calls for “bandhs” every year. But food seems a higher inflation fear which I failed to understand that why the common man does not reacts on increase in prices for the other two basic necessities.

I am not in support for calling “bandhs” but we should at least show our concerns for increase in rent or property and clothing prices.

Now let's take fuel prices. They were recently raised because international fuel prices have been going up....but a major percentage of fuel prices are taxes. If the government wanted to keep fuel prices at the same level, they could have reduced the tax and the subsidy at the same time.
(Image source: Beinoman.com)

The Sales Funnel

Keeping control of your sales pipeline.

With the idea of the Sales Funnel, one uses the metaphor of a funnel (wide at the top, narrow at the bottom) to monitor the sales process.

At the top of the funnel are the "unqualified prospects" - the very many people who might need your product or service, but to whom you've never spoken. At the bottom of the funnel, many sales and delivery steps later, you have people who have received delivery of your product or service and have paid for it.

The metaphor of the funnel is used because people drop away at each stage of a long sales process: For example, many of your unqualified prospects may have existing suppliers with whom they're very satisfied. Others may have needs which other competitors are better-placed to satisfy. Still others may love your products, but not have the budget to buy them.

The sales funnel is not a new tool for the management of the sales process. Most sales managers use it to understand the sales pipeline and its status. However, the sales funnel can be an important tool in improving performance. It can help us identify areas for improvement and understand what actions can help the sales and marketing process to both increase deal flow and lower the cost of sales. Different sales executives define the sales funnel in different ways.

Sales and marketing management can be more of a science and using the sales funnel can help us understand what is happening, and why and how we can improve the processes. The results can increase revenue while lowering the cost of sales.
(Image source: Seanseo.com)