It is no secret that we have long advocated for analyzing the business from a market or “outside-in” perspective before you complete planning and forecasting. So many planning efforts fail or don’t produce real value as they reflect a perpetuation of experience cast into internal beliefs which end up influencing expected outcomes. Unfortunately, past experience doesn’t predict future success in a world where innovation is exploding, and behaviors are changing. According to Kevin Sneader, McKinsey’s Global Leader, patents granted have doubled over 2019 levels and “we have seen ten years of digital innovation in roughly three months.”
So why do more companies not spend time gathering facts before making investments in the future, rather than relying on executive experience? Because it is a change, and it is hard. It becomes about our mindset and what questions we ask rather than how we operate—the how over the what—which is what GrowthDNA™ is all about. In fact, GrowthDNA™ can be measured, and this scorecard assesses the enablers and inhibitors to growth for your organization, including how data driven decision-making is.
Remember the book and movie Moneyball, about how sabermetrics, an analytical approach which correlates with wins in baseball, was adopted? Then you probably remember how established scouts and baseball icons made fun of the system and were highly skeptical of its success until Billy Beane proved them wrong.
A recent article titled The Strategy-Analytics Revolution written by Chris Mulligan, promotes using data points to calibrate strategy and performance aspirations. “The approach can be used to motivate bold strategic moves. For example, an energy company realized that their planned strategy had achieved the financial performance they were targeting in only 10% of historical cases. The strategy was too timid.” Another source clarifies that only one of every four strategic investments pay off—not good investment odds. Are we like those baseball scouts, reluctant to change, or are we looking for “outside-in” information to inform and improve not only the quality of decision making but to encourage us to think more boldly and achieve higher growth?
It is the market intelligence we generate pre-planning that enables the confidence to make bolder moves as we begin to view the market through different eyes—enabled by statistics and trends that showcase true growth opportunity. Data also tends to create better team alignment, as it is an “equalizer” which enables everyone to operate off the same knowledge base and minimizes the clash of different functional experiences in strategic discussions. One recent client, after review of the market data, even though they operate in a specific and hard-bound geographic area, realized that the potential of their business was 3-5 times its current size and a 6-8% annual increase wasn’t bold enough. When you start asking what your potential is, based on market data, the nature and scope of the discussion changes from asking the more typical “how do we improve what we already have?”.
According to Miller, advanced analytics can be used to accomplish the following:
- Reduce bias in decisions, by calibrating the likelihood of your strategy succeeding before you allocate resources.
- Unearth new growth opportunities, by complementing traditional brainstorming methods to reveal hidden pockets of growth.
- Identify early-stage trends, by painting a real time picture of how your business context is unfolding so that you can trigger big moves before your competitors do.
- Anticipate complex market dynamics, by generating proprietary insights about the combined impact of myriad forces.
In the GrowthDNA™ model we have simplified those concepts to creating alignment in knowledge and decision, identifying new insights about the market that guide decisions and create a picture of the future, leading to the creation of new opportunities that already exist but were undiscovered. To find out more about your organization scores in this area of Market Intelligence and learn about how to strengthen your approach, take the GrowthDNA™ Scorecard Assessment here.