Tim Barnes is a widely experienced consultant and author. He has provided strategy, market research and branding services to industries as varied as semiconductors, software, banking, furniture, industrial design and life insurance.
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The Hypothesis - where analysis meets action
In Seven Steps to a Sound Strategy we outlined the phases of strategy development. This is the point at which the rubber meets the road. You’ve developed a problem statement, collected information, developed a research plan, carried out the research, and now you have to decide what it all means.
The goal of this phase is simply to build a logical argument that connects your problem statement to a comprehensible explanation of the market and the opportunities available to you, via the research data you have collected along the way. In other words, a good hypothesis takes your audience on a journey that begins with the problem statement and situation analysis, and proceeds to a clear view of actionable alternatives that will help your business and address the problem statement. Perhaps this seems obvious. It’s not. It’s difficult to simplify all the materials without losing the subtlety of different customer insights. If’t difficult to make tradeoffs, and more difficult to sell them internally to your stake-holders.
The two key concepts are understanding your audience, and organization.
- Your audience means the people to whom you have to deliver the strategy recommendations. They have prejudices, certain levels of experience, specific responsibilities, and so on. Your hypothesis is actually a test vehicle for a final strategy that you will use to gain the support of your audience. Hypo is Greek for “under”, and so…
Web 2.0 and technology
I wrote a while ago about Web 2.0, and the connections between people that it enables. I still think that’s perhaps the most important social impact of Web 2.0, and the real difference from a user standpoint. But there’s another angle, which is the development side.
When I moved beyond static web pages I learned about Content Management Systems, which are typically a combination of software systems that allow the separation of the content of a website from its presentation, and indeed from the infrastructure that manages all the content and presentation. I’ve built sites in the past on a couple of those CMSs –
The new thing I learned is that the structure of these software systems is a really important part of enabling the Web 2.0 experience. One aspect of the way we experience Web 2.0 applications is that they update much faster and look and feel much more like desktop applications. In the old web, most sites would have to repaint most or all of a page every time you clicked. Now with Web 2.0 technologies like Ajax, it’s possible to do a lot of much more dynamic things that improve the sense of fluidity and naturalness in the web experience.
“Ajax…
Strategy: Effective Market Research execution
Market research is the foundation of great strategy. Knowing more about your market and your customers than your competitors gives you an advantage when it comes to identifying new opportunities and capitalizing upon them.
There are many kinds of market research, and a wide range of expert services to help you apply them. In this article I will therefore focus on the kinds of qualitative research that is most helpful in strategy development. By now you will have developed a research plan that describes your chosen research methods and plan. In that you will have identified the key questions you wanted answered, and the sources most likely to provide those answers. You will if necessary have identified partners and resources that can help you achieve your goals.
Research execution is an operational problem—following through on all the complexities of running a program that depends on people outside your group and company. Here are some tips:
- Start scheduling customer meetings early. There is often a long lead time getting to customers, especially if it means travel. It’s also important to think about the sales relationship in business-to-business markets: the sales team may be close to finalizing a contract, in which case the last thing they want is someone potentially destabilizing the customer discussions at a sensitive stage.
- _Schedule interviews…
Research planning drives new insights
Having defined your strategy problem and completed an environmental scan, you’re ready to plan the research. One of the key outputs from the environmental scan was a set of questions. It’s worth documenting the unanswered questions carefully, because they are the primary input to your research plan.
Questions represent gaps in your knowledge that you’d like to fill through research, in order to develop a strategic hypothesis. The sources of those answers will be the research sources you need to tap.
Here are some of the best sources of research data – which ones you choose will depend on your industry and the nature of your strategic questions:
- Customers – a primary source of knowledge, because ultimately the customer is the source of income and the success of your business. It may seem obvious to talk to customers, but the question is how? Recognize that customers will have very different opinions, depending on the segment to which they belong. So in order to plan customer research, it’s a good idea to plan out the customer groups you want to reach. For example, if I’m selling bicycles, I will probably want to talk to racers separately from commuters (even though some will fall into both categories, probably). I want to separate them in order to understand the needs, perceptions and preferences of each segment separately, so I can build campaigns targeted to each. Another important factor with customer research is that it…
How business model innovation drives business success
Business models are the way you offer your products or services to the market. They include elements like pricing and packaging, terms and conditions, and added-value elements that increase differentiation.
In most markets, having the right products is not enough. Selling books against Amazon is really tough. Selling consumer electronics against Best Buy is too hard for most of us. One strategy to increase your differentiation and therefore to separate yourself from competitors is to find a new business model.
When Netflix started, their business model was an online version of the traditional video rental business. $4 / rental, with $2 for postage and additional fees if you returned the movie late. Their value proposition was their broad line of product, and an element of convenience – you could shop from the comfort of home. But their model also had a downside – less immediate gratification. So ultimately, it wasn’t that differentiated.
In late 1999, Netflix introduced their distinctive business model – no late fees, flat rate monthly charge. The rest is history. Recently they shipped their billionth DVD. The appeal of the business model is that you don’t have to worry about anything. If you keep a disk for a long time, that’s fine. You just can’t get more until it goes back. Depending on the monthly fee, you can alternate and overlap the shipping.
Netflix represents just one example of a business model innovation that really…
Strategy: the Environmental Scan gets you oriented
Strategy is about making good decisions. The best decisions are made on the basis of a combination of experience, intuition, and fact-based analysis.
The first step is to get oriented.
The environmental scan is a process I’ve found of great value in a complex strategy project. It follows the problem definition phase. The purpose is to gather and organize all the information you can easily reach, so you’re better informed when you go on to develop a research plan.
Some of the sources of data for the environmental scan include:
- Interviews with colleagues who have an opinion and (hopefully!) some knowledge on the subject. These interviews should be informal and exploratory, but they can help a lot not just because of the information they provide, but because they will indicate where there’s an absence of information, which is critical to your research plan.
- External analyst reports are often too far out of date to be helpful in the formulation of a strategy. But they can be very useful in this orientation stage, because they tend to cover a lot of the basic information. Remember that most analysts write to educate as much as to explain, and so they often provide a good basic coverage of a topic that you may need to analyze in more detail.
- Internet searches are a must-do, and they yield a few different kinds of information:
- News stories that can be helpful in understanding the actions of competitors and partners…
Strategy: defining the problem
In Seven Steps to a sound strategy, I outlined the elements of an effective strategy process. The first step is defining the problem.
It’s not as easy as it may seem, because early in strategy development there’s a lot that isn’t known. Here are some tests for a good problem definition:
- If you solve it, will it materially impact the business?
- Is it scoped down enough that it can be solved in a reasonable amount of time?
- Is there some evidence that the information required exists or can be created?
- Is there an internal customer for the solution?
A good strategy problem is also one that will cause people to think outside the box – to explore new ideas and directions and perhaps to open new doors. Perhaps this is the difference between a strategic conversation and a tactical one – in the strategic space we’re trying to discover new territory, new opportunities, and new ways to work. In the tactical case we’re trying to improve our existing operations.
Another guide has to do with understanding what it is that you don’t know. For example in the semiconductor business, we know that designers are going to build more and more complex chips, but we don’t know what their technical solutions to dealing with that complexity are going to be. If we’re in the business of serving those customers with solution, understanding more about the customer’s preferred…
The Django book is out
I’ve written before about the power of Django – it’s the engine that underpins this website. A lot of my learning came from the main Django website here, but now there are a couple of books available.
The first one of the two is better – it’s written by two of the creators of Django and it’s clear, entertaining, and practical, with a lot of clarifying and thought-provoking examples. It’s also more current, although the authors wisely recommend that you check with www.djangoproject.com for the latest information.
The second book (published first, and referring to a slightly out-of-date version of Django) is broader, but it also covers another Python-based framework – Turbogears. This book is useful if your goal is to understand the kinds of things that web development frameworks are capable of, and to get a taste of a couple of modern examples.
If your goal is to learn about Django specifically, and perhaps to build a site based on Django, my recommendation is to start with the Holovaty book, and then go on to other resources once you’ve learned the basics. In any case, this book provides a lot of reference material that will be useful even when you’re an expert.
Seven steps to a sound strategy
Strategy is about making informed choices with limited resources, in ways that strengthen your business. There’s no easy way to be sure that you have the right strategy, but there is a process that yields consistent results. In this post I’ll summarize a proven process for strategy development. Then I’ll describe each step in turn.
The seven key steps are these:
- Problem definition – what’s the scope of the strategy? Who is the end customer for the information? What are the success criteria?
- Environmental scan – get hold of every piece of information that’s easily available. Talk to people within your circle. Build up a basic education about the area in which you need a strategy.
- Research plan – on the basis of the environmental scan, you’ll have an idea of what you know, and what you need to know. Make a plan to find out the things you need to know.
- External research – through interviews, reading, and if necessary purchased research, gather the information you need in order to develop a strategy.
- Hypothesis – given all the information you have from your environmental scan and research, develop an argument around solving the strategic problem you set out to address.
- Validation – before you’re ready to make a firm recommendation, you need to test your thinking, internally and externally. This step will increase the credibility of your recommendations…
What is Web 2.0 really?
60% of online news is now published by individuals, rather than by organizations, networks and commercial portals.
That’s a huge change.
I think the most useful aspect of Web 2.0 is the way these technologies connect individuals and enable individual voices to be heard on the web.
Web 2.0 is based on the realization that even if the answer you want is not online, someone who knows the answer is online. The social networking and folksonomy sites are as much about people as content. Through them you can find out who is thinking what, and decide for yourself who you want to talk to.
When I wanted to learn how to integrate photos with my blog, I didn’t find the answer I wanted on the web – but I found some people who had solved the same problem, and by interacting with their blogs and discussion groups, I found the information I needed. When I finished my work, I let them see it, and we all derived some small pleasure from seeing progress.
So this is why I think Web 2.0 is so interesting – it’s the way it connects people with people, rather than just connecting people with information.
But there’s also a technical approach to Web 2.0 – ideas like Ajax, for example. A few comments about that here.
