How micro and macro fit into competitive strategy</h1> <article> <h1>How micro and macro fit into competitive strategy</h1> <p>Tue, 08 Jul 2014 18:48:22 GMT</p> <p><p>The scope of enterprise operations mostly occurs on two levels - one of the big picture and the other of the small details. Micro and macro business transactions are more than just financial in nature. They dictate the daily workflow of a firm and drive its long-term success as well. By integrating <a href="http://www.fuld.com/services/" target="_self" class="dnautolink">competitive intelligence</a> into this framework, companies can ensure that these interactions is made with greater insight and boosted accuracy as compared to traditional forecasting and guesswork.</p><p><strong>The little things</strong><br /> Starting with the small things is a good place to begin, as it's often easy for employees to understand what's right in front of them. Individual work tasks, various HR solutions and integrated technology assets all make up the overall workflow of a single day, therein generating the tempo for the bigger picture.</p><p>Business 2 Community stated that micro focus <a href="http://www.business2community.com/customer-experience/creating-micro-customer-experiences-can-greatest-competitive-advantage-0912151">provides greater attention to detail</a>, enhancing the value of each interaction and creating superior customer and employee engagement. Every data point in the micro scale drives individual experiences, thereby putting <a href="http://www.fuld.com/services/research-and-analysis/" target="_self" class="dnautolink">strategic analysis</a> of unique communication at the forefront of consumer care and CRM initiatives.</p><p>Companies like Starbucks provide the micro-level engagement and relationship management that strategic analysis thrives upon, as the source showed. Baristas are coached to write names on cups, address regulars, provide personality and a genuine interaction with every person who walks through the door. Similarly, driving app and service Uber offers custom mapping and personal pickup locations that best fit each user's situation.</p><p>The key in all of these instances is to build a rapport with individuals. These people are the building blocks upon which macro-level transactions and enterprise <a href="http://www.fuld.com/services/competitive-intelligence-process-consulting/process-design/" target="_self" class="dnautolink">competitive strategy</a> are built.</p><p><strong>Taking it all in</strong><br /> With the big picture comes complexity, intricacy and opportunity for larger audiences. Instead of just looking at one person at a time, the macro transactional business landscape deals in entire markets, advertising campaigns, methods of interaction and corporations as target entities.</p><p>The more power companies have in this realm, the <a href="http://www.reuters.com/article/2014/06/24/us-google-skybox-commodities-idUSKBN0EZ2NF20140624">easier it is to grasp a target industry</a> and rise to its pinnacle. Google is working on just such a competitive strategy, as Reuters reported, with its recent acquisition of SkyBox Imaging. The firm has a sprawling presence in many corporate and private activities, but this new move gives greater insight into infrastructure management and global markets as a whole.</p><p>Some businesses however are expressing concern that Google may be going too far with its industry insight solutions. However, competitive intelligence isn't spying - it's gathering readily available data and making fact-driven conclusions based on these tautologies.</p><p>Whether on the small scale or within the big picture, companies are increasingly aware of how powerful competitive intelligence can be. By building a strong, personal base of loyal individuals, it's easy to launch successful projects and make big acquisitions at the macro level.</p></p> </article> <article> <h1>Finding the personal side of competitive strategy</h1> <p>Tue, 08 Jul 2014 18:48:20 GMT</p> <p><p>Business is about more than just making money and boosting brand image. It's about people, both inside the organization and customers on the outside of things. Every person involved in the corporate process plays an important part in making sure that companies can make their goals into realities, whether it's to do with money, market position or enterprise engagement.</p><p>But are business leaders doing enough to promote the importance of people?</p><p>There are some companies that see the value in more engaged personnel, customers and partners. <a href="http://www.fuld.com/services/competitive-intelligence-process-consulting/process-design/" target="_self" class="dnautolink">Competitive strategy</a> suggests that firms take this kind of tact, as it's the only way to make sure that enterprise endeavors actually come to fruition. Understanding how to attract more customers, retain employees and encourage investors to spend on business endeavors requires that companies come to see what people are really worth.</p><p><strong>Human capital management</strong><br /> The value of a person is not only gaged by how that individual performs, but by the time and money a firm invests in him or her. As U-T San Diego stated, Starbucks is making major inroads with its employees by <a href="http://www.utsandiego.com/news/2014/Jun/16/starbucks-tuition-subsidy-rising-college-costs/">offering them tuition at local colleges</a>. Not only does this significantly boost morale among workforce, it also provides corporations with a more educated and skilled talent pool that they can easily control.</p><p>On top of that, Starbucks already offers its employees a bevy of benefits. Providing each worker with stock options, offering health care coverage for all personnel and subsidizing pension plans are only some of the major perks to being a Starbucks barista.</p><p>But as the source noted, the coffee magnate is doing something contrary to other corporations in terms of benefits. The reasoning here lies in the competitive advantage that such a move gives Starbucks over other businesses on a number of levels. Showing consideration for workforce improves brand image, attracts more talented employees and provides the firm with built-in expertise as more learning occurs.</p><p><strong>Caring to connect</strong><br /> It's not just the <a href="http://www.entrepreneur.com/article/234837">organization as a whole that needs to acknowledge personal value</a> of personnel, as Entrepreneur added. While Starbucks does a great job of showing off the power of competitive strategy for employee and customer retention, there's an anonymity about the company's leadership that may seem off-putting to some.</p><p>Transparency is key for personalization and relationship management, the source stated, pointing to Virgin Group's founder, Richard Branson. As the source noted, interacting with personnel and the general public on a one-to-one basis encourages superior engagement. This too provides critical competitive strategy, as it thrusts the human face of the organization into people's minds.</p></p> </article> <article> <h1>How competitive strategy helps hiring options</h1> <p>Tue, 08 Jul 2014 18:48:19 GMT</p> <p><p>When it comes to having the best people in a business, companies really only get one chance to make the right decision. Extending a job offer is a contract that lasts only as long as a firm can engage a person, or for whatever period an individual can continue to avoid termination from employers. The end result is that more companies are looking for <a href="http://www.fuld.com/services/research-and-analysis/" target="_self" class="dnautolink">strategic analysis</a> in their HR departments to limit turnover and reduce onboarding expenses, as well as creating a better work environment.</p><p><strong>Seeking solutions</strong><br /> The Moscow Times stated that <a href="http://www.themoscowtimes.com/news/article/employment-the-evolving-role-of-human-resources/502448.html">supply and demand play a critical role</a> in the hiring process. Are there enough talented people available right now in the candidate pool? Is there a need for professionals of a certain type across industry lines? Learning when and who to hire is an intrinsic part of successful HR operations.</p><p>On top of that, advanced <a href="http://www.fuld.com/services/" target="_self" class="dnautolink">competitive intelligence</a> feedback can help firms in both hiring boons and droughts determine which person is most likely to offer the best long-term return on investment. The source noted that HR professionals can tap into trends in innovation, work schedules and dynamic imagination to see which candidates are most likely to fit with present corporate layout and who is best suited to delivering dynamic performances. By harnessing the power of big data and strategic analysis, determining who is best suited for a position becomes more of a scientific process. Advanced intelligence allows hiring professionals to make job offers with greater certainty that the onboarding process will go smoothly and retention won't be an issue.</p><p><strong>Boosting searches</strong><br /> The biggest problem still remains the volume of interested applicants currently available to job seekers, as Business Insider stated. If there are too many firms seeking staff members of a specific type, it may be nigh unto impossible to lure top talent.</p><p>At the same time, <a href="http://www.fuld.com/services/competitive-intelligence-process-consulting/process-design/" target="_self" class="dnautolink">competitive strategy</a> can help firms overcome common staffing shortages and market issues. The source noted that potential employees will do their best to display their greatest attributes, so companies need to do the same. Strategic analysis can help firms in this position determine which attributes job seekers are most interested in, allowing corporations to provide targeted hiring campaigns.</p><p>As psychologist Matt Barney told Business Insider, it's important to promote positive relationships right from the first interaction. Competitive strategy allows for a more dynamic workplace, so long as these engagements are driven toward the right people and provide personnel with the tools they need to make informed decisions during the hiring process.</p></p> </article> <article> <h1>Personalization of health care through IT strategic analysis</h1> <p>Tue, 08 Jul 2014 18:48:17 GMT</p> <p><p>A sick person goes to the doctor. The doctor assesses the patient, does an examination, orders some blood panels, a few scans, maybe a follow-up with a specialist… In the end, a diagnosis is made and a method of treatment is prescribed, with plans to follow up in the future while also providing tips and texts for further knowledge and greater quality of life.</p><p>This is the same process by which companies arrive at <a href="http://www.fuld.com/services/competitive-intelligence-process-consulting/process-design/" target="_self" class="dnautolink">competitive strategy</a> launches and how these plans run their course. So too do these enterprise operations base their planning and diagnostics on proven insights and years of market experience. However, as IT assets and network availability continue to change, so too do organizations in the health care field need to learn how to properly integrate their in-house performances with online and data-driven applications.</p><p><strong>Meeting personalized goals</strong><br /> The idea of <a href="http://www.sfgate.com/technology/article/Stanford-conference-focuses-on-big-data-in-health-5499724.php">custom care tailored specifically to an individual's health history</a> and needs is a dream option for individuals and health care providers alike. As the San Francisco Chronicle stated, it's also one of the biggest movements supported by Big Data.</p><p>"Big data is the connecting piece that enables us to get research to the benefit of patients and study outcomes of the care being delivered," Dr. Lloyd Minor of Stanford University said at the recent Big Data in Biomedicine conference, the source reported.</p><p>The challenge for medical firms, however, remains the overwhelming volume of information that these organizations need to deal with on a daily basis. Many health care facilities ran off of paper documents and had no idea how to use digital systems until recently, making the matter far more difficult still.</p><p>As the Chronicle reported, about 5 petabytes of information land at the feet of health care providers every year. Buried in the nethers of all this convoluted communication is the essence of <a href="http://www.fuld.com/services/" target="_self" class="dnautolink">competitive intelligence</a>, the building blocks upon which companies can learn what their patients need most, what kinds of services they prefer, and even things as minor as when they like to go to the doctor and what kinds of ailments are most likely to bring them to the office on an emergency basis.</p><p><strong>Person to person</strong><br /> The idea of meeting personal expectations of every patient in each visit scenario may seem like a tall order for some doctors, but with the help of predictive analytics and competitive strategy, it's becoming increasingly ordinary for practitioners to preempt their patients in terms of requesting medical attention.</p><p><a href="http://www.bizjournals.com/portland/blog/health-care-inc/2014/05/how-big-data-will-transform-and-personalize-health.html?page=all">BioData has become the war cry of many IT professionals</a> in the health care industry, shared by providers and practitioners alike on the front lines facing clients directly in their offices every day. The Portland Business Journal wrote that health care expenses and personal care have reached about one-fifth of the GDP of the entire country. This kind of excessive spending is prompting some groups to start thinking about what they can do preempt some of the more expensive and harmful cases that crop up due to neglect or lack of available services.</p></p> </article> <article> <h1>Where does the future of competitive intelligence lie for health care?</h1> <p>Tue, 08 Jul 2014 18:48:15 GMT</p> <p><p>The present enterprise landscape for medical and health services requires that corporations incorporate electronic records, digital infrastructure and more intuitive systems. These kinds of demands put many practitioners well outside their realms of familiarity, potentially causing concerns for security and continuity outlooks.</p><p>It's important for companies in this field to understand that their operations need to change, and getting an early grasp on operational deviations and business demands helps these companies gain more ground than they might otherwise when floundering in the past. What's more, by honing in on new enterprise developments and corporate plans, it's easy for organizations to implement <a href="http://www.fuld.com/services/" target="_self" class="dnautolink">competitive intelligence</a> operations that rely heavily on such intuitive and fluid assets.</p><p><strong>Tracking changes</strong><br /> Med City News stated that <a href="http://medcitynews.com/2014/06/whats-pharmas-future-patient-centricity-healthcare-services-competition-big-data-firms/">circumstances for medical providers are likely to continue to decline</a> as more local, state and federal mandates fall into place. Health care reform is an increasingly interesting field for third-party investors and other contract consortiums, but the source postulated that these ideas weren't full fleshed out enough to be any real threat to medical operations.</p><p>Still, the source noted, organizations in the medical field need to start doing more to deliver personalized care to patients, as well as enhancing the use and <a href="http://www.fuld.com/services/" target="_self" class="dnautolink">benchmarking</a> value of competitive intelligence feedback. Even the source noted that almost three out of four medical services providers aren't able to handle all the intricacies of IT and health care management on their own. With this in mind, it's important to consider how <a href="http://www.fuld.com/services/competitive-intelligence-process-consulting/process-design/" target="_self" class="dnautolink">competitive strategy</a> can help assuage these concerns.</p><p>First of all, the source noted, it's necessary to think about things from a competitive intelligence angle. Removing emotional responses allows an employee to act objectively without weighing down one's conscience. The result is a much more cut-throat business landscape, the source noted. Companies will begin trying their hardest to offer faster network speeds, more integrated services and superior options for handling health care than what other companies already provide.</p><p><strong>Looking ahead</strong><br /> The end-game scenario, as a recent IDC report showed, is to move toward a <a href="http://www.prnewswire.com/news-releases/global-business-outlook-survey-of-senior-executives-2013-2014-264236251.html">more sustainable business practice</a> and design that allows for ease of operations with or without someone necessarily helming the crew. As the white paper stated, balancing budgets, business connections, employee engagement and other factors of personal retention and relationship cultivation may often fall by the wayside.</p><p>Such times can call for desperate measures, but it's necessary for firms to back up their assumptions with competitive intelligence garnered from the variety of data points a firm has to deal with each day. At the same time, every person's particular needs are likely to shift, resulting in more diverse and demanding business outlets for each person either employed or covered.</p><p>"Going forward, the industry will have to take a different stance on affordability of novel therapies as perceived by the payers," Peirre Morgon of Cegedim told Med City, "and the net consequence for the shareholders will be to admit that the story becomes 'profitability, but not at any cost,' almost as an integral component of the company's CSR policy."</p></p> </article> <article> <h1>The BIG Leap (Part 2 of 2): What’s Next for Life Sciences If Big Data Dominates the World?</h1> <p>Thu, 12 Jun 2014 15:00:00 GMT</p> <p></p> <p>Imagine a future world in which technology companies would come to the rescue of the traditional life sciences industry. A world dominated by Big Data companies, such as Google, rather than a world of firms that live with lab benches and test tubes. A world like this might produce a highly efficient and cost-effective life sciences industry where virtual talent could easily supplant large supplies of scientists married to one location.</p> <p>This scenario was previously detailed in a scenario planning discussion and blogpost <a href="http://www.fuld.com/blog/bid/71245/The-BIG-Leap-Will-Tech-Companies-Replace-Traditional-Life-Sciences-Incumbents-Part-1-of-2">here</a>. Let’s say Google tries to “own” some part of the life sciences market, what strategic implications would a biotech or pharmaceutical firm need to consider? Below are a few strategic imperatives for this Big Data world. </p> <ul> <li> <p><b>More bets, smaller bets.</b> Pharmaceuticals and biotechs will make smaller bets and more of them. Private money – not government grants – will fuel these bets. Biotechs will take experiments and pre-market products, and then license them out to Big Pharma companies that still have the marketing organizations they need to become successful. </p> </li> <li> <p><b>Foundations could replace government as a funding source</b>. There will be more R&D partnerships between Gates Foundation-type organizations and biotechs, as well as Big Pharma. Private foundations will only supplement, not totally replace, anemic government funding in the future.</p> </li> <li> <p><b>Crowd sourcing</b> <b>will become a fundamental R&D engine</b>. This will allow same or similar levels of R&D without corporations having to incur the overheads they do today.</p> </li> <li> <p><b>Google and other Big Data companies will rethink and re-shape how science does R&D altogether</b>, redirecting its labor from the lab bench to solving health challenges using computing power and mathematics. </p> </li> </ul> <p>On this last point, a number of voices around the room questioned a Google’s ability to go beyond the Big Data analytics. That is, could a Google develop the wherewithal to manage clinical trials, submit NDAs and generally learn the competencies needed to fully enter the healthcare, drug-development mainstream? While a Google may not have these competencies today, most participants agreed at the end of this mini-debate that it is very possible for Google to not only could manage the administrative tasks needed to launch a drug but also likely find a way to rewrite the drug submission and launch rules altogether.</p> <p><b>A parting message</b></p> <p>You can be sure that no single future story will describe our world in ten years. In fact, our future will likely be a combination or more than one of these stories. That is exactly the point of our <a href="http://www.fuld.com/services/war-games-and-scenario-planning/scenario-planning">scenario planning</a> workshops. If you are doing your job right as a strategist your goal is not to predict the future but rather to outline the boundaries – where our world can take us in five, ten or twenty years from now on a particular issue and understand the implications should they actually happen. If this world came to be in 2020, what are the strategic implications for you and your R&D operations over the coming decade? </p> <p>SEE RELATED ARTICLES:</p> <p><a href="http://www.fuld.com/blog/bid/71245/The-BIG-Leap-Will-Tech-Companies-Replace-Traditional-Life-Sciences-Incumbents-Part-1-of-2">The BIG Leap (Part 1 of 2): Will Tech Companies Replace Traditional Life Sciences Incumbents?</a></p> <p><a href="http://www.fuld.com/services/war-games-and-scenario-planning/http:/tech.fortune.cnn.com/2014/05/13/americas-tech-talent-shortage-is-it-just-myth/?iid=SF_F_River">Fortune Magazine: America's tech talent shortage: Is it just myth?</a></p> </article> <article> <h1>The BIG Leap (Part 1 of 2): Will Tech Companies Replace Traditional Life Sciences Incumbents?</h1> <p>Tue, 20 May 2014 12:00:00 GMT</p> <p></p> <p><span style="font-size: 13px;">In a scenario planning discussion with life sciences experts from MIT, Big Pharma, and biotech entrepreneurs, we facilitated a number of future stories focusing on the availability of STEM (Science, Technology, Engineering, and Math) talent. </span><a href="http://www.fuld.com/services/war-games-and-scenario-planning/scenario-planning" style="font-size: 13px;">Scenario planning</a><span style="font-size: 13px;"> helps an organization envision a future very different from the present and develop concrete strategies that anticipate and prepare an organization for a change in future market and competitive conditions.</span></p> <p>Considering where the discussion began, the group built a scenario that stood in sharp contrast to its initial assumptions about the future of STEM talent and the implications to the life sciences and biotech industries. Here is their scenario:</p> <p><b><em>A LIFE SCIENCES REBOOT: BIG DATA COMPANIES REWRITE THE INDUSTRY</em></b></p> <p><em>PALO ALTO, JANUARY 2, 2020 - Google has just launched its second blockbuster drug in the past three years, an almost unheard of accomplishment in the modern history of the pharmaceutical industry – except that only five years ago no one had ever thought to classify Google as a pharmaceutical company. Amazon, Google, IBM and other high-tech behemoths have rapidly rewritten the rules of the life sciences business by collapsing the supposedly sacrosanct Discovery – Clinical Trials – Product Launch timetable by more than half. As IBM’s Watson 10th generation computing systems have shown, the company’s disciplined and nearly bottomless R&D talent pool can trump the comparatively medieval and bureaucratically cumbersome approaches of Big Pharma that ruled this marketplace for over a century. </em></p> <p><em>Despite a shortage of technical and scientific talent in the United States and a drop in Federal Government funding, the high-tech industry has taken up the slack in drug R&D – along with the support of private investment groups from around the globe. </em></p> <p><em>As Google cofounder Sergei Brin stated in a keynote speech at a major oncology conference, “Google is never one to leave money on the table. We saw a great efficiency gap in the pharmaceutical market and decided to take the lead in filling that gap and recognizing both the goodwill and the profits that we would enjoy….”</em></p> <p>Do you believe in this story? Can it happen based on what you know today? </p> <p>In part two of this blog post, I will report on some of the implications noted by the group - as they peered through the STEM filter - for the future of life sciences in the coming decade. My bet is that some you already have considered a few of these future implications but that a few may be counter-intuitive surprises.</p> <p>SEE RELATED ARTICLES – <a href="http://www.fuld.com/services/war-games-and-scenario-planning/http:/tech.fortune.cnn.com/2014/05/13/americas-tech-talent-shortage-is-it-just-myth/?iid=SF_F_River">Fortune Magazine: America's tech talent shortage: Is it just myth?</a></p> </article> <article> <h1>Your Competition Doesn’t Wait To Turn Their Clocks Ahead So Why Should You?</h1> <p>Tue, 18 Mar 2014 14:00:00 GMT</p> <h2></h2> <p>Last year, while monitoring clinical trials for a number of competitors in the oncology field, we spotted a Twitter announcement from a third-party patient advocate who wanted to see this company renew a particular set of trials it had dropped. The advocate was working with this biotech competitor to recruit new patients and announce a special recruiting event. This Twitter feed continued for a couple of weeks then suddenly stopped once the biotech likely filled its patient quota. Social media signals like this one are essentially a small spark of intelligence you have to notice when it occurs. Had we not been monitoring this company’s tweets, we would have missed this early warning signal on the clinical trial restart and in this instance there were no lingering leaflets pinned onto bulletin boards or mass mailings designed to recruit patients.</p> <p>When I heard newscasters announce a week ago that we all must turn our clocks one-hour ahead, I chuckled, thinking how changing clocks has become largely an anachronism. Just as I don’t need to “change my clocks” anymore (my desktop computer and my phones all change automatically, as does my cable box which serves as our living room clock) your rival can just as easily alter its strategy and execution without most of the market seeing the shift. Today, time and your competition can march on without notifying us of the change. Competitors can do this because they are able to signal the market in a very discrete and targeted manner.</p> <p>Consider how you and your competitors used to act in the market and how you informed that market. You advertised with new catalogs and product announcements by sending packages to your supply chain. You counted on trade shows to expose much of the customer base to your messaging and changes in market tactics. The process of communicating strategy was all very physical - all these signals started with printed materials, the post office, and eventually sales people knocking on doors.</p> <p>In a similar fashion, pharmaceutical firms that work hard at crafting messages for their products increasingly rely on altering their websites and sending out daily email blasts. The changes to a company’s website may be subtle and you’re unlikely to see a big press release on the wire services. And yet, the message has simply and quietly changed, and in turn will be reflected in future sales tactics and messages the company offers at scientific congresses, social media, and so on.</p> <p>With respect to watching for change in competitor strategy, the message for company strategists and the executive suite should be “don’t wait to turn your clocks ahead!” The changes may already have taken place. You need to pay attention to the subtle changes as they occur because they will be quiet and unless you remain alert to all the channels –real and virtual – a competitor’s strategic shift will happen right under your nose and you will wake up too late to do anything about it.</p> </article> <article> <h1>Can you dominate in 2014?</h1> <p>Thu, 02 Jan 2014 15:00:00 GMT</p> <p>Now that is a loaded question! Dominate? No corporate counsel in his or her right mind would use that word in any correspondence concerning the company. Dominate is a word that can trigger anti-trust inquiries. Is that really how you want your company to begin 2014 with an anti-trust investigation by the American Department of Justice? I don't think so. </p> <table border="0"> <tbody> <tr> <td> <p>You can relax because I am asking this question in a totally different context and that is in the way game theorists use the concept. For anyone who has played in the world of game theory knows a company should always apply its dominant strategy. That is because game theory states that "dominant strategy" means the dominance or strength of one of your firm's strategies over another – and not how you will dominate an opponent. Rather, it emphasizes how you need to play your strongest hand whenever you consider various strategic options.</p> </td> <td></td> </tr> </tbody> </table> <p>Nearly every company has a dominant strategy. For instance <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-mediaHome" title="Amazon’s" target="_blank">Amazon’s</a> online strategy will always be stronger than its retail strategy. Even though it has decided to plant storage lockers in local shops for direct store access to customers, its online shopping experience will remain its dominant strategy. Dell's customization of its laptops and online ordering system dominates its retail strategy – even though it now has an increasing retail presence via kiosks and displays at <a href="http://www.bestbuy.com/" title="Best Buy" target="_blank">Best Buy</a> and the like. <a href="http://www.apple.com/" title="Apple" target="_blank">Apple</a>, on the other hand, offers a relatively simple online shopping experience with most of its online platform dedicated to selling content, not hardware. Apple's dominant strategy for selling hardware is through its high-concept retail stores. While Dell may not win more share in the market via its online ordering system, that remains its dominant strategy. Dell's battling Apple on the retail front will not be in Dell's best interests. Retail sales are not Dell's dominant strategy.</p> <p>The list goes on and on. Every company in every industry has a dominant strategy, from financial services to life sciences and more.</p> <p>You need to use your dominant strategy to at least maintain or eventually win in your market. You may not dominate a market with your dominate strategy but you will have the best chance at winning the most share or greatest margins by doing so.</p> </article> <article> <h1>Black Friday and Crossing the Risk Threshold</h1> <p>Wed, 27 Nov 2013 21:00:00 GMT</p> <table border="0"> <tbody> <tr> <td></td> <td> <p>Even as a little kid, I remember my father anxiously looking toward Black Friday (the day after America’s Thanksgiving holiday) and onto the end of the holiday season as the time his store made a large chunk of its profits for the year. Looking at my father, I saw someone who worried about this make-it-or-break-it time each November and December. A similar kind of threshold exists for those pursuing competitive knowledge but instead of a profit line it’s a risk line, the point after which you feel you have enough information to feel comfortable with your particular strategic or tactical decision. Maybe if he had Excel back then and could easily do a year-to-year comparison that exercise might have eased the worry a bit. But he was the co-owner of a small jewelry store and had all he could do to keep his customers happy and the store operating effectively.</p> </td> </tr> </tbody> </table> <table border="0"> <tbody> <tr> <td> <p>Unlike Black Friday, though, this risk-comfort line is very much relative and not fixed to a particular calendar date. For some corporate executives this line is very movable but maybe at the very far end of someone else’s comfort zone. In other words, some individuals can work with very little information to arrive at a conclusion, a decision with far less information than their counterparts.</p> <p> </p> </td> <td></td> </tr> </tbody> </table> <p>All companies and all managements have their Black Friday risk-comfort thresholds. What makes these supposed market risks less threatening is worrying you have too little information when you may not. Indeed, the fear of what you don’t know can push the fear ahead of the reality. Certainly there are competitive threats and rivals that want your market share but very often knowing just enough information will allow you to make decisions far sooner than you otherwise expect. Trying to achieve “information perfection” by a cautious management does very little to allay the fear. Delaying that decision in hopes you will acquire more supporting evidence at times may be warranted but from my experience only exacerbates the fear and exaggerates the risk.</p> <p>Here’s a final confession: No one in my family could truly lessen my father’s Black Friday anxiety. We could offer some consolation or assurances and that was all. Companies are merely extensions of the people who manage them. The big difference is that modern management does have many tools to mitigate this risk-comfort stress. Today’s management has the Internet, filled with useful insights. Many B2C or B2B firms have data mining technology (now listed under the label of Big Data) from which it can analyze a customer’s likely behavior and buying patterns. In addition, today’s corporation can use instant communication to dispatch its staff to ask questions on the ground, questions whose answers will shed light on those dark rumors. Use these tools to improve your knowledge and reduce Black Friday fears.</p> </article> </main></body></html>