Mind the Gap – in Troubled Times aim for the space between Choking and Panic

The news today is filled with tales of woe. Global fuel prices are increasing at a phenomenal rate. Access to basic necessities such as water, food and shelter is being impacted by a more chaotic and changing climate. The global economies are suffering from the after effects of an economic downturn, the result of the United States subprime mortgage debacle and its investment banks Structured Investment Vehicle follies. All in all, the world seems very much in turmoil.

 

One of the great challenges we see is that decision making is oscillating more widely between two ends of the data spectrum. The absence of data or access to too much data are causing behavioral extremes that Malcolm Gladwell described at the turn of this century in a particular prescient article in The New Yorker titled, “The Art of Failure.” I was reminded of this article in a recent story in a recent Financial Times “Outside Edge” column by Rahul Jacob. Jacob was focusing on the behavior of the tennis player Roger Federer, asking whether or not he chokes under the demands of fifth set match play – I am assuming he was reminded of this after Federer’s recent Wimbledon win to advance to a match against Lleyton Hewitt. Nevertheless for me, I found saw the concept in a new light. In his article, Gladwell described twin forces connected by instinct but very different:

 

“Choking is about thinking too much. Panic is about thinking too little. Choking is about loss of instinct. Panic is reversion to instinct.”

 

With the inability to process too much information manifesting itself as “choking”, and the inability to access enough information manifesting as “panicking” – and evident in the newspapers everyday – managing our actions rationally seems the only way to address this conflict. This is where I see KT fit. At its extreme we help our clients find the space between choking and panic. Through the application of systematic, rational, visible approaches we can ally ourselves to our clients need for business results. By using our Decision Analysis methodology we can help clients address their data deficiencies more effectively by gathering, sorting, organizing, analyzing and confirming the necessary meaningful action. In our Problem Analysis approach we can cut through the complexity of data surrounding an issue and identify the information that is most germane to the identification and confirmation of root cause.

In troubled times, clarity of thought helps you aim for the gap between choking and panic to use data in a way that helps you do what you need to survive and thrive.

Mind the gap – contrary to the London Underground – that’s where the value lies.

Innovations in New Product Development & Marketing

Brad Golden, Global VP for Kepner-Tregoe’s (KT) Consumer Packaged Goods Practice, and Drew Marshall, KT’s Chief Innovation Officer spent this past week at Frost & Sullivan’s MindXchange™ conference for senior business leaders in San Diego, California. The Conference was titled, “Innovations in New Product Development & Marketing.”

 

This two and a half day event covered the intersection between new product development and marketing and how the two areas are not only interdependent but unlock tremendous value when effectively integrated. Our focus was on the back-end of innovation or, “what do you do once the light bulb goes on?” This plays to KT’s long-standing strength in assisting our clients in executing their strategies through integrated thinking and action.

 

In an early session, the way in which a product’s design elements are gathered and considered for inclusion focused on the value of “designing for gross margin.” Sheila Mello and Wayne Mackey, co-authors of Value Innovation Portfolio Management: Achieving Double-digit Growth Through Customer Value, presented a method for driving cost out of product development by using a value assessment driven by customer requirements. (For those familiar with past posts to this blog, this is the second time in as many conferences that the effective use of customer requirements has been a key element. The VOC – voice of the customer – rules.)

 

From KT’s perspective, the decision objectives for that kind of assessment are critical. A MUST objective, or perhaps at a minimum a high-weighted WANT objective should be: Design solutions to meet requirements for which a customer is willing to pay a higher price. With this objective in mind, most organizations can develop ‘test’ mechanisms that could demonstrate and ‘fly’ the cost drivers of new products or business models to be able to clearly say how much true value exists. The key is to listen to what customers want and consider the environment in which they have unmet needs – unless you can do both you may mislead yourself into building something for which there is little perceived, or real, value.

 

“A negative return on investment is not a case for a strategic investment.” – Subra Narayan, Director, Venture Capital and External Alliances, Eastman Kodak

 

Another area of keen interest for participants was the impact of sustainable product development. The Environmental Marketing Manager from HP’s IPG (Imaging & Printing Group), Maggie Davis, provided a rapid overview of how that group is tackling this approach to their markets. In this space the key objectives for deciding whether or not to purchase a product or service have tended to fall into the following four areas: personal protection (how does this impact me and my immediate circumstances?); cost (does it fit within my price constraints?); status (how will this broadcast my environmental awareness?); altruism (how much good will it do?). A crucial point: if you do not meet these objectives from a base of credible engagement, your products or marketing efforts will have a negative on your brand. This is no market space to be two-faced.

 

In any case the answer to the question, “what innovations should we pursue?” comes down to considering those innovations that are sustainable, authentic (to the brand and customer experience), and create value. All of these must be perceived and measured in the eyes of your customer. Take care in what you choose to do…

Big Decisions – Demand Rigor

Only 18 months and the primary election cycle in the United States has (finally) ground to a halt. The victors, or almost victors, are steeling themselves for the general election process and one of their first critical decisions as their party’s representative for election to the highest office in the land – the selection of a running mate. One of their first decisions as the presumptive nominee of their respective parties is to indentify, vet, and select a Vice Presidential running mate. These are the kinds of decisions that, while they may not make an election, they can certainly break an election.

 

How do they do it? What’s the process? What’s the received wisdom?

 

Well there appear to be four key concepts that seem to have been presented each time this comes to light. 1) Focus on the potential Vice President’s location – it should enhance or close a gap in the electoral armor; 2) Present a record that aligns with and enhances the core position of the candidate (for example, Barrack Obama is more than likely looking for someone with a strong anti-war record); 3) Look for someone who is bi-partisan so that you can cast as wide a net as possible into the territory of “the uncommitted”: and, 4) Identify someone who has a complimentary record that may balance the Presidential candidate’s shortcomings (for example, John McCain may be looking for a Vice Presidential candidate who shores up his social conservative credentials.) With all that said, it doesn’t really matter how well a potential running mate does against these criteria unless they pass the initial “dust-busting” assessment designed to identify any skeletons in the closet.

 

For those of you who know KT, these are the beginning of a more robust set of objectives in what should be a comprehensive Decision Analysis. As with all big decisions, understanding your intent and capturing the benefits that you want to derive from your choice in terms of a clear set of objectives is key. Without them, the whole assessment effort becomes a “beauty contest” driven almost entirely by personality and feel. Some of the concepts above could be crafted into specific objectives for assessment purposes, but the key objectives are those of the final decision maker. It’s interesting to note that Mr. McCain presents a rudimentary Decision Analysis matrix on his election website. But this decision matrix leaves out a number of critical elements, the primary one being able to assess the data against a specific, weighted objective. He calls this section of his website, “The Decision Center,” yet that would appear a misnomer as all the decisions presented have been made on a viewers’ behalf. In terms of their Vice Presidential running mates, I wonder what Mr, McCain and Mr. Obama have in mind as they make this crucial selection. It’s not one that either of them would want to get wrong…