While 72% of brands say they are future-focused, 70% say they are not willing to sacrifice short-term gains to invest in long-term benefits. The results of this recent survey of business decision makers show the wide gap between recognizing business challenges and taking the necessary steps to create new opportunities.
Are insights professionals doing enough to prepare our business leaders for the future? Is sharing what’s happening in the marketplace today enough to inform decisions that will have ramifications six months, a year, multiple years down the road?
These questions were address by two insights leaders the fourth of a five-part Insights Association and Olivetree Insights webinar series: ‘Insights, A Source of Strategic Leadership.’ The following is a recap of the key points from each presenter.
Piotr Szymski, Vice President, Insights/Business Intelligence & Catalog, Sony Music Entertainment
Piotr kicked off the session with a definition of three key terms – Hindsight, Insight, Foresight – learned during his days at P&G:
- Hindsight are learnings and insights based on the past. This can help build understanding but is less actionable than insight or foresight.
- Insight is an understanding of the nature of things as they exist today. In business, it covers what customers do, decisions they make, how they behave, and why they do what they do.
- Foresight is about what will happen in the future. And importantly considering how we build hypothesizes about the future to inform better decisions.
Foresight is more critical than hindsight or insight because we live in a world of disruption, rapid innovation, and complexity. Whole industries have been caught unaware: photography by the advent of cameras in phones; taxis with Uber. In fact, the same lack of foresight affected the music industry as it wasn’t on the leading edge of innovation and was severely impacted and caught by surprise by piracy issues, iTunes, and streaming. Industry revenues fell off a cliff and it required the technology sector to come in and save the day.
Piotr’s experience in numerous industries convinced him of the importance of the Insights team having a leadership role in foresight planning. He believes that the objective, consultative, and deep understanding they have about consumers means that marketing researchers are well equipped to lead foresight initiatives. However, he also adds that it is critical that all key functions are involved and contributing to future-focused efforts, such as finance, sales, operations, manufacturing, etc.
Some future-focused methodologies Piotr recommends that researchers build expertise around include:
- Trend work
- Scenario planning
In particular, scenario planning is an area that Piotr believes should be embraced by insights teams. Scenario planning is a foresight technique that relies on using multiple hypotheses to create potential scenarios about the marketplace.
He cites examples of using scenario planning in the music industry, where there is limited research for upcoming releases and labels need to be ready for different scenarios based on the initial reaction of audiences to the music that is distributed. With this pre-planning, he can help prepare his leadership team to jump on opportunities quickly and maximize outcomes.
Chris Grabarkiewicz-Davis, Partner, Olivetree Insights
Chris provided an overview of scenario planning and two case studies. Scenario planning provides forecasts that are very different from the risk management forecasts provided when we cite research learnings like “25%, give or take 5 pts., are likely to buy our product based on survey results.” This type of forecast doesn’t account for the multiple circumstances (competitive, technology, social, etc.) that a new product might face.
Scenario planning is instead based on considering multiple future scenarios to facilitate better decisions.
- Requires laying out facts, assumptions, conditions and linking them to business
- Pushes people to step outside of their hypotheses/biases and avoids group think
- Scenarios help cross-functional partners look at research from a business versus functional perspective
- Helps them see the impact and tradeoff of each alternative and gain internal alignment which is often missing from research findings
Chris provided an overview of the four key steps in scenario planning: identify the focal topic, prepare the team (existing primary and secondary research), build scenarios (identify driving forces, critical uncertainties, and plausible scenarios), and create plans based on an analysis of implications. She then applied the process to two case studies.
Case #1: Customer Journey Example
The first case was based on a retailer’s shopper journey study used to help marketing bring in more new customers. Should they invest in a new website or outdoor mall signage? Both were identified as customer pain points in the shopper journey.
The insights team used the results of the shopper journey study and in collaboration with finance and others business units, built financial forecasts for each scenario, as well as a “no change in marketing” scenario. The decision for how to move forward became clearer based on the new information.
CASE #2 – Connect with Millennials Example
The second case was based on reverse-engineering the recent launch of the Capital One Café. The Café was created to “bridge the disconnect in traditional banking with Millennials by providing free coffee (sometimes), free Wi-Fi and if desired…free financial advice.”
In this case, the Capital One team could have considered the key driving industry forces: the growth of Fintechs (like PayPal) and Techfins (like Apple Pay) as well as the decline of the value proposition of traditional banks. They would identify certainties (like the continued importance of credit) and uncertainties (like consumers want more engagement with their credit card company/bank) about the future. Then, they would construct scenarios around the uncertainties, discuss the common risks and implications across all scenarios, and create future-focused plans...including their launch of the Café’s in test markets.
Olivetree Insights’ Scenario Planning Workshop will help your team become Scenario Planning pros! Because we guide you in conducting your first workshop, you’ll walk away with not only with the skills and tools to conduct future sessions yourself, but with a set of scenarios that your company can use for future planning. Contact Carol Shea for more information.