• Buying data about competitors and customers—from any one of the many companies that make this their business.
• Developing your own data—you can survey clients and market experts or use your customer service communications to gather new information about changing markets. Think about your website, your phone centers, or any other point of outside contact.
• Finding ways to look beyond your present markets—participate in industry gatherings, attend presentations, and read as much as possible, always with an eye to how this could affect your business. For more on this idea, see the Industry Spotlight below.
• Engaging in strategic conversations—we are big believers in talking with people outside the company as a way of sensing an industry’s direction, new developments, and others’ impressions of your strengths and weaknesses. These conversations also flatter the people with whom you conduct them, prompting them to become closer strategic partners. For more on this approach, read Issue 13 of Trekking.

After receiving data from all these sources, many companies set up distribution networks internally to share the information. This may be done via dashboards, where statistics are involved (e.g., semi-conductor chip prices), or with intranets and blogs to share feedback. Whatever way you choose, the best way to start is to keep it simple—just take on a few small projects that have a direct impact on business units and take it from there.

In our teaching and speaking, we often use a presentation that shows the “cone of silence” used in the 1960’s television show Get Smart. Without external information, you and your management team are limited to your own ideas. Lift the cone, open the windows, and let the fresh external information refresh your thinking.

- Michael Oleksak   2006

So, if you have an important decision to be made and hard data are incomplete or unavailable, how can you improve your techniques of gathering soft data? Ask effective questions of your important information sources. In our Strategic Thinking course, we do active exercises to teach three types of questions as part of our “Gather Data” section on decision making:

• Closed Questions—these are the yes/no or a one-word answer type questions. “Was the sales presentation effective?” “Does it meet our needs?” “Is it a product we should buy?”

• Open Questions—these require a more expansive answer or opinion. “Can you describe how the product could help us?” “What problems do you see if we shift to this product?” “How might the product work in our process?”

• Follow-up Questions—these are the ”why” type of questions. It can take as many as four or five “why” questions on one topic to get to the root of a problem or a real reason for something, so keep asking.

Try using the above types of questions in a pattern. Start by asking closed questions to warm up a respondent, continuing with open questions that delve deeper into their thought process, and then finishing with “why” questions to get even deeper.

Face the reality that soft data is critical to your success as a manager, and build your skills to maximize the quality of this data.

- Michael Oleksak    2005

• A company’s clients identified high value services that they wanted the company to expand. The company saw these services and activities as just an accommodation to the clients. As a result, the company reorganized and expanded their offering to facilitate these services and now gets paid for the value.

• Despite a very long and successful relationship, a company’s most important client expressed concern that the company was falling behind the times. The company was actually a leader in its industry, but it was not communicating that fact. It had a very stale website, and never communicated about their new services or about the important role they played in their industry’s regulation by the FDA. As a result, the company made a conscious effort to communicate its expertise through article writing and speaking appearances by the senior management. That same client recently called the CEO and said, “We hadn’t thought about you for this job until I saw you on the cover of our industry magazine today. Let’s talk.”

The catalyst in both of these situations was a strategic conversation with key clients. The results of this type of conversation should be examined together with external research, industry meetings, and internal knowledge collection. The patterns that emerge can become an excellent catalyst and inspiration for change in operations, marketing, service, communication with clients, and product mix.

If you are ready to undertake some strategic conversations on your own, please read our article in The Handbook for Business Strategy for practical hints on how to do it.

- Michael Oleksak    2005

CEO’s and business owners are often experts at the product they make or the service they offer. But there is more to being the head of a company than being a good leader. You need to have a vision of the big picture that extends beyond the walls of your organization. One of the compelling ways of achieving this vision is by having strategic conversations with your customers and industry contacts. Strategic conversations focus on the future and help you identify critical challenges to the status quo.

Seek out strategic conversations through scheduled meetings with your best clients about your product offering, threats on the horizon in the industry, and concerns your client may have. (“What keeps you up at night?” is always a great question). But also seek these conversations in more informal circumstances such as industry gatherings. Ask people directly about their view of your own business. You may not heed each idea, but sometimes a different perspective could lead to the solution of a problem or the next great brainstorm.

Outsiders have a different view of your company than you do. Their ideas and comments may help you correct a weakness or further develop an area of strength. Having strategic conversations also builds a stronger bond between you and your contact, because you are showing that you respect their opinion as you ask for their input. They will be happy to provide it.

Remember, it is vitally important to keep fresh information coming in about your company, customers, and industry. It feeds innovation and helps you create a process of continuous improvement.

-Mary Adams    2005

It is a great sentiment for a feel good baseball movie—not a good idea for a business, however. Recently, we helped two companies by conducting market research. For one, we canvassed a difficult market to determine the viability of a product on the drawing board before a lot of money was invested. For the other, we investigated six financial services sectors to identify new markets for a software product.

The first exercise pointed out that our client needed more capital and industry experience in the field before buyers would get on board. As a result, our client has gone back to the drawing board and come up with a less risky and more patient road to success. The second client is now developing a marketing and sales program to pursue those markets we identified more efficiently than if we had not done the research.

Do your homework before you enter a new market, you will save yourself money and be much more effective in delivering new sales.

If you are looking to make significant improvements in your business, you need something more than a few tweaks to your current practices. How do you break through to the next level of performance? Start with fresh information.

This is often the strategy step that gets the least attention. It is easy to assume that you know everything you need to know about your business and its environment. After all, you spend your corporate life in your market; why would you need to study it more? The truth is that you know everything about yesterday—but what about tomorrow? Most challenges come from a surprise or a change that starts outside your core market. The only way we know to avoid a surprise is to have a disciplined (but not complicated) process for generating fresh information.

By the way, fresh information also gives you a neutral starting point for your planning discussions. Remember the many differing views around the table? Start with a discussion about objective facts, not opinions. What are the market trends, customer needs, and technological opportunities for your business? An agreement about the reality—just the facts—surrounding your market opportunity and risks will lay a good foundation for planning the future. The discussion will no longer be about what individuals think, but rather what the facts tell you that you need to do. From there, it is much easier to work through to the action plans that make it all happen. Starting with the external makes it a lot easier to avoid sliding into an internally-focused discussion that only gives you incremental improvements—it will help you come up with new solutions, new opportunities, and breakthrough performance. Tips on gathering fresh information are covered in Michael’s Strategic Action column below.

-Mary Adams   2004