How to get CEOs to use both analysis and their gut to make decisions

November 21, 2017

The biggest hurdle for any business analyst is getting their work to be used.

 

I recently reflected on the most complicated task for business analysts delivering market intelligence output to management.

After some thinking I decided that it makes sense to distinguish between things within your control and those that are not. Things within your control – e.g. collecting good data – may be challenging, but are not the most complicated. Here, practice makes perfect.

The complications start with the things you cannot control, e.g. the mind of your customer, the decision-maker.

A decision-maker may order market intelligence work to be done. However, they may also collect their own inputs, or be offered inputs by sources you do not know. Their own collection may also build up a picture of what there is to know.

It is only at the time of delivery of your painstaking work that you discover they have already made up their mind about the topic you’re reporting upon. So they may choose a decision based on data other than the facts that you have offered. How do you, as an analyst and business professional, handle that?

 

What is true in business also holds true in the world of government

We are not alone in business in facing this challenge. Keren Yarhi-Milo in her dissertation “Knowing the Adversary – leaders, intelligence and the assessment of international relations” explains how intelligence agencies and Western Governments operate in remarkably similar way to ourselves as professionals in business.

A key insight of Keren’s work relates to what is known as the vividness bias. When a decision-maker has vividly experienced new information, the impact of this experience on their perception of the topic at stake is such that they are often no longer open to changing their view.

No matter how balanced the CIA analysis provided to the US President on the intentions of Soviet Russia was during the Cold War, one short meeting of the President with his Soviet counterpart mattered more to how he viewed their intentions.

In business, for a CEO that visits a new country and sees one or two shops selling your firm’s products, this matters more to their views than a balanced market share analysis provided after weeks of intensive market intelligence work. The shops they saw for sure were not representative. But the CEO’s picture is already biased, the damage has been done. The persuasiveness of the format of the CEO’s acquisition of this intelligence (a foreign trip, a new country, a good experience, a lively host) easily beats your balanced report with many sophisticated tables.

 

How to make the vividness bias work for you as analyst

In analysis for business, I currently see two options: to get cynical or to get inspired. The first option is not great, so I suggest the second one. Why don’t we, as business analysis professionals, offer our customers vivid experiences when we deliver our content?

When did you last provide your output in video-format – in which you interviewed your customers for the top brass to see – to create that memorable experience? When human psychology relates vividness with persuasive impact, we are better off when we do not fight against it, but rather make it work for us. After all, it serves the right cause: maximizing the return on insight of your company by making insights being used to underpin your management’s decision-making.

 

About the author

Erik ElgersmaErik Elgersma is author of The Strategic Analysis Cycle Toolbook and The Strategic Analysis Cycle Handbook. He is the director of Strategic Analysis at FrieslandCampina, one of the world’s largest dairy companies. He speaks and lectures frequently at universities and business seminars on the topics of strategic analysis, competitive strategy and related data analysis and management. Erik holds a PhD from Delft University of Technology, The Netherlands, and is alumnus of the International Institute for Applied Systems Analysis in Vienna, Austria.

 

 

Note

  1. The vividness bias is only one of several insights that justify a market intelligence professional to study Keren’s work: Yarhi-Milo, K. [2014], Knowing the adversary, Princeton University Press, Princeton.

 

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