build a winning marketing strategy with logical structuring

Logical StructuringBuilding marketing strategies that drive growth

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Agenda

Break 15 min.

Lunch 60 min.

Program Overview5 min.

Analyzing the research 40 min.

Logically structuring your strategy90 min.

From Storyboard to Presentation90 min.

Debrief15 min.

Break 15 min.

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2

3

4

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Program Overview

Section

1

4

The purpose of this review is to standardize the structure,process, and deliverable format required for your annual marketing strategies

Statement of Purpose

Set standard guidance on the core concept of marketing strategy development…

1. research and analysis, 2. logical structuring, 3. and storyboarding

…to enable you to write and communicate strategies more clearly.

1

Unclear strategy, like unclear thinking, is frequently caused by a lack of consistent structure

5

By the end of this review, you’ll be able to develop a marketing strategy, storyboard it out, and convert it into a presentation

Program Objectives

By the end of this review you will be able to complete the following functions:

A. Use the Research & Analysis Process to develop a solution to a complex business challenge;

B. Apply the principles of “logical structuring” to your solution and create a strategy storyboard;

C. Translate your storyboard into a strategy presentation.

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Much of this is work that we already perform.This process will standardize our outputs and allow us to compare apples-to-apples

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To develop a marketing strategy, you’ll need to complete 3 exercises; we’ll go over each aspect of those exercises in this review

1A. Complete the

Research Analysis Process

B. Develop your recommendations

2C. Define the logical flow

of your recommendations

D. Group & order the logical flow of recommendations

3E. Lay out the storyboard for

your recommendations

F. Convert your structure into a presentation

MARKETING STRATEGY DEVELOPMENT PROCESS

Research & recommend Build logical structure Create the storyboard

Research & AnalysisConnecting the dots

Section

2

8

Developing a marketing strategy begins with declaring the problem you’re looking to solve – make an educated guess at your problem-statement

Declarethe

ProblemYou’re Solving

But how do you know what yourrecommendation is before you’ve conducted your research?

Leverage your expertise to analyze research more efficiently.

Guess! (Really.)Fortis Fortuna Juvat(FORTUNE FAVORS THE BRAVE!)

Claim your problem statement

& declare your

hypothetical solution(s)

Your hypotheses will provide the necessary foil to drive your research forward.

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• Review research, (Mkt. Intel & CI), log the major points you find, and note performance trends

• Watch for subcomponents of you problem statement

• Given your research review, hypothesize as to the solution of the problem you’ve declared

• Recap findings at the end of each area of research

• Identify gaps in knowledge and risks

• Summarize your findings and weigh them against your hypothesized solutions

• State your recommendations

With your problem statement front-of-mind, complete the followingResearch Analysis Process and develop recommendation(s) based on the result

CLARIFY

Step 1

STRUCTURE ANALYZE CONCLUDE

Step 2 Step 3 Step 4

CLARIFY STRUCTURE ANALYZE CONCLUDECLARIFYyour research

STRUCTUREyour findings

ANALYZEthe findings

CONCLUDEyour recommendation

RESEARCH ANALYSIS PROCESS FOR STRATEGY BUILDING

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As you review research, create a research log to track patterns and note important findings that impact your problem-statement

Date Problem Researched Finding SourceSlide # or

Web Address

Notes

11-Aug Broker ProdutionBrokers would prefer 7 other types of Sposorships over PGA events

Co. A's 2013 Broker Segmentation 13Check with Michele. Could we spend more at Grammy's, since that's they're 4th favourite event?

RESEARCH LOG TEMPLATE (AVAILABLE ON SHAREPOINT)

CLARIFY STRUCTURE CONCLUDEANALYZE

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To answer your problem-statement, you must use data relating to market statistics, voice of customer, competitor comparisons…

CLARIFY STRUCTURE ANALYZE CONCLUDE

Market Statistics

• Size of market

• Growth projections

• Segmentation (target)

• Economic factor vulnerability

Voice of Customer

• Demographics

• Needs

• Loyalty

• Buying behavior & purchasing criteria

Competitor Comparisons

• Type and number

• Location (service area)

• Strengths and weaknesses

• Turnover

• Barrier to entry for new competitors

• Competitor’s strategy

• Potential future competitors

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…And define your product/service capabilities and sales needs.


Product/Service-specific Capabilities & Risks

• Product, Competitive advantages and disadvantages

• Current product development pipeline

• Product life span (What’s trending to underperform?)

• Known business risks

• Operations capacity, present and known future state

• Research and development needs

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Note, Quantitative findings justify your problem-statements;Qualitative findings explain the quantitative findings


Definition Examples Sources

Quantitative

•Numerical and statistical •Most suitable when the objective is to measure or quantify data•Answers the “what” questions

•Firm stock value•Market share•Net Present Value

•financial statements•statistical studies•surveys•censuses

Qualitative

•Interpretive and insightful •Most helpful when the goal is to understand situations or provide context •Answers the “how” and “why" questions

•Pending lawsuits •Consumer trends•Market perception

•press releases•annual reports•industry white papers•analyst reports

It’s important to use both quantitative and qualitative observations to support your recommendation. Combining both creates a balanced argument.

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Weigh your findings against your problem-statement and, in turn, assemble your recommendations to address the problem statement


Your research log will show that the balance of your hypotheses are supported by the breadth of your findings

Hypothetical Solutions

you’ve assumed

Direction supported by

Research

Logical StructuringWhy to use it and how it works

Section

3a

16

Forces you to be “dead clear” about what you’re is communicating to the reader; preventing messages that are unclear, unintended, or intellectually empty

Makes Message Precise

Enables you to identify gaps by anticipating and responding to the reader’s questions before the communication is delivered

Reveals Gaps in Thinking

Prevents the reader from “working” to understand the message, thereby eliminating the possibility that your message is misunderstood or ignored entirely

Provides Clarity to Reader

Having assembled your research log, we’ll now examine how to logically structure your findings to supports your hypothesis

Values of Logical Structure

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Logical Structuring helps to simplify complex recommendations into clear justifications for action

Original

Mort,

John Collins telephoned to say that he can’t make the meeting at 9:00. Hal Johnson says he doesn’t mind making it later, or even tomorrow, but not before 10:30. Don Clifford’s secretary says that Clifford won’t return from Frankfurt until late tomorrow. The conference room is booked tomorrow, but free Thursday. Thursday at 11:00 looks to be a good time. Is that okay with you?

JC – not today;HJ – tomorrow

after 10:30;DC – not before

Thursday

Room not available

tomorrow;

Room OK Thursday

Is Thursday OK with you?

Mort,

Could we reschedule today’s 9:00 meeting to Thursday at 11:00? This would be more convenient for Collins and Johnson, and would permit Clifford to be present. It is also the only other time this week that the conference room is available.

Logically Structured Reply

More convenient

for JC and HJRoom is available

Permits DC to attend

Reschedule today’s

meeting to Thursday at

11:00

Mini-Exercise

Observe how the pyramid forces clarity

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Governing ThoughtStates the answer to the question raised in the readers mind – the single recommendation

Key LineMajor points that when taken together prove the answer – the logic behind your recommendation

SupportData and facts that support the key line

The “pyramid principle” is the basis of Logical Structuring – it’s how you build the storyboard that becomes your strategy presentation

“PYRAMID PRINCIPLE” OF LOGICAL STRUCTURING

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3 Rules to building a logically structured pyramid

1. Ideas at any level must be summaries of the ideas grouped below• Derived from high-level ideas• Point of a paragraph is a summary of the sentences it contains

2. Ideas in each grouping must always be the same kind of ideas• All ideas are from the same logical grouping • Label idea with a plural noun

3. Ideas in each grouping must be in a logical order • Deductively • Chronologically • Structurally • Comparatively

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Company A should pursue D2C digital sales and its first priority should be to defend

its current market share

Opportunitiesand Threats

Co. A’s current

customers are more

likely to shop online than the general population

Co. A’s competitors

are increasing their online

product assortment

Without an online

channel Co. A risks losing

some customers to competitors

Co. A’s online sales in 2015 could reach

$100mm

Primary benefitsof the internet strategy

Defendmarket share

Growrevenue

Develop deeper

relationships with

customers

Support Co. A’s

operating strategy

Wrongly, strategies are often structured around discrete tactics:simply aggregating the tactics and justifications into a pyramid does not create a strategy…

EXAMPLE OF AN UNCLEAR STRATEGY LAID-OUT IN PYRAMID FORM

In the bottom row of the diagram, note the insufficient reasons for supporting the strategy

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Co. A’s can reduce costs by $10mm in the next 2 years through operational improvements

Differentiate service levels to save $2mm

Re-engineer core functions to save $5mm

Outsource non-corefunctions to save $3mm

Governing Thought

Key Line

Support

…but assembling your strategy by applying the reasoning principles of logical structuring will ensure your approach is comprehensive, compelling, and clear

Segment customers by value

Determine economic level of

service for each

segment

Shift lower value

segments to lower cost channels

Evaluate internal cost

of core function

Compare cost of function to best-in-class benchmarks

Adopt best practices based on

benchmarks

Select non-core functions

Evaluate cost and

service level of potential

partners

Choose one partner for

each function

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To translate your research into a logically structured strategy, you must complete the following tasks

Write the introductionThe introduction establishes the Situation, Complication, Question, and Answer.

1

Work out the logic (i.e., Build the pyramid)Each idea in the pyramid is logically related vertically to the idea above and horizontally to other ideas on the line.

2

Group the IdeasIdeas on a line are grouped in one of three ways: time order, structure order or class order

3

Create the StoryboardAfter developing the pyramid, the ideas are laid out in a storyboard format; you’re then able to turn the storyboard into your strategy presentation

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4 TASKS TO BUILD YOUR STRATEGY FROM YOUR RESEARCH

Logical structuringHow to write a compelling introduction

Section

3b

24

The introduction is the foundation of your strategy, once it’s written your strategy will flow easily


1


2


3

Create the StoryboardAfter developing the pyramid, the ideas are laid out in a storyboard format; you’re not ready to turn the storyboard into your strategy presentation

4

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A strong introduction has three main elements

Contain the three elements of a story: 1. The situation

2. The complication

3. The solution implicitly answering a question

1

Set up the relevant question on a reader’s mind that will be answered in the document

2

Remind the reader of the issues rather than inform

3

3 Principle of strong introductions

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Introduction AWe are very pleased to have the opportunity to speak with you today. We think that your business is very exciting and you have highly skilled people working for you. We have many ideas on how we can help you, which we would love to share with you.

Introduction BAs you are aware, growth in the insurance industry is slowing. Since you have promised investors that you will achieve an annual EPS growth rate of 20%, you need to investigate other opportunities for growth. We believe the highest opportunity for growth is in the brokerage industry.

Fundamentally, the introduction tells a story that’s relevant to the reader

Which introduction appeals to you?

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4 REQUIRED ELEMENTS OF THE INTRODUCTION

When you’re using logical structuring, once you have detailed out the introduction, the rest of your strategy will ladder up underneath

Answer

A statement about the subject with which you know the reader will agree

The complicating event that creates the tension in the story

• Situation:

• Complication:

The implicit question that results from the complication

• Question:

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A well-designed introduction is composed of 4 parts, the Situation, Complication, Question (S-Q-C) and Answer1. The Situation

• Starting point for your story• Non-controversial statement• Triggers the reader to wonder “so what?”

2. The Complication• Follows the situation• Introduces a disturbing event• Should raise a question in the readers’ mind

– (that your document will then address)

3. Key Question• The situation: complication can create questions

— What do we do?— Is this the right solution?— Why not?

4. Your Answer to the Question

The Superbowl is on television on Sunday

I have work and other activities I need to do on Sunday

How do I …?

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You can create multiple S-C-Q scenarios with the same base information; therefore, it is important to consider all options before settling on one solution

Situation: The Superbowl is on television on SundayComplication: I have other work and activities I should be doing on SundayQuestion: How do I prioritize my time on Sunday

Possible Answers: Activity prioritization strategies

Situation: The Superbowl is on television on Sunday. I would like to watch it but have to complete a number of work/activities during the day

Complication: The work activities necessitate getting together with my teamQuestion: How can I combine meeting with my team and watching the Superbowl

Possible Answers: Facilities identification & ground rules for multi-tasking

Situation: The Superbowl is on television on SundayComplication: I have other activities that I should be doing on SundayQuestion: How can I change my commitments to have Sunday off work

Possible Answers: Negotiation strategy to change my commitments

EXAMPLES OF SITUATIONS WITH MULTIPLE SOLUTIONS

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Exercise 1. S-C-Q• Develop S-C-Q alternatives for one topic

• Potential Topics:– Organizing a client meeting– Identifying resources required for a project– Making a deliverable deadline

• Develop at least 2 alternative S-C-Qs for your selected topic

Mini-ExerciseCreating multiple

S-C-Qs from the same challenge

Logical structuringHow to build support for your approach

Section

3c

32

With your introduction set, you’ll now use your research findings to define the answers to your problem-statement


1


2


3

Create the StoryboardAfter developing the pyramid, the ideas are laid out in a storyboard format; you’re not ready to turn the storyboard into your strategy presentation

4

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The pyramid imposes a vertical Q&A dialogue with the reader; the horizontal groupings answer the question

Vertical Logic• Creates a question and

answer dialogue

• Pyramid asks questions until there are no more questions raised by the answers given

• Typical questions: – Why? – How? – How do you know?

Governing Thought:

Key Line:

Support:

Horizontal Logic• Logically answers questions raised vertically

• Logic/reasoning used to answer questions: – Inductive – Deductive

Action

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Vertical Logic Questions

How?

Why?

Action

Conclusion

Step Step Step

Reason Reason Reason

We must redesign customer service to take advantage of

$10 million in savings

Redirectvolume

Improve organizational

efficiency

Establish operational standards

We should purchase a new office building in Atlanta

We need moreoffice space

It is the least expensive

option

It is a moreconvenient

location

Structure Example

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Company A must develop a value

proposition tailored to the Millennial market.

Understand the uniqueneeds of the Millennial

market

Adapt product line to meet the younger market’s needs

Educate the Millennial market on Company A’s

ability to meet their needs

Governing Thought:

Key Line:

S: Company A must increase its focus on the Millennial market

C: Company A is not currently focused on the Millennial market

Q: How can Company A increase its focus on the Millennial market?

Step 1 Step 2 Step 3

Answer: Vertical Logic – How?

How?

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Company A should spend $25 million to

accelerate the approval process

for D2C VB Accident insurance

The D2C VB Accident insurance market is

expected to top $1 billion per year

Earlier approval allows Company A more time

before enrollment season, which is worth $200 million in profit

MetLife is developing a substitute that may

capture the market if launched first

Governing Thought:

Key Line:

S: Approval for Company A’s new D2C VB Accident insurance is taking longer than expected

C: Company A can spend $25 million to accelerate the approval process

Q: Should Company A spend $25 million to accelerate the approval process?

Reason 1 Reason 2 Reason 3

Answer: Vertical Logic – Why?

Why?

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Quiz: Which Question is Raised - How or Why?S: Ford’s plant is not meeting its production goalsC: The production line is frequently stopped because of insufficient partsQ: What should the plant do differently?A: The parts procurement process needs to be redesigned to reduce fulfillment time

S: Sow’s Ear Inc. developed a silk purse product line 2 years agoC: Since then, the silk purse division has been unprofitableQ: What should Sow’s Ear do?A: Sow’s Ear Inc. should abandon its silk purse product line

S: Books-a-Million, a book retailer, is considering developing an online channel C: The online retail book market is dominated by 2 strong playersQ: Should Books-a-Million develop an online channel?A: Yes, Books-a-Million should go online because it cannot afford to lose market share

S: You have undertaken a number of initiatives to improve customer serviceC: Customer service continues to result in decreased customer satisfactionQ: How can we improve customers service?A: We must completely redesign customer service

Mini-ExerciseDetermine if

these are HOW or WHY

questions

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Vertical Logic Example – Delegating Work

Governing Thought:By delegating

work I can meet this week’s project

deadline

Some of the less senior team

members could complete the work over the next two

days

Early drafts of the

document exists

Some team members

are currently

under-utilized

S: I have a project deadline this weekC: I have to complete several action

items in order to meet the deadlineQ: How do I meet the deadline?

How?

Why?

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Exercise 2. Vertical Logic

Build a vertical logic tree using one of the alternatives from your selected S-C-Q (Exercise 1)

Governing Thought:

S: C:Q:

Key Line:

Answer

Mini-ExerciseBuild a

Vertical Logic Tree

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There are only two possible horizontal logic flowsDeductiveGroupings

Deduction Conclusion

• 1st idea makes statement about a situation that exists

• 2nd idea comments on the subject or predicate of the first

• 3rd idea states the implication of the first two ideas existing at the same time

• Conclusion summarizes the argument of the ideas

Presents an argument in successive steps

Inductive Inference

Groups ideas related by their plural nounInductiveGroupings • Ideas are all the same type:

• Steps• Reasons• Problems

• Ideas described by the same plural noun

• Draw inference based on the similarity of the ideas

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Deductive and Inductive Reasoning

German tourists are driving in droves to Krakow

Russian tourists are

sampling the delights of

Polish vodka in Poland

Italian tourists are

responding to the joys of

Polish opera

Poland is becoming a prime attraction

for European tourists

Deductive Reasoning

Inductive Reasoning

French tourists are

forsaking the Riviera for Warsaw

Birds fly I am a bird Therefore, I fly

I fly because I am a bird

• The first point makes a statement• The second point comments on the first• The third point is the “therefore” point• The point above summarizes the

grouping by taking the third point, putting it above, and adding a “because” to cover the other two points

• Ideas are all of the same kind (have the same subject or the same predicate)

• They are all able to be described by the same plural noun (e.g., reasons, problems, steps)

• The point above states the insight gleaned by seeing the similarity in the ideas

Thus, the rule of thumb is:• In deduction, the second point

comments on the first• In induction, the points are

separate and of the same kind

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Quiz: Which Logic is Represented?1. To maintain its growth, Company A needs to move into new markets

– Company A needs to sustain a high growth rate – The growth rate in Company A’s current market is slowing– Company A needs to move into new markets

2. Acme Industries can increase revenue by $100 MM per year– Develop an online channel– Extend the product line– Target new customers

3. Sow’s Ear Inc. should exit the silk purse market– The silk purse market is stagnant– Stagnant textile industries are unprofitable– The silk purse division is not profitable

Mini-ExerciseDetermine if Inductive or Deductive

Logic is being used

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Answers: Which Logic is Represented?

1. To maintain its growth, Company A needs to move into new markets• Company A needs to sustain a high growth rate • The growth rate in Company A’s current market is slowing• Company A needs to move into new markets

2. Acme Industries can increase revenue by $100 million per year• Develop an online channel• Extend the product line• Target new customers

3. Sow’s Ear Inc. should exit the silk purse market• The silk purse market is stagnant• Stagnant textile industries are unprofitable• The silk purse division is not profitable

Deductive

Deductive

Inductive

Related Points

Related Points

Unrelated Points

Mini-ExerciseDetermine if Inductive or Deductive

Logic is being used

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Summary• Vertical Logic: Creates the question and answer dialogue between the parties

– Two typical questions raised through vertical logic are: • How?• Why?

• Horizontal Logic: Answers questions raised vertically – Horizontal logic typically uses:

• Inductive reasoning - groups ideas of the same type that are related by their plural noun

• Deductive reasoning - presents an argument in successive steps

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Exercise 3. Horizontal Logic

Create one Inductive logic stream and one Deductive Logic stream for your pyramid based on two different Key LinesDeductive Reasoning

Inductive Reasoning

Mini-ExerciseCreate one

Inductive Logic stream and one Deductive Logic

stream

StoryboardingGrouping your recommendations

Section

4a

47

Ideas in any grouping must be in logical order: there are only 4 different ways to order your ideas

When using deductive reasoning, there is only one way to order your presentation:The logical order of ideas for deductive groupings are imposed by the structure of the reasoning

Time Order Structure Order Class Order

Outcome

Step 2Step 1 Step 3

Company Structure

Division B

Division A

Division C

Universe of Problems

3 Key Problems

All Other Problems

• Grouping items to reflect the order in which they occur

• Always answer “how” question

• Grouping ideas in the order that reflects what you see once you visualize something—by diagram or map or drawing

• Grouping items because they possess a characteristic in common and are different from other items in the universe

When using inductive reasoning, there are three possible ways to order your presentation1. Time order 2. Structural order 3. Class/degree order

V.S.

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Clarifying Grouped Ideas

• Organize ideas into logical order:

– Order of Importance

– Time Order

• Write the essence of each category

• Define problem / issue within each idea:

• Ask “Why isthis a problem / issue?”

• Identify:– Patterns– Categories– Ideas

• Create a list of key ideas:

– Findings from interviews

– Research – Analysis

List all Ideas Identify the Type of Issues

Summarize the Ideas Order the Ideas

Process to clarify grouping of ideas:

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• The major causes of businesses moving to the country are:

– Ability to attract and retain employees

– High costs ofoperating in the city

– Office spacerequirements

• Operational costs• Office space

requirements• Ability to attract and

retain employees

• Operating cost• Office space• Employee impact

• High city taxes• Higher wage rates• No room to expand• Employees

commuting time• City office space is

expensive• Lack of public

transportation• Lack of technology

infrastructure

• High city taxes• Higher wage rates• No room to expand• Employees commuting time

• City office space is expensive• Poor public transportation • Lack of technology infrastructure

Clarifying Grouped Ideas: ExampleMany businesses are moving out of cities & into the country due to the following:

List all Ideas Identify the Type of Issues

Summarize the Ideas Order the Ideas

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Clarifying Grouped Ideas: Example (cont’d)

The major causes of businesses moving to

the country are:

Ability to attract and retain employees

Key Line:

Governing Thought:

Employee commuting time

High costs of operating in the city

Office space requirements

Lack of public transportationSupport: High city

wage taxHigher

wage rates Expense of office space

No room to expand

Lack of technological infrastructure

Order of importance was dictated by a low unemployment rate, a move to cost management, and finally growth perspective of most businesses in the city.

Why the Order?

Why?

51

Don’t forget to apply the Rules of MECE to your pyramid

MECE = Mutually Exclusive and Collectively Exhaustive Example

• Making Dinner:– Select menu– Buy ingredients– Prepare courses

• Mobile Phone Types:– Analog cellular– Digital cellular– Digital PCS

• Reasons to acquire competitor:

– Complimentary customer base

– Superior technology– Digestible size

MECE

MutuallyExclusive

Do any of the points overlap?

CollectivelyExhaustive

Have all possibilities been covered/or explored?

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MECE Example• Which belong to a MECE Grouping?

1. Africa2. Hong Kong3. North America4. Amazon5. Australia6. Manila

7. South America8. Antarctica9. Taipei10. Asia11. Europe12. Hanoi

Mini-Exercise

Which items are MECE and why?

53

We identified the highest-potential area for cost reduction in

credit card operations.

Identified all costs involved in each division

within credit card operations

Compared the costs in each division to external

benchmarks

Governing Thought:

Key Line:Calculated the variance btw internal costs and

external benchmarks to identify widest gap

Support:

Supporting ideas/data

One Common MECE Grouping Is By Time Order

Time Order Example

54

A Second MECE Grouping Is By Structure Order

Structure Order Example

Wallace Cheese, Inc. needs to increase

profits.

Raise the priceper pound of

cheese

Reduce manufacturing

cost per pound of cheese


Governing Thought:

Key Line:

Support:

55

A Final Common MECE Grouping Is By Class Order

Class Order ExampleCompany A should

develop an integrated customer service

strategy.

Customer retention will improve, creating more

revenues.

Customer interactions will be more structured,

reducing burden on reps & increasing their morale.

Company A’s brand image will improve.


Governing Thought:

Key Line:

Support:

StoryboardingCreating the storyboard for your presentation

Section

4b

57

Translating your well-structured pyramid into a horizontal presentation (i.e., PowerPoint) is easy

From Pyramid to Storyboard

Cutting Edge Corporation should close its razor

manufacturing operation in Wisconsin and

manufacture razors in Mexico

Overall costs in Mexico are 75% lower than in

Wisconsin, resulting in recovery of

moving costs in 6 months

Key Line:

Governing Thought:

Mexico provides an operating environment that is as stable as Wisconsin,

ensuring continuity of operations

Manufacturing technology is more advanced in Mexico

than in Wisconsin, enabling Cutting Edge to leverageleading edge capabilities

Support:

One page for each idea

Page 2

Page 1SituationComplication(Question)

Each requiresa set-up

page

58

Overview

Cutting Edge Corporation currently manufactures all of its razors in a Wisconsin plant. The plant was built 50 years ago and the location selected because of its proximity to key suppliers.

However, over the last 3 years, all of your key competitors have moved their manufacturing facilities to Mexico. Your key suppliers are also beginning to move operations to Mexico.

1

Cutting Edge corporation should close its razor manufacturing operation in Wisconsin and manufacture razors in Mexico. Doing so will reduce costs while ensuring operating stability and providing access to world-class technology.

Reduce Costs — Overall costs in Mexico are 75% lower than in Wisconsin, resulting in fast recovery of moving cost

Ensure stability — Mexico provides a stable operating environment that will ensure continuity of operations

Improve capabilities — Manufacturing technology is more advanced in Mexico, enabling Cutting Edge to leverage leading edge capabilities

2

S: Cutting Edge Corp. currently manufactures all of its razors in a plant in Wisconsin

C: Cutting Edge’s key competitors have relocated their manufacturing facilities to Mexico

Q: Should Cutting Edge move its Wisconsin plant to Mexico?

Your 1st page of your document describes the situation and complication; the 2nd page provides the answer as well as the rationale

59

Key Line:

Governing Thought:

Support:

Cutting Edge Corporation should close its razor

manufacturing operation in Wisconsin and manufacture

razors in Mexico

Overall costs in Mexico are 75% lower than in

Wisconsin, resulting in full recovery of moving costs in 6 months

Costs are 75% lower operating generating

$10mm/year in savings

The net cost of moving from

Wisconsin to Mexico is $5mm, half the

annual savings

The net cost of moving will be fully

recovered in 6 month

Reduce Costs Labor Cost____

– ______ Investment____

– ______ Recovery

– ______ 3

Labor Cost

$22.4 34.0 41.9 57.5 67.2 53.9

1995 1996 1997 1998 1999 20004

Recovery

$22.4 34.0 41.9 57.5 67.2 53.9

1995 1996 1997 1998 1999 20006

Investment120.0

$25.550.5

24.020.0

1996 1997 1998 1999 2000 5

The 3rd page will start to go through the support for the governing thought using the top down approach

60

The Horizontal Logic of Storyboarding Leads the Audience From One Page to Another – your horizontal logic becomes your headlines

– Can the headlines of the deliverable be scanned to determine the context of the document?– Can the document tell a story without a consultant there to explain it?– In the case of a Word Document, does the Table of Contents tell its own story about the flow of the

deliverable?

Deliverables require key threads.

Threads flow through the entire deliverable.

This creates a narrative story.

A narrative’s logic can be easily followed.

The narrative must be understood by clients.

Understanding gives a deliverable credibility.

61

The Vertical Logic (Content) On a Page Must Support the Headline of the Storyboard

– Does the content of the page match the heading?– Is the page clean, simple, and uncluttered?– Does the page convey a message through the use of tasteful graphics and text?

E-tailors must focus on increasing Volumes.

• Seen increase in volumes over 3-year time period.

The company should build a warehouse in Chicago.

62

The complete Story Board should mirror the structure of your pyramid

\ \ \ \ \

•••

•••

•••

t)

\ FS \ \ \

– –

K: \FS\ \ \ \ \

•

•

•

•

•

•

–

–

–

\

• • •

• • •

• • •

Labor Cost

$22.4 34.0 41.9 57.5 67.2 53.9

1995 1996 1997 1998 1999 2000

Labor Cost

$22.4 34.0 41.9 57.5 67.2 53.9

1995 1996 1997 1998 1999 2000

Overview

key suppliers are also beginning to move operations to Mexico

1

Overview


1

Reduce Costs§ Labor Cost____

– ______§ Investment____

– ______§ Recovery

– ______

Overview


1

Overview


1

Reduce Costs§ Labor Cost____

– ______§ Investment____

– ______§ Recovery

– ______

Ensure Stability

MacroeconomicEnvironment

MacroeconomicEnvironment

Labor UnionsLabor Unions

LegalInfrastructure

LegalInfrastructure

TextTextText

TextTextText

TextTextText

Description

R e l o c a t i n g t o M e x i c oC u t t i n g E d g e C o r p o r a t i o n

F e b r u a r y 2 0 0 1

Macroeconomic EnvironmentChart Title: 14pt Bold, Title Case

Chart Subtitle: 12pt, Title CaseChart Units or Dates: 10pt, Title Case (e.g., $ Millions; Percentt)

Chart Title: 14pt Bold, Title CaseChart Subtitle: 12pt, Title Case

Chart Units or Dates: 10pt, Title Case (e.g., $ Millions; Percent

0102030405060708090

100%

1995 1996 1997 1998 1999 20000

102030405060708090

100%

1995 1996 1997 1998 1999 2000

Labor Unions

•First level bulletSecond level bullet

Title Text•First level bullet

Second level bullet

Title Text

Legal Infrastructure

First level bullet–Second level bullet



Label10pt Bold, Centered






Label: 10pt Bold, Centered Title Case

Improve CapabilitiesnProvision Cutting

•____________________n Packaging

•____________________nQuality Control

•____________________

Provision Cutting


Column Title Text




Column Title Text


First level bullet– Second level bullet


Column Title Text



Packaging

$22.4

34.0

41.9

57.5

67.2

53.9

1995 1996 1997 1998 1999 2000

Quality Control

Label: 10pt Times New Roman Bold



First level table bullet–Second level table bullet



Text Description:




Text Description:




Text Description:

Next Stepsn_______________________________n_______________________________n_______________________________n_______________________________

3

5 74

9 108 11

15141312

Overview

suppliers…

Mexico 1

OverviewCutting Edge Corporation currently manufactures all of its razors un a Wisconsin plant. The plant was built 50 years ago and the location selected of its proximity to key suppliers…

However, over the last 3 years, all of your keycompetitors have moved their manufacturing facilitiesto Mexico. Your key suppliers are also beginning to move operations to Mexico

1


§ Reduce Costs— Overall costs in Mexico are 75%

moving cost§ Ensure stability— Mexico provides a stable operating

§ Improve capabilities— Manufacturing technology is

leverage leading edge capabilities2


§ Reduce Costs— Overall costs in Mexico are 75% lower than in Wisconsin, resulting in fast recovery of moving cost

§ Ensure stability— Mexico provides a stable operating environment that will ensure continuity of operations

§ Improve capabilities— Manufacturing technology is more advanced in Mexico, enabling Cutting Edge to leverage leading edge capabilities

2

Investment

120.0

$25.5

50.524.0

20.0

1996 1997 1998 1999 2000

Investment

120.0

$25.5

50.524.0

20.0

1996 1997 1998 1999 2000

Recovery

$22.4 34.0 41.9 57.5 67.2 53.9

1995 1996 1997 1998 1999 2000

Recovery

$22.4 34.0 41.9 57.5 67.2 53.9

1995 1996 1997 1998 1999 2000

5 6

63

There Are Six Primary Storyboarding Pitfalls

#6 Visual mismatchSupport and headline are unrelated

#1 See belowHeadline does not capture key idea of page

#2 So what?Headline offers information but no conclusion

#3 Data dumpSupport is not logically presented

#4 Orphan dataSupport is not captured or introduced by headline

#5 Visual clutterPage has too much and too complex information

64

Keep These Additional Principles in Mind When Developing Content

Clarity of messageThe “point” of the slide should be clear within five seconds

SimplicityMinimize clutter that obscures the message

Self-sufficiency of each slideSlides should be able to stand alone and retain their meaning

Assumptions, notes, sources and file references MUST be documented on the slides

Logical flowThe headlines should convey a coherent “story” WITH A CONCLUSION

Each slide should link to the previous and next slides

Professional languageAvoid slang or business jargon

StoryboardingPractice case

Section

4c

Mini-Exercise

Complete the following

practice case

66

E-mail from Steve to Company A ManagerProject Manager,

I’ve just landed in Germany and received an e-mail from another team on the ground at CareFirst.

Using information that they have access to, they have done some analysis and determined that CareFirst should focus on a substantial workforce reduction. They have developed the detailed recommendation slides and have asked me to include them in the presentation on Wednesday.

Could you please have the team to take a look at the attached slides, bubble them up into a recommendation, and add it in as the third key recommendation in your presentation? I think this is a good opportunity for us to touch on a lot of their areas of concern – leading to a great deal of work for Company A.

Thanks,Steve

Mini-Exercise


practice case

67

CareFirst still operates call centers onshore, refusing to take advantage of reduced offshore rates• TBD.

Position # of Employees

Onshore Salary per employee

Total Onshore Salary

Offshore Salary per employee

Total Offshore Salary

Customer Service Rep. 223 $38,000 $8,474,000 $14,820 $3,304,860

Supervisor 15 $51,000 $765,000 $19,890 $298,350

Trainer 7 $60,000 $420,000 $23,400 $163,800

Manager 3 $89,000 $267,000 $34,710 $104,130

Totals 248 $9,926,000 $3,871,140

Total Savings: ~ $6 Million

Source: CMT Analysis

Mini-Exercise


practice case

68

The Membership function has repetitive sub-functions resulting in wasteful allocation of resources• In Payments/Requisitions sub-function, CareFirst could eliminate eight positions resulting in

approximately $400K in savings per year.• If all sub-functions are assessed, savings could reach over $2 million.

Functional Duplication

Data Entry3 11

Payments1 3

Proof & Ctrl6 15

Investigation2 8

4 5

Finance9 40

Data Entry2 6

Payments2 13

Proof & Ctrl1 1

Investigation2 3

Proj. Mgt.1 4

Finance4 12

Payments3 41

Proj. Mgt.1 3

Finance1 3

Consolidated Bus.Accounts

CareFirst of Maryland

Group Hosp. & Med Srvs.

Membership

Proj. Mgt.

FunctionGroups FTE

Key:

35

57

38

37

28

77

TotalFTEs

Data Entry3 18

Proof & Ctrl5 22

Investigation3 26

Proj. Mgt.4 16

Finance3 22

BCBS of Delaware

Source: CMT Analysis

Mini-Exercise


practice case

69

CareFirst should remove approximately 160-290 employees in management positions to maximize efficiency

• By aligning CareFirst’s managerial span-of-control with Best In Class (BIC) levels… TBD.

SMD/MD/EVPSVPs

1st VP/VPAVP

1 Headcount Data as of beginning of June 20062 Best In Class (BIC) based on Company A Healthcare

experience3 Assumes fully loaded cost of $100K/person

Total Savings Range: ~ $16 – 29 Million

Number of People$ Millions3

Opportunity

Number of People

Potential Savings

3.2

Existing

286$28.6

4

BICHigh2

3.6

BICLow2

Staff 4570 45704570Management 1428 11421269

159$15.9

Management:Staff Save Range

Management:Staff Ratio of 1428:4570 or 1:3.2

Total Number of Management by FunctionNumber of People1, %

260

381

239

167

174

1428

46%

17%

27%

52%

81%

23%

Total Management

Management as % of Total Staff

207 85%

Finance 12% 23% 46% 19%

Marketing 13 24.1 59 4

Membership 11 24 55 11

Information Technology

13 17 48 22

Human Resources 19 13 44 25

Communications 12 18 41 29

CareFirst Total 13 21 52 14

Mini-Exercise


practice case

70

Exercise 4. Pyramid to Story Board

Work together as a team to complete the following:

• Organize your two recommendations, along with the workforce reduction strategy, into a logically structured pyramid

– Your recommendations should include the pro-forma analysis targets– Your support should justify the recommendation and the target so make sure to incorporate

assumptions, justification and rationale from the financial analysis exercise

• Using notecards, physically arrange your pyramid on a flipchart or on the wall for presentation to the Project Manager

• Convert the content from the pyramid into a skeleton presentation deck; focus on structure, slide titles and supporting information, not formatting

Mini-Exercise


practice case

Appendix

Section

5

72

Questions to the room… • What was the most helpful section of the pyramid in structuring your

recommendations / presentation?

• What was the most challenging section of the pyramid to understand / develop?

• How was it to incorporate the workforce recommendation into your pyramid?

• If you were at a client site, how might you apply the pyramid on a day-to-day basis?

73

Common Patterns for Introductions

Choosing Among Alternatives

Making a Recommendation

S: We want to do XC: We have 3 ways to do XQ: Which way is best?

Explaining “How To”S: You must do XC: You currently can’t do XQ: How do we do X?Do X in

Y way

Select C

Y is the optimal solution

S: You are doing XC: X is causing a problem.Q: What should we do?

ExamplesCompany A is currently using a logistics management system.The system is not working properly.

S:

C:

How can we fix the system?Q:A: You can fix the system by further

customizing the software.

Company A needs more office space.S:Company A can build a new building, buy a new buildingor lease additional space?

C:

Which alternative is best?Q:Company A should buy a new building.A:

Acme has been growing revenue quickly.S:Rapid growth has strained Acme’s operations.C:What should Acme do to maintain operations?Q:Acme should build 2 new operations centers.A:

74

Exercise 1: Grouping the Ideas

Senior management is dissatisfied

with the current cost reports

The reports are often

delivered late

The data is sometimes inconsistent with other

reports

The format of the reports is hard to follow

Key numbers on the reports

should be highlighted

The reports are not

generated frequently

enough

The font on the reports is

too small

The reports contain more data then is necessary

The data on reports often

contains errors

KeyLine:

GoverningThought:

Group the points into categories

Mini-ExerciseGroup the ideas into categories

75

Exercise 1: Grouping the Ideas

The reports are often

delivered late

The data is sometimes inconsistent with other

reports

The format of the reports is hard to follow

Key numbers on the reports

should be highlighted

The reports are not

generated frequently

enough

The font on the reports is

too small

The reports contain more data then is necessary

The data on reports often

contains errors

KeyLine:

GoverningThought:

Timing TimingData Data DataFormat Format Format

Senior management is dissatisfied

with the current cost reports

76

Business Plan Scorecard