Empirical Methods for Business Strategy

Effective Methods for Communicating Information

Deloitte Consulting LLP

Agenda

Introductions and Objectives Effective Data Analysis and Executive Messaging Applied Exercises Wrap-up and Final Presentation Guidelines

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High-level Path to a Decision

Focus of the overall assignment

Problem / Question

Frameworks / Tools

Analysis / Recommendations

Communication

What is the situation and complication? What is the context? What is the scope?

What approaches are relevant for this context? What methods will help add structure to the thought process?

What information is required to answer the question? What insights are revealed by the data? What are the options?

What is the story? How do I tell it? Who is the audience for it?

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Key Considerations for Data Gathering

Five real-life facts about collecting information: 1. Data is not all in one place

Analysis / Recommend ations

Communica tion

- There is no such thing as a perfect repository or source for data; Companies still often use disparate systems

2. Getting the right information and data is actually more complex than performing the analysis
- Generally teams spend twice the amount of time on constructing the dataset than on generating the computations

3. Setting the boundaries for parameters is key (time period, geography, etc)
- Inconsistent data is typically the norm, not the exception. Ensuring youre comparing apples to apples is critical

4. Understand the underlying assumptions upon which the analysis hinges

- Once a partially completed database is created with the available data, make reasonable assumptions to fill in the gaps using comparable data (whenever possible) or business sense; many analyses are determined by a few critical assumptions

5. Pay proper respect and attention to organizational dynamics - Access to information is typically controlled by a few gatekeepers who may or may not be helpful

Often, an immediate answer based in 80% fact is required rather than waiting for 100% complete information to make a decision
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Spectrum for Analyzing Information

30,000ft Overview
Set the Stage Peel Back the Layers

Analysis / Recommend ations

Communica tion

In the Weeds
Figure Out the Details

Clarify understanding of the situation with high-level analysis

Refine existing and develop new hypotheses , while balancing expediency with depth

Develop specific, actionable insights through detailed analysis

Revenues Forecast per Region

Product Portfolio Analysis

Marginal Analysis

Qualitative business intelligence (through interviews or otherwise) should be used throughout the analysis process to ensure quantitative data is aligned with business decisions
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Guide to Executive Messaging

Analysis / Recommend ations

Communica tion

Executive level messaging is the development of thoughts, ideas, and data into an actionable, outcome-driven deliverable Questions for consideration
What is most top of mind for the executive? What is the current context for the communication? Does the executive have a preferred communication format or style?

Feedback from Senior Practitioners

Get to the point. Executives want the punch line first. Make messages simple, logical and put the major message up front. If they want to more details or clarification, theyll ask for it. Make the message very personalized and efficient communicate to the executive that you understand their situation with specific details and insight Use the minimal set of data to provide analysis and recommendations
The Outcome The Executive
Political & Personal influences Actions and emotions that influence the outcome

Framework
Start by understanding the desired outcome; Then work backwards; Reiterate and refine
The Data & Analysis
Necessary analysis and data to support the experience of the message

The Business
What impacts the business Pain points

Iterate & Refine Revisit the steps in the framework to refine the message
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A Focus on Value

Analysis / Recommend ations

Communica tion

It is crucial not to lose sight of the business value when deep in analysis or developing recommendations

Shareholder Value

Revenue Growth

Operating Margin

Asset Efficiency

Volume

Price Realization

SG&A

COGS

PP&E

Inventory

A/P & A/R

Effective messaging will highlight the impact of business decisions on shareholder value

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Agenda

Introductions and Objectives

Effective Data Analysis and Executive Messaging

Applied Exercises

Wrap-up and Final Presentation Guidelines

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Remember What you are Answering

Nilia SpA management is concerned about overall profitability and believe there is potential to optimize its overall product portfolio based on changes in trends and regional demand

The Challenge

The Ask

They are asking Anderson to perform a product portfolio analysis and to identify an efficient strategy to improve the Firms profits. Nilia SpA is looking for pragmatic, datadriven solutions for growth and margin improvement You are going to present for 10 minutes to the executive team and recommend a goforward product portfolio strategy Channel strategy and supply chain are out of scope

The Parameters

The firm has a specific goal for overall operating profit of 35% in the near-term with long-term goals of 40%

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Framing the Answer for the Presentation

All analysis should focus on value What are the organizations financial objectives? How will it help the organization achieve its objectives? What did you hear from executives in the interviews?

Develop a Portfolio View

Considerations

Pour Lui Nilia Pour Elle

Clothes Shoes & A Clothes Shoes & A Fit with Management Strategy Product Segmentation Regional Impact Revenue Impact Profit Impact

Emporio Nilia

EN Uomo EN Donna NiJe Him NiJe Her

Nilia Jeans

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Week 9 Summary
Key Takeaways:

Understand and explain key assumptions in the analysis; validate assumptions with qualitative data, if necessary Use distinct pieces of analysis to fill in different parts of the story set the stage or highlight an actionable insight Dont lose sight of the outcomes you are trying to achieve and craft the communications accordingly Tie recommendations back to the value they deliver to the business

Preparation tips:

Each presentation will last 10 minutes with 5 minutes of Q&A Do not be overly scientific; focus is on pragmatism No data is perfect; make assumptions where necessary and communicate assumptions clearly (source the data) Do not make huge leaps beyond provided material; creativity is encouraged, but not fantasy

Evaluation criteria for the presentation:

Logical structuring of the argument Strength of the supporting analysis Coherence and appeal of the communication

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