Blog archive - May 2012
Use the blog to discuss and comment on the latest industry insights provided by our analyst experts.
by Katherine Burns 30 May 2012
Well, it’s my first blog. Not just my first one for Frost & Sullivan – my first blog ever. As a professional writer, and professional communicator, I guess this means I’m somewhat old-fashioned. I’d rather write something longhand than type it, and I wish we’d all put the Postal Service back in business by sending each other some letters. (Remember letters? No “you’ve got mail” ding, dong, ping, or gong could ever be better than the silent anticipation of opening an envelope.) Anyway, I’m old-fashioned in most aspects of my life. I love old movies. I love old music. A few weeks ago my husband asked me to name a famous Grunge band, and the best I could do was Aerosmith (apparently they are NOT “Grunge”). Somehow this makes me eccentric, whereas the fact that he couldn’t tell me the difference between Ella Fitzgerald and Julie London just means he’s cool. Whatever. And so I’ve skipped through life, mostly paying homage to things that happened before I was born, and all to a Cole Porter soundtrack. I’ve watched Singing in the Rain more times than I could count; I’ve memorized all of Fred Astaire’s movies. I’ve devoured books on the Golden Age of Hollywood. Mid-20th Century detective stories are my vice (I’ve read them all, but Nero Wolfe’s brownstone is my absolute ideal…and if that doesn’t mean anything to you, do yourself a favor and pick up Some Buried Caesar, or maybe Champagne for One). Speaking of mid-20th Century detective stories: One of the lovely things about them is the way the detecting is done. There’s no scanning of Twitter pages, no research of Facebook posts. The hero might read back issues of the New York Times, or he might pay a trip to the library. He might even go really high-tech and type something, on a really snazzy machine like an Underwood. In all, a decidedly low-tech (but always successful) way of arriving at whodunit. Imagine my anxiety, then, when I was asked to write about technology. Not the technology of yesteryear—but the technology of tomorrow! Technology that hasn’t even happened yet, and how we can predict it and prepare for it! Did I mention I’ve barely started to blog? As I like to remind my boss, I have only to look at a computer to fry its insides past the point of hope or redemption. Perhaps I should explain why I was so chosen. I’m responsible for writing a series of Growth Team Membership deliverables called the Growth Process Toolkits. These toolkits are essentially primers – how-to-manuals—on key topics that drive a company’s top-line growth. For example, we’ve published toolkits on M&A, new product launch, distribution channel optimization, and more. We needed to write a toolkit on technology strategy, and as the author of the series, the responsibility fell to me. I was, as I said, somewhat hesitant to begin. What could I possibly teach on this subject, when I was so ill-informed myself? And then I realized two lovely things all at once: I’m not the only one who’s overwhelmed by the rapid, nearly disorienting pace of technology evolution today. It’s OK to acknowledge this feeling, and to empathize with others who may also be struggling to make sense of the chaos. That’s why I decided to open the toolkit with a quotation from historian Henry Adams (for you history buffs out there, Mr. Adams was a direct descent of John, who was his great-grandfather). I came across this passage while reading David McCullough’s wonderful new book The Greater Journey: “Every day opens new horizons and the rate we are going gets faster and faster till my head spins and I hang on to the straps and shut my eyes.” He wrote those words in 1900 – but how apt they seem today! Maybe not everyone reading this would self-describe as “old-fashioned,” the way I have, but I think everyone can relate to that sentiment and sometimes feels powerless to keep up with…well, anything today. We live in a crazy time. That’s probably why we need a toolkit on technology strategy in the first place. And that leads me to my second realization: The ideas don’t have to be mine; I just have to present them clearly. One of the great things about my job, and about writing these toolkits, is that it’s made easier by working with extremely smart people. I may not know a lot about technology, but I know who in our company does, and I know how to seek them out, ask them questions, and see how they’ve helped others think through technology-related challenges. All I have to do is collect the goods and translate them into a single, cohesive story. I might not be good at blogging (am I?), but I can certainly do that. And so there was no need for trepidation—and in fact, this was a good chance for me to learn about something that I’ve avoided, perhaps to my detriment, for a very long time. I’m happy to say that the production of this new toolkit has been a learning experience for me; I hope reading it will be one for you as well. That last sentence probably makes it sound like the toolkit is finished. It’s not. But it will be soon, and we’ll share it with you as soon as it is. Check back in with us next month, and we’ll provide some more detail on it (that, and my favorite detective stories). Until then, happy computing. Katherine Burns Katherine is the Director of Strategic Communications for Growth Team Membership, a premier best practices research group within Frost & Sullivan.
by Holly Lyke Ho Gland 29 May 2012
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Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/innovation and product development executives throughout Europe. The executives were asked to identify their most pressing challenges for 2012. The survey reveals that R&D executives continue to struggle with doing effective portfolio planning and leveraging a wide network for idea generation. Moreover, respondents are challenged by how to generate an accurate technology map—outlining customer needs, available solutions, and technology gaps—to guide portfolio planning and project prioritization. The other prominent challenge is a perennial one, identifying the next breakthrough idea. To examine these challenges in more depth, the survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. R&D executives attribute their challenges to two primary causes: limitations in staffing and processes. R&D executives are unlikely to see additional staff in 2012; most respondents expect staffing level to remain static. On a positive note, budgets are expected to increase in 2012. Despite the emphasis on breakthrough innovation, most of the budget increases will be allocated to short-, medium-term, and incremental innovation projects. In view of open innovation’s (OI) growing prominence and potential to help R&D develop emerging or disruptive technologies, the survey asked respondents about their use of OI. Surprisingly, given its prominence in the last two years’ survey results, the majority of respondents do not leverage OI in their product development processes. This may be attributed to respondents’ challenges with establishing partnerships and measuring the ROI of OI efforts. In regards to creating OI partnerships, respondents struggle with identifying partners with the right IP, establishing clear communication channels, and building sustainable trust. The R&D departments that are embracing OI tend to use it for idea generation and screening during product development life cycle and customers are their primary source of ideas. In terms of staffing for open innovation activities, most respondents employ part-time technology scouts. Open Innovation for Idea Generation - 2012 R&D Innovation Priorities Survey Results View more presentations from Frost & Sullivan
by Jannette Whippy 24 May 2012
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As an in-house designer who works alone, I require constant feedback. It’s the only way to know if I am on the right track. Recently, I had an epiphany: I have ignored my best design resource available, my fellow designer. I could have kicked myself for the oversight. I was working on a poster that was just not fitting together well. I ignored my first instinct to send it to a friend, and instead sent it to a fellow designer in a different department. Her insightful comments and suggestions helped me to see the holes in my design and the fixes we discussed made the poster better. Feedback is only as good as the reviewer. If your reviewer doesn’t know your intended audience or have much experience in your subject, their feedback (while interesting) is not as meaningful as another, more appropriate, reviewer. Take care in gathering feedback. Your work will get better if the feedback gathered is from someone who understands/is part of the audience you wish to engage. As Seth Godin says: “Shun the non-believers.”
by Austin Pullmann 23 May 2012
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Or rather, what is an example of a subject line you simply could not resist opening? I can think of a few – “How you can do what xx did”, or “Does this version work for you?”. Sometimes no subject line is the most effective of all. The airlines could stand to improve at this. I’m subscribed to perhaps every domestic airline’s email list, and the emails (judging by subject line) have virtually nothing to say. Subject lines consist of “Austin, check out these great offers”, or “Take advantage of our (insert month) sale”. The airlines must also get data from the same source on the best time/days to launch an email, since they tend to dump into my inbox at roughly the same time. In an effort to uptick open rates and increase email campaign effectiveness, here are 3 tips: Spike curiosity – This can be achieved in a number of ways. Introducing an incomplete thought that can only be completed by opening the email is very effective. For example, “Do you believe it?” virtually requires a reader to open it and learn more. Get to the point – Every word chosen either adds or detracts from the message. Limit subject lines to 50 characters or less, and ideally just 4-5 words maximum. The goal of the subject line is to get the reader to open the message. Once that’s been accomplished, the message itself can convey your objective. Don’t shoot yourself in the foot – There are certain terms that recipients are reluctant to open (such as “Free!”, or “Reminder”, or “Help”). Even worse, some terms are set to be blocked by spam filters. Choose wording that will grab the reader and entice them to open the message. Use these tips in your next email campaign and compare the results with previous campaigns. Post tips of your own if I'm missing anything critical!
by Holly Lyke Ho Gland 23 May 2012
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Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/innovation and product development executives globally. The executives were asked to identify their most pressing challenges for 2012. GTM will focus its best practices research to address the prominent issues identified in the survey. This year’s survey indicates R&D executive struggle with two chronic challenges: (1) managing the product portfolio and (2) finding the next disruptive idea. In regards to portfolio management challenges, respondents struggle to develop accurate technology maps for planning, to prioritize innovation projects, and measure their portfolios’ success rate. Overcoming these challenges requires R&D executives to map out their portfolio strategy and develop key performance indicators to guide project prioritization and monitoring. Identifying the next breakthrough idea rarely involves a “Eureka” moment, but does require time and resources. While companies understand the need to develop emerging technologies, they are reluctant to commit substantial resources to high-risk projects. This risk aversion appears to be impacting R&D budget allocations—budgets for incremental innovations are increasing, while disruptive technology budgets remain stagnant. The survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. R&D executives attribute their challenges to two primary causes: understaffing and processes (ineffective or nonexistent process). On a more positive note, R&D executives foresee additional resources—both staffing levels and budgets are expected to increase in 2012. Given the pressure on R&D executives to tap into new ideas and emerging technology, survey respondents were asked about their use of open innovation. The majority of respondents employ some form of open innovation team (OI)—typically a small, dedicated sub-group within R&D. It comes as no surprise that OI’s primary role in the product development life cycle is idea generation and that customers are the primary source of ideas. Even though companies are committed to using OI to increase their ability to develop emerging or disruptive technologies, respondents struggle with the fundamentals of establishing an OI process: securing internal buy-in, getting resources for idea testing, and creating a collaborative framework with external partners. Idea Generation and Portfolio Management - 2012 R&D Innovation and Production Development Priorities Survey Results View more presentations from Frost & Sullivan
by Holly Lyke Ho Gland 22 May 2012
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Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/Innovation and product development executives in North and South America. The executives were asked to identify their most pressing challenges for 2012. GTM will focus its best practices research to address the prominent issues identified in the survey. According to the 2012 survey results, R&D executives continue to wrestle with portfolio management. Specifically, R&D executives need to prioritize innovation projects, balance the value and risk of the portfolio, and allocate budgets across a wide range of project categories. Respondents also struggle with two other persistent issues: (1) identifying breakthrough ideas and (2) integrating inputs from internal stakeholders (e.g., Sales and Marketing) with portfolio planning. The survey reveals differences in challenges between different business models. For example, the key challenges for R&D executives in B-to-B companies are generating technology roadmaps for portfolio planning and managing an open innovation process. In contrast, their peers in B-to-C companies are challenged by securing buy-in for promising innovations with senior management and streamlining the product development process to reduce costs. The survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. By and large, R&D executives attribute their challenges to understaffing. Fortuitously, staffing and budgets are expected to increase in 2012. Ironically, though respondents stress the importance of driving breakthrough innovations, short-term or incremental projects account for the majority of the 2012 budget increase. Given the potential of open innovation (OI) to tap emerging technologies, survey respondents were asked about their use of OI. The majority of respondents (58%) apply OI approaches to their product development process. When asked about the role OI plays in product development, respondents report using OI for ideation generation and screening. However, respondents in B-to-C companies are more likely to use OI throughout the product development process than their B-to-B peers. The composition of respondents’ OI teams varies by business model. Respondents within B-to-B companies employ small, dedicated open innovation teams, while R&D executives in B-to-C companies use part-time technology scouts. While most R&D organizations engage in OI activities, R&D executives still struggle with implementation: establishing an effective OI process, garnering resources, and collaborating with partners. Respondents in B-to-B companies are focusing on developing a method to measure the ROI of OI activities, while their peers in B-to-C companies are endeavoring to establish a structured process to test the feasibility of idea submissions. From Portfolio Management to Open Innovation - 2012 R&D Innovation and Product Development Priorities Survey Results View more presentations from Frost & Sullivan
by Nancy Fabozzi 16 May 2012
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The CMS EHR Incentive Programs The adoption of health information technology like electronic health records (EHRs) and health information exchange (HIE) has been a top priority of the United States federal government since the administration of George W. Bush. The Obama administration has accelerated the push towards health IT with approximately $30 billion in incentive payments earmarked for various initiatives as part of two key pieces of legislation - the American Recovery and Reinvestment Act of 2009 (ARRA) and the Patient Protection and Affordable Care Act (PPACA) of 2010. The CMS EHR Incentive Programs, part of AARA, will provide incentive payments to eligible professionals, eligible hospitals and critical access hospitals (CAHs) as they adopt, implement, upgrade or demonstrate “meaningful use” (MU) of certified EHR technology. Eligible professionals can receive up to $44,000 over five years under the Medicare EHR Incentive Program. Incentive payments for eligible hospitals and CAHs may begin as early as 2011 and are based on a number of factors, beginning with a $2 million base payment. share this clip) Tracking the Progress of Health IT Adoption Given the potential for health IT to significantly improve some of the most glaring inefficiencies and quality concerns that plague the health system today, health policy analysts are keeping a close watch on how providers are progressing in the move to digital technologies. In addition, the large amount of tax-payer funds involved with health IT drives the need to collect robust metrics and pinpoint potential areas of concern. The nonprofit Robert Wood Johnson Foundation (RWJF), which is the largest philanthropy in the nation devoted exclusively to public health issues, works with the Office of the National Coordinator for Health Information Technology (ONC) to report on various health IT issues, including tracking progress toward the universal adoption of EHRs. A series of reports have been issued by RWJF since 2006 and ONC will use a portion of this year’s study (Health Information Technology in the United States: Driving Toward Delivery System Change, 2012) to report to Congress on the status of health adoption. The newest report expands on previous analysis on health IT trends by investigating providers’ (hospitals and physicians) readiness to meet the requirements of the CMS EHR Incentive Program and also explores the role of health IT in other health care reform initiatives. Included in the report is a look at EHR adoption data from surveys of U.S. hospitals and office-based physicians; recent data on the progress and challenges of HIE at both the state and federal levels; the importance of health IT to health reform initiatives including patient-centered medical homes and accountable care organizations; and several other issues relevant to health IT. Adoption Trends as Reported by RWJF The authors found steady increases in the level of EHR adoption for physicians and hospitals throughout the United States. For physicians in ambulatory practice, the authors report on data collected by the CDC's National Center for Health Statistics (NCHS) as part of its National Ambulatory Medicare care Survey (NAMCS): Electronic Medical Records Supplement (funded by ONC). The most recent survey was sent to 10,301 physicians in 2011 and had a response rate of 64 percent. The NAMCS surveys show that the proportion of physicians reporting the use of any EHR (defined as either all electronic or part paper/part electronic) increased from 17.0 percent in 2002 to 57.0 percent in 2011 while the proportion of physicians with at least a basic system rose from 12.0 percent in 2007 to 34.0 percent in 2007. In terms of the rate of EHR adoption relative to physician characteristics, the data showed primary care physicians are increasing EHR adoption at a faster rate than specialists and that physicians in practices with more than two physicians and those in the Northeast are adopting at a faster rate than others. As for intentions to qualify for EHR incentive funds (either Medicare or Medicare), data from the NACMS showed that 51.3 percent of physicians reported that they intended to apply. However, only 10.5 percent of those intending to apply actually have an EHR system with the appropriate functionality to meet MU requirements as stipulated by the EHR Incentive Program. The data also showed that those physicians working in physician-owned practices were significantly more likely to apply for EHR incentive funds. As for hospitals, the authors report on data collected by the American Hospital Association (AHA) Health Information Technology Supplement (also funded by ONC). The AHA survey of health IT adoption is sent as a supplement to AHA's Annual Survey. Data for the 2011 survey was collected from October through December 2011 from 2,646 hospitals, approximately 50 percent of all acute care hospitals in the United States. For this survey, EHRs are characterized as basic or comprehensive depending on various functions and extent of use. The AHA survey found that hospitals’ use of basic EHRs rose from 11.5 percent in 2010 to 18.0 percent in 2010 and the use of comprehensive EHRs rose from 2.6 percent to 8.7 percent. Of concern, the authors report that the gap between the use of EHRs in larger, urban teaching hospitals and smaller, rural hospitals is growing. Data show that adoption among lager hospital increased by 17.3 percentage points compared to 10.1 percentage points among smaller hospitals. The authors also point out concerns around hospitals' ability to fully meet MU based on key functionalities required (e.g., drug-drug and drug-allergy checks, quality reporting and CPOE). Progress is Impressive but Providers Need Hands On Assistance to Meet Meaningful Use As the RWJF report clearly shows, the adoption of EHRs has been on an upward swing for some time but has significantly accelerated since the passing of AARA and PPACA. The latest data being reported from CMS (March 2012) shows that a total of 225,765 providers have registered for the CMS EHR incentive programs - 222,282 eligible professionals (physicians, nurse practitioners, dentists, etc) including 148,476 under the Medicare program and 73,806 under Medicaid, and 3,483 hospitals. Payments, which began in May 2011, have totaled approximately $2.4 billion. While things are certainly moving in the right direction, albeit somewhat slowly, data from the RWJF report and CMS verify some key trends and potential concerns around EHRs that we have been tracking for some time. First, many physicians and hospitals are moving to digital technologies because they simply must in most cases. This is due to a number of factors in addition to incentive funds including growing complexities in reimbursement from both government and commercial payers; the need to drive cost efficiencies and streamline operations; the proliferation and growing familiarity with information technology; an explosion of data and information due to technological and scientific advances; and, most imperative, the need to improve the quality and safety of patient care. However, the adoption of EHR technology does not automatically translate into MU - that is, meeting the government’s core objectives around specific functions designed to improve patient care. This is due to technical issues around EHRs (i.e., some providers have EHRs that are not equipped with core MU functions like clinical decision support, etc) as well as logistical issues that providers face in actually adapting to workflow changes, some of which are quite daunting. Technology Vendors Must Be Highly Proactive in Helping Clients Achieve Meaningful Use As we are seeing more and more, getting to MU, and ultimately sustaining the process, is complex and multi-dimensional entailing significant changes in technology use, workflow, communication, and culture on both organizational and personal levels. MU is a living, breathing entity that must be continuously nurtured as the government adopts ever more stringent requirements to qualify for incentive funds. The drumbeat round MU complexities is growing louder, particularly since CMS released the proposed requirements for Stage 2, set to begin in 2014. While the government may continue to be flexible around timelines and some aspects of MU requirements, it is unlikely that requirements will significantly relax. What this means from a market perspective is that those vendors who have technologies and services that are particularly adept in helping clients meet and sustain MU will continue to gain. It will come as no surprise that the need is particularly acute for ambulatory providers and small hospitals. Vendors must be extremely proactive about understanding and meeting client challenges around MU, both technical and logistical. Selling the EHR technology is not enough – ongoing communication and support are critical for survival in this increasingly competitive market. Technology vendors must be willing invest time and resources in helping their clients succeed.
by Holly Lyke Ho Gland 16 May 2012
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The Growth Team Membership™ (GTM) program recently surveyed marketing executives to identify their principal challenges for 2012. The survey found that marketers struggle to (1) cultivate a differentiated value proposition that resonates with clients, and (2) ensure Sales adopts the appropriate messaging and materials. Survey respondents indicate that understaffing and a lack of strategic alignment across Sales and Marketing’s leadership are the primary causes of Marketing’s struggles. By joining forces with Sales, Marketing can address the strategic alignment issue and tap into additional staff. However, successful collaboration requires taking a closer look at the following three areas: 1. Goal Alignment—Since revitalizing the value proposition requires a substantial commitment in time and resources, it is essential that Marketing and Sales agree on the reason for the revitalization at the outset. To achieve this goal, marketing and sales executives need to build consensus on answers to the following questions: Are our assumptions about how we are perceived by our customers accurate? Can we quantitatively prove any of our assumptions? How does our value proposition differentiate us from the competition? Does our current messaging tell the story we want? How consistently is our messaging being used? 2. Sales Involvement—No matter how necessary, or how compelling, the redesigned value proposition may be, the sales force may still resist it. Successful marketers understand that sales reps want some measure of control over the way they communicate with their customers and are prone to resenting outside influence. Marketers therefore involve the sales force throughout each stage of the new value proposition’s development (including messaging creation). This inclusion builds cross-functional ownership of the new messaging and limits the likelihood that Sales will reject it later on. Furthermore, it speeds new messaging roll-out, since the sales force will already be familiar with the value proposition and how to tailor its message for various segments. 3. Continuous Engagement—Trust and transparency are crucial to any long-term successful collaboration between Sales and Marketing. One way to maintain this openness is through regularly scheduled meetings between senior management in Sales and Marketing. Growth Team Membership researchers have found that a monthly cadence works best for keeping the conversation flowing, collecting feedback, and addressing collaboration challenges. Monthly meetings also allow marketers to track value proposition adoption and identify opportunities for improvement. While sales and marketing collaboration is a perennial challenge, some companies have found ways to unite these often-at-odds functions. Take the experience of Kronos, a workforce management software solutions company. For many years, Kronos considered itself a market leader, in spite of its flat product revenue growth. This disconnect stimulated Marketing and Sales to collaboratively revise and differentiate Kronos’ value proposition and messaging. Kronos’ sales and marketing teams followed the practices outlined above—alignment, inclusion, and engagement—to overcome key barriers to collaboration. Successful collaboration has resulted in 92% of the sales force consistently using the messaging. Kronos’ new value proposition has also led to a 36% increase in its earnings before interest, taxes, and amortization (EBITA). In conclusion, Growth Team Membership survey data suggest that marketers are committed to differentiating their companies through redesigned value propositions. However, Marketing’s efforts are constricted by a lack of coordination and buy-in from Sales. By including Sales in the development process, Marketing can ensure its efforts are adopted and strengthen its relationship with Sales for long-term success. Want to learn more about best practices for sales and marketing integration? Sales & Marketing: Revitalizing the Value Proposition View more presentations from Frost & Sullivan
by Jessica Jeffcoat 14 May 2012
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The future is inherently unpredictable, forcing companies to conduct strategic planning in the face of great uncertainty. As a result, many companies struggle to develop strategies that take into account long-term threats and opportunities, while balancing short-term priorities. Scenario planning is a structured methodology you can use to test existing strategies against varied future states or scenarios. Scenario planning is not meant to predict the future. Instead, it allows you to explore a series of high-impact, uncertain—yet plausible—future states. This knowledge, in turn, enables you to recognize the “signposts” of scenarios as they unfold and react accordingly. Frost & Sullivan’s Growth Team Membership (GTM) profiled Merck & Co., Inc. (the global pharmaceutical company) and how it applied scenario planning. Merck’s objective was to better anticipate how different strategies would hold up against the state of the global healthcare environment looking out 10 years. What follows are some of the key insights the team gleaned in understanding Merck’s approach. Garner Internal/External Insights and Buy-In To establish plausible scenarios for the future, it is important to involve a cross-divisional team to garner the full range of views within the company. It is equally important to tap into external perspectives on the industry, and outside scenario-planning consultants, to lend credibility and objectivity to the effort. Finally, C-level buy-in and participation in the initiative must be secured. Challenge Assumptions about the Future Before you can start exploring future scenarios, you must first understand your existing assumptions about the future. What is the conventional wisdom about where the industry and economic, political, and regulatory factors are headed over the next 10 years? What assumptions about the future underpin this outlook? Once this information has been brought to light, you need to challenge your underlying assumptions to explore alternative future scenarios. It can be helpful to pose this question: What if, and how could, your assumptions about the future turn out differently? The answers to this question uncover they key uncertainties you have about the future and allows you to start envisioning different future scenarios that could emerge. Explore Future Scenarios’ Implications After considering a range of alternative future scenarios, it is important to focus on a digestible number of scenarios—generally no more than four—to explore in depth. It is essential to filter the scenarios by plausibility and impact to select the most significant, relevant scenarios for your company and industry. Identify signposts of the future: A critical step in evaluating the final group of scenarios is to identify early indicators that would signal each scenario is coming to pass. A company should continually monitor this list of indicators to look for early warning signs so it can determine what, if any, strategic shifts are necessary. This enables you to hedge your bets against future risks and gain a first-mover advantage. Test current strategies against divergent futures: It is important to think about how your company’s current strategies would perform in the context of each scenario. What challenges and opportunities would you face? What actions should you consider taking now to prepare for each scenario? Revisit Investment Decisions Once you have identified and explored the most plausible scenarios, the next step is to present your findings to executive management and help them internalize the scenarios’ implications. It can be beneficial to run an investment exercise with executive management that compares their current long-range resource allocations with the allocations they would make in the context of each future scenario. If a particular scenario were coming to fruition, how might your company change its resource allocations toward existing and new business areas? This type of exercise can translate scenario planning into strategic discussions and decision-making about the future. Learn from Merck’s Approach to Scenario Planning Scenario planning enabled Merck to embed longer time horizons in its strategy planning, gain a deeper understanding of its internal capabilities and the competitive landscape, and prompt scenario-based resource allocation decisions. Register for a complimentary webinar on May 22nd featuring the Merck case and learn how Merck used scenario planning to explore long-term threats and opportunities. Download a three-page sample of the Merck Best Practice Guidebook, Scenario Planning: Fostering Long-Term Strategic Thinking. If you have questions regarding the Growth Team Membership™, contact us at GTMResearch@frost.com, follow us on Twitter @Frost_GTM, or visit us at www.gtm.frost.com.
by Daniel Ruppar 01 May 2012
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MarketWatch talk Q&A in the Business session track, Speaker: Zachary Bujnoch - Senior Industry Analyst, Connected Health