Gap Analysis


Gap analysis is a statistical technique with immense power under certain circumstances. Its maps of the market are used to determine how various products are perceived by how they are positioned on the market map. On any map the items plotted tend to cluster here and there, with open space between them. These open spaces are gaps, and a map that shows gaps is, not surprisingly, called a gap map.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Financial Analysis: Real Problems


The term financial analysis  when applied to new products conjures up visions of sales forecasts and profit calculations. By using traditional financial analysis, we can get a good read on the current proposal.

 Actually, sales forecasts and financial analysis systems are no problem as such. We have an immense warhead of forecasting methodologies, most based on many years of experience. We know, for example, what makes for sales. This model does an excellent job and serves as the basis for some very advanced mathematical systems used by some of the most sophisticated new product marketers in the world. And every firm has people who can make an income-statement-based net present value calculation (using discounted cash flow methods). We have had years of experience with it.

 The financial model requires product cost, prices, the current value of money, probable taxes on the future income, the amount of further capital investments that will be required between now and when we close the books on the product and much more.

 They will never be certain, even after living out the product’s life cycle. Sales will be known, but we might have had a better marketing strategy. Costs are always just estimates. We will never know the true extent to which a new item cannibalized sales from another product. If we had not marketed the new item a competitor probably would have. And on and on.

 The fact is, we rely on estimated. Management’s task is ot to make the estimates as we can and then manage around the areas of uncertainty in a way that we do’t get hurt too badly.

 On minor product improvements we do this pretty well. On near line extensions, we also do well, but with more misses. Totally new products, using technologies never so applied before, are pure guessing games.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Study Your Best


If you want to be sure that you have started with the right three talents, study your best in the role. This may sound obvious, but beware: conventional wisdom would advise the opposite.

Conventional wisdom asserts that good is the opposite of bad, that if you want to understand excellence, you should investigate failure and then invert it. In society at large, we define good health as the absence of disease. In the working world, the fascination with pathology is just as pervasive. Managers are far more articulate about service failure than they are about service success, and many still define excellence as “zero defects.”

When it comes to understanding talent, this focus on pathology has caused many managers to completely misdiagnose what it takes to excel in a particular role. For example, many managers think that because bad salespeople suffer from call reluctance, great salespeople must not; or that because bad waiters are too opinionated, great waiters must keep their opinions in check.

Reject this focus on pathology. You cannot infer excellence from studying failure and then inverting it. Why? Because excellence and failure are often surprisingly similar. Average is the anomaly.

For example, by studying the best salespeople, great managers have learned that the best, just like the worst, suffer call reluctance. Apparantly the best salesperson, as with the worst, feels as if invested in the sale that causes him to be so persuasive. But it also causes him to take rejection personally—every time he makes a sales call he feels the shiver of fear that someone will say no to him, to him.

The difference between greatness and failure in sales is that the great salesperson is not paralyzed by this fear. He is blessed with another talent, the relating talent of confrontation, that enables him to derive immense satisfaction from sparring with the prospect and overcoming resistance. Everyday he feels call reluctance, but this talent for confrontation pulls him through it. His love of sparring outweighs his fear of personal rejection.

Lacking this talent for confrontation, the bad salesperson simply feels the fear.

The average salesperson feels nothing. He woodenly follows the six-step approach he has been taught and hopes for the best.

By studying their best, great managers are able to overturn many similarly long-standing misconceptions. For example, they know that the best waiters, just like the worst, form strong opinions. The difference between the best and the worst is that the best waiters use their quickly formed opinions to tailor their style to each particular table of customers, whereas the worst are just rude—average waiters form no opinions and so give every table the same dronning spiel.

And the best . . . .

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Opportunities in the Developing World


Examination of opportunities in developing countries is appropriate for two reasons. First, more and more developing countries are pursuing the growth path. The developing world is beginning to rely on the market mechanism to attract investment and technology and become industrialized. Second, government plays a significant role in business decisions. The bureaucrats approach foreign investment with much less sophistication and confidence than to private sector executives.

 

These characteristics suggest that in analyzing opportunities in the developing countries, a company should be willing to lay more emphasis on long-term potential than on short-term gains. In addition, adequate treatment should be given to political and social variables. Further, business condition vary so much from one country to the other that a comparative (i.e., multi-country) analysis may be difficult. Availability of reliable and timely information makes the opportunity analysis more difficult in developing countries. Thus, there is no way to systematically evaluate such factors as sociopolitical conditions. Instead, a general feel for the situation is necessary, for which a trusted native could be of immense help.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight