Analytical Frameworks
that Deliver
Value
SLA CID Presentation
Monday June 9, 2014
Derek Johnson & Zena Applebaum
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Agenda
1. Introductions
2. What is an Analysis Framework
3. Issues Analysis
• Exercise
4. Scenario Analysis
• Exercise
5. Acknowledgements
5. Questions/Comments
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As Chief Executive Officer and Managing Director –
Worldwide Services of Aurora WDC, Derek Johnson
spends most of his time guiding the overall strategy of the
business and directing the firm’s external consulting
opportunities with clients. Prior to this promotion in March
2010, he served the prior seven years as Chief Operating
Officer and Director of Research with the firm.
Chief Executive Officer
@dljalpha
Derek.Johnson@AuroraW
DC.com
Prior to joining Aurora in 2003, Mr. Johnson was in the
Investment Management industry as an account and
portfolio manager. He served as Wisconsin’s SCIP chapter
co-chair from 2007-2009 and remains on the steering
committee, was Program Chair of the 2009 SCIP
International Conference, and is a SCIP Catalyst Award
recipient. He is also a Chartered Financial Analyst (CFA),
with this designation conferred upon him in 2001.
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Zena Applebaum Director of Competitive Intelligence Bennett
Jones LLP, a leading national and International law firm
based in Canada. Her primary responsibilities include
conducting analyses of market and competitor performance
to inform the firm’s strategy, business development, client
relationship management, counter-intelligence and
marketing. Tying it all together, she enables strategic
collaboration throughout the firm via the firm's award winning
intranet.
Director, Competitive Intelligence
@ZAppleCI
applebaumz@bennettjones.com
She brings a unique perspective to intelligence and the
dynamics of market and industry issues as a result of broad
business development, marketing, and corporate research
experience across a variety of sectors.
Zena is a frequent writer and speaker on competitive, market
and business Intelligence topics in Canada and abroad.
Zena is a member of the SCIP Board of Directors and is
currently the Chair Elect Special Libraries Association
Competitive Intelligence Division, and a member at large of
the Professional Marketing Forum. Zena has a joint
academic and applied Masters degree in Communication and
Culture from York and Ryerson Universities.
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Analysis Frameworks
At its most basic definition, an analysis
framework is problem solving tool. It is
a way in which information can be
assessed and analyzed in a particular
context to solve a specific issue.
Not all frameworks are created equally,
and not all frameworks are appropriate
to answer any strategic question. The
framework used to assess data should
match the issue.
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Issues Analysis
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Outline
Issue Analysis

Introductory case:
McDonald’s issues

Overview

Advantages

Limitations


Process for Applying the
Method
Complimentary Analysis
Methods
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Introductory Case Study:
McDonald’s Issues



McDonald’s was founded in 1940 by
businessman Ray Kroc and is now
headquartered in Oak Brook, Illinois.
McD’s faces a variety of external
challenges, some like nutrition
concerns, employment, global growth
have become “issues.” Many of these
issues are listed and described in
some detail at: www.mcspotight.org
Already facing increased competition
from formidable rivals like Subway
and fighting to grow market share on
many fronts, it now has government
policy makers, activist groups and
regulators in many countries putting
the company in their sights and want
to restrict its discretion to operate.
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A Current, Strategic Issue for McDonald’s
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Introductory Case Study:
KITs/KIQs for McD’s Using Issue Analysis






What legitimate criticisms is McD’s
receiving from its key stakeholders?
In which countries are laws or rules
changing that impact McD’s operations?
Are there laws or regulations changing
anywhere around the globe that can reduce
McD’s discretion to operate?
Relative to identified issues, which groups
support us? Which ones oppose us?
What institutional arenas do we need to be
active in to influence public policy making?
What actions should McD’s be taking to
level the competitive “playing field level?”
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Description



Issues are controversial inconsistencies
caused by gaps between the expectations
of a business and its stakeholders
Issue analysis aids in the firm’s
management efforts by enabling
managers to anticipate changes in their
external environment and to become more
pro-active in shaping their external
environment through their influence on
public policy. It is a key part of issues
management
Issues management is a strategic process
by which organizations identify issues in
the stakeholder environment, analyze and
prioritize those issues, develop responses
to the issues, evaluate and monitor the
results
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Overview and Strategic Rationale

Someone in the company (SLA
pros!!) must monitor the sociopolitical environment for
opportunities and threats (aka,
issue signals).

Info pros can assist decision
makers to identify, monitor, and
select issues for action that may
impact the firm’s bottom line and
competitiveness.

Helps decision makers to avoid
surprises that emerge from
STEEP factors.
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Advantages

Gives management an advantage in
selecting the highest impact issues.

Allows for the early identification of
emerging issues.

Active monitoring allows ability to
transform emerging trends into
opportunities.

Provides an organization wide
process for anticipating and dealing
with STEEP factors.

Can reduce the uncertainty of
adapting initiatives in a changing
environment.
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Limitations
May not always assist in achieving
a competitive advantage.
 Issue analysis must be carried out
on an ongoing basis- overwhelming
amount of data.
 Many issues contain an emotional
or attitudinal factor, defying logic.

There are few yardsticks by which
to evaluate IA effectiveness.
 Many executives don’t get IA.
 The ability to provide correlations
between issues and financial
measures can be tenuous.

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Process:

Before an issue can be
analyzed, it has to be
identified.

Three tasks are precursors to
issue analysis:
- Identifying issue categories.
- Identifying their source.
- Assessing their evolutionary
development.

Information-search techniques
for identifying issues:
- Content analysis.
- Scenario development.
- Survey techniques.
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Process

The issue analysis process
consists of
1. Ongoing Monitoring,
Scanning of the external
environment
2. Issue Identification Briefing, Forecast
3. Analysis, Assessment
4. Selection of issues to allow
the organization’s decision
makers to determine the
nature of potential
responses.
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Process: Step 1
Identification, Forecasting

To identify – specify the
controversy, the
expectations gap

Define the issue

Next, write an issue brief


To forecast -- Use the
issue life cycle
4 stage PP progression
1.
Formative
2.
Politicization
3.
Legislative
4.
Regulation/ litigation
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Process: Step 2
Analyze, Assess the Issue
Use issue priority, leveraging, and
scoring matrices.




Where is the issue in its stage of
development?
How probable is it that the issue
will evolve?
What is the likely affect of the
expected PP on the
organization’s bottom line?
Does the organization have the
capabilities to influence the issue
evolution process?
Variables most frequently used are
probability and impact (PIGs)
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Process: Step 3
Selection of Issues
Response patterns and types.

There are several ways that an issue
may be responded to by an
organization (Cochran & Nigh, 1987). An
organization might:
1. Alter its behavior
2. Try to bring its stakeholders’
expectations of corporate behavior
closer to its own
3. Enhance education of stakeholders
4. Contest the issue in the public opinion
arena
5. Ignore the issue and hope it goes away
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Process: Step 3 Cont’d


Mahon’s (1989) political issues alternative
matrix.
Two dimensions to consider when
planning a response:
- Whether a direct or indirect mode of
attack should be launched
- Whether the focal unit should be an

issue or the organization.
Four different tactics arise from these two
dimensions as follows.
- Defuse the issue.
- Blur the issue.
- Attack the group.
- Undermine the group
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Process: Step 3 Cont’d

Alternative classification
scheme for preparing
responses to public issues.
(Mahon, 1989)
- Total Resistance
- Bargaining
- Capitulation
- Termination
- Cessation of Activity
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Summary
Issue analysis is a method that SLA
pros can/should easily support.
Issue identification, analysis and
response process rarely unfolds in
sequential fashion.
Issues are multi-layered & require
continuous scanning, monitoring.
Must continuously adapt to the
evolving conditions.
Uncertainty is ever present.
Companies that manage issues well
can achieve competitive advantage
vs. companies who do not.
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Related Tools and Techniques
Driving Forces
Analysis
CSF Analysis
STEEP
Analysis
Forecasting
Industry
Forces
Analysis
Issue
Analysis
Stakeholder
Analysis
Institutional
Analysis
Scenario
Analysis
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Scenario Analysis
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Outline
Scenario Analysis
Introductory Case
 Short Description
 Background
 Strategic Rationale
 Advantages
 Limitations
 Process for Applying the SA
 Case Study: Scenarios for
Traditional and Emerging
Forest Products Enterprises

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Introductory Case: The Future for Microsoft

Founded by Bill Gates and Paul Allen in
1975, Microsoft is one of the most
successful computing-industry companies
of the last 3 decades.

It has seen 3 major shifts occur, all of
which it successfully navigated from the
front: 1) MS-Dos, 2) Windows, 3) Office
Suite.

Today, it faces a new breed of challenges
and rivals, from large rivals like Google,
Linux, Apple, open sources, the cloud, and
its own momentum.

What will the future look like for Microsoft?
Will it still lead in 10 years?
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Some KITs/KIQs for Using Scenario
Analysis

Is the industry an attractive one for us to enter
or to remain in?

What technology platforms will be dominant in
5-10 years?

Will personal computing be done primarily by
mobile telephony, or other means in the next
decade?

What new applications and uses can be found
for our current products and services?

Can/How can our company influence the
industry forces that are reducing our profits?
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Short Description

A scenario is a detailed, consistent
description of what the future may look like
and is based on a set of assumptions that
are critical for an economy’s, industry’s, or
technology’s evolution.

Scenario analysis is a structured way of
developing multiple scenarios that address
two common decision-making errors —
under-prediction and over prediction of
change.

The overall purpose of scenario analysis is to
build a shared baseline for strategic thinking
and provide strategic early warning.
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Background





Scenario analysis was first developed for military
applications.
Strategists at RAND were the first to formally define
scenarios as ‘hypothetical sequences of events
constructed for the purposes of focusing attention on
causal processes and decision points’ (Kahn & Wiener,
1967).
This was followed by the now famous scenario
analyses of sustainable global economic growth in
Limits to Growth (Meadows et al., 1972) and Mankind
at the Turning Point (Pestel & Mesarovic, 1974).
1982 study conducted by SRI International, Seven
Tomorrows (Hawken, Ogilvy, & Schwartz, 1982).
Most of these early scenario techniques were highly
quantitative, though recent years have seen the
evolution of blended qualitative forms as well.
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Strategic Rationale

According to Schoemaker (1995), organizations facing the following
conditions will especially benefit from scenario planning and analysis:
Uncertainty is high relative to managers’ ability to predict or adjust.
Many costly surprises have occurred in the past.
The firm does not perceive or generate new opportunities.
The quality of strategic thinking is low.
The industry has experienced significant change or is about to.
The firm wants a common language and framework without stifling
diversity.
There are strong differences of opinion, with multiple opinions.
having merit.
The firm’s competitors are using the technique.
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Strategic Rationale and Implications


A scenario is a detailed, consistent description of what
the future may look like.
There are four general types of approaches to scenario
development:
Quantitative methods
- 1. Computer-generated econometric models.
Qualitative methods
- 2. Intuitive methods.
- 3. Delphi method.
- 4. Cross-impact analysis.

Most effective method in most CI work: mixed
scenario analysis, with a bias toward the
qualitative approach.
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Advantages
Testing resource-based view strategy options
 Organizational flexibility
 Filling the forecasting void

Information overload management too
 Scenario analysis improves an organization's
ability to respond nimbly:

Ensures that an organization is not focusing on
catastrophe to the exclusion of opportunity.
Helps an organization allocate resources more prudently.
Preserves an organization's options.
Ensures that organizations don't look backwards but look
forward.
Provides organizations with the opportunity to rehearse
(Stauffer, 2002).
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Limitations
Relegating strategy formulation solely to
scenario analysis.
 Inherent bias.

Group consensus difficulties.
 Connecting scenarios to competitive and
financial concerns.


Cognitive limitations and biases.
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Process for Applying the Technique

Follows systematic and recognizable phases.

The process is highly interactive, intense and imaginative.

Phases of Scenario Development:
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Process for Applying the Technique
There is no “one right way” to conduct scenario analysis.
 Several practical guidelines have been developed
(Schoemaker, 1995). This one is time-tested.

1.
2.
3.
4.
5.
Define the scope of the analysis.
Identify the major stakeholders.
Identify basic trends.
Identify uncertainties.
Construct initial scenario themes
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Process for Applying the Technique
There is no “one right way” to conduct scenario analysis.
 Several practical guidelines have been developed
(Schoemaker, 1995). This one is time-tested.

6.
7.
8.
9.
10.
Check for consistency and plausibility.
Develop learning scenarios.
Identify research needs.
Develop quantitative models.
Evolve toward decision scenarios
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Process for Applying the Technique
Should culminate in three or four carefully constructed
scenario plots.
 Can also be represented in a scenario matrix as follows:

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Process for Applying the Technique


Once the number of scenario ‘plots’
has been decided upon, the
strategic intent of the firm must be
proactively determined.
3 options when dealing with future
uncertainty:
Shape the future.
Adapt to the future.
Strategic options.
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Case Study: Scenarios for Traditional and
Emerging Forest Products Enterprises

These scenarios were identified by Don
Roberts and Dr. Sten Nillson
The main scenario inputs are energy,
carbon and fiber prices
 Scenarios were given these names:
The World Continues its Course

Repeated Economic Meltdown
Skyrocketing Energy Prices
Emerging Carbon Economy
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Case Study: Scenarios for Traditional and
Emerging Forest Products Enterprises

Scenario 1: The World Continues its
Course
Forest product industry suffered
dramatically during the global
recession of 2006
The scenario sees the beginning of
indicators suggesting that the recovery
had begun by 2009 – 10
As such the demand levels and prices
would return to pre-crisis levels
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Case Study: Scenarios for Traditional and
Emerging Forest Products Enterprises

Scenario 2: Repeated Economic
Meltdown
The U.S suffered one of the worst
financial meltdowns in history during
2007
In this scenario recovery never actually
comes to the extent that many
forecasters predict.
As a result the demand for and
consumption of traditional lumber
products stay at the low levels of the
crisis
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Case Study: Scenarios for Traditional and
Emerging Forest Products Enterprises

Scenario 3: Skyrocketing Energy
Prices
Demand for new energy products is tied
to the forest products sector.
This scenario does not see the supply
keeping up with the demand, pushing
prices higher.
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Case Study: Scenarios for Traditional and
Emerging Forest Products Enterprises

Scenario 4: Emerging Carbon
Economy
Continual burning of fossil fuels and
deforestation have contributed to global
warming
Governments forced into investing into
alternative energy resources causing a
boom in the carbon market.
Under this scenario, a dramatic growth in
the pricing of carbon occurs through
voluntary compliance efforts as well as
regulatory penalty.
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Case Study: Scenarios for Traditional and
Emerging Forest Products Enterprises

Business Implications of These Scenarios
Each of these four scenarios suggest conditions for the future
emergence of winners and losers
Under the first scenario, the traditional analysis of companies
markets, and industry attractiveness should help you better
understand who is likely to win and lose competitive battles.
Although many products will continue to see eroded profitability under
the second scenario, some products will find favor.
Scenario three will require companies to be astute in their choices of
where to operate and with whom they choose to collaborate and
partner
Scenario four has some highly robust and potentially valuable
possibilities for strategy.
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Exercise


What does the “future” look like for Libraries and
Librarians?
Sketch three possible scenerios
What research would you need to do to support this
scenerio?
What trends does this scenerio take into account?
What themes and uncertainties does the scenerio
address?

Define the the strategic impact of each scenerio your
organization.
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Acknowledgements
Dr. Craig S. Fleisher is Chief Learning Officer and
Director, Professional Development at Aurora WDC.
Connect with Dr. Fleisher via:
Email:Craig.Fleisher@AuroraWDC.com
Twitter: http://twitter.com/CraigFleisher
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Questions?
Thank you!
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