The Strategic Analysis Cycle

The aim of strategic analysis is to deliver quality deliverables that are accepted – and acted upon, with positive results – by decision-makers. When it achieves this goal, the analysis function can contribute significantly to the company’s fortunes. In doing so, it also secures its own continuity, but that should never be a leading consideration. Analysts are still human, for the time being anyway, and some effort needs to be invested in organizing for analysis. According to recent research, getting the organization right is a challenge.

In a 2015 McKinsey survey, 519 executives representing the full range of regions, industries and company sizes reported that organizations pursue data and analytics activities for a variety of reasons (Brown, 2016). But:

“[…]companies have found mixed success: 86 percent of executives say their organizations have been at best only somewhat effective at meeting the primary objective of their data and analytics programs, including more than one-quarter who say they’ve been ineffective. […] the low-performer executives say their biggest challenge is designing the right organizational structure to support analytics.”

This conclusion should not come as a surprise. Harvard Business School icon Michael Porter pointed out in the 1980s why organization in strategic analysis should not be neglected (Porter, 2004):

Reading this chapter will allow you to avoid just that: creating a haphazardly organized strategic analysis group. In this chapter we’ll take a look at which sorts of organizations stand to best serve your company’s analysis needs. In the end, the very nature of your firm’s strategic analysis needs will define how you set up your analysis function.

THE GO-AHEAD: SETTING UP A STRATEGIC ANALYSIS FUNCTION IS A LONG-TERM CHOICE

• A management team identifies business environment analysis needs that are perceived to be unmet; the team faces challenges it lacks the information and insights to cope with.

• A decision is made to create an analysis function internally, rather than outsourcing it to a vendor.

The need to set up this function often arises out of the execution of a formal strategy process, for example the writing of marketing plan where a lack of understanding of the business environment is discovered. Strategic analysis after all is a specialized discipline that cannot just be undertaken by any marketing executive. In response, a decision is taken to structurally execute strategic analysis tasks within a company. Subsequently, the responsibility for the task is assigned to one or more individuals, sometimes only as a part-time role. In response, a strategic analysis department is born. All this talk about the need for an analysis group may sound exaggerated when, in the beginning, the work probably only takes a single employee a few hours a week to polish off. Technically, however, the amount of resources dedicated to strategic analysis is immaterial to the fact that it is recognized as a must-have function in a company, or in a sub-section of a larger unit of the company.

A management team choosing to embed strategic analysis as a function in their organization is advised to take a long-term view. Strategic analysis is not an undertaking to set up one year, run for a second year, shut down in year three, and have a new management restart it again in year four. If you’ll pardon the cliche, an analysis group can be like a fine wine; it gets better when given time to mature. To a management team that in essence only has a one-off (or short-term) strategic analysis need, outsourcing the requirement is almost by definition the better option.

Research firm M-Brain reported in a survey of 989 respondents, evenly distributed around the world, that 76% of all surveyed companies/units had a strategic analysis function in place (GIA, 2011). This suggests that most larger companies have progressed beyond an initial kickoff phase with their strategic analysis program. The survey was perhaps slightly biased towards companies that already had some basic function in place. Even so, a substantial number of companies have not yet established such a function.

Shared responsibility is no responsibility, as no single individual can be held accountable. This universal truth is applicable to organizing a strategic analysis function. When the size of the business does not immediately justify appointing a full-time equivalent staff member, the responsibility for strategic analysis may well be combined with the responsibility for other back-office tasks. A common approach is to combine strategic analysis with consumer (market) research, with internal or external communications or with public affairs. These functional disciplines require a similar type of personality and have similar job dynamics. In these roles, control over the agenda is relatively more in the hands of the individual staff person than is the case in front-office functions. In contrast, in sales the ethos is entirely target-driven, with the prioritization and timing of everything continually set and re-set by demanding customers. In the hit-and-run world of sales, you live and die monthly numbers.

Allocating strategic analysis to someone as a part-time role alongside a demanding front-office job (such as sales or customer service) is a sure-to-fail choice. The high priority (but relatively low-importance) tasks of day-to-day sales administration and sales ops will constantly disrupt the lower priority (but strategically more important) analysis work. As a result, the strategic analysis output will rarely amount to more than situation reporting. Moreover, a person who gets his adrenaline rush from hit-and-run sales work will rarely be a discerning, uncertainty-loving analyst, working quietly on a complex puzzle.

This also means that a competitor-monitoring gatekeeper model in a business team is neither desirable nor effective. A business that faces ten major competitors should not disperse the responsibility to ‘keep track of’ these competitors across ten different operational managers. Below are just a few of the reasons why it’s less than optimal to have each of those ten managers half-heartedly track a different customer and report back once or twice a year on developments:

• When such managers do a fine job with their primary responsibilities, but ignore the competitor monitoring, no senior executive will truly push them to do their strategic analysis homework. In other words, they will get away with ignoring it

• Even when the gang of ten all start with the same template for monitoring a competitor, chances are they will each deliver different outputs in terms of quality, interpreting template topics differently, etc. Their wildly differing outputs will likely be so informal and unstructured and as to render them unactionable.

• None of these executives spends enough time on strategic analysis to become truly good at it, so no matter how effective they may be in their day jobs, most will be amateurs in strategic analysis. Tenure tends to positively correlate with strategic analysis output quality.

• No cross-competitor insight will be gained because ten uncoordinated players will each be focused on a single competitor, rather than collaboratively cross-referencing their find.

Strategic analysis is a functional specialty, just like HR, finance or law. A company wouldn’t spread its ten most pressing lawsuits across ten managers, each responsible for a single case, right? Research by M-Brain indeed indicates that in 2005, about 90% of all their globally surveyed companies had appointed a dedicated staff member to strategic analysis (GIA, 2005). This is a global best practice. When starting your journey in strategic analysis I recommend you adhere to it.

In the early phase of setting up a strategic analysis function, its cash flow will be negative. Money will be expended, but tangible outputs that lead to actionable intelligence or help mitigate risks opportunities or mitigating or controlling risks will yet be few. This period forms the fundamental of a management team’s commitment to maintain the function.¹

The dynamics of starting up an analysis function in an organization have been well described (Godin, 2007). Godin phrases it so well:

“At the beginning, when you first start something it’s fun. You could be taking up golf or acupuncture or piloting a plane or doing chemistry – doesn’t matter; it’s interesting, and you get plenty of good feedback from people around you. Over the next few days and weeks, the rapid learning you experience keeps you going. Whatever your new thing is, it’s easy to stay engaged in it. And then the Dip happens. The Dip is the long slog between starting and mastery. A long slog that’s actually a shortcut, because it gets you where you want to go faster than any other path. […] At trade shows, you see dozens of companies trying to break into an industry.
They’ve invested time and money to build a product, to create a marketing organization and rent booth space – all in an attempt to break into a lucrative market. A year later, most of them don’t return. They’re gone, unable to get through the Dip.”

The previous section emphasized the need to deliver results quickly and to build a solid base of champions for the analysis function. However, building such a group doesn’t happen overnight. Don’t expect enthusiastic support or exuberant contributions early on. This is especially true when building a network of human sources, both within and outside the company.² Requesting that others in your firm embrace strategic analysis requires them to accept the notion that this new function is in place and that it now delivers analyses. Change happens in phases. It starts with awareness. So in the first few months, awareness-building work is key. Why will strategic analysis allow your colleagues to arrive at better decisions, and do so faster? What will strategic analysis contribute and by when? And, just as importantly, what won’t it contribute? What instruments need to be used to make people aware of all the good you can do? Who has to be talked to first? Who is an opinion leader, whom once in the camp of strategic analysis, will be the ambassador to tout your message. Strategic analysis may initially be perceived as another overhead function that promises to conjure up insights that managers intuitively already had.

There is a catch here: don’t over-communicate. There is a need to search for balance. It is great when strategic analysis awareness covers your firm like an oil spill. The film, however, shouldn’t be spread too thin. Awareness that you’ve arrived on the scene should be backed up rapidly with a library of case studies demonstrating concrete, tangible, immediate contributions of strategic analysis work to business decision-making. Filling up that library also should be on the calendar. There is no magic ratio for the time spent on building awareness and building up your case library. The ratio depends on the size of the company and the scope of the strategic analysis function that is being introduced. In a relatively small, organizationally flat company, based in a single country, awareness-building may be relatively straightforward. In a diversified, organizationally complex, truly global business, it will take more time and considerably greater effort.

The ultimate proof of commitment in a corporate environment is budget allocation (more later on executing your new group’s first-ever strategic analysis plan). Many managers will pay lip service to how relevant strategic analysis is in an organization, but how many are really prepared to earmark a tangible figure in their budget for the out-of-pocket cost and staff expenses?

The previously mentioned M-Brain survey also touched on the size of corporate analysis budgets (GIA, 2011). The conclusion was that a company’s median budget was €357,000 per year (including staff cost), whereas the weighted average was about €1 million (including staff cost). The median net sales of the surveyed companies was some €2.5 billion/year and the weighted average was €11 billion. This suggests strategic analysis requires a typical budget of 0.01-0.02% of net sales.³

For a smaller company, there is a minimum threshold below which any spending is probably not useful. A unit of a company, or a smaller company, should not start strategic analysis work when it is not prepared to dedicate at least 0.4 full-time staff member to it, with at least about €100,000 a year to spend on buying subscriptions to news services, journals, reports, key web databases, etc. Spending less will unlikely lead to actionable strategic analyses of sufficient quality.

The history of MI6 as told in public literature presents two views. When Winston Churchill in 1919, facing the aftermath of the First World War, learned about a budget cut proposal for MI6, he reacted as follows (Milton, 2014):

“With the world in its present condition of extreme unrest and changing friendships and antagonisms…it is more than ever vital for us to have good and timely information.”

This quote is immediately applicable to today’s business world, or so it seems. In the corporate environment, however, overhead cuts are just as common as government budget cuts intelligence are in the military, are after a war. A level-headed view of intelligence budgets remains helpful (Jeffery, 2011g):

“[there are] twin permanent and unchanging truths about intelligence: that, no matter what the circumstances, there is never enough money; and equally, no matter how much information is provided; there is never enough of it.”

The ideal tone of the pitch for a strategic analysis function to ‘sell the budget’ depends on the personal needs of the executive who ultimately would provide the funding. Some executives are more risk averse. They may feel better when spending on strategic analysis is positioned as paying for fire insurance for your corporate cash flows. Others may be more entrepreneurial. They may be triggered to sign off on the decision by focusing on the opportunities strategic analyses may discover, or conversely the opportunities lost when strategic analysis is not being executed. The rationale and tone should of course match with the initiatives planned for the new year. The best strategic analysis budget is the one about which executives only wonder: ‘is that enough?’

In laying the groundwork, subtly map the group’s initial needs (and projected ability to help with) the specific needs of key budgeting executives. But tread lightly; in order to quickly build a happy initial customer base there’s serious risk in over-promising too many people too much too soon. One of the most widely applicable versions of Murphy’s Laws reads: ‘if you try to please everybody, nobody will like it’. When business executives mention strategic analysis problems they would like to see resolved, the problems are more than likely to be more complex than they look. Had these problems been easy, they would have already been resolved. Underestimating complexity equates to underestimating the upcoming workload of the strategic analysis staff. With a fixed number of strategic analysis staff, this either means underestimating the time of delivery or timely delivery of a sub-par deliverable. The best deliverables are timely, accurate and complete. When you are still in the first year of building the function’s reputation, it makes sense, as possible, to only take on work from customers that can reasonably get done in a timely manner. I would also only offer quality standards that are (realistically) attainable. When the deliverables subsequently are provided before agreed deadlines and the quality of the deliverables consistently exceeds expectations, the function’s reputation gradually builds. Manage expectations from day one – and regularly exceed them wherever possible.

When toiling under the constraints of a tight budget, it can be both challenging and, in a way, exciting to make the most of every dollar spent. The trick is to create a portfolio of assignments and a structured data and analysis-filing system that allows for the creation of internal cost synergies. In summary: collect once, use (sell) thrice and do not reinvent the wheel.

In carefully plotting out a new analysis function’s initial portfolio of projects, be sure to populate the calendar with activity that:

The first projects that are executed make or break the perception of the analysis operation’s value. Ensure the projects work out well not only for the your internal customers but also for the department’s image.

Building on the previous recommendation of maximizing output per unit of input, let me repeat how important it is to begin with the end-game in mind. The foundations of the back-office collection and filing flows (see chapter 19 ) in particular need to be designed correctly right out of the starting gate. Ensure that any system solution that is chosen is scalable on the key content dimensions. At the start, it is hard to imagine that one day the system may contain over 100,000 different documents that all need to be easily retrievable based on either a metadata profile, or through searching for a text string, or be mined using natural language processing.

For strategic analysis projects, the recommendation for the first year is most of all to learn by doing. Consider engaging in pilot projects with a limited scope and a single customer first. Once the learning curve has been surmounted alongside an understanding and positive customer, a flawless roll-out of the project to less understanding and less-than-positive customers is the next step.

No man is an island. Thus, the back-office strategic analysis department should not become an island. When setting up your operation in a countryor category-organization of a larger company, or in a decentralized company, ensure that it becomes integrated into the rest of the organization. In a country or category unit, strategic analysis in most cases will connect best with the sales and marketing staff.

An easy first step for a strategic analyst is to get invited to regularly-scheduled sales or marketing meetings. As the analyst, listen in on the discussions. Learn where your firm competes with which competitors for what orders. Understand the benefits and features that allow your sales colleagues to win and how competitors gain an upper hand. What makes the difference? Why? How can your analyses help further your company’s advantage?

Being present in a low-profile way allows you to monitor the business environment as the sales and marketing staff see it. Apart from one-on-one discussions with the company’s senior-most executives, there’s no better way to flesh-out an analysis team’s project portfolio. Come to be seen as a smart, trusted, collaborative partner who’s there to help the sales and marketing organizations win. With that trust in place, the function becomes the focal point for tacit knowledge collection, analysis and, most of all, dissemination. This may sound simple, but don’t underestimate the time, study, planning and effort necessary to build bridges, gain trust and become a valued member of the bigger team.

Forging the human connection is critical to gaining trust. Trust precedes sharing. Tyson emphasizes that a strategic analyst may easily spend 80% of his time on the people side of connecting and sharing and perhaps 20% on the IT systems side of sharing (Tyson, 1995).

Sharing unfortunately may be counter-intuitive in a great many organizations. The paragraph below explains why getting people to share isn’t always the easiest thing to accomplish(Cusack, 2010):

“Access to information is the currency of intelligence. Both analysts and organizations are sometimes reluctant to share an insight with others not in their fiefdom because it may be replicated with credit and they could lose their perceived value (and funding). Only strong leadership can overcome a basic psychological bias: sharing often requires more work without direct personal reward.”

As a rule, as a strategic analyst you have to give tenfold to sales colleagues what you can reasonably expect to receive back. Don’t start to whine about this. Paradoxically, this is actually a good thing. Sales staff should not as a reflex give things away freely. Sellers have been recruited to provide a good or service for a price. Your company can find itself in big trouble if giving comes all too easily for a sales person. Conversely, a predisposition toward giving should be second nature to a successful analyst. Empower the front office staff with easy-to-locate, tailor-made, relevant news and analysis (see chapter 19 ). An additional benefit is that once the sales staff knows the analyst behind the system, the system insert may actually be trusted and thus used more effectively as well.

The value to the analyst of connecting and sharing is twofold. First, it allows the analyst to build a picture (as complete as possible) of the environment, by encouraging human connections to deliver their tacit knowledge. Second, as an analyst it enables you to connect the dots across business disciplines or even categories/countries. Suddenly, the jumble of data-points that made no sense begins to assemble itself into insight that can drive real, meaningful change. Failing to share facts has been identified as the root cause of significant government intelligence failures.⁴ This learning should also apply in business, especially in larger companies. When an analyst can position her group as an internal knowledge broker, its value will grow exponentially.

This reasoning on the relevance of connections is confirmed by research in business. Networking and sharing are even more important than having a bigger budget (GIA, 2011):

“The best market intelligence programs are not better resourced than the rest but they are closer to management, more networked and more effective.”

It shines a light on the importance of an analysis team being outwardly focused, networked, and truly tapped into the larger organization’s goals, methods and activities. With this approach, those outside the analysis group who contribute facts and analysis to the system are consistently recognized. This is indeed good practice. However, the best way to get sales staff to proactively contribute their insights to your analysis work is to deliver analyses that really and truly help them win in the marketplace.

It is good practice to support awareness-building by branding your strategic analysis function and its deliverables. Consider defining a creatively playful yet distinguishing small logo that consistently appears on every one of your function’s deliverables. Branding helps to build the identity of your function around the key promises that speak to your internal customers. Think of promises like timely, accurate and complete. In FrieslandCoberco Dairy Foods I started off by branding the internal knowledge management system with the tagline Dairy News and Analysis , or ‘DNA’. The logo was of course a stylized double helix, suggesting that without DNA an organism (in this case, the company) has no future. We went live with DNA in October 2001. By 2015 the system had logged roughly 50,000 discrete visits (on a user base of approximately 8,000) with a typical monthly average of around 1,700 unique users. The consistent but low-key marketing efforts paid off nicely.

In another large food company, the competitive intelligence unit used a picture of a fashionable lady in a trench-coat, wearing a typical 1930s spy hat, wearing sunglasses and carrying binoculars. Clever as that sounds, such type of 007-bravado imagery is probably best avoided. When ethics and compliance are the true, underlying values of a strategic analysis function, as they should be, even a playful hint at espionage tradecraft is inadvisable.

As you’ve seen throughout this book, strategic analysis in business and government intelligence have multiple methodologies and best practices in common, but legally non-compliant or unethical collection practices are not among them.

As we’ve made clear, it is important to quickly establish both the credibility and the value of the strategic analysis function. To do this, it is preferable to attract projects that have a quick-win impact and to ensure a balanced portfolio of tasks and projects. Some projects may not have an immediate pay-off but once finished will have disproportional relevance and value. A strategic analyst needs to at all times watch out for ‘the tyranny of current intelligence’ (Moore, 2007c). This term refers to working exclusively on making sense of current news in support of tomorrow’s orders. Happy are the analysts who operate in an environment where executives are hungry for strategic analysis also to look beyond this week’s deal-close and the end-of-month revenue roll-up.

Two pivotal tasks for a new strategic analysis function are to build awareness and help deliver successes. The latter is often linked to solving the initial problem that management faced, which triggered the creation of in-house strategic analysis function in the first place. The initial data and information needs required to execute the first projects drives the search and selection of the first sources. But too often, the process runs in the wrong direction. A subscription-based information source seller stresses the relevance of their offerings. The vendor will position itself as the proverbial hammer, and the analyst as the overwhelmed carpenter with many nails to be pounded. The service provider will convince the analyst that not buying the biggest, best hammer will be downright irresponsible. The vendor will argue that all your competitors are armed with veritable sledgehammers, and that if you aren’t sufficiently equipped, you’ll be embarrassingly out-hammered. Listen, rookie, have you ever tried to hit a nail with your bare hands?

Buyer beware: information needs, both for projects and for general business environment monitoring, always precede the source selection. Over time, a right-sized network of useful data sources and information collection for both process and project purposes will sort itself out. Don’t be talked into buying what you don’t need; the right hammer will eventually find its way into your toolbox. Gradually it will also become clear what to look for in a continuous monitoring process (the right radar frequency); this too will come through trial and error.

Most information sources are not free. And, as I’ve noted internal human sources (like sales staff) may need to be given ten units of data before they give one piece back. Most external (public) sources may first require payment of a subscription fee. As the analyst goes about her business, networking externally through conferences and elsewhere, she’ll connect with a whole host of sources. The protection of these sources is critical. Therefore, as a best practice, a report may contain the cloaked term ‘team analysis’ as its source. This can be a useful euphemism for a source that may not wish to be connected to a particular data-point. As long as all applicable laws and professional standards are being complied with, a good rule of thumb is to almost always keep your human sources anonymous.

Deutsche Telekom provides a good case study on establishing a human source network for insight into technical innovation (Rohrbeck, 2006). This model might be applied when a set of external human sources is identified that can be helpful with specific structural data monitoring needs.

The strategic analysis function needs a plan. It should summarize the function’s areas of responsibility over a given period of time (normally a year), its main scheduled activities and, where applicable, the related budget breakdown. Table 20.1 gives an example of a plan for a typical corporate or centralized analysis group. I’ve called out the following routine responsibilities:

• Developing and running a project portfolio of strategic analysis tasks and projects. (As discussed above, priority projects must be identified and sufficiently defined before the plan is drawn up.)

• Servicing the organization as a strategic analysis expert in multiple assignments.

Demonstrating a track record of early successes and effectively wooing management stakeholders (with one presumably leading to the other) will obviously be critical factors in getting the function’s plan approved. As discussed, establishing the relevance of projects to key decision-makers – ‘playing to your audience’ – will be helpful.

Once the strategic analysis plan has been approved and the function’s position in the organizational chart has been established, it is the analyst’s responsibility to maintain, and where needed defend, its position. Although this may sound more aggressive than it is meant to, it’s just a kind reminder that responsibilities and authority have been given to the function – and the function should be ready to be held accountable. This may not become an issue, but in a competitive corporate environment questions about various groups’ competence, relevance, roles and responsibilities do arise. As a relatively new function, strategic analysis may become embroiled in debates over territory, and who’s responsible for what. For example, when does signalling changes in the regulatory arena become a monitoring responsibility for strategic analysis, and when does it remain within the realm of a public affairs department? Similarly, when do changes in consumer trends stop being purely a marketing responsibility and cross over in the analysis group’s jurisdiction? And so on.

Before you run for the trenches, consider a lesson I’ve learned the hard way over the years. To a senior executive, it is usually immaterial who does the work. The executive simply wants the work to be done, and preferably now. Whatever you do, try to always first solve the executive’s problem. Once the problem is solved and the time pressure is off, consider how to agree on competency border issues with other departments to avoid the same misery once the next urgent call comes up. There are a few neighbourly ground rules that can help fend off petty disputes with the team down the hall:

(i) Beating a competitor is more useful for value creation (and continued employment) than fighting a colleague.

(iii) Make friends before you need them (as per former NATO Secretary-General Jaap de Hoop Scheffer).

Rule (i) speaks for itself. Competency fights seldom create value – and senior management generally frowns upon all the brawlers, no matter who started it. Rule (ii) is also simple: when a business issue with a strategic analysis dimension can be viewed through different lenses, cooperate with other departments and work together as a team to deliver a common viewpoint. A multi-disciplinary team almost by definition delivers a better deliverable than a one-man band. This links automatically to rule (iii): ensure you develop good relations with other departments before you urgently need them. This is a logical part of the awareness-building work that the strategic analysis function should drive anyway. The time spent on this is bound to pay off well.

Once the function’s plan has been approved, ensure the function not only produces content deliverables but also shows an activity progress report to its sponsors. A well-organized manager will cycle through some version of a plan-do-check-act loop. Apply this loop within the function as well. Develop a simple one-page progress report that is, for example, issued quarterly, showing what activity was scheduled for the year, what progress was made, what issues may have emerged, etc. Included in such a report can also be performance measurement statistics reflecting use of internal and external information technology systems (number of unique users per month, total visitors per month, etc.).

Once strategic analysis has been firmly established established in a firm, its usefulness is likely to generate a growing need for analysis. To satisfy such a need, more execution resources may be required. And that can fuel organic growth in both outsourced solutions and the in-house organization itself.

Growth is a great thing, provided it is managed well. As we’ve discussed, strategic analysis may start with a single individual’s part-time work. It can grow over time as that sole provider that forges links with other part of the business, informally building a network of experts, self-starters and self-appointed analysts. Such informal networks can quickly jump borders and go truly international.

Organizational growth goes in stages. Each stage requires a different management focus – and possibly a different management team personality profile. Rarely is the CEO of a large multinational able to drive the growth of a new start-up and vice versa. What applies to organizations at large also applies to organizing the growth of strategic analysis within an organization.

The analyst-pioneer who nurtured a fledgling effort through its baby steps, built initial awareness and realized a first success or two may not be the natural-born leader needed to manage a 10-person strategic analysis department. The world of start-ups is littered with awkward geniuses who don’t survive the journey from their cluttered basement workshops to the glass & walnut of the corner office.

What is true for a function leader is equally true for the organization itself within a firm. The structure that worked well in the start-up phase may not be the ideal construct for a mature corporate organization.

THE RIGHT ORGANIZATIONAL STRUCTURE ENABLES THE MOST EFFICIENT/EFFECTIVE EXECUTION

In 1962, Chandler launched a paradigm that remains useful to this day. He suggested making structure follow strategy (Chandler, 1962). This also applies to setting up and running strategic analysis in a company. Chandler defines strategy as what you aim to do, but most of all what you don’t want to do. In enabling you to do what you set out to do, strategy becomes the guiding principle for allocating execution resources. In other words, once the choices have been made (responsibilities, span of authority, deliverables), the structure should enable the work to be executed efficiently and effectively.

In the function plan described in the previous section, the structure for execution has intentionally been kept open. This is partly due to the fact that the quality specifications for the deliverables have not been spelled out. A deep-dive into a market may require anywhere between 150 hours to 1,500 hours of work, subject entirely to the quality specifications set for the effort. Even so, the overall plan may still be executed with equal success through different organization structures. The whole plan may be driven through a central team, servicing various business units as well as the executive board. Similarly, business-unit-specific projects might be executed by decentralized staff who are at best loosely connected through a platform that facilitates the exchange of best practices.

To organize strategic analysis in a corporate environment, an almost infinite number of structures is imaginable. An easy way to begin working through structural planning is to sketch out two extreme forms, and an intermediate form, of large company organization models. That exercise might look like this:

Choosing the right structure for your company’s analysis function depends first and foremost on the nature of its analysis needs. Below we will first share a few design principles and subsequently discuss the pros and cons of a centralized or decentralized structure model.

The three design principles below may assist in deciding the structure of a strategic analysis function in a firm:

Follow-the-money speaks for itself. Management that pays for strategic analysis as a function has the say over where it is physically based and can prioritize its activities. M-Brain in its surveys of best company practices found that strategic analysis is in most cases set up under strategic planning (GIA, 2005); (GIA, 2011):

Strategic planning/corporate strategy/business development may over time seem to be losing some of its lead as the most dominant organizational port of call for strategic analysis. Yet, there remains a logical connection.⁵ When strategic analysis has a more long-term/strategic focus, corporate strategy prevails; with a shorter-term/tactical focus, the, sales and marketing group is a more logical harbour for the function. Logically speaking, one or the other of these corporate functions would be the natural home for a strategic analysis function.

Minimize the distance is another relevant design principle. General Patton stated that plans should be made by those that will execute them (Axelrod, 1999). A strategic analysis plan should be executed as close to the plan makers as possible. Distance should be minimized in at least three dimensions: time, physical presence and psychological connection. A function that is present – as and when the business environment of a company changes – is also front-and-center when senior leaders think on their feet and formulate plans on the go in response to changes. Being there in real time enables strategic analysis to be part of the team, to help address a problem or grasp an opportunity, and thus by default to be part of the business solution. Even in an internet-connected world, physical presence may still make the difference in understanding what a business really needs in terms of analysis, resulting in deliverables that are actionable and that are being acted upon. Being close to the decision-makers may also contribute to the building of psychological trust. This not only leads to the function becoming more of a trusted advisor, but also puts the analysts where they’ll hear the rumours the business hears; the staff become part of us (in the line business or the functional team) rather than one of them from corporate.

Need-to-know is another key element to consider. Lines of business may not wish corporate staff departments to know all the details of their operational wrangling, because the moment corporate functions know, control is lost. Corporate may start to think for itself about what the data mean for that unit (and may: may start to interfere in that unit’s decision-making). Line managers may not have been recruited for their control-freak tendencies but may at any time become intrusively heavy-handed. A decentralized analysis outfit with a reporting line within the organizational unit is within such a unit’s scope of control. A decentralized team may again be perceived as one of us . This positive sentiment eases the sharing of data and analysis between the unit’s management and its dedicated staff, enhancing the probability that the deliverables are being acted upon. The embedded unit will truly get all the need-to-know data it requires for its work. There is a limit, though. Still, a too-chummy relationship can lead to one of those dreaded psychological biases: groupthink.

In contrast, a corporate strategy-based small analysis unit, a bit detached from the line organization, may more objectively review strategic issues in the light of the holistic interests of the entire company, rather than the parochial interests of an individual business unit. Such a corporate-linked unit may also have a different need-to-know base. This central department may for example be privy to the corporate M&A funnel and plans, which would never be need-to-know if the analysis team resided in a line of business.

CENTRALIZED FUNCTIONS ARE EFFICIENT, DECENTRALIZED ONES ARE FAST AND ON TOP OF DETAILS

Centralizing and decentralizing staff both have their respective merits. Table 20.2 summarizes the pros and cons by key responsibility (Canadian Land Forces, 2001); (Tyson, 1995); (Philips, 1999); (Gilad, 1988).

RESPONSIBILITY	CENTRALIZED STRUCTURE	DECENTRALIZED STRUCTURE
Monitor business environment	- No duplication, efficient. - Critical mass to ensure permanent review of actuality in filing. - Scale to justify IT-systems’ cost. - Scope to justify monitoring global trends/competitors.	- Speed of issue identification and issue response due to rapid priority review of staff. - Capture decentralized, tactical human-sourced based news. - Focus on local unit’s precise needs based on in-depth understanding (including unit-specific sources). - No language barriers. - No cultural barriers. - Local staff facilitates trustbuilding with local principals and customers.
Execute projects	- Objectivity, limited groupthink risk. - Global scope of thinking, applied to local issue . - Central team may have more diverse and stronger talent pool.
Develop capabilities	- Economy-of-scale (procurement). - Experience in developing tools for multiple contexts.	- Tailor-made for unit’s real needs rather than compromise solution that pleases nobody.
Offer professional services	- Economy-of-scale. - Experience through frequency of using tools in multiple contexts. - Neutral facilitator: not one of ‘us’.
Procure source subscriptions	- Economy-of-scale (procurement). - Contract standardization.	- Tailor-made for unit’s real needs (cheap single pop rather than costly corporate subscription).
Compliance	- Single undisputed code of ethics.	- Code of ethics harder to develop and implement due to ‘loose’ structure.

TABLE 20.2 MERITS OF CENTRALIZED AND DECENTRALIZED ANALYSIS STRUCTURE BY RESPONSIBILITY AREA

In conclusion, there is no ideal one-size-fits-all structural model for organizing strategic analysis in a firm. Where synergies arise by combining different analyses – as when different units within a firm have the same competitors or serve the same customers or consumers – it almost by definition calls for shared resources. When lines of business within a firm have highly specific product-market combinations, strategic analysis should be local and tailored. To achieve synergies, it certainly makes sense for methodologies, capabilities, tools, procurement and preferably the sourcing and filing system to be centralized and standardized. Empirical evidence corroborates this assessment: a hybrid pip-model often delivers the best overall results to a company (Brown, 2016).

Execution of projects, however, remains a service to the business principal. Serving the principal’s needs is critical to maximizing strategic analyses being used for the furtherance of the goals of the business the analyst serves.

The evidence that teams outperform individuals is irrefutable, provided a single condition is met: it has to be a good team. First, let’s define the word ‘good’ in this context. The first dimension is behavioural. Having a strong cohesive team may still result in poor decisions if it doesn’t capitalize on the diversity of its skills, as it may lapse into groupthink.

A team has good behavioural dynamics when it gets the best out of all members (Lencioni, 2002). The behavioural dimension is truly important.⁶ However, covering this fascinating topic in more depth is outside the core scope of this book. Assuming the team’s behavioural interaction is positive and strong, there are two other dimensions that need to be managed: the personal and the functional diversity aspects. The section below will elaborate on both.

Let’s face it, depending on the age, race, gender, upbringing, cultural background and socio-political disposition of a reader, any discussion of diversity will carry its share of sensitivities. Any normative statement in this field is probably, on some level political. Having acknowledged that, the section below looks at generally accepted views you’re likely to find inside a contemporary Western-headquartered company. For that matter, most of this is probably also valid globally. Personal diversity dimensions include:

Functional dimensions, specifically relevant for strategic analysis, include (Philips, 1999):

Two general statements apply. Heterogeneously composed teams tend to outperform teams of homogenous composition. Separately, in most cases teams outperform individuals. A diverse flock of decentralized and independent thinkers who work together will in most cases outperform both a team of groupthinkers and a set of dispersed individuals (Surowiecki, 2005f).

Diversity along the personal and the functional dimension is a must in a strategic analysis team that serves a large (global) company. This applies both when the team is centrally located and when it is decentralized. To build a diverse team, staff with different educational backgrounds should be recruited. Since specific training in strategic analysis is rarely taught in university curricula, recruits may include economists, econometrists, sociologists or anthropologists, political scientists, historians and engineers or scientists. The latter are preferably subject matter experts specializing in business lines the firm operates in.

Diversity along the personal dimension may be accomplished by having at least two long-term senior staff members that have amassed extensive mental libraries of business patterns for quick recognition, interpretation and action. One long-tenured executive is too few; it would make the firm too vulnerable. In parallel, having younger staff is critical in ensuring that the team doesn’t miss out on how younger generations think and act. In a multinational company, an equally multi-national team is critical to ensure that language and cultural differences don’t create analysis barriers. Collection staff, especially those who are to gather data from human sources need extroverted, sociable attitudes. In contrast, back-office analysts may be introverted, if not even a bit reclusive, and still do a brilliant job. The department head or functional leader has the privilege and the responsibility of defining the diverse team that serves her company best, given its industry sector, geographic reach, business environment and resource constraints.

Given the fact that strategic analysis is a holistic discipline that sources insights and skills from many different scientific disciplines, it remains a bit of a craft. A craft is learned through experience. There is solid evidence that a longer tenure in this craft leads to objectively better forward-looking intelligence assessments (Economist, 2014); (Mandel, 2014). Experience does build excellence, and excellence breeds success.

Given the importance of experience and craftsmanship, so the importance of building a pupil-master on-the-job training model in a strategic analysis team is evident (Cooper, 2005c). The seniors in the team will not only work on the department’s more complex assignments but are also to be held accountable for continuously educating the next generation of collectors, analysts and reporters.

To encourage tenure of the best staff members, a good department head has to convince HR of the need to align personal incentives with long-term company tenure needs. A dual career ladder needs to be defined, similar to that in R&D. In R&D a senior scientist does not need to have many direct reports to still achieve a decent (read: high) job grade. How nice it would be if this were done more often in strategic analysis as well, to help build and sustain crack analysis teams. These last few lines sound simple. This may sound logical enough, but securing attractive compensation and career opportunities for analysts is never a cakewalk (Brown, 2016):

“The most significant talent challenges that companies face, according to respondents, are a lack of structured career paths (especially at larger companies) and the inability to compete effectively on salary and benefits.”

A strong strategic analysis leader is a critical asset to not only ensure that the function creates great deliverables, but also that the company creates a context within which great analysts can make it all happen.

Strategic analysis not only is a craft, it is also in many ways a competition. Good analyses enable a firm to outsmart its competitors. M-Brain reports that a typical strategic analysis team consists of 13 staff (GIA, 2011). A diverse team of highly qualified staff, does not need to be larger than that to outsmart their competitors. A military example may be helpful to illustrate this. British Second World War military scientific intelligence chief Reginald Jones beautifully summarizes from his experience why I believe a strategic analysis head is to ensure that her department does not get too big (Jones, 1978c and 1978d)

“[…] keep the staff to its smallest possible limits […], because the larger the field any one man can cover, the more chance there is of those fortunate correlations which only occur when one brain and one memory can connect two remotely gathered facts. Moreover, a large staff generally requires so much administration that its head has little chance of real work himself, and he cannot therefore speak with that certainty which arises only from intimate contact with the facts.
Do as much as the actual Intelligence work yourself as you can; you will find that you can then speak with increased confidence at the highest conferences, which you will certainly be required to do. The fact that you have done much of the work yourself will give you a great advantage.”

There are two messages here. The first message is the relevance of exposure to multiple-source dimensions simultaneously. This text, written more than 70 years ago, implicitly describes what is now known as recognition-primed decision-making. The second message is that a leader of professionals, such as a strategic analysis function head, should aim to do the work themselves. Professionals often have a nasty habit of being meritocratic. For them, reporting to a department head who really and objectively is (among) the best in the discipline is easiest to accept. A boss that is just a boss but isn’t seen by the staff as an intellectual peer is going to have a hard time of it. To principals and decision-makers, a strategic analysis function head who is a highly respected professional also adds to their confidence in the function’s work, which increases the probability of the function’s output being acted upon. (And think of the implications in terms of budget perpetuation, salary hikes, all-around respect and admiration, etc.)

Jones wrote an epilogue to his book, Most Secret War, where he reiterates his key messages (Jones, 1978d) as a recommendation to management regarding future intelligence professionals:

“Intelligence depends more than anything else on individual minds […], and your organization should only provide a smooth background on which these can operate.”

Creating a diverse team of brilliant individuals is the functional leader’s ultimate assignment.

As we’ve alluded to, in contrast to physics or chemistry, strategic analysis is a craft. But the foundation of science is reproducibility. Every experimenter who repeats this methodologically and correctly will observe this physical phenomenon, regardless of the place or time where this it’s carried out. Science curricula are an elegant mix of facts and hypotheses that are considered enduringly true – as long as new experiments do not prove them incorrect – and methods to reconfirm these truths and expand the body of truths. The scientists has at her fingertips a painstakingly accumulated, endlessly reassessed, historically sweeping base of scientific knowledge.

In strategic analysis there is no such thing as an accumulated base of knowledge, because almost by definition reproducibility of ‘experiments’ is impossible. Strategic analysis only knows facts: the observed acts and reported resulted of companies, the size of markets, consumer yoghurt-eating habits in the kingdom of of Yololandia. Data in strategic analysis, however, cannot upgrade to knowledge. Consider the following example. Company X acquired three distributors in foreign countries in the past two years. In an interview two years ago, Company X’s CEO indicated he was looking for acquisitions to drive his company’s products global distribution. Afterwards, he bought three foreign distributors. Still, this does not in any way guarantee that more deals will follow. There is no reproducibility or forward predictability of a sort that definitively says: this happened, so it will happen again. An answer to a strategic analysis question that was correct two years ago may now be incorrect. This means that while strategic analysis has to store data, there is no point in teaching them, as historic facts do not have universal value. As a consequence, in strategic analysis only methodologies are worth teaching. Methodologies are best split in two main segments: those aimed at strengthening an analyst’s functional and those intended to enhance his behavioural competences.

In short, the answer to the generic question ‘what to train?’ is simply functional and behavioural competences. The proverbial five honest service men – why, who, where, when and how – help us to further define strategic analysis training as part of an in-company an analyst’s function’s responsibilities.

TRAINING OBJECTIVES RELATE TO BOTH IMPROVING DELIVERABLE QUALITY AND ACCEPTANCE

Let me start by elaborating on the why question. Training is a means. The end goal of training is to upgrade the functional or behavioural competences of the different strategic analysis stakeholders and/or strategic analysts. This ladders up to the two real needs served by training in strategic analysis.

The first may be to improve the competency level on the supply side – that is within the function. This is realized by upgrading the skills and expertise of the in-house staff to meet the demands put upon them by the (increasing) complexity of the function’s portfolio of assignments. Junior staff (in terms of experience) may also require training because senior staff (in terms of experience) can move on to other jobs or retire. Even when this training often proceeds whilst on the job, formal trainings focusing on specific topics in tailored settings may be needed and quite useful. This can do wonders to improve the quality of deliverables and elevate their executive acceptance rate.

The second need relates to improving the competency level on the demand side of strategic analysis. This involves the subtle art of helping executive decision-makers get better at articulating their needs and calibrating their expectations. Having better-educated, more realistically level-set senior leaders will in turn lead to better all-around performance by the analyst.

The question ‘why train?’ thus gets a straightforward answer: to improve competences in order to improve required quality or acceptance on the demand and/or the supply side. Implicitly, this also answers the ‘who’ question regarding; both your analyst team supply side and your decision-maker customer demand side. There is another relevant answer to the ‘who’ question which concerns whether the participant volunteered to do the training or were directed to. The answer to this question may affect a participant’s buy-in to active participation in the training. Discussing participants’ buy-in in great detail is out of scope in this book. What is obvious, however, is that a participant who voluntarily or proactively applied is likely to have a much higher commitment to the training than a participant (read: victim) forced to attend. The volunteer wanted to change, whereas the employee who was told to show up has been forced to change.

In summary, strategic analysis training relates to, at a minimum, the following independent dimensions:

ON-THE-JOB TRAINING IS THE PREFERRED FORMAT; IT PUTS NEW SKILLS TO IMMEDIATE USE

Of the three remaining questions (where, when and how) the questions where and how do not represent fully orthogonal dimensions, as the choice where to train partly defines how the training is delivered. The question when represents a separate dimension. First, we’ll discuss when.

Trainings has the highest impact in competency building when the learned skills are immediately put into (daily) work practice by the trainee. Providing training to teach a skill that is not put to use by the participant until some time later is almost by definition useless. This is a generic truth. The answer to the question ‘when to train?’ thus links training to the work agenda of the participants. The work agenda determines the training needs. Consider a management team trying to articulate its business environment analysis needs for the next year. Why not deliver a training session that generically explores what strategic analysis can do for them (and what not!). Conclude the training with a final exercise that lets the management team actually create a working draft of an analysis needs portfolio for the year ahead. This means that you as the strategic analysis function both train and apply the training in one fell swoop, compelling your executive students to put their lessons into immediate action.

In this way, on-the-job training isn’t limited to junior staff; it helps drive skills development all the way up the chain of command…. and greases the skids for your day-to-day work with senior decision-makers going forward.

Table 20.3 provides a non-exhaustive list of where/how options that are common in training strategic analysis. For the sake of simplicity, I have used an individual-participant scenario as the basis. Simultaneous, group training is usually done in classroom sessions at your office location, or classroom sessions conducted at an outside venue.

Table 20.3 at first sight looks all too simple. Group training is conveniently delivered in a classroom setting. First of all, in-class comes in three different forms: in-the-office with colleagues; in an external venue but still exclusively with colleagues, and in an open enrollment program; and where your firm’s participants mingle with peers from other companies with a similar training need. These are very different approaches even when objectively the same learning materials are offered through (possibly) the same trainer. The different venue alone may strongly affect whether participants absorb and retain the material, and put it to use when they return to their desk.

Venues are all about context. In his book The Tipping Point , Gladwell describes the underestimated relevance of context to human behaviour (Gladwell, 2000b). He shows that the very same people with the very same personal needs act profoundly differently in different settings. We may see a commonality here. What applies to strategic analysis deliverables may just as well apply to strategic analysis training. As one might imagine, the training’s success is directly related to the quality of the classes and the participants’ buy-in, attention and participation level. In the final analysis, getting participants to sit up and pay attention may be just as critical as the quality of the course materials and its delivery. Not entirely unlike trying to teach geography to a classroom full of teenagers, I suppose.

Unwilling victims in a workplace venue – like the conference two doors down from their regular office – are the worst. Stuck in that setting, they are encouraged to constantly think of the emails they cannot attend to because they have to be in this stupid training they don’t believe they need. A strategic analysis function that chooses an appealing venue for its training may may soften the blow somewhat. The hotel is nice, and the breakfast spread was OK, but all-in-all he’d rather be somewhere (anywhere) else.

Training the same stuff in another context may result in both different participants behaviour and in creating a different impact.

The strategic analysis function should put some thought into what venue suits which learning objective for which group. When the group is believed to consist mainly of victims, investing in the appropriate venue may be a lever (however meager) for group buy-in and ultimate impact.

Expecting victims to run e-learning courses at their homes is wishful thinking. When they do, it is because of the black mark they fear on their annual performance appraisal if they skip out of school. If they do sleepwalk through an online course, it is not because they believe they should learn something. Genuinely interested volunteers, however, may not care about having to do it in a less-personal way and at home: they are eager to learn. They believe the training supports them in their career development.

In conclusion, for a strategic analysis function, choosing the ‘where’ and the ‘how’ of training depends on the answers given to the question of ‘who’. The individuals’ and groups’ motivation and attitude will help determine what setting promises to work best.

There is one more dimension to the question ‘who’. This relates to the personal learning preferences of the participant. Some may strongly prefer to be personally trained and coached in learning a new competence. Others may simply want to quietly study using written or audio/video materials, doing so individually in a silent, well-lit room. Those participants preferring to be personally coached may either benefit most from working in-class or being taught by a more experienced colleague, in on-the-job training mode. Results may vary, but if you embrace employees’ preferred learning styles, this can be an effective way to upgrade staff competencies.

Classes should not only be tailored to teaching methodologies your students are comfortable with, but you’ll obviously need to deliver the right material at the right time. In-house, on-the-job training of a junior function staff member by a senior team member comes closest to this ideal of pure tailor-made training. This presumes the senior staffer feels appreciated for offering this form of training. It also helps if both team members have developed a personal rapport that stimulates a mutually fruitful exchange of ideas.

Even so, even the best longtime employee can neither be a specialist in all sub-disciplines of strategic analysis nor have unlimited time to dedicate to training due to what is known as the tyranny of current intelligence. This wonderful term refers to the constant need to deliver analyses. So, in some cases, training may need to be outsourced to specialists, perhaps to a corporate education and training firm.

A strategic analysis function head may choose to in-source a tailor-made analysis curriculum, meeting a particular competency-building need related to a specific project. He may also buy an off-the-shelf, fixed content training package from a third-party supplier, which can be company-specific or made available to multiple companies through an open enrollment program. In the latter case, there is next to no possibility of changing the curriculum in the former case, a co-design of the curriculum and agenda may to some extent be possible. Either way, the start of any competency-building initiative in intelligence begins with the set-up of a common and indisputable taxonomy (Fisher, 2008). Words in strategic analysis should have only one meaning. In chapter 19 I discussed taxonomies at some length, as they are also critical to filing. Once such a taxonomy has been defined, the most practical way forward for a function head is to define a set of modules that can act as coursework building blocks, which can be used as they are delivered mixed and matched for at least some degree of flexibility and variation.

Table 20.4 gives an example of what a strategic analysis training module collection could look like. In this table the focus is on analysts, so not suitable for training the analysis functions’ internal decision-maker customers. As mentioned, those internal customers may benefit from introductory training on what strategic analysis can and cannot do, built up from (parts of) the modules below. Such training may introduce strategic analysis as discipline, focusing on collection and analysis and the related methodologies, techniques and tools. We‘ve noted that the training may be completed by having the customer – your business leader – apply the concepts she learned to an exercise that actually begins shaping her analysis needs plan for the following year by defining their analysis need portfolio for the next year.

DISCIPLINE	BEHAVIORAL COMPETENCE MODULES	FUNCTIONAL COMPETENCE MODULES
Project definition & management		- Project management skills/Project portfolio management - Time management
Collection		- Open source data collection - Interview techniques - General collection skills - Compliance (anti-trust, etc.) - Languages
Analysis	- Dealing with uncertainty	- Counter-deception - Creativity - Finance for non-finance types - Statistics - Strategy and analysis tools for business - Psychology for analysts - Industry-specific subject matter courses - Analysis tools (executive profiling, etc.)
Reporting	- Personal effectiveness	- Storylining (pyramid principle) - Slide writing - Visualization
Filing		- Software-tool related skills - Information management
Interaction with decision-makers	- Persuasion skills - Personal effectiveness - Leadership	- Stakeholder management - Meeting facilitation - Consultancy skills
Counter-intelligence		- Counter-elicitation - Counterintelligence program design and implementation
Compliance & ethics	- Dealing with integrity	- Ethics and strategic analysis - Anti-trust and competition law

TABLE 20.4 A PORTFOLIO OF POSSIBLE TRAINING MODULES FOR STRATEGIC ANALYSIS STAFF

An additional dimension to training is the capability level that a participant needs to have achieved once all is said and done. There is a wide gap between having elementary awareness of and becoming subject matter expert in a discipline. The needs of the participant, by discipline, determine how intensive training should be to yield varying levels of competence.

Happy is the strategic analysis function head who sees his staff voluntarily move up this ladder, mastering multiple sub-disciplines.

Larger companies tend to have an in-house training department that may facilitate training (participation recruitment, venue management, etc.) that may include strategic analysis training modules in a broader corporate training program. Some companies even ensure key training is delivered in cooperation with universities. Such training is thus formally accredited. This option also allows an employee to add a university-level training and education credentials to her resume.

Rome was not built in a day. Similarly, it will take time, patience and a lot of hard work to grow your analysis function into the respected, game-changing powerhouse it can become. A previously published schematic titled ‘World Class Market Intelligence Roadmap’⁷ can be both inspirations for newbies and helpful to functions still working their way up the professionalization curve(Hedin, 2011). In the next chapter we will define strategic analysis as a profession that entails lifelong learning. Taking the lifelong learning perspective implies that the World Class Market Intelligence Roadmap may be useful to any strategic analysis staff or function, regardless of its stage of development.

The Roadmap distinguishes five levels of progressively increasing professionalism. For each level, the Roadmap indicates the nature and sophistication in six MI dimensions. The dimensions include:

• Intelligence culture: this dimension relates to how well strategic analysis has been embedded in an organization at large.

The competence levels, using the authors’ original term ‘market intelligence’ (MI), relate well to the competence levels mentioned in the previous section. In strategic analysis one starts with understanding that the professional discipline exists and that it has a value. This leads to level one – informal MI. Pick the fire that burns most ferociously and start fighting it, and in doing so, make friends who allocate the budgets that can help move the MI function beyond only changing the oil in the fire engine.⁸ Applying discipline and order to the analysis function allows you to move from fighting unexpected brush fires to implementing a well thought out prevention and emergency-response plan. In doing so, we reach level two. Upon correlating and adapting strategic analysis to meet the tailored needs of its widening group of the core audience of executive decision-makers, we move towards level three – intermediate MI. To reach level four, you need to teach business leaders and staff to embed analysis in strategy design and execution. At level five, MI-based strategies inspire boards and shareholders to invest in the future of the firm.

I’ll say it again: Rome was not built in a day. Patience has its virtue. In 1999, at FrieslandCoberco, we started the strategic analysis journey, taking off barely at level one. This book reflects much of what was encountered during a 17-year journey. Over time we enjoyed some fine successes and developed a passion for lifelong learning. We will indeed keep moving. Hopefully this book contributes to your passion for moving forward with strategic analysis competency-building as well.

• Central	All staff form a single team (often located in a single office) that offers deliverables to the global company.
• Pip	‘Primus inter pares’ (abbreviated to pip) is Latin for ‘first among equals’. There is a central organization where the most experienced/senior analyst operates: the primus . In parallel, there are analysts employed in business units who don’t report into the central function’s team but reside in a line of the business: the pares or peers. The peers are loosely connected to the central team, perhaps through sharing procurement budgets for collection, or through training.
• Decentralized	Analysts are appointed in business units as and when the need arises; there is no ‘central’ coordination and no organized mutual exchange within the company’s informally-organized analysis community.

	2005	2011
• Strategic planning/business development	55%	38%
• Sales and marketing	28%	37%
• Technology and R&D	10%	14%
• Others	7%	11%

What?	functional	and	behavioral
Why?	deliverable acceptance	and	deliverable quality
Who?	demand (i.e. customer)	and	supply (i.e. analyst function staff)
	volunteer participant	and	victim participant