We live in a world drowning in data. Our interactions with each other and with the world around us take place increasingly through digital means: our mobile phones, our web browsers, our email accounts, our social media accounts and our messaging apps. The more we convert to digital, the more data we produce. As individuals and as companies, we all leave behind digital breadcrumbs.
In this book we have discussed how these breadcrumbs are largely overlooked at present. We have discussed how this is a big missed opportunity and how analysis of online breadcrumbs can be beneficial for boards, executives, marketers, product developers, risk managers and investors.
Although Outside Insight is in its infancy today, its significance should not be underestimated. Companies that embrace Outside Insight will make decisions with an information advantage and over time will outperform peers who don’t. For this reason Outside Insight will become a core, indispensable tool for managers across every business function.
The adoption of Oracle, CRM, BI and ERP shaped modern management into a rigorous data-driven practice based on internal data. The adoption of Outside Insight will have a similar effect, this time for external data. As technology and software catch up with the complexity of harvesting the open internet for valuable insights, Outside Insight will become as commonplace as BI and CRM are today and quickly become one of the most important tools in the next-generation management toolbox.
The adoption of Outside Insight will dramatically alter how companies are governed and run. It will introduce a new transparency in the boardroom and will transform decision-making from being reactive to being proactive, and executives will shift their focus from operational efficiency to a holistic understanding of the ebb and flow of their industry.
As a board member, it is often difficult to understand fully what is going on within the operational side of the business. The board has to go by what is presented to it by the management. Management presents a narrative supported by data and analysis, but their outlook will inevitably be coloured by their personal beliefs and motives.
By incorporating Outside Insight, it is possible to assess a company’s performance based on third-party data. Through an apples-to-apples comparison with industry peers it is possible to understand how well a company is developing independently of management reports and beliefs.
By bringing Outside Insight into the boardroom, the board can determine how well a company is performing compared with its competitors along critical, forward-looking dimensions. This will inevitably change the conversation. Rather than spending time looking at historical data, the board can evaluate strategic questions such as: what is the size and sentiment of our online brand footprint? Is it trending positively or negatively compared with our competitors? Which company has the happiest clients? How has this trended the last twelve months? How much are we investing in sales and marketing? Do we invest below or above the industry average?
Such analysis will never be able to replace management reports, but it will give the board an invaluable understanding of overall industry trends. Introducing Outside Insight into the boardroom provides board members with a valuable backdrop to interpret management reports and to engage in constructive boardroom discussions.
In between board meetings, board members can access real-time Outside Insight dashboards to help them keep a finger on the pulse of the industry.
Business practices today rely heavily on internal data such as financials, but making decisions based on historic financial results is a very reactive approach to running a company. Company financials are the end-result of investments and activities that took place in the past. To study the financials is to study the aftermath of historical events.
The future results of a company are a function of its ability to retain existing business and to compete for new. Central to a company’s ability to compete, therefore, is a deep understanding of how the competitive dynamics in the market-place are changing.
With Outside Insight, changes to the competitive dynamics can be detected in real time. Outside Insight provides forward-looking information with many clues to how a company’s competitiveness will develop. Client satisfaction, advertising expenditure and job postings are all examples of this. Client satisfaction can be analysed in real time, and its trend can be prescriptive of future churn or new client wins. If competitors are increasing their ad spend, it signals future increased competitive pressure. Job postings are early indications of investments and can signal whether competitors are investing in sales or product development.
Moving from analysis of internal data to Outside Insight is a transformation from a reactive to proactive decision paradigm. Lagging performance indicators such as financials are replaced by real-time analysis flagging new threats and opportunities in the competitive landscape. Long-term sustained success is ensured by taking action proactively and decisively when changes in market and conditions arise.
Internal data is about your company. A focus on internal data fosters an inwardly focused culture of operational efficiency. Transitioning to external data is replacing the operational tunnel vision with a peripheral vision to study the ebb and flow of the overall industry.
The Outside Insight emphasis on a good command of external market conditions does not necessarily contradict a focus on operational efficiency. Well-positioned companies often play to their strengths and achieve high operational efficiency as a result. With the Outside Insight approach, though, the external factors are always centre-stage because it doesn’t matter that a company operates like a well-oiled machine if the market-place is changing and rendering the company irrelevant.
Outside Insight acknowledges that a company’s future depends on more than just internal factors and that it exists within a broader ecosystem. A company is influenced by a large range of external factors, and executives need to develop a deep understanding of these in order to be conscientious and successful stewards of their company.
The positive impacts of Outside Insight in the short to medium term are pretty straightforward. Executives will make more informed decisions because new types of information will be included in the decision-making process. By understanding real-time trends in external factors, executives will also become more responsive to changes in their market-place.
In the long run, the impact of Outside Insight will become much more profound and will be hard to overstate. There are three macro trends driving this development: exponential growth of cloud-based computing power, exponential advances in artificial intelligence and exponential growth of external data. Together these trends will converge to create Outside Insight software with staggering capabilities.
In the future the job of an executive will look very different from the way it looks today. Decisions will no longer be based on data points and insights, but will be guided instead by prediction of future outcomes with the help of AI, game theory and scenario analysis.
In the future, an executive will be supported by an abundance of computation power and powerful AI. Any potential decision will be carefully analysed and scored by large computer clusters processing historical and up-to-the-second intelligence about competitors and other players in the ecosystem. Competitors’ possible counter-moves will be listed in order of probability and rated by corresponding positive and negative consequences.
Data analysis will at this point be completely automated. The Outside Insight software will be the sensory interface with the external world, and the internal ERP systems will be the feedback loops of gains and losses of decisions made. The Outside Insight brain, consisting of all its artificial intelligence, will be the oracle that scenario analysis managers, executives, boards and investors will consult.
As the world moves further down the digital path, as machines become increasingly intelligent and data science increasingly more sophisticated, Outside Insight will make a profound impact and completely change the way we think of corporate strategy and decision-making.
Outside Insight has the potential to transform dramatically the way companies are governed and run. Outside Insight has the potential to transform dramatically what it will take to become a successful business executive.
After Outside Insight business will not be the same.
It’s time to enter the front lines of a new era.
It’s time to embrace change.