Why On-Demand Human Intelligence Can Help Companies De-Risk Their Assumptions | Social
While the digital age continues to open many doors for businesses, it has also left them with little time to validate their instincts when it comes to critical decisions, instead relying on untested assumptions. Fortunately, on-demand human intelligence is a viable solution for turning these assumptions into value through validation.
At SMWLA, President of Suzy, Avi Savar, presented a picture of the current marketplace today and offered best practice and insights for making better, more informed decisions faster.
Here are a few important takeaways from his session:
Disruption & a New World Order
Grounded largely by the evolution in computing power, innovation today happens in months, not years. Microprocessors, cloud computing, and the like have virtually democratized the business landscape paving the way for new innovations that continue to emerge at unprecedented clips. As the world continues to move faster and faster, the decisions we make must happen in real-time and the struggle to gut-check and validate the assumptions integral to our day-to-day jobs has become increasingly difficult.
To further depict this reality, Savar shared a quote from Jeff Liu, a Global Technology Leader at EY, who said, “The force and velocity of disruption today are unlike anything ever seen before. It’s a perfect scenario for companies to erupt in value or be destroyed and disappear.” This characterization is further reinforced by the exponential growth of ‘the unicorn club’ since 2011. that have reached a billion-dollar valuation or more.
What impact does this have on the public market? Put bluntly, half of the existing S&P 500 companies have disappeared in the last 20 years. Further, their average lifespan has decreased from 67 years to 15 years between 1920 and today. While this creates a level playing for many different companies, it also proves that, in the words of Savar, “Everybody in this world, every company, every organization across every vertical is in the crosshairs for potential disruption.“
Most of the companies creating the level of disruption we’re seeing are technology-driven, who share a core uniting factor of connecting people. That is, their key business objective, regardless of their service of product, is to understand what consumers want and need and to innovate accordingly. In vein with this, Savar shared results from a 2016 CEO pulse survey conducted by PwC that found the leading factor that causes disruption is customers, cited by 71 percent of CEOs. This was followed by production (69%), competitors (60%), regulation (57%), and distribution (52%).
Types of Assumptions
“Assumptions in business are equivalent to risk. When you assume, you take risks and once you validate your assumptions, the risks come off the table and value is created,” Savar described.
There are two types of assumptions in business to note: technical risk and market risk. Primarily, technical risk refers to considerations including can we actually make what we say we want to make? How long will it take us to do it? Will it scale? What resources and budget will be required? What from a regulatory or legal perspective do we need to be mindful of in terms of our overall process?
On the other hand, market risks involve the questions such as how compelling is our product or service? What are the message points we’ll use to sell it? Will it fit within customer’s lifestyle and/or workflow? What is our market opportunity size? Further, this involves addressing unmet needs. From an individual’s perspective, this may involve taking sentiments like fear, stress, pain, and discomfort out of the equation. Concerning the general processes of a business, this can mean addressing inconsistencies, redundancies, poor outcomes, surprises, workarounds, and more.
With each of these types of risks, the moral to pocket is that the more we can validate the assumptions around what value we’re creating, our businesses will thrive. On the flip side of the coin, failure to validate results in cases where products fall on deaf ears because they don’t resonate with consumers, or campaigns that spark outrage due to poor consideration of context and overall messaging.
“The number of brands that have to apologize every day is skyrocketing,” said Savar and main reason is largely due to the fact that 84 percent of decisions are made based on management judgment as opposed to data.
Validating Assumptions in Real-Time
The fundamental steps to validating our assumptions, per Savar, are to “observe the world, to ideate effectively, and before you go out into the world, validate your theories and theses and then repeat the process until you’ve refined it to a point where you are comfortable and confident to put it out into the world.”
Enter Suzy, a software solution for providing instant, on-demand validation and access to consumer intelligence and insights to achieve objectives like identifying de-risk strategies, tapping into new markets faster, driving growth, and remaining relevant. In short, the idea is to have an instant-forward view at all times, a “crystal ball” as Savar describes Suzy, versus a rear view mirror.
More specifically, using the automotive industry as an example, Savar outlined the ability of on-demand platforms to help businesses retarget, that is, offering the ability to benchmark and communicate over time so that you’re able to more accurately understand patterns, behaviors, and shifts around consumer behavior and sentiments. In one particular case, in Arizona, a company asked people about their interest in autonomous vehicles. When there was a fatal crash by an Uber self-driving car two months later, they were approached again and asked what they thought after hearing the news.
In all, every assumption needs to be validated, small or large with overarching goal being to convert these into knowledge as quickly and as cost-effectively as possible–in other words consuming intellectual capital before tapping into outside capital. By integrating this process into daily routines, you can avoid untested decisions and instead rely on those driven by real thought and validation by consumers.
“Companies who put customers first are disrupting those who don’t,” reinforced Savar.
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