How The C.I.A. can help you!

A man you have probably never heard of called Richards J. Heuer, Jr wrote a book for an organisation you have almost certainly heard of – the C.I.A.

Now I need to make it clear for those who don’t know me well; I’m not a spook, a spy or any sort of undercover agent. There are a few reasons for that, not least that my shoes squeak in the wet!! So having cleared that up what’s my interest in the C.I.A.?

Well the book that Richards Heuer wrote was called the Psychology of Intelligence Analysis and deep in the book is a really great thought:

“The spirit of decision analysis is to divide and conquer: Decompose a complex problem into simpler problems, get one’s thinking straight in these simpler problems, paste these analyses together with a logical glue”

That’s a really great thought, especially if you apply it to your business issues. Think about it, if you’re faced with an issue that you cannot come to grips with, split it into component parts that you can get your mind round. Let me give you an example.

I once asked a senior executive if there was a real plan to grow his business by the 20% he had promised his backers (my clients). “Sure” he told me, “It’s all here”. He showed me a copy of a spreadsheet, with lots of complicated calculations, which did indeed show that his earnings would grow by 20%. It was a mixture, as I recall, of volume increases, price changes, market growth assumptions, share gains – you name it and it was there. So I told the executive, “Well it all adds up, but what are you concentrating on out of all these elements?” He looked at me strangely, and told me that all the assumptions needed to be managed to get to the end result.

Well my loyal reader, I have to tell you, I found all that too complicated, so I went away and deconstructed his plan; I looked at each element and by keeping the others constant worked out which of the elements were responsible for the most $ increases. It turned out that in his case the most important element was his volume market growth assumption. That single factor represented about 70% of his growth.

So I went back to the senior executive the next day, and asked him how he was going to grow the market at the rate needed to meet his projections and what plans he had to stimulate category growth and educate the consumer. To cut a long story short, this executive had never looked at his plan this way, had never focused on the elements that would really generate growth. His plan in reality was a mathematical exercise, with little substance.

Within three months though, this self-same executive had completely turned his strategy around, so that it focused on category growth (It had previously been concentrating on steeling share from competitors). Within the year he was close to his 20% growth figure, not quite there but close enough to retain the confidence of his backers.

Maybe this is not the best example, but you get the idea? Split issues / problems / projects into manageable tangible parts that can be grasped by you (or a subordinate) rather than try to tackle the whole amorphous mess in one go.

Simple advice? Probably. Logical? Probably. Always implemented? Not as often as you would think. So remember the words of Richards J. Heuer, Jr, and how the C.I.A. can help your business.


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