16 Feb 17 Information overload – How much information is enough for strategy?

Being in a research company, we often deal with the strategy folk at large companies.

Typically, they need answers to various questions, some of the most common of which are:
1. Which market should I enter?
2. Which customer segment should I target?
3. Which products should we sell to them?
4. How should we reach out to them?
5. How do my competitors go to market?
6. What are they selling and for how much?


In trying to answer these questions, we often look at market data, such as market size, growth rates, or market shares. Naturally, everybody wants numbers that are definitive and accurate. However, in the desire for preciseness and granularity, we often lose sight of the objective or key intelligence questions. For instance, would a strategy change if growth was 9% instead of 8%? In any case, projections can go wrong – nobody could predict Donald Trump!

How important is precision to the strategy formulation? In my experience, I’ve found that we need to focus on the order of magnitude, rather than spending a lot of time in getting more precise numbers. For example: Is the market worth Rs.1 billion or 10 billion? A 10% variance will not change the strategy. This will help the client focus on the bigger picture rather than looking for a needle in a haystack.

Let me give a real example: One of our healthcare clients in medical devices was looking at the market shares of its competitor across regions in India (North, South, East and West breakdown). The Eastern market was insignificant – less than 5% of its revenues. However, the client got bogged down in trying to establish product splits. We did provide the numbers, but wouldn’t it have been a more effective use of resources to focus on the more important market?

If we plot a 2×2 matrix as below:


Some clients focus too much on the “Knowable and Unimportant” quadrant. Getting unimportant information, though knowable, is not going to yield any effective results as the term “unimportant” says it all.
The focus should be on the two quadrants under “Important”. Some of the “Unknowable” maybe worth investing time in.

Here it is important to see the bigger picture and try to get all the relevant information; usually the insight (not data) is what is needed to make decisions. It is essential to have all the relevant information, but it is NOT necessary to have ALL information.

What do you think?

Rathin Shah

I am currently a project manager at ValueNotes. For the past 8 years I have worked on custom research projects in the technology and engineering space. You can contact me on rathin@valuenotes.co.in or over my LinkedIn profile

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