LEADERS MUST MOVE FROM KNOWLEDGE TO INSIGHT BEFORE TAKING ACTION. HERE’S HOW.
By Peter Mulford
In 1985, The Coca-Cola Company replaced the original formula of its flagship soft drink, Coca-Cola, calling it New Coke. While the launch was based on data gathered during taste tests, surveys, and focus groups, the market’s reaction to the change was negative, and the launch failed.
The problem? The team was data rich but insight poor. Former Coca-Cola Company President, Donald Keough, noted, “All the time and money and skill poured into consumer research on the new Coca-Cola could not reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people."
Knowledge and Insights Are Different
It is commonly understood that generating insights is important, but what insights are and how they are different from data or knowledge, is not widely known. Taken together with the influx of data and the need for faster decision making, this misunderstanding has had an unfortunate impact in the workplace —firms are rushing data to action without first generating insights. At best, they are missing opportunities for differentiation; at worst, they are losing in the global battle for competitiveness.
Creating an Insight Driven Organization
Leaders know winning in the future means delivering experiences as compelling as Apple and Whole Foods, but few have the culture it takes to deliver these types of experiences. The good news is that creating an insight driven organization isn’t difficult. It requires three things:
- An appreciation for what makes knowledge different from insights
- Techniques for converting one from the other (before you take action)
- Leadership and practice to ensure #1 and #2 become part of the rhythm of your business
1. What Makes Knowledge Different from Insight?
An insight is best understood as a penetrating understanding of the underlying nature of a thing—in the case of consumer insights, it is the why beneath the why that explains human needs and wants.
What makes this different from merely knowledge is the underlying nature of an insight. Thanks to information technology, data and knowledge are now visible, common sense and relatively easy to find. An insight, by comparison, is often invisible, surprising and hard to find. Yet, good insights have the potential to surprise your firm, your competitors, and—best yet—your clients. This is why the best insights can’t be gleaned merely from focus groups or surveys. Henry Ford captured this point perfectly when he noted, “If I had asked people what they wanted, they would have said 'faster horses.’”
2. Techniques for Converting Knowledge to Insight (Before You Take Action)
Generating insights can be difficult because it demands types of exploration different from what is traditionally taught and executed in the fields of marketing, research, and problem solving. Moreover, it is hard to be aware of managers' patterns of exploration, in part because it is usually an individual not a group exercise. Since it is hard to see, it is hard to create organizational habits that support it. Thus, a good solution is to visualize a group’s pattern of exploration and insight generation using something like the chart below.
This tool can be shared and used in the office setting (as a wall chart) or virtually (using interactive social media). To use it, managers capture data points (sticky notes will do) and then convert them from data to knowledge, and then—importantly—from knowledge to insights, before finally taking action. The discipline is in the doing and in the questioning. An insight makes the cut only if it is (1) fact-based, (2) uncommon sense, (3) and penetrating. Teams can hold each other (and their insights) to those standards.
In making the leap from knowledge to insights, step number 1 is compelling managers to use the toolkit above. When they do, the most difficult “leap” will be from knowledge to insights. Making this jump requires tools and time.
There are a number of different tools one can use to convert knowledge to insights. All involve “ALOE”—Asking, Listening, Observing, and Empathizing. Examples of ALOE tools include “Empathy Mapping,” “Five Whys,” and “Customer Journey Mapping.” (Detailed instructions and downloadable templates for each are just a web search away). What makes these techniques unique is that they push the users to dig beyond obvious explanations (Knowledge) to gain deeper, more surprising understanding of what’s going on. Not surprisingly, a key success factor for insight driven decision making is the idea that you don’t find consumer insights “in the office.” You need to get outside. A leader won’t need to stress this point—it will become abundantly self-evident as teams attempt to use these tools.
3. Leadership to Ensure #1 and #2 Become Part of the Rhythm of Your Business
Henri Ducard noted, “The training is nothing, the will is everything—the will to act.” This is particularly true for making this shift. To create an insight driven organization leaders model the right behaviors, and create the environment in which their people can practice the new techniques until they become habits—and the culture will follow. This means visualizing the patterns of insight generation using dashboards like the one illustrated above, ensuring the insights generated meet the acceptance criteria we described, and building the confidence and capability to use ALOE techniques to that end.
While it might be tempting to include that causing this change requires a complex change effort, we have found that it is usually adequate to simply to:
- Introduce the tools with training (Experiential learning is pivotal here).
- Encourage their daily use through exploration and inquiry.
- Capture learning, improve, rinse and repeat.
Companies large and small are winning through insight driven decision making. Whole Foods, Apple and Nike have rethought and are rethinking how they are organized to deliver better consumer experiences based on unique insights. Smaller companies like Morphie and Rapha Racing get it too—and likely won’t be small for long. They are winning by creating insight powered organizations. And you can too.
About the Author: Peter Mulford is an Executive Vice President at BTS and the Chief Innovation Officer.