Category Archives: Analysis

Accountability, Analysis, Data, Expectations

Forecasting

No discussion of forecasting would be complete without some back handed comparisons to those people who actually make their living by forecasting, namely weather forecasters. There are others that also can be said to make their livings this way. People who are in the stock or commodity markets are in effect forecasting the upward or downward movements of prices in the markets based on whether they buy or sell at any specific time. But when it comes to forecasters, it is the weatherman that everyone immediately thinks of. Believe it or not this idea fits into my general business and sales approach to topics. I think it is pretty apparent that if you forecast in business as accurately as weather-people (need to be politically correct here) forecast the weather, you won’t be in business very long.

I heard a great weather-person related joke the other day. It goes:

When I die I want the television weather-person to be the one that lowers my casket into the grave. That way they can let me down one last time.

To be honest it has been a challenging period for weather forecasters here in Texas. Probably not so much in the other parts of the country. Elsewhere in the country it seems that any forecast that contains the words “cold” and “snow” has at least a reasonable chance of being correct. Here in the last week we have had sunny warm spring like days, rain, sleet, ice (yes ice, they immediately shut the entire state down when anyone anywhere in the state gets ice) and snow. Sometimes we have had multiple selections on the same day. We have had almost fifty degree temperature swings between the sunny warm highs and the snowy cold lows in just two days. Still, you would think that based on either the officially certified coin flipping or dart throwing weather predicting process that appears to be used, that the laws of probability and statistics would have to take over at some point and they would get at least one forecast right.

It is against this publicly recognized futility in forecast accuracy that we need to look at forecasting within the business environment.

Successful business is predicated on properly setting expectations. If you set your customer’s expectations properly, and then meet them, they will be satisfied. We all know that a satisfied customer is a good thing. If you set the stock analysts’ and business press’ expectations about how the business will perform, and then meet them, the price of your stock will probably go up. We all know that an increasing stock price is also a good thing. If you set the expectation with management regarding the performance of your business, and then you meet it, you will probably get to keep your job and may even be asked to take on more responsibility. Keeping your job is also a pretty good thing.

Setting expectations is also known as forecasting. It leads to a thing called “predictability”. Predictability is usually a desirable thing in business.

Good business forecasting is all about breaking down the complex (in this instance, “the business”) into its component pieces (such as “revenue”, and “costs” and things like that) and working the individual forecast for each one. You can then combine these individual forecasts into the overall business forecasts.

It also provides you an excellent insight into which specific components may need to be looked at for potential adjustments should the total forecast not meet what may be considered acceptable levels of expectation by management.

Expectations are funny things. They can cut both ways. Businesses usually want to set expectations that are difficult but achievable with senior management. Senior management usually wants to set the expectation that it requires more from the business than the obviously easily obtainable expectations that they are currently being provided. Senior management will then in turn try to set expectations for the overall business performance with the analysts and market that are believable, and the analysts and market will decided whether or not they will believe them.

This all takes us back to forecasting. Expectations are set with management through the use of forecasts. There are forecasts for revenue. There are forecasts for costs. And then there are the resulting forecasts for margin or earnings. Hopefully there is a relationship between the revenue and the cost forecasts so that margin and earnings can in fact be realized.

As an example of forecasting, in Texas you know that in May it is going to start getting hot. By June it will be hot. It will probably stay hot until September and that by October it might start to not be so hot. This is known as “Climate”. In general you can expect this. You can look at historical averages and trends and see what the various highs, lows and precipitation were for specific days, but you don’t know what they will be this year. That specificity is known as the weather.

The closer you get to any specific date, the more accurate your forecast can and should be for that dates weather.

The same should apply for businesses. At the beginning of the year there is a general expectation of what the “climate” should be for any specific business. This is based on past performance and the desires for growth (or contraction) in the component markets and businesses. As data comes in and performance evolves the forecast for any specific piece of the business will begin to come more and more into better focus. Unexpected events and unforeseen issues can always occur and cause the accuracy of the forecast to change, but in general, the closer you get to a specific date, or target, the more accurate you should expect the forecast to be.

The key here is that the forecasts should always be based on the factual data. If it has been cold and snowy in the northeast for the last few weeks, and there are still several feet of snow on the ground, then no matter how badly senior management would like to see sunny, spring like temperatures it is probably best to stay with reality. Understanding the business equivalent of “in the summer it’s hot and in the winter its cold”, regardless of the specific day to day variations, is an important aspect of accurate forecasting.

Forecasts are designed to inform people of what they need to know and hear, not what they want to know and hear. They are keys to setting expectations of the business’ performance and targeting areas for attention when expected performance does not meet the business needs. When a forecast is missed it will have a ripple effect throughout the business.
When a weather forecaster misses a forecast there is a possibility that someone may get wet when they thought they would be dry, or they may be cold when they dressed for warmer weather. When a business misses a forecast the financial performance of the entire organization can be brought into doubt. This usually results in actions that must be taken to bring the financial performance back in line with expectations. These actions can usually be distilled down to one of two things: increasing revenue or decreasing costs.

The need for decreasing costs is never a fun forecast for the people in a business.

Analysis, Data, Decision Making, Leadership, Recognition

You Don’t Know

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Over time I have learned that I don’t know everything. I am going to pause for a minute here for several reasons. The first is for effect. The second is so that I can let the hysterical laughing and rampant applause in general die down. The third is so that I can go and pick my wife up off the floor. I believe that she was so convinced that I did in fact know everything that my admission that I didn’t has created such a shock to her system that she fainted. That must be it. I am sure of it. It is one of those things that I do know. Doesn’t every wife believe in the infallibility of their husband?

At least that is the interpretation of her response that I am choosing to believe.

The next thing you know I will be asking for directions when I am lost, or reading the instructions on how to put something together before I actually start to do it.

Nah…..

Now remember I said I didn’t know everything. I didn’t say that I didn’t know anything. (My wife is now looking at me out of the corner of her eyes again. This time I am not sure how to interpret her behavior.) I would like to hope that after all the experience that I have gotten (Randy Pausch, the author of “The Last Lecture” said “Experience is what you get when you don’t get what you wanted”, and there are so many things that I have wanted and not gotten that I could conceivably be considered one of the most experienced people around) and all the book learning that I have done in college and elsewhere, has enabled me to know a few things.

One of the things that I do know is that there is more information out there about every business topic, business issue and business opportunity than can ever taken into consideration when a decision is to be made an action taken. I didn’t let this fact stop me. I openly suggest that you don’t let it even slow you down. I do think that you need to be aware of it, and prepare for that rarest of rare days when one of your assumptions, decisions or actions turn out to be the wrong one. There is also one other thing that you need to be aware of when making decisions or taking actions in business.

Everyone is fighting a battle that you don’t know about.

I saw this line on a LinkedIn splash page of all places. Like so many other seemingly non-business related comments or topics, this got me to thinking about business, sales and how to lead.

I have stated in the past that business is all about the person to person interactions between people. All too often we have our decision made and our actions decided. All that is left is to align everyone else with our obviously well thought out and logical approach to things. It should be easy. We are already on to the next topic in our minds. Only the people who should see the obvious wisdom of our leadership, don’t seem to be catching on as quickly as we would like or expect. They seem to have their own views as to what should be done.

It’s hard to have a broad view of things in business when you don’t have a broad responsibility. You have to think in terms that are larger than the topics and areas that you can affect. Not everyone does this. That is an understatement. Very few people seem to do this. You have to understand something about the battles that other people are fighting. You have to do this while understanding and fighting the battles that are your own. It takes extra effort.

You have to understand the issues that external competitors are visiting upon sales opportunities as well as the unknown / political issues that the customers themselves are bringing to bear when arguing pricing or deal desirability with the sales team. Having been there, it should be understandable why so many sales teams seem to get more frustrated with their own companies than their competitors, when they focus solely on one internal metric instead of the broader customer requirement.

Conversely, the same can be said about the sales team that only looks at the sales volume and does not take the time to understand the company’s cash flow or profitability issues when they bring a customer opportunity to the table. Orders are always good, but it is the answers to the questions such as if and when the company will get paid that will keep the company in business. It may be hard to understand or even believe, but there is actually some business out there that is not worth having. The key is to be able to identify and differentiate it from the other more desirable types of business.

The point that I am so clumsily trying to make here is that we all are going to encounter resistance in the normal course of the execution of our business responsibilities. How we deal with that resistance will have a great deal of impact on how we are to be perceived as leaders. We all have a tendency to only examine issues from our own specific perspective or point of view. The leader will try to understand the larger issues, even if they are not responsible for them. The leader will try to understand what the unknown battle is that the other person is fighting.

The question that then arises is how does the leader know what they don’t know?

Despite the very Zen sound of this question, it is somewhat the basis of leadership. It is not enough to know that someone is providing resistance to a desired course of action. It is more so knowing why they are providing resistance and how to resolve, reduce or avoid it altogether.

Fortunately, there are few people who are so contrary in nature as to oppose our every idea solely on the basis of who made it. Those that do behave this way are normally referred to as “spouses”, and again fortunately, most of us do not work in business with our spouses.

What that means is that in general, there will probably be either a known or unknown battle that people are fighting that will be a cause for any perceived resistance to your plans and activities. Understanding what the external pressures and unknown battles are will enable the business leader to position their requirements in such a way as to avoid the conflicts associated with these unknown battles.

It’s not enough for the leader to say what they don’t know. They have to understand why they don’t know. Continue reading You Don’t Know →

Analysis, Decision Making, Performance, Risk and Return, Self Analysis

Is Phil Mickelson Ruining Business?

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I was watching the U.S. Open golf tournament the other day. I enjoy doing that because it gives me the chance to watch people who really know how to do their job which in this case is to play golf. Believe it or not I think I actually learn a little when I watch them as well. Not much, just a little. I feel the only thing that truly separates me from them is talent. They have it and I don’t. That and age, and flexibility, and focus, and drive and probably a few other traits that I am not currently aware of.

What I noticed about this broadcast was that they seemed to focus on the players’ recovery shots. The course was set up so that if you weren’t in the fairway you were in trouble. What I saw was a lot of miraculous recovery shots that were attempted from this trouble, and only a select few that were successfully executed. However, the guy who eventually won didn’t seem to attempt the miraculous on every shot. Truthfully he was probably not in trouble as often as the others, but when he was, sometimes instead of attempting the miraculous he just chipped out. He then tried to put the ball on the green and make a putt to save par. He did that a lot. The other guys didn’t. He won by like eight strokes, which in golf terms is the same as lapping the field, or a knockout.

Let’s get this straight right up front. Phil Mickelson is an amazing golfer. He has won forty two events on the PGA tour. He has won five major championships. He has spent over seven hundred weeks in the top ten of the world’s golf rankings. I cannot hit my driver as far as he hits his six iron, maybe even his seven iron if he decides to hit it hard. He is a crowd favorite everywhere he goes because of his demeanor on the course and his willingness to interact with the fans. So why do I think that he is ruining business? I think of him as the father of the miraculous recovery golf shot. He makes a lot of them and they are all highlight reel material. When we see what we think of as an “everyman” like Phil Mickelson pull off the miraculous recovery, we think we can all do it, and not just in golf.

David Feherty on the other hand, is a former professional golfer. While he did win five times on the European golf tour, he has never won on the PGA tour and may not have spent a single week in the top ten of the world’s golf rankings. He retired in nineteen ninety four to become a golf announcer. It is widely accepted that he is far better as a professional golf announcer than he ever was as a professional golfer. Why do I bring up David Feherty in responding to my question as to why I think Phil Mickelson may be ruining business? It is simple. David Feherty provided the following quote regarding Phil Mickelson:

“Watching Phil Mickelson play golf is like watching a drunk chasing a balloon near the edge of a cliff.”

We are now getting close to the point. 

Phil Mickelson will hit some of the most incredible shots in golf that will end up getting him into some of the deepest trouble possible on a golf course. He has been known to get a little wild, or to make some foolish decisions at the most inopportune times imaginable. What is amazing about him is that he can then hit some of the most amazing recovery shots humanly possible and put himself right back in the game again. Notice that I said he “can” hit amazing recovery shots. That doesn’t mean that he always does. Sometimes it works and he is almost unbeatable. Many times it doesn’t, and then things only get worse. Golf, like business is very unforgiving of compounded mistakes.

While it is true that he has won so many times on tour, what is not so widely publicized is the number of times that he lost when he should have or could have won, due to the erratic nature of how he plays the game of golf. In 2006 Phil Mickelson lost the U.S Open on the seventy second and last hole. He came to it leading by one and needing only a par to win. It was not an especially long hole, but as with all major championships it was not easy.

Instead of being a little conservative, and probably winning or at worst tying, he went for it as he always does. He teed off and knocked his drive into the trees.

Instead of playing it safe and smart (as this year’s U.S. Open winner did on several occasions), and pitching out to the fairway where he could then rely on his well documented and much acclaimed pitching and putting skills to get his par, he went for the fabulous recovery shot. Mere mortals could not have hit the shot he was going to try and hit.

He was going to bend a shot around some trees and knock it on the green from more than two hundred yards away. It didn’t work. He hit another tree and the ball came rolling back toward him.

Now he is laying two, and he needs a four to win or a five to at least tie, and he is no better off than he was before.

He goes for it again because now he has to. This time he gets it around the trees, but misses the green and it ends up in a difficult lie in the greenside bunker. Now he needs to get it out of the bunker and in the hole in two shots just to tie.

He gets it out of the bunker, but misses the putt to tie and just like that he loses the tournament.

While Phil Mickelson is renowned for his miraculous recovery shots, there will always be the question of should he have avoided the trouble in the first place. Could he have played it smart and not hit his sometimes erratic driver, opting for a club that he could have more easily used to hit the fairway? Once in the woods could he have made a better choice that would have taken losing the tournament outright out of the equation, while still giving him the chance to win? Mistakes in golf, like in business can always happen, and when you do find yourself in trouble is it always the best course of action to go for broke on the recovery?

History has shown that most attempts at miraculous recovery shots fail, otherwise it would not be considered so miraculous when they succeeded. If they always succeeded they would just be recovery shots, not miraculous recovery shots.

Too many times it seems that businesses can find themselves in a difficult situation and instead of playing to their own strengths and capabilities, play for the miraculous recovery. Most of the time when they try the go for broke recovery in business, the business does indeed go broke. There are examples of successes using this approach. They usually end up in some business school case study where they are captured and passed down to future generations.

I think they are more like lightning strikes in a rain storm. They are relatively rare, individual events, and as the saying goes lightning doesn’t usually strike twice in the same place.

Actually in golf getting struck by lightning even once is not considered a good thing. That’s normally why we go inside when it starts to rain. Getting struck by lightning of a golf course will usually ruin your round, and probably any future rounds you had ever planned on playing.

In golf a steady performer is known as a “grinder”. A grinder is someone who works at minimizing their mistakes and maximizing their opportunities. A grinder usually doesn’t have less talent; they usually just don’t take as many risks. When a grinder makes a mistake or does find themselves in a difficult position, they weigh all the risks and rewards with an eye toward realistically minimizing the downside risk. They understand that they may not be able to win the tournament with a good decision, but that they can certainly lose it with a bad one. Making par after a mistake is not a bad score.

Tiger Woods is a possible example of the ultimate grinder. He has been the best golfer in the world for almost as long as Phil Mickelson has been in the top ten. He rarely makes mistakes to the point that it is extraordinarily uncommon that he ever beats himself. The majority of the other top ten golfers in the world are probably best described to one exten
t or another as grinders also. This means that the riskier, more swashbuckling approach to golf that Phil Mickelson so successfully uses is much more the exception than the rule for the truly successful.

Miraculous recoveries are attention grabbing by their very nature. Few of the attempts are really ever successful despite the numbers that are tried. Those that are successful however are very widely reported and seem to take on an image and a life all their own. Miraculous recovery attempts seem to have become the standard against which we want to measure all performances, be it in golf or in business.

A business that finds itself challenged might better learn from this year’s U.S Open winner. He calculated when to go for the miraculous, and when to play it smart and just chip out of trouble and play on. Phil Mickelson has finished second six times in the U.S. Open indicating he definitely has the talent and capability, but has never won. This year he was sixteen shots back. Businesses are also always competing and need to understand that while the miraculous is usually widely reported, that by its very nature cannot be expected to regularly occur.

Setting realistic goals for each shot a business is going to take is a key to a business’s ongoing success. It’s better to leave the miraculous recovery shots to the golfers.

Analysis, Risk and Return, Self Analysis, Strategy, Value

Big Deals

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I try to avoid starting off by asking a question, but sometimes I just can’t help myself. Is it just me or does it truly seem that in many instances it is possible for business egos to get in the way of business IQs as the size of the business opportunity increases? This big deal blindness is a phenomenon that I have encountered several times in the past. As the magnitude of the numbers being considered for whatever purpose (sales, costs, scope, merger, etc.) increase, there seems to have been some instances in the business past where the momentum of the deal takes over and the basic principles of business analysis and management appear to be forgotten.

This type of behavior does not seem to be confined to any one company or industry, but rather emerges unexpectedly for a while in one place and then just as quickly goes dormant again. But not until after some sort of a business millstone has been placed around the corporate neck. It then takes all of the business’s senior leadership to formulate the path back to recovery. Meanwhile the general process is that those responsible for “the deal” have already declared victory, taken their bows and then very quickly exited stage left.

I am not specifically talking about Mergers and Acquisitions here (M&A) when I talk about things such as the magnitude of the deal, but rather more along the line of basic internal business conduct. However, I think some of the lessons that have been learned by some of these humongous M&A failures of the past can equally be applied to business situations that are more related directly to the operation of the business.

Here are a few lessons for business deals that leaders ought to take into account, at least in my opinion, before they start looking at the next big opportunity, at least in my opinion:

• Unlike the Bob Dylan song (Times They are a Changing), the times are not changing. The same basic rules apply to big epic opportunities as they do to the smaller ones. Profitability still matters. Core competencies still matter. The magnitude of the deal disproportionately increases the risk of the deal if the probability of success is based on a significant change or transformation away from what has been the business’ norm is associated with the deal.

The success of the deal is usually associated with doing something that you already know how to do, to a great extent. Growth and expansion by necessity mean that you need to take on some new aspects and scope with each deal, but unless you are relying at least in large part on your known core competencies, the big deal that is supposed to be a game changer or entry into a new market is usually an even bigger risk.

• In too many instances it seems that management may have felt the need to make a big, bold, landscape shifting, game changing sort of deal. This may be as a result of a desire to get into a new market or in response to some sort of internal or external business pressure. The idea appears to be to make a dramatic market statement or splash in order to signal some sort of new direction.

Few businesses do the new, big and splashy right the first time. Unfortunately if the deal is big enough and as a result generates a situation that is bad enough, there may not be the second opportunity to do it right. Change associated with business core competencies or structure takes time. It can’t be forced as a result of a big deal. A certain amount of ego is essential for leadership. Too much ego results in deals where the mouth has written a check that the brain can’t cash.

Deal success usually comes about as the result of doing the basics well. This capability evolves from doing similar types of deals on a regular basis, understanding what your deal or market sweet spot is, and maintaining a stable business approach. If you have been successful doing smaller deals in one area, the chances of having issues with a larger magnitude deal outside of your knowledge area are significantly increased.

• Sometimes deal momentum takes over and supplants common sense. When a large opportunity or deal is first noted, it begins to appear in the various business forecasts. It doesn’t matter that it may be exploratory or of initially low probability. The longer it stays visible, the more it becomes part of the expected fabric of the business. Eventually it becomes expected and sometimes even counted on as part of the business results.

It is very seldom that any amount of caution, qualification or warning can stop this progression. It eventually evolves that big deals that have been around for a while become deals that “cannot be lost”. Once this mentality has set in it leads to a set of seemingly logical steps that culminate in an illogical deal. Costs can be shaved, schedules can be condensed and onerous terms accepted all in the name of getting the game changing big deal done.

This type of deal behavior would normally result in a difficult environment for success if the opportunity was associated with a core competency of the business. When it is associated with a new market or an unproven capability the performance and results are usually not so pretty. The budgets and the schedules are usually the first items to be impacted, with the profitability and customer’s satisfaction very close behind.

Perhaps again we are seeing another business manifestation of one of C. Northcote Parkinson’s Laws, specifically Parkinson’s Law of Triviality, from his 1957 book “Parkinson’s Law”. In it amongst other topics, he examines the amount of time and attention that businesses spend on smaller (trivial) items as opposed to the larger, more complex and more important ones. In summary:

“He dramatizes this “law of triviality” with the example of a committee’s deliberations on an atomic reactor, contrasting it to deliberations on a bicycle shed. As he put it: “The time spent on any item of the agenda will be in inverse proportion to the sum [of money] involved.” A reactor is used because it is so vastly expensive and complicated that an average person cannot understand it, so one assumes that those that work on it understand it. On the other hand, everyone can visualize a cheap, simple bicycle shed, so planning one can result in endless discussions because everyone involved wants to add a touch and show personal contribution.”

Big deals are an important aspect of any business’s growth plan. They require a significant amount of discipline as businesses seem to get more anxious to close them, the closer they believe they are to closing them. (Perhaps this can now be cited as Gobeli’s Big Deal Corollary (BDC) to Parkinson’s Law if Triviality.) This phenomenon can result in final agreements that are far from the original big deal concept and far from beneficial to the business. The risk associated with the big deal increases rapidly if it is outside of the business’s normal operating area, or is associated with senior management’s plan for the transformation of the existing business or business model into something else.

Big deals are quantum events that must be given at least the same amount of deliberation if not more than that associated with the standard business conduct, regardless of the business’s desire or dependence on their closure. If you are going to try to successfully change the business, it is also probably better to not start the change, or make it dependent on a big deal.

Analysis, Planning, Self Analysis

Anticipation

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Projecting is not what they do in the movie theater. Well, it actually is, but that is not the type of projecting I want to talk about here. What I want to discuss here is the idea of projecting yourself into the position of someone else. By putting yourself in the position of your business associate, customer or boss you can try and gain some insights into what factors are important to them, how they might respond to you, and what you can do to be prepared for those eventualities. By anticipating what the people you are doing business will want or how they will react, you can be prepared for future business actions.



It is also a key to the art of thinking ahead.




The business environment has been relatively unstable for some time now. This has driven a focus on seemingly shorter and shorter term deliverables and objectives. As the focus has become shorter the number of controllable forces that can affect the desired outcomes associated with the business has gotten smaller, and in most instances has become more internally oriented to the business. In short we have a tendency to think and act more and more on our immediate needs, drivers and goals, and less on those needs of the customers, the others we deal with and the future.




We cannot afford to be only present day demand / response driven in how we conduct business. We need to remember that each activity is a link in the business chain. It was driven by the previous business activities, but more importantly it will drive other different future business activities. When we focus on only what we want, and are concerned with only what we need and how we will react, we are looking at only one half of the business equation.




Our business activities do not occur in isolation. We are working with customers and responding to the requests and requirements of other business groups. We have to project ourselves into the other half of the business activity. By taking this next step and anticipating how those we are conducting our business with will react, we can adjust our current activity to generate the future response that we desire.




I admit that this is a pretty basic concept, but it seems to be one that we are paying less attention to as we look at today’s meeting calendar, or try to worry about this month’s or this quarter’s numbers. When the headquarters staff teams are looking for forecasts, the first inclination is to get them some numbers (whatever numbers are handy at the time) and get them off your to-do list so that you can get back to actually conducting business. The problems that occur next month or next quarter because of the hasty forecast or early customer sales recognition are to be worried about next month or next quarter. Hence we seem to be always explaining the present and not planning on the future.




When you start looking at why people are interacting or conducting business with you in the manner that they are, it should change the way you interact and respond to them. Instead of just providing a number in a forecast, add a trend and an explanation of the trend. I think that’s what I would like to see when people provide me a forecast, so wouldn’t others want the same type of information? By providing that extra anticipated piece of information you have already provided the answer to the next question.




Sun Tzu in “The Art of War” always noted that the good battles to fight were the ones you had already won, before you fought them. He also stated that by anticipating and preparing for the future conditions, the best battles were the ones that were won without ever having to fight them at all.




The same should be the case for business. By taking a minute and trying to understand why the business request or the customer interaction is in its current form, projecting yourself into the requestors or customers position and anticipating what the next or future interaction will be, you can start managing the future and not just the present. “Good” issues are those that you have ready solutions to. The best issues are those that you never had to deal with because you were able to anticipate them and avoid them all together.

Analysis, Competition, Risk and Return

Sun Tzu Was Right

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In his book “The Art of War”, Sun Tzu (a 5th century B.C. Chinese general) stated “If you know yourself, and you know your competition, you will never lose a battle” – I hope you don’t mind if I have paraphrased a little.

 

Sun Tzu speaks about the importance of knowing your own capabilities, whether they are personal, corporate, technological, whatever. You must assess if you have the skill and resources to achieve the desired goal. He also speaks about the importance of knowing your competitors (opponents) capabilities, along the same lines.

 

He also talks about taking into account the terrain, climate and intangibles when preparing for war / competition. These ideas can be roughly analogous to the market, the economy and the morale/status of your team.

 

What he does not say is that if you take these things into account that you will win. What he does say is that you will not lose. What this means to me is that after these reviews, you need to pick your battles and your objectives. Analyze the risk and the return. If after review you find yourself at a significant competitive or market disadvantage, it may be best not to engage in that competitive environment.

 

Use the analysis of yourself, your competitors, and the various markets to choose those opportunities where your probabilities of success are highest. It sounds simple enough. It should be simple enough. To use a modern day analogy, it’s like blocking and tackling in football. But as we have seen in football, the basics are not always that simple based on the high level of talent and competition out there, and even then it takes a significant amount of practice to get  the basics right.