An Iterative Research Process

The biggest challenge in doing business research on the web these days is sifting through all the stuff out there to find the most informative sources and best foundation for your analysis.  Because commodity information is so cheap and easy to produce these days, it can crowd out the sources you’re really looking for.  To avoid wading through millions of sources aimlessly, you need a strategy.

Think of research as an iterative process where you create a chain of searches going from general concepts to specific ones.  You’ll find the right facts when you get down to concepts specific enough to eliminate redundant general content but still broad enough to avoid hitting keyword-stuffed pages like job postings.

The process goes something like this:

  1. Search
  2. Identify relevant concepts
  3. Organized and prioritize them
  4. Iterate one level down with searches on the most important topics

The goals are to focus your time on high-priority concepts instead of whatever happens to come up and to start organizing your thoughts for what your deliverable will look like while you are doing research.  The biggest mistake most business analysts make in research projects is to spend too much time looking for data, past the point of diminishing returns, and not enough time thinking about the information and how to analyze it.  Taking a concept-based approach from the beginning is one way to avoid that trap.

A Home Depot example

To walk through a concrete example, let’s say you are doing research on Home Depot’s strategy as part of an analysis of the home improvement retail industry.  One good approach is to start with general background sources to get a sense for the company’s strategy.  In this case, however, let’s try the iterative approach I described, starting with a web search on “Home Depot strategy” to see what comes up.  Walking through the first 30 results or so, I came across a moderate amount of useful information, but more importantly some notable terms to follow up on.  After grouping them together, here are a few of the topics I would look into further:

  • Management
    • Frank Blake, CEO
    • Bob Nardelli, former CEO
    • Matt Carey, CIO
    • Bob DeRodes, former CIO
    • Craig Menear, EVP Merchandising
  • Store strategy
    • Store format / store layout
    • Store modernization
    • Store leadership program
    • Expo Design Centers
    • Home Depot Supply
    • “Clustering strategy”
  • Customer service
    • American Customer Satisfaction Index
    • Harris Interactive Reputation Quotient
    • “Customer cultivation”
    • Staffing levels
  • Marketing strategy
    • Merchandising
    • Multichannel marketing
    • “Every day value”
  • Other
    • Executive turnover
    • Lowe’s
    • Hughes Supply Acquisition
  • While some of these company-specific phrases sometimes lead to overly-specific pages like job postings, they can also help you strike the information jackpot.  For example, Home Depot is currently positioning itself as “every day value,” but searching on that term mostly inundates you with job postings and other less than useful pages.  Of course, it also brings up a good presentation on merchandising by EVP Craig Menear, which provides amazingly detailed information on how Home Depot is working to use “destination” product lines to drive sales of complementary products.

    Looking at these results, you can start to see the outline of a few analyses that might be interesting to present to a client.  One might be a chart showing Home Depot’s customer satisfaction scores over the last few years combined with changes in staffing policies and other initiatives as well as financial results.  It seems like customer service has been one of the hot-button issues for the company over the last few years, and one that led to former CEO Bob Nardelli’s departure in 2007.

    By partitioning your search out this way, you also get halfway to a document outline.  Even when you’re in the middle of looking for data, never let yourself get so absorbed in the research process that you neglect to keep thinking through what you’re going to do with it.

    Different Hats for Business Researchers

    If you do much business research, many of the mental habits involved become second nature.  As with any complex skill, you build up a lot of tacit knowledge over time; context that makes the work easier and more effective but is difficult to express explicitly and transfer to others.  In this post, I’d like to attempt to put some of the context for business research activities down on paper, so to speak, and codify some of the intangibles that can make more of a difference than how you use the search engines or research sources.  This stuff can be particularly difficult to internalize for more junior people just starting in business research and analysis roles.  Much of it boils down to putting on a different hat at each stage in a research project.

    1. Figure out the story

    Decide what your story is first.  In other words, what does your audience really need to know?  Let’s say you’re helping to prepare for a sales meeting: emphasize the meeting participants, recent initiatives they may be involved with, and overall priorities for the organization.  Short and sweet.  In contrast, a competitive analysis might entail much more extensive information on sales and marketing strategy, core competences, and profitability over time.  Outline the deliverable at the outset, perhaps in only a handful of bullet points.  Then structure your research framework and related topics around that outline.  If marketing is one aspect, the research should include advertising, product mix, pricing, distribution channels, and a few other concepts like social marketing.

    This is going to sound like screenwriting advice more than business research advice, but also think about the story arc.  Two companies in the same industry might have vastly different stories which mean that you should focus on different data points to help explain those developments.  For a struggling company like GM, what are the fatal flaws that led to their problems?  Have they found the keys to redemption, and why or why not?  For a rising star (like Toyota, until recently), what market trends or internal strengths led to their ascendance? Continue reading Different Hats for Business Researchers

    Research Strategies - Where to Start?

    So you have a new piece of research to do.  It could be a competitive analysis of your industry.  Maybe it’s due diligence for an acquisition.  Or maybe it’s background research for a sales meeting your boss has coming up.  Where do you start?  If you’re like most people (myself included, sometimes), your natural inclination is to fire up Google (or maybe Bing or Yahoo).  Contrary to popular opinion, that’s probably not the ideal place to start.

    Why?  First, it’s too easy to end up with irrelevant or only marginally helpful results, especially if you don’t have a set of well-targeted search terms in mind.  Second, it can be very time-consuming to go through search results, and that may impede your progress.  Finally, you never really know when you’re done.  There’s always the temptation to keep searching for that last little nugget of information, and once you do stop, there’s always the nagging worry that you missed something. Continue reading Research Strategies 1: Where to Start?

    Search Engines and the Illusion of Comprehensiveness

    Lots of information is ridiculously easy to find these days.  GDP of Argentina?  Check.  Last quarter’s earnings at Google?  They’re everywhere.  But as soon as you start trying to do more in-depth research, you become painfully aware of the ongoing limitations of the current search engine paradigm.

    For example, try doing basic background research on, say, Oracle’s marketing strategy.  You’ll quickly find that out of the top 50 results on Google, half are either redundant or spammy (companies like Highbeam trying to get you to sign up for their subscription services), another 40% have marginally useful but redundant information (all linking to the same press release, for example), and only the remaining 10% really provide much value. Continue reading Search Engines and the Illusion of Comprehensiveness

    Dealing with Information Overload in Business Analysis

    It’s interesting to think about how business research and analysis has changed over time.  As recently as the 80′s, analyses were done with slide rules and presentations were done with stencils.  Office applications have of course changed all that, of course.  The amount of data and analysis available has increased dramatically too. Everyone has search engines, market research reports, investor filings, blog posts, and all manner of information at their fingertips much more than in the past. But somehow research is still often a maddening process.  Now there’s too much data, and many times sifting through it is now the real challenge.  Most information sources are poorly organized, and there’s a great deal of inaccurate or redundant data out there as well.  At the same time, everyone’s expectations for work products have risen.

    Of course, there are plenty of tools out there that aim to cure these headaches.  Continue reading Dealing with Information Overload