Is It a Puzzle, Or Is It a Mystery? Three Tools For Solving Mysteries…… with The Wisdom of Crowds David E. Schnedler St. Louis Product Management Group April 27, 2010

Puzzles and Mysteries? To solve a puzzle we must find the missing pieces to the puzzle – we need the missing data… But mysteries require judgments and the assessment of uncertainty, and the hard part is not that we have too little information but that we have too much. Gregory Treverton

Product Managers deal with both Puzzles and Mysteries every day Puzzles  Pricing  Forecasting  Positioning Mysteries  What will our users want three years from now?  How will our competitive landscape change in the 3-5 year time frame?  What new business opportunities are about to emerge?  What is our most nefarious competitor about to do to us?

The Wisdom Of Crowds “Groups are remarkably intelligent, and are smarter than the smartest people in them” “A large group of diverse individuals will come up with better and more robust forecasts and make more intelligent decisions than even the most skilled decision maker.” James Surowiecki

Is The Competitive Landscape Best Analyzed By One Person, Or By Many? Michael Porter’s Five Forces

Or This? Michael Porter’s Value Chain

Or This? Cloud Computing Cloud Computing

Three Conditions For Collective Wisdom  Diversity  Independence  Size

For Solving Puzzles Prediction Markets Are A Powerful Collective Intelligence Tool  Pricing  Scheduling  Sales Forecasting  Event probability  Environmental and Competitive Predictions  Risk and Uncertainty

But How Can Diffuse Knowledge and Wisdom Be Captured and Concentrated Upon These Mysteries? The conundrum of middle management is that solving a mystery is not enough – the challenge is to do so in an emotionally engaging manner which demands implementation of an actionable solution.

Three Mystery Busting Methodologies Primary ConsiderationChoice Benefits Beating the competition: War Games Best tool for promoting insightful knowledge of the competition Excellent tool for anticipating competitive moves or countermoves Excellent means for wind tunneling an action before it is taken Suitable for both strategic and tactical decision making Picking the right strategy: Charrettes Best tool for generating creative new strategies and for broadening thinking about strategic alternatives Increases awareness of choice. Increases awareness of the probabilistic nature of strategic choice, including expected outcomes, probabilities, risk profiles, and degrees of difficulty Anticipating the future: Scenario Planning Best tool for creative idea generation and new opportunity identification Excellent for industries anticipating rapid or discontinuous change Elevates external awareness Promotes consideration of all facets of the business environment Broadens thinking about opportunities and threats, and for breaking a status quo mindset Excellent tool for explicitly identifying the underlying business plan assumptions

Scenario Planning: the future is shaped by a confluence of forces and trends… Although the future cannot be precisely foretold, these forces and their interplay can be understood…

Scenario Planning 1.Choosing the core team 2.Defining the Objective and time frame 3.Brainstorming, consolidating and ranking forces and trends 4.Breakout teams with content experts 5.Development and elaboration of scenarios 6.For each scenario, identify the optimal strategy 7.Cross analyze the strategies 8.Identify next steps

War Games 1.Defining the objective 2.Selecting the competitors 3.Designing the teams 4.Choosing the venue 5.Researching and preparing the briefing books 6.Designing the games 7.Embedding the facilitators 8.Judge Judy 9.Post Game Washup/next steps/actions/owners

Charrettes 1.Researching and Writing the Business Case 2.Designing the teams 3.Choosing the venue 4.Running the event 5.Presenting and defending the work product 6.Analysis, integration and convergence

Prediction Market Applications War Games Predict the success of different competitor moves Charrettes Measure the relative attractiveness of alternative strategies Scenario Planning Predict the likelihood of external events and scenarios Anonymous Voting Methodologies Can Subsequently Be Utilized To Assess The Results

Four Factors For Success  Timing  Preparation  Venue  Participants Diversity Independent mindedness Size

Final Caveats  You will be surprised  You will have fun