7 Steps for a Successful Goal Setting Process

 

Companies that want to create impactful change need a well-defined goal setting process. Using an effective goal setting approach, you can establish and encourage steady goal progress while keeping employees motivated and accountable. 

In this article, we’ll cover everything you need to know about creating a successful goal setting process, covering:

• What is goal setting 
• Why goal setting is important
• Types of goals
• Goal setting frameworks
• 7 goal setting steps 
• Tips for an effective goal setting process 

What is goal setting?

A well-defined goal setting process is a surefire way to improve your organization’s performance and reach new levels of success. In a business environment, goals are achievements you want to attain at the organization, team, or employee level over a specific period of time.

As a powerful driver of motivation and learning, effective goal setting involves using a structured working model to approach your goals. That is, using the goal setting theory as a model for understanding the components of a practical goal.

Back to basics: The goal-setting theory 

The goal-setting theory honed by Edwin Locke and Gary Latham in 1990 highlights the correlation between goal setting and performance, stating that specified and well-defined goals can enhance productivity. They proposed that such goals can motivate individuals to do their best by cultivating focus, effort, and perseverance.   

The goal-setting theory is said to work when you meet five critical conditions:  

1. Clarity: Goals must be specific and measurable, letting employees know what they’re striving to achieve
2. Challenge: Goals should be challenging yet attainable, as easy goals won’t encourage employees to put their best foot forward
3. Commitment: Employees need to support the goals they’re working towards and commit themselves to achieving these
4. Feedback: Feedback helps employees determine how well they’re performing and what they need to change to improve results
5. Task complexity: Employees need an adequate timeline for their goals — one that accounts for the learning curve and task complexity

What is a goal-setting process?

A goal-setting process is a vital tool for organizations seeking to drive measurable progress and achieve desired outcomes. It offers a clear path to defining goals and outlining the steps necessary to attain these. As a result, fostering clarity, motivation, and accountability among employees.

The importance of goal setting

Having an adequate goal setting process can be highly beneficial for organizations of all sizes, as: 

Effective goal setting provides direction 

Business goal setting can pave a clear direction for your employees to embark on, and leadership goals help your team leaders play their part. Once the steps to goal setting are complete, employees can follow a distinct pathway that aligns their daily activities with the company’s main objectives. This allows them to zero in on areas prioritized by your business while discouraging them from going on a tangent and investing energy into activities that don’t contribute to key goals.   

Successful goal setting keeps motivation levels high

When employees directly contribute to business goal setting, they’re more likely to stay motivated when faced with challenges. Measurable goals are incredibly motivating, as employees can visibly see themselves progressing towards the end goal as they hit each milestone and short-term goal. This keeps them increasingly engaged as they close in on their final objective. 

Setting goals improves accountability 

Beyond cultivating motivated employees, business goal setting also hold keeps employees accountable. A carefully crafted goal setting process depicts clear goalposts and deadlines, giving employees a timeline to abide by. As such, they’ll consistently work towards these milestones, simultaneously monitoring their progress to ensure they’re on track.  

A well-defined goal setting process boosts employee performance 

After choosing a goal setting framework and creating goals for your employees, they know what needs to be done and by when. This gives them a clear sense of purpose, resulting in heightened productivity. A study published in the Journal of Leadership & Organizational Studies corroborates this, revealing a positive relationship between an employee’s goal commitment and their department’s performance.  

Business goal setting helps you address obstacles 

Once you’ve announced your goals, employees can consistently compare their performance with the desired outcome. This can help them uncover where they’re falling short and where they’re thriving, revealing what needs to be improved or adjusted. As such, establishing effective goal setting processes can help you stay on track by pinpointing what you need to adapt or reconfigure to move forward. 

Types of goal setting

When setting goals, you can choose to establish different types of goals. These can vary depending on the scope, context, duration, or complexity of what you want to achieve. 

Process vs. performance vs. outcome goal setting

• Process goals refer to methods or strategies you want to use to facilitate progression and attain the performance goals
• Performance goals are short-term initiatives that work together to achieve the outcome goal
• Outcome goals are overarching end goals that you’re striving to achieve

Short-term vs. long-term goal setting

• Short-term goals are goals you want to accomplish soon — often within the next week, month, or quarter, depending on your cadence. These serve to complete the bigger picture and contribute toward larger business goals.
• Long-term goals refer to end goals you want to accomplish later on. These are rooted in your company’s values and require more time, commitment, and planning.

Individual vs. shared goal setting

• Individual goals are personalized to each employee based on their professional goals and broader organizational objectives. These help employees cultivate unique pathways that align with their aspirations while contributing to overarching business goals.
• Shared goals help employees work together by fostering a sense of unity. Additionally, they enhance collaborative capabilities within departments, teams, and projects. Therefore, shared goals are vital to creating an environment that balances strengths and weaknesses, resulting in an inclusive and productive workplace.

Qualitative vs. quantitative goal setting 

• Qualitative goals are assessed objectively, as there’s no concrete definition or measurement for achievement. Instead, goal achievement for qualitative goals is ‘felt.’
• Quantitative goals are measurable and can be tracked, with goals accomplished when a particular metric or outcome is reached.

Different goal setting frameworks

Choosing the right goal setting framework can bring you closer to realizing your goals. These can help you align employees with your company’s trajectory while allowing you to keep an eye on your progress. Below, we discuss seven of the most widely used goal setting frameworks you can choose as part of your goal setting process.  

SMART goals

SMART goals guide your goal setting process by defining goals using five principles:  

1. Specific: goals clearly highlight what you want to achieve
2. Measurable: goals have metrics attached to them
3. Achievable: goals are ambitious but not unachievable
4. Realistic: goals are attainable with the available resources
5. Timely: goals have a reasonable deadline

OKRs 

The OKR framework stands for objectives and key results. This goal setting framework can help you execute your priorities by facilitating transparency and focus while ensuring effective resource allocation. The OKR framework consists of three main components:  

1. Objective: a short statement that highlights what you want to achieve during a given period
2. Key result: a progress indicator showing how well you’re progressing toward your desired outcome
3. Task: activities that you undertake to help you make headway

KPIs  

KPI stands for Key Performance Indicators and depicts quantifiable measures that track performance over time. You can select KPIs for multiple organizational domains, including project, individual, departmental, or business objectives.

Backward goal setting 

Backward goal setting, as the name suggests, involves working backward. You start by determining your end goal and work retrogressively to develop an action plan. That is, you keep your end goal at the forefront of your mind while breaking it down into smaller goals and milestones, identifying the daily, weekly, and monthly goalposts you need to reach along the way to achieve your final goal.  

MBO

Management by Objectives (MBO) is a strategic goal setting methodology that defines objectives for managers within an organization. These objectives are then relayed and spread across the organization, where they can be discussed, acted on, and monitored.

BHAG  

BHAG goals stand for Big, Hairy, and Audacious goals. These refer to challenging, long-term business goals (often 10-25 years away) that your organization uses as a guiding light. While these goals are far away, they can continuously direct employees toward effective action.  

4DX 

4DX refers to the four disciplines of strategy execution framework, which proposes four core disciplines for helping individuals and teams reach their goals. These disciplines include: 

1. Focus on the wildly important: Teams and individuals should narrow down their focus to no more than two Wildly Important Goals (WIGs) 
2. Act on the lead measures: focus on activities that drive the best results, where lag measures describe what you’re looking to achieve and lead measures describe the activities that influence goal attainment 
3. Keep a compelling scorecard: teams should have access to a visible scorecard that lets them know whether they’re successful or not 
4. Create a cadence of accountability: Teams and individuals are held accountable for their goals through weekly WIG sessions where they discuss commitments, performance reviews, and improvement plans 

EOS

The entrepreneurial operating system (EOS) is a goal setting framework used by small and medium-sized businesses. Its goal setting process uses six key components for organizational focus and efficiency. These include vision, people, data, processes, traction, and issues.

1. Vision: Establishing and communicating the values, goals, and purpose throughout the organization
2. People: Ensuring the right people and teams are in place to help undertake the tasks and activities needed to execute the vision
3. Data: Providing an overview of business health using key performance indicators
4. Process: Analyzing business metrics to figure out existing strengths and weaknesses and address them appropriately
5. Traction: Holding recurring meetings to foster goal accountability 
6. Issues: Pinpointing, prioritizing, and solving obstacles as they come

BSC

The balanced scorecard (BSC) is a strategic management framework that helps organizations translate their mission and vision into actionable objectives and key performance indicators. It comprises four distinct perspectives, providing a comprehensive view of an organization's performance:

1. The financial perspective measures organizational success from a shareholder's standpoint 
2. The customer perspective aims to understand how the organization is perceived by customers 
3. The internal process perspective examines the efficiency and effectiveness of value-adding internal operations and processes 
4. The learning and growth perspective considers the development of employees, innovation, and the organization's ability to adapt to change for long-term sustainability and competitive advantage

Agile

Although Agile is not a goal setting methodology itself, it's a management principle often associated with OKRs. It's about embracing outcome (customer) focus on product, while having a quick, iterative development process to reduce time to value.

7 goal setting steps

After choosing a suitable goal setting framework, you can begin crafting and perfecting your goal setting process. Use the seven goal setting steps highlighted below to ensure you've established goals correctly and are on the right track.  

Step 1: Figure out your goals  

The first step of an actionable goal setting process is figuring out what you want to achieve, why you want to achieve it, and when you want to achieve it. If you’re unsure where to start, use your company’s comprehensive mission statement as a base. This way, you can work on setting goals for employees and teams based on your company’s priorities.   

Step 2: Write your goals down  

Once you’ve settled on your goals, the second step involves writing these down. Putting pen to paper and writing out your goals cements them as tangible, improves clarity, and gives you time to reflect on why you chose them. When putting your goals in writing, it’s essential to take note of your language: avoid using perhaps, may, or might, as these can affect how attainable you perceive these goals to be.   

Step 3: Consider how you’ll measure your goals 

After solidifying your goals in writing, the third step of the goal setting process is figuring out how you'll measure goal progress. Achieving your goals requires you to know precisely what success looks like, and most of the time, this requires a quantifiable approach, such as using KPIs or OKRs.

Step 4: Prepare for potential obstacles  

You must be prepared to encounter challenges when working to achieve your goals. As challenges can come in many forms (e.g., knowledge, people, skills, or context), you need to take a bird’s-eye view and consider all grounds when anticipating goal setting obstacles. Once you’ve pinpointed possible hurdles, dig deeper into their root causes. Thinking of these beforehand can help you address and tackle goal setting issues before they emerge, resulting in more confidence throughout the goal setting process.  

Step 5: Map out a timeline 

The fifth step of goal setting is to create a timeline for your goals. This timeline should clearly outline the tasks, milestones, and deadlines you need to tick off to achieve your goals. A visual timeline of everything you need to accomplish can help you create realistic expectations for achieving your goals while making the more significant goal seem more digestible.   

Step 6: Create a plan 

After establishing your goal setting timeline, you need a plan for approaching these goals. With a plan in place, you become aware of what you need to do to accomplish the goals you’ve set out for your business. You can start creating a plan by first emphasizing the daily habits you must get into to gain momentum. After this, pan out to the weekly, monthly, and quarterly steps you need to take to overcome obstacles and successfully realize your goals.  

Step 7: Monitor progress consistently  

A study by Censuswide and Geckoboard revealed that tracking your progress increases the likelihood of obtaining your goals, with companies that track progress hitting their goals almost twice as much as companies that don’t. As such, you need to engrain weekly or monthly goal progress reviews into your goal setting process. Doing so can also help you remain organized and focused while allowing you to reflect on your goal performance.   

Tips for an effective goal setting process

1. Align goals to wider company objectives

As part of your goal setting process, your goals should tie into your more comprehensive company strategy. This ensures they serve a purpose and don’t just yield one-off achievements that don’t contribute to your company’s growth. 

Beyond creating a ripple effect for your organization’s success, there are several reasons for aligning your employees’ goals with company objectives. These include:  

• Employees feel more connected to your company
• Employees understand the impact of their work
• Employees gain clarity on your organization’s priorities

To make goal setting and alignment easier, ensure your company’s story and objectives are communicated consistently across the whole company. For example, you can emphasize objectives in your company’s history, company-wide meetings, or company newsletters.   

2. Keep goals visible 

Ensuring your goals are visible keeps you working towards them, reminding you and your employees of what you want to accomplish. This further increases your likelihood of attaining these goals as it avoids them becoming a one-off conversation, where employees forget about their goals after initially discussing them.  

3. Commit to your goals  

According to the goal-setting theory, goal commitment is composed of self-efficacy and perceived importance. That is, an individual’s belief that they can achieve their goals and the importance of their expected outcomes. Therefore, you need to instill confidence in your employees and emphasize the importance of these goals. 

To boost goal commitment (and, consequently, your chances of goal attainment), acknowledge the value of these goals to your company. When doing so, ensure that executives are on board with your goals, as vouching for the importance of these goals is futile unless C-suite people prioritize them.  

4. Establish rewards  

Rewarding your employees for attaining their goals can keep them inspired — particularly when it comes to long-term goals. Giving them something to look forward to can drive performance, productivity, and retention, as:  

• 88% of employees agree that employers should reward employees for great work
• Recognition increases employee productivity, engagement, and performance by 14%
• 91% of HR professionals agree that rewards and recognition increase the likelihood of employees staying within a company

Therefore, establishing goals can make your goal setting process and efforts more effective.

The goal setting process in a nutshell

Ambitious and effective business goal setting keeps your employees accountable and productive while allowing you to monitor progress. You can choose to set different goals (e.g., long-term, individual, quantitative) depending on the breadth, reach, circumstances, time scale, and complexity of your goals. 

Regardless of the goals you select, an effecting goal setting process needs to be supported by a suitable goal setting framework. The right goal setting framework can help you align employees and craft an actionable plan for tackling your goals. Moreover, using the goal setting steps and tips outlined in this article, you can facilitate a seamless goal setting process that makes goal attainment achievable.

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How to predict your competitor’s next move

 

By Emma Parry

Know which competitors matter the most and predict their next steps with greater accuracy.

In this episode of the Inside the Strategy Room, John Horn, author of the new book Inside the Competitor’s Mindset (The MIT Press, April 2023), explains how to predict competitor actions. Horn is a professor at Washington University’s Olin Business School in St. Louis who helps companies maximize the value of competitive insights. He spoke with Emma Gibbs, who leads McKinsey’s Strategy and Corporate Finance Practice in the United Kingdom, Ireland, and Israel. This is an edited transcript of the discussion. For more conversations on the strategy issues that matter, follow the series on your preferred podcast platform.

Emma Gibbs: What is the core message of your book?

John Horn: The big idea is that many companies do competitive intelligence, but where they fall down is in turning that intelligence and data into insights about what the competitor will do. Many of my clients say that their competitors are irrational, but this is because they are not taking the time to look at the world from their competitors’ point of view. Once they do, those competitive actions start to make sense. The book sets up frameworks and processes to help executives get inside the competitor’s mindset.

Emma Gibbs: Why do you think companies have such a hard time understanding their competitors’ points of view?

John Horn: One reason is that we assume our approach and the way we look at the world is right. When someone does something differently, it creates a dissonance with what we think is the correct answer. The other reason is that with more seniority, power, or status comes greater difficulty in being empathetic. We made choices that got us promoted, so we assume they had to be right choices. Any others don’t make sense to us.

Emma Gibbs: Have you come across instances when a company does act irrationally?

John Horn: I have yet to see a company act truly irrationally. Typically, the competitor’s actions aren’t irrational but are moves that we wouldn’t make or we don’t want them to make. I did a war game with a transportation client, and we discussed whether we should include warehousing space as a choice in the game. The client said, “No, because our competitor is irrational with their warehousing. It’s a mature industry with excess capacity and they are adding warehouse space.” I asked, “Have you added capacity in the past 18 months?” He recited a short list: expanding one facility, adding another, acquiring a third. I said, “So you’ve added or expanded 12 facilities. Your competitor added four, and they’re irrational?” He looked at me and said, “Yeah, but there is a good reason why we added those 12.”

Emma Gibbs: How would you approach figuring out the competitor’s reasons for their moves?

John Horn: It’s about breaking out of your own mindset and forcing yourself to look at the world from competitors’ points of view. If I had their assets, what would I do with them? If I decrease my prices and the competitor matches that decrease, I won’t gain any market share. Any time you plan to build a new plant or acquire a company or change your pricing, you should think, as in any game, “If I make this move, what will my opponent do in response?” The minute you say, “They’re irrational,” you stop trying to understand them.

Emma Gibbs: In your book, you have a four-stage framework for understanding competitors. Can you explain those steps?

John Horn: The first step is to pay attention to what competitors say and do by downloading earnings calls or annual reports and scanning media releases. 

The second step is to find out what assets, resources, and capabilities they have. They may have a supply chain in markets or geographies that you don’t have or upgraded facilities. That’s where you start to differentiate the competitor. The way I like to phrase it is, “If I had their toys to play with, what would I do?”

The third step is to consider the person making the decisions. What do you know about them? When someone with a marketing background becomes the CEO, they won’t suddenly start optimizing the footprint of factories. That person will likely focus on marketing to help the company grow, partly because they will think, “My background is why the board hired me.”

"Companies doing competitive intelligence often try to collect all data about all competitors all at once, but they lack the staff or the ability to analyze the information and develop insights. You should start small. Who are the major competitors you want to track, and what do you want to track about them?"

Compa

The fourth element, which is really important, is making a prediction and then tracking it to see how it lines up with what happens. If you paid attention to what the competitor said and did, considered all its assets, and understood the leaders’ backgrounds, you can say, “I think they will do this in the next three to six months.” If what they do is in line with what you expected, you know you are on the right track. If you’re off, then go back and ask, “What did I miss? Maybe they used a certain partner or hired a new person to make decisions.” That updates what you pay attention to going forward to help you make better predictions. The objective is never to be 100 percent accurate, but it’s a lot better to be 30 percent accurate than to be 0 percent accurate in predicting what your competitor will do.

Emma Gibbs: In our practice, we talk a lot about the social side of strategy—ingrained ways of thinking or internal agendas. How should individuals who gather these insights share them with senior leaders so they make the best decisions?

John Horn: It’s more about storytelling than about charts and spreadsheets. It’s hard to say, “Here is what we should have invested, and here’s what the return would have been.” Rather, come up with examples of where the company faced big challenges in the past. For example, it might be something like, “Remember when we entered Latin America and got hammered by that competitor and lost our $200 million investment?” Then go back and look at what the competitor had done before. “If we had spent time to analyze the competitor, we may not have perfectly predicted their reaction, but we could have seen them as a threat and paid more attention to them.” Anecdotes aren’t proof, but you want those big hairy, messy anecdotes to be in senior leaders’ minds, so they realize that this is something they need to pay attention to.

Additionally, when you start implementing a competitive intelligence program, you want to go for small wins to build up the right to get bigger. Focus on one or two competitors and one or two strategic choices; maybe it’s one competitor’s pricing and product portfolio. Then track that and show that you can predict their actions with growing accuracy.

Emma Gibbs: Should business leaders start small when venturing in a new strategic direction, to get a sense of the competitor response?

John Horn: Some strategic choices can’t be made incrementally. If I’m going to acquire a company or expand a facility, I can’t do that partially over time. On the other hand, maybe I can expand a product into a couple of areas and see if a competitor tries to block it. We have this idea that our competitors are tracking our every move and just waiting to pounce. In fact, many will not realize that you are making a move in the market for weeks or months. With big moves, war games and simulations can be very helpful: “Emma, I want you to play a competitor. Here’s what I want to do. What would you do in response?” You can come up with a pretty accurate sense of the competitor response and based on that, decide what you might do differently.

Emma Gibbs: You interviewed people from different backgrounds for the book. What insights did you gain from that?

John Horn: One of the challenges with competitive insight is that you can’t talk to your competitor, so you have to intuit outside in, from second- and third-party resources. A colleague of mine said, “It’s similar to a homicide detective who can’t ask the victim, ‘Who killed you?’” It made me realize that other professionals, such as archaeologists, paleontologists, and neonatal ICU nurses, face the same challenge. Paleontologists can dig up fossil bones, but that doesn’t tell them how T. Rex ran or if it hunted in packs. I asked these different groups how they approach the challenge of not being able to directly interrogate the subject of their research and synthesized their answers into ten lessons. 

The number one thing was to create a diverse team. Almost everyone said, “If you want to have good competitive insight, you need people who look at the problem from different angles, whether that’s cultures, genders, or functional or educational backgrounds. The more people with different voices actively participating, the better answers you will get.”

Emma Gibbs: What advantages can technology bring to getting into the minds of competitors? And how do you combine it with the human aspects?

John Horn: It’s hard to do competitive insight without having a good database of what companies have done in the past and are doing currently so you can see patterns. Competitive insight or business analytics dashboards are very helpful for collecting and codifying that information. When you’re trying to predict your competitor’s actions, you need to know two things. 

First, are they following patterns? For pattern tracking, artificial intelligence and dashboards are helpful as long as AI recognizes the pattern. For example, if I want to know how a competitor will react when I change my prices or when another competitor changes its prices, I have to train the AI tool not only to recognize when the competitor I’m tracking changes its prices, but when others in the industry change their prices. I’m not sure AI has reached the level of being systemic and holistic in tracking multiple competitors relative to one other.

‘Knowing competitors’ historical patterns doesn’t tell us whether those patterns will continue. That’s where the human element comes in. Given what you know about what the competitors are saying and doing, do you expect them to continue those patterns or change direction because they want different outcomes?

The second element, which AI is not good at right now, is predicting changes. I used to do an exercise with my students to prepare them for consulting interviews. It was a consumer goods case, where one company’s market share went from 33 percent to 30 to 27, and another’s went from 27 percent to 30 to 33. The client company stayed flat. I asked the students which company they should be worried about, the one whose market share went up or the one whose market share went down. Most said the one that went up, because that competitor got stronger. I asked, “Do we know that this company wants its market share to continue to go up, or are they happy with where it is? Or did their market share go up without them doing anything and it will fall back because they’re not paying attention to it?” Similarly, the company whose market share went down could continue to go down because the company plans to exit that market. Alternately, its leaders could aggressively try to regain that market share, or they could try to merely stabilize things because they’re focused on other areas.

This shows that knowing historical patterns doesn’t tell us whether those patterns will continue or change. That’s where psychology and the human element comes in. Given what you know about what the competitors are saying and doing, do you expect them to continue those patterns or change direction because they want different outcomes? Technology is not yet good enough to make and track predictions without that human intervention.

Emma Gibbs: On your point about codifying patterns, what information should companies track?

John Horn: It’s a good question because companies doing competitive intelligence often try to do everything. They collect all data about all competitors all at once but lack the staff or the ability to analyze the information and develop insights. It goes back to my earlier point that when you start a competitive insights function, you should start small. Who are the major competitors you want to track and what do you want to track about them? Is it about product innovation, pricing moves, acquisitions, talent management, or supply chain? You figure that out by asking people in the organization where they have seen the competitor surprise or challenge them in terms of their response.

Coming up with a small set of competitors and strategic factors will help you focus the data collection. If I’m focusing on acquisitions, I don’t need to reverse-engineer the competitor’s product portfolio, but I do need to track how often they made acquisitions. How big were the deals? Were they bolt-ons? As you build up that information, you start to get feedback. “That’s great. Can you also look at this other question?” You earn the right to expand the function. It’s similar to the idea of a minimum viable product for entrepreneurs. You start with the MVP, get feedback from the people in your organization, and continue to develop and refine it.

Emma Gibbs: Does John Nash’s equilibrium theory, and game theory in general, play a role in predicting competitors’ moves?

John Horn: The Nash equilibrium essentially says, “I’m going to make the best response in reaction to you, and you will make the best response in reaction to me.” But Nash and the theory of economics always starts from the idea that we want to maximize profit. In the real world, sometimes we are trying to maximize market share in the hopes of getting profits down the road, or to maximize short-term earnings, or to integrate an acquisition as quickly as possible. All Nash would say is, “If that’s your objective, will the competitors have the same response as in other scenarios?” It’s a reminder that we have to consider not what we want other players to do, but what those players will do that’s in their own best interests.

Emma Gibbs: Can you offer some examples of organizations that have effectively generated competitive insights?

John Horn: One financial services company gained support from the CEO. Anytime someone proposed a new strategic initiative, the CEO would ask, “Did you talk to the competitive insight group?” Working with that group became part of how the company did business. The company was also deliberate in ensuring that information flowed up and down throughout the organization.

In another company I worked with, regional managers initially didn’t talk to each other. Since competitors applied similar strategies across regions, there were a lot of missed opportunities. The competitive insights group asked the regional managers to provide information about their main competitors and shared with them information they received from others. When the first reports started trickling in, the managers realized that when a competitor lowered prices in one country, they might lower prices in their regions. The company started small and then created a virtuous feedback loop: “If you want more information, give us more information.” Once you start providing information that helps people do their job better, they will want more of it.

Emma Gibbs: Do you find that companies tend to prioritize customer insights over competitive insights? Are there techniques used for customer research that could be applied to generating competitive insights?

John Horn: I think companies do a better job of understanding customers than competitors. I have led strategy workshops where we asked the client what makes the company distinctive, and the participants said things like high quality and customer responsiveness. The CEO said, “All our competitors would say the same thing, so how are we different?” We have to apply those same empathetic techniques to competitors, as well as supply chain partners and ecosystem stakeholders. For example, why are regulators making the moves they are making? Companies are good at scanning social media to understand how customers are responding to their products, but they don’t apply those techniques to reviewing how customers respond to competitors’ products. What is the competitor’s customer experience score? Are positive or negative responses changing for competitors? That can help you gain insight into what the competitor will do.

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