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Paul Hudson
Paul Hudson CEO of Intersperience
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Every bit of insight helps, or does it?

Last week saw some big changes and announcements at Tesco. None of them particularly surprising – they had all either been expected or been announced previously. But the new Chief Exec has certainly made an impact!

One of the more interesting statements was the comment “the business is adjusting its strategy to meet the rapidly changing needs of a different customer”. Specifically, Tesco has stopped all plans for new hypermarket store formats (resulting in huge property losses from stores already planned for building) stating that they are no longer ‘economically viable’. Instead, Tesco is putting emphasis on improving the experience at the smaller store formats, “We’ll be focusing much more on building our multichannel credentials.” All very sensible. But also very costly because this is a significant change in strategy.

This got me thinking about the role of insight. Was it working as effectively as it could have done for Tesco? 
Insight can mean different things to different people. To me, insight means something that ‘we previously didn’t know’ and that will ‘result in changing something in the business’. But even with this definition, there are many different uses of insight. For example:
  1. To measure success (to see how well our customers like us)
  2. To validate a new product 
  3. To improve a new product or service
  4. To increase the use or purchase of something
  5. Identify critical factors in success (can be similar to point 1) so we can do more of it
  6. To understand/predict change
Most of these are giving insight into what customers want today. In this sense they are ‘tactical’ – helping a business ensure it gets the right product to the right people. Fundamentally, they are about what the customer thinks and does at the moment, actions that help us run the business today. Only the last one is about the future or trends.  
In light of the Tesco example, the question businesses should be asking themselves is whether they get the balance right between the different types of insight. So much of insight budgets are spent on the first 5, it is entirely possible that not enough attention or focus is given to the 6th one, the future. 
And the impact of not getting this balance right can be costly – Tesco have spent millions, maybe even a billion in changing their strategy. Could insight have helped them get the right strategy earlier? Why, if insight into changing behaviour is available, couldn’t changes have  been made earlier? 
What can businesses do to ensure that insight is functioning at its very best? 
  1. Improve the way we measure the ROI or value of insight. This is often measured over the course of a calendar year. The difficulty with the 6th type of insight is that it takes longer for the ROI to come through. This can clearly be seen with Tesco, who are now suffering the costs of failing to apply strategic insight 
  2. Ensure the business is structured to hear the insight. If the business operates with a silo mentality then  businesses like Tesco don’t hear the insight in the right places at the right times. 
  3. The delivery and use of insight needs to improve. Not just the production of the final output of a project, but working to take it into the business and directly influence actions and strategies. Too often, the connections here are not effective – management consultancies do this well. And insight agencies need to follow them. 
  4. We need to be willing to spend money on the creation of insight not just the collection of data. Too often, spend is judged on collection of data rather than understanding it well. And yet, ROI is measured on the output of the process, which is where the real value is created.
  5. A separate entity of insight, called ‘foresight’ needs to be recognised. I’ve heard this term used a lot recently, but we need to be careful not to rebrand all of insight with this term, as it will then lose its impact. All of insight is NOT foresight – just re-read my list above. 
Foresight is about the future, not about today. It takes different skills to create it, needs different budgets to produce it and different internal structures to make use of it. 

The Tesco example demonstrates that foresight is still lacking within our best organisations. 

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