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How To Use Your Company’s ‘Insight Score’ To Change Your Market Position

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This post originally appeared on Forbes and can be found here.

You might have heard of the Boston Consulting Group’s Growth Share Matrix. It’s a framework that helps companies identify where to allocate capital across business lines and/or products. The framework is a 2×2 matrix that plots the market growth rate and your relative market strength. 

The model is simple to understand. You have the “dogs” (low growth, low share), “question marks” (high growth, low market share), “stars” (high growth, high market share) and the “cash cow” (low growth, high market share). 

I’m typically brought in to a company to help it jump a square — to turn a “dog” or “question mark” into a “star.” Contrary to the common belief that once you’re in a quadrant you can never get out, I believe that with the right circumstances, you can turn a dog or a question mark into a star.  

Having led turnarounds in both startups and large companies, I’ve developed a framework to determine if you have enough advantage to change your market position. Think about taking an entire strategic planning process, which typically takes months and large sums of money for a consulting group, and condensing it into five core questions that will help you determine if you can change your market position. I call this the Insight Score.  

Think of the Insight Score like your FICO score, which is a weighted calculation that takes aspects of your past and present credit history to determine your creditworthiness. The Insight Score acts in the same way. The equation is simple. Below, add up the values from questions 1-4 and multiply them by question 5.  You can actually take the quick 5 question survey here.

1. Is the market big and growing?

This question is identifying if the total addressable market is large enough for your business to grow.

How to score this question:

It’s Still Emerging / Undefined (1 pt.)

It’s <$1B Market (2 pts.)

It’s Large, $1B+ Market (3 pts.)

2. Are the market dynamics favorable to you?

This question is about timing of market entry and whether the right conditions exist for you to win. Timing is the hardest question to answer, especially if you’re an early-stage company. You are often too early or too late if you’re a newer player. 

How to score this question:

It’s unclear (1 pt.)

It’s shifting in our favor (2 pts.)

Yup. It’s good for us (3 pts.)

3. Do you have a good track record in this space?

You’ll know if you have product market fit. You’ll have a good sense of your momentum getting customers, working with suppliers, beating the competition, etc.  

How to score this question: 

It’s slow going — too soon to tell (1 pt.)

We have a strong fit (2 pts.)

We have an advantage (3 pts.)

4. Do you have an executable plan?

In my experience, when I’m taking over a company, this is typically lacking. If you are in the right place at the right time and have an offering that is working in the marketplace, that’s more than half the battle — but you need a strategic plan. I often find that in turnaround situations, there is a strategy issue — for example, I often identify that a company is working on too many businesses or has too many priorities.

How to score this question: 

Not yet, still working (1 pt.)

Got a plan, no resources (2 pts.)

We are ready to GO (3 pts.)

5. How confident are you that you can attract the talent and resources needed to pull this off?

Sometimes, you’re in a business that may not be attractive for new capital. Typically if you are getting higher numbers through the first 3 questions, you have a business that investors should be interested in, and it will be easier to attract and retain talent.

Here’s how to score this question: 

Not at all (1 pt.)

Pretty confident (2 pts.)

Very. No problem! (3 pts.)

Remember to multiply the total from questions 1-4 by the total from question 5. I’ve seen high degrees of success if the score is close to or over 30. You typically want to be very confident that you are in a big market with great timing. It’s OK if you don’t have the right plan or perfect product yet, assuming that you have the ability to attract the right team and capital. Not every business will be a scaled market leader. Not every company has an edge that delivers high returns to investors. That’s OK. A string of laundromats is very different from a software startup, but both can be viable businesses.

My recent example of how I applied this formula is Rosetta Stone. I was brought on to turn around the iconic language business — it had lost its luster. The team and I had a very successful outcome for our employees and investors, as we recently sold the business and took it private.

Here is how I looked at the business before I started:

1. A huge market (language learning is estimated to be an nearly $50 billion market). SCORE: 3.

2. Digital language learning products were growing fast and we had a product that, while not optimized, was far enough along to take advantage of the timing. SCORE: 3.

3. We previously had a strong record (but didn’t when I started) and had a crazy edge with the most recognized brand. SCORE: 2.

4. But we didn’t have a focused plan — we had lots of different strategies and we were focused on B2B sales versus our iconic consumer business (consumer had the larger market and strong brand awareness). SCORE: 1.

And last but not least:

5. We had some ability to attract investment and talent. SCORE: 3.

That is a solid 27. It took us a couple of years to see the results.

Stay tuned for a more in-depth look at the Insight Score as I break down each step in forthcoming posts. 


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