To pick a timely analogy, let’s use the Olympic Games as a backdrop for understanding how difficult strategic planning tends to be for emerging market executives. Competing in a hypothetical Olympic archery duel is one executive from a developed market, and one executive from an emerging market. The goal of the contest (as usual) is to precisely and accurately hit the target. Rather than laminated plastic foam, their target is business growth.
Armed with years of practice and experience (historical performance data), and the best equipment money can buy (robust and high quality market data), the developed market executive is able to hit his target a majority of the time. Repetition and knowledge of his sport has made him a master at predicting his performance.
On the other hand, you have the emerging market executive. Given almost no time to prepare (little to zero historical data), a bow and arrow fashioned from a dying oak tree (poor market data), and essentially spun around while blindfolded and told to shoot…how do you think you would do? This is the situation many emerging markets executives face while attempting to harness data in their strategic planning process.
When data is unavailable, strategic planners have to rely considerably on estimates and assumptions.
Emerging markets often have limited granular market data sources, making analysis for potential market share, growth, and opportunity extremely problematic. Even data that is available may be outdated or inaccurate, increasing uncertainty.
In response to this problem, FSG has recently compiled a set of core principles and best-practice strategies executives can use to mitigate the challenge of data availability and quality, based on the key abilities of being able to effectively quantify and compare opportunities in the planning stage, and efficiently check assumptions on a periodic basis during plan implementation. One of the core insights is that while desired data may not be readily available, there are ways to equip your team to collect proxy data which is directionally helpful and far better than shooting blind. With these tactics at their disposal, we anticipate our clients will feel they are able to take off their blindfolds and improve the accuracy and precision of their strategic planning process, despite the persistent challenge of playing what is essentially a different game than planning in developed markets.