6.2 How the Buying Process Works
Learning objectives.
- List the steps in the buying process and describe how and why the process is evolving.
- Understand the role of emotions in the buying decision.
- Learn how to use FAB for effective selling.
For years, the buying process was considered to be linear; scholars and researchers who closely monitored buying behavior identified several steps that the B2B customer goes through before she makes a purchase. It’s helpful to understand these steps to appreciate the changes that are taking place, even as you read this.
The Traditional View of the Seven Steps of the B2B Buying Process
You are probably familiar with buying as a consumer. But did you ever think about how Aéropostale decides what products will be in their stores for the spring season, how a restaurant determines which beverages it will offer, or how Hewlett-Packard (HP) identifies which parts it will use to manufacture its printers? The buying process outlines the steps that the B2B customer goes through when he is making a purchasing decision on behalf of the company. This process applies whether the buying decision is being made by an individual or by a buying center.
1. Recognizing the need . The buyer realizes there is a need for the product or service. Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). In the B2B environment, this might occur because of an internal need (e.g., the company needs more office space) or because of a customer need (e.g., green tea is becoming more popular, and so we want to offer it on our menu). This is the ideal opportunity for you to learn about your customers’ needs, although it may be difficult to know exactly when a customer or prospective customer is beginning this step. That’s why it’s important to engage your customer in dialogue to understand their current and future needs. Sometimes, you can help your customer see an opportunity that he didn’t realize.
2. Defining the need . This step usually involves users as well as initiators to put more definition around the type of product or service that will help meet the need. Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). For example, in the case of office space, the head of facilities would ask the head of human resources about the types of new positions that will be needed and the type of workspace each requires. He might also ask for insight from each hiring manager or department head in the company, such as the head of operations, marketing, finance, and other areas. This will help him more fully understand the general type of product or service that is needed. Salespeople can play a role in this step of the buying process by sharing information and insights from other customers, without divulging any confidential information.
3. Developing the specifications . This is the step at which the exact needs are outlined. Barton A. Weitz, Stephen B. Castleberry, and John F. Tanner, Jr., Selling: Building Partnerships , 7th ed. (New York: McGraw-Hill Irwin, 2009), 93. For example, if Target identified the need to create its own brand of DVD player, the appropriate people in the company would determine the exact specifications of the product: what functions it will have, how large it will be, what materials it will be made of, how many colors will be offered, and all other attributes of the product. When a salesperson has a good relationship with a customer, the buyer might ask the salesperson for insights and advice on different features, functionality, and production costs to finalize the product or service specifications.
4. Searching for appropriate suppliers . This step is focused on researching potential suppliers. This research can be conducted online by doing a Google search for suppliers of the desired product or service. Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). Trade associations are also an excellent source as many provide unbiased evaluations of suppliers; for example, Forrester Research publishes a report on Web site analytic tools.
Forrester Research Reports on Web Site Analytics Tools
http://www.forrester.com/rb/Research/web_analytics_buyers_guide/q/id/53043/t/2
And industry trade shows can be an excellent source of information about prospective suppliers. One of the best ways to identify suppliers is by referrals; use your business network, including LinkedIn, to get feedback about reliable suppliers that might be able to meet your needs.
5. Requesting proposals . This is when the buyer or buying center develops a formal request for proposal A formal request from possible suppliers to provide or create a specific product or service. , often called an RFP, and she identifies several potential vendors that could produce the product or service. Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). For example, if Home Depot decided that it wanted to upgrade its bags, the buyer would have determined the specification, quantity, shipping points, usage, and other requirements (e.g., being environmentally friendly), and put the information into a formal document that is sent to several bag manufacturers along with questions about the history of the company, key customers, locations, manufacturing capacity, turnaround time, and other relevant information. Each manufacturer would have the opportunity to respond to the RFP with a formal proposal A written document that outlines a company’s capabilities, delivery, and pricing in relation to a specific product or service. , which means that each company would provide information about their company, capabilities, delivery, and pricing to manufacture the bags. This is an opportunity for a salesperson to respond with a complete proposal that addresses the customer’s needs and concerns. See the sample RFP template for a nonprofit organization below.
RFP Template for a Nonprofit Organization
http://www.npguides.org/guide/grant1.htm
6. Evaluating proposals . After the proposals are submitted, the buyer or buying center reviews each one and determines whether the company would be a good fit for the project. At this point, the number of potential vendor choices is narrowed to a select few. Usually, salespeople from each of the chosen companies are invited to meet with the buyer or buying center to discuss the proposal, capabilities, and pricing. Negotiation for pricing, quality, timing, service, and other attributes may also take place during this step. Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). This is the step where a salesperson may need to overcome objections, or the reasons why the customer may not want to choose her as the company of choice. Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1, 2009).
7. Making the buying decision . The buyer or buying center chooses one (or the necessary number) of companies to execute the project, finalizes details, negotiates all aspects of the arrangement, and signs a contract. This step requires perseverance and attention to detail on the part of the salesperson. Once the decision is made, the real business of selling begins: delivering the product or service as agreed upon and building the relationship.
8. Postpurchase evaluation . Throughout the buying process, the buyer is provided all the good news: how the new product or service will solve her company’s problems, increase demand, reduce costs, or improve profitability. It is the postpurchase evaluation that tells the tale. Did the product or service perform as promised? Was the delivery and installation done correctly and on time? Are the business results in line with expectations? Is the relationship growing? Do the salesperson and his company really care about the performance of the buyer’s company? Does the salesperson add value to the buyer’s company? This is where the rubber meets the road; it presents an opportunity for the salesperson to communicate, anticipate, and solve any problems that may have arisen. Michael R. Solomon, Greg W. Marshall, and Elnora W. Stuart, Marketing: Real People, Real Choices , 5th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2008), 190.
The process makes sense and is a flow of systematic steps that leads a B2B buyer through a logical buying process. But there are two flaws in this thinking that significantly impact the buying process and, as a result, the selling process: (1) the Internet changes everything and (2) emotions dominate B2B buying. Geoffrey James, “Is Your Sales Process Obsolete?” BNET, March 30, 2007, http://blogs.bnet.com/salesmachine/?p=30 (accessed August 1, 2009). , Bryan Eisenberg, “Buying Is Not a Rational Decision,” ClickZ, November 26, 2001, http://www.clickz.com/927221 (accessed August 1, 2009).
The Internet Changes Everything
It used to be that B2B buyers relied on salespeople to get information, demonstrations, and cost about products and services. Salespeople sold, and buyers bought; the world was a simpler place.
Today, B2B buyers are doing the work of two or even three employees because there are fewer people working at companies due to cutbacks and restructuring. The fact is, buyers don’t have the time to meet with salespeople like they used to. And the Internet has been a game changer. Buyers can not only research product and supplier options online, but they can also see product specifications, view demonstration videos, participate in online forums, get real-time recommendations and feedback from users on social networks, and basically be smarter than any salesperson before he even calls for an appointment. Geoffrey James, “Is Your Sales Process Obsolete?” BNET, March 30, 2007, http://blogs.bnet.com/salesmachine/?p=30 (accessed August 1, 2009). The power has shifted from sellers to buyers. In fact, the Internet has had such a profound effect on how people make purchasing decisions that the Wall Street Journal has coined a new term: “new info shopper.” These are people who can’t buy anything without getting information online first. What’s even more important to note is the fact that 92 percent of new info shoppers have more confidence in the information they get online than from an ad, salesperson, or other company source. Mark Penn, “New Info Shoppers,” January 8, 2009, Wall Street Journal , http://online.wsj.com/article/SB123144483005365353.html?mod=dist_smartbrief# (accessed August 1, 2009).
So what’s a salesperson to do? Stop, listen, and help your customer make the best decision for her business, even if it means that she doesn’t buy your product. Despite the importance of the Internet in providing information throughout the buying process, B2B buyers still gather insight from a variety of sources that include salespeople. Successful salespeople are those that truly focus on the buyer’s needs, which may mean giving up the sale and bringing valuable feedback to your company to change the product, service, or other options that are reasons why customers might not buy from you. The new world order requires everyone to rethink the conventional wisdom. Selling used to be something you “do to” a customer; now it’s something you “do for” a customer. Geoffrey James, “Is Your Sales Process Obsolete?” BNET, March 30, 2007, http://blogs.bnet.com/salesmachine/?p=30 (accessed August 1, 2009). The salespeople who win are the ones who listen in person, on the phone, and online, then make the recommendation that is in the customer’s best interest.
Information is no longer the exclusive domain of the salesperson. But great salespeople bring value to their customers with ideas, insights, knowledge, and personal commitment that can’t be duplicated on a Web site, online forum, or even on a social network. And the role of the Internet in B2B buying decisions is changing quickly.
Sales 2.0 has changed the way people seek, receive, and interact online. The Internet used to be only an information source, a place to search Web sites for information. But static Web sites have given way to not only information gathering, but to problem solving. Crowdsourcing Situation in which a company takes a job that is normally performed by an employee and puts out an “open call,” usually on the Internet, for people all over the world to work on it. occurs when a company takes a job that is traditionally done by an employee and issues an “open call,” usually online, to people all over the world to solve the problem. This is a new way for businesses and individuals to leverage the Internet in an efficient and effective way. BrightSightGroup, “Jeff Howe: Crowdsourcing,” video, July 6, 2008, http://www.youtube.com/watch?v=F0-UtNg3ots (accessed August 3, 2009). Crowdsourcing uses the wisdom of the crowd in a virtual way to make information and solutions readily available to everyone. This video describes how crowdsourcing has changed the photography business forever.
Crowdsourcing
Learn how to make the crowd work for you.
Source: Jeff Howe
Salespeople can embrace crowdsourcing and bring the power of the crowd to solve any customer problem. Facebook, iPhone apps, and YouTube are just three examples of crowdsourcing. Consider this example of the power of the crowd: Apple offered more than 65,000 apps for its iPhone in less than two years, and the number is projected to rise to 300,000 in 2010. Will Park, “Apple Bans Hundreds of Spammer’s iPhone Apps,” Into Mobile , August 3, 2009, http://www.intomobile.com/2009/08/03/apple-bans-hundreds-of-spammers-iphone-apps.html (accessed August 3, 2009). , Daniel Ionescu, “Android Market Hits 20,000 Apps Milestone,” PC World , December 16, 2009, http://www.pcworld.com/article/184808/android_market_hits_20000_apps_milestone.html (accessed December 20, 2009).
Power Selling: Lessons in Selling from Successful Brands
What’s Next? Ask the Crowd
How do content companies know what people will want to read about in six months? How do retailers determine what color will be hot next season? How will car companies know what defines luxury next year?
Trendwatching.com, a global trend service, uses a team of global network of business and marketing-savvy “spotters” (a.k.a. the crowd) in 120 countries to gather data, observe consumers, and talk to the people who are innovators and trendsetters to identify what’s next. Trendwatching.com offers a free version of its basic trend reports on its Web site ( http://trendwatching.com ), but also sells premium and customized trend information to all types of companies such a retailers, media companies, manufacturers, and others. Trendwatching.com, http://trendwatching.com (accessed August 9, 2009).
The use of technology in B2B selling, especially social networking, will continue to explode as digital natives People who grew up with interactive technology. (people, probably like you, who are under the age of 27) move into the workplace and meet the digital immigrants People who did not grow up with interactive technology but have adopted it. , Generation X and baby boomers who accept technology, but developed their online habits during a different time. Processes, behaviors, communication, and decisions will occur differently in the future.
The B2B Buying Process
What will it be like in the future?
http://www.enquiro.com/b2bresearch
Emotions Dominate B2B Buying
Whether you look at the traditional buying process or the role the Internet plays in providing information, it appears that the B2B buying process is logical and rational, but appearances can be deceiving. Despite the implication and belief that companies make purchasing decisions based on facts, it’s a good idea to remember one of the key tenets of B2B buying mentioned earlier: business-to-business means person-to-person. That means that although a B2B buyer is making a decision on behalf of her company, she still behaves like a consumer and is subject to emotions and feelings. “People rationalize buying decisions based on facts, but they make buying decisions based on feeling,” according to Bryan Eisenberg from ClickZ.com. Bryan Eisenberg, “Buying Is Not a Rational Decision,” ClickZ, November 26, 2001, http://www.clickz.com/927221 (accessed August 1, 2009).
Fear and Trust
You learned in Chapter 3 "The Power of Building Relationships: Putting Adaptive Selling to Work" how important trust is in a relationship. People won’t buy from someone they don’t trust, which is why some salespeople are more successful than others; they work to establish and develop trust with the customer. People buy when they feel comfortable with the product and the salesperson and when they believe it is the best decision they can make. They want to do business with someone who understands all their needs, not just the needs of the product or service. And because the B2B purchasing process usually includes multiple people, it means that the salesperson needs to develop a relationship and establish trust with as many people involved in the purchasing process as possible.
Although trust is a positive emotion that can influence a sale, an even stronger emotion in B2B buying is fear. B2B buyers have several fears, not the least of which is being taken for a fool. Many executives have had the experience of being told one thing by a salesperson only to learn the hard way that what he said just wasn’t true. “People are afraid of being sold,” according to Tom Hopkins, author of How to Master the Art of Selling . “Fear of Buying,” Selling Power Sales Management eNewsletter, August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed March 16, 2010). The best way to overcome this fear is to demonstrate that you are trustworthy. That means something as simple as returning a phone call when you say you will, or following up with information as promised. Even the language that you use can signal trust. For example, “initial investment” is a better term than “down payment,” “fee” is more customer-friendly than “commission,” “agreement” says something different than “contract,” and “can’t” sounds more negative than “would you consider.” Understand your customer’s fear of buying and replace it with comfort, trust, and confidence—in you. “Fear of Buying,” Selling Power , August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010).
Power Player: Lessons in Selling from Successful Salespeople
Fear as an Opportunity
Norm Brodsky is the owner of an archive-retrieval business called CitiStorage. He is a master salesperson because he is an astute listener and understands how to “listen between the lines” to pick up on customers’ fears. One day he was showing a prospective customer through his facility when she saw all the boxes and said, “Gee, aren’t you afraid of having a fire in this place?” Norm was not concerned at all because he already had backup coverage. But he realized that she was afraid of a fire so instead of simply saying that he was not concerned, he took the opportunity to address and respect her fear, not gloss over it. He responded by saying, “Yes, certainly, I’ve thought about the danger of a fire, and let me show you what we’ve done about it.” Norm Brodsky, “Listen and Earn,” Inc. , March 1, 1997, http://www.inc.com/magazine/19980301/878.html (accessed August 9, 2009). He used the opportunity to put her fear to rest, even before his sales presentation.
Some consumer products such as virus protection, security systems, or insurance, appeal to the emotion of fear; consumers balance the assurance of owning it with the pain of acquiring it. (Let’s face it: It’s more fun to buy a new PC than to buy virus protection.) However, in the B2B buying process, the buyer is not the person who experiences the benefits of the product or service she purchased. “Beyond the B2B Buying Funnel: Exciting New Research About How Companies Make Complex Purchases,” Marketo, April 22, 2009, http://blog.marketo.com/blog/2009/04/beyond-the-b2b-buying-funnel-exciting-new-research- about-how-companies-make-complex-purchases.html (accessed August 1, 2009). The fact is if the product or service doesn’t perform as expected or doesn’t generate the desired results, the decision maker could put their job in jeopardy. “Fear of Buying,” Selling Power , August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010). “B2B buying is all about minimizing fear by minimizing risk,” according to a recent study by Marketo, a B2B marketing company. “Beyond the B2B Buying Funnel: Exciting New Research About How Companies Make Complex Purchases,” Marketo, April 22, 2009, http://blog.marketo.com/blog/2009/04/beyond-the-b2b-buying-funnel-exciting-new-research- about-how-companies-make-complex-purchases.html (accessed August 1, 2009). There are actually two kinds of risk: organizational risk Potential exposure, hazard, or danger for a company. and personal risk Potential exposure, hazard, or danger for a person, especially the potential of losing his job. . Most salespeople address the organizational risk by discussing the rational aspects of the product or service with information such as, “This server accommodates more than five times as much traffic as your current server.” However, it is the personal risk, which is usually not articulated, that has a significant impact on the buying decision. This is especially true today given the focus on personal accountability, budgets, and performance. Imagine being the buyer at a fashion boutique that bought too many plaid skirts and has to request a budget for markdowns, or the decision maker who bought the computer system to power the United States’ government car rebate program, Cash for Clunkers, which was delayed for over three weeks because the system crashed. “Cash for Clunkers Launch Postponed Due to Computer Crash,” U.S. News and World Report , July 24, 2009, http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090724-Breaking-News-Cash-for-Clunkers-Launch-Postponed-by-Computer-Crash (accessed August 4, 2009). Some purchasing decisions at certain companies have been so bad that people have been fired as a result. Every B2B purchaser thinks about nightmares like this, so she is naturally risk-averse. The best approach in these instances is for the salesperson to reassure her that you realize how important it is for her to look good to her boss and throughout her organization as a result of the decision and show her exactly how you will help her do that. “Fear of Buying,” Selling Power , August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010).
Fear is a strong motivator in a B2B buying decision, and it can’t simply be addressed in one meeting or conversation. Successful salespeople are aware of it in each contact and use every opportunity to demonstrate trustworthiness. “It’s how you handle the little things that show customers how you’ll handle the big ones,” says Tom Hopkins. “Fear of Buying,” Selling Power , August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010). It’s best to look at the situation from your customer’s vantage point; you’ll see more clearly how you can deliver value. Bryan Eisenberg, “Buying Is Not a Rational Decision,” ClickZ, November 26, 2001, http://www.clickz.com/927221 (accessed August 1, 2009).
The Evolving Buying and Selling Processes
The framework for the buying and selling processes has been in place for many years. The buying process changes literally every day and has dramatic impact on the selling process. As a result, the “new” processes are not yet clearly defined. One thing is for certain; the processes are no longer organized, controllable functions. “Linear is so twentieth century,” according to Michael R. Solomon, author of Consumerspace: Conquering Marketing Strategies for a Branded World . Michael R. Solomon, Conquering Consumerspace: Marketing Strategies for a Branded World (New York: AMACOM, 2003), 11. Cultural, social, and technological changes will continue to drive companies for even better performance, faster, and with ideas as currency, which will continue to drive change in the buying process.
To understand the impact of the rapid changes occurring in the buying process, it’s important to know the basic steps in the selling process. The next seven chapters review the selling process in detail and include insights into how the process is changing. A study by William Moncrief and Greg W. Marshall provides a roadmap for the evolution of the selling process in Table 6.2 "The Evolution of the Seven Steps of Selling" .
Table 6.2 The Evolution of the Seven Steps of Selling
Source: Reprinted from Industrial Marketing Management, 34/1, William C. Montcrief and Greg W. Marshall, “The Evolution of the Seven Steps of Selling,” 13–22, Copyright (2005), with permission from Elsevier.
Buying Process Meets FAB
No matter how the buying process evolves, customers continue to make purchase decisions driven by emotions. You learned how motivating trust and fear are for people who are making B2B buying decisions. Comfort, vanity, convenience, pleasure, desire to succeed, security, prevention of loss, and need to belong are all emotions that motivate purchases. A company may want to build a new building that carries its brand name downtown to signal its importance to the city and business community; that would be an example of vanity as a motivator. Or perhaps the company wants to move its headquarters to a better part of town to provide better security for its employees. Maybe a prominent figure in the community donates a large sum of money to your college motivated by the desire to give back. The same types of motivations apply to B2C purchases: a woman purchases makeup in the hopes of looking as beautiful as the model in the ads, a man buys a sports car in the hopes of turning heads, a student buys a microwave for the convenience of having food when she wants it.
Figure 6.10 Nutritional Information
Source: http://www.thedailyplate.com/nutrition-calories/food/doritos/cool-ranch-ind-bag
Emotions are the driving force in so many B2C and B2B purchases that you might not even realize it. Consider this: would you buy the product in Figure 6.10 "Nutritional Information" ?
Figure 6.11
The Doritos bag is more appealing than the nutritional information.
Source: http://fritolay.com/our-snacks/doritos-cool-ranch-chips.html
So how do you create the same type of emotional appeal with your customers? The answer is simple: FAB.
While you might not consider buying it based on only this factual information, you probably have bought this product based on the emotional appeal of the packaging, advertising, and other marketing messages that tell you that the product is the best late-night snack.
Consider this information that was on the home page of Amazon recently:
3G wireless means books in 60 seconds. No monthly fees, service plans or hunting for Wi-Fi hotspots. Over 300,000 of the most popular books, newspapers, magazines, and blogs available. Amazon.com, http://www.amazon.com (accessed August 4, 2009).
Amazon truly understands how to use FAB Selling technique that focuses on F eatures, A dvantages, and B enefits. , a selling technique that focuses on F eatures, A dvantages, and B enefits, to sell its Kindle electronic reader. FAB is more than a way of selling; it’s a way of thinking like your customers. Using the Kindle as an example, here are the details about how to use the FAB approach for effective selling.
- A feature A physical characteristic of a product. is a “physical characteristic” of the product. Charles M. Futrell, Fundamentals of Selling: Customers for Life through Service , 10th ed. (New York: McGraw-Hill Irwin, 2008), 114. In the Kindle example above, the feature is the 3G wireless capability. Features are characteristics of the product; a feature comparison chart between the Kindle and the Kindle DX is shown below.
Figure 6.12 Feature Comparison Chart between the Kindle and the Kindle DX
Source: http://www.amazon.com/dp/B0015T963C
- A product advantage The performance characteristic of a product that describes how it will help the buyer. is the “performance characteristic” of the product, or what the feature does. Charles M. Futrell, Fundamentals of Selling: Customers for Life through Service , 10th ed. (New York: McGraw-Hill Irwin, 2008), 114. In the information about Kindle included at the start of this section, the advantages of the 3G service are that the user doesn’t need to hunt for Wi-Fi hotspots and that over 300,000 of the most popular books, newspapers, magazines, and blogs are available in sixty seconds.
- The benefit The result a buyer will realize because of the product advantage. is the “result” the buyer will realize from the product because of the product advantage, or in other words, what the feature does or the result it delivers. Charles M. Futrell, Fundamentals of Selling: Customers for Life through Service , 10th ed. (New York: McGraw-Hill Irwin, 2008), 114. The benefit of the Kindle is the fact that you can “rediscover reading anywhere, any time.” Amazon.com, http://www.amazon.com (accessed August 4, 2009).
Kindle FAB Story
Amazon created an entire video to tell the FAB story of Kindle.
http://www.amazon.com/Kindle-Amazons-Wireless-Reading-Generation/dp/B00154JDAI/ref=amb_link_ 84932831_1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-1&pf_rd_ r=1SBQSS8P947CD5QK29MC&pf_rd_t=101&pf_rd_p=485413371&pf_rd_i=507846 .
Notice how Amazon skillfully reinforces the benefit of portability by showing someone reading on a beach or a bus.
Why does FAB work? Because customers want to know what a product or service will do for them—not just what it’s made of. B2C and B2B customers seek information before making a buying decision but are also driven by emotions. FAB helps you appeal to a customer’s rational and emotional buying behavior by providing the most compelling features and factual information and then showing how the features provide an advantage that delivers a benefit. This is how salespeople help customers establish an emotional connection with a product. You remember from Chapter 1 "The Power to Get What You Want in Life" the power of an emotional connection between a customer and a brand.
You probably use FAB sometimes without even realizing it. “My new Lucky Brand jeans have a dirty wash, fit great, and make me look thin. The best part is they were on sale for only $89.00.” The features are the dirty wash and the fact that they were on sale for $89.00; the advantage is that they fit well (no easy feat when it comes to jeans); the benefit is that they make you feel like you look thin and, as a result, make you feel good when you wear them. Your statement is much more powerful when you frame it with FAB than if you simply say, “I got some new jeans today for $89.00.”
Or maybe you stopped into McDonald’s and tried one of their new Angus Third Pounders. The product feature is that the burger is one-third of a pound and is available in three flavor options; the advantage is that it is thick and juicy; the benefit is that you will enjoy the taste and your hunger is satisfied. The FAB message is more compelling than simply saying that you had a hamburger that was one-third of a pound; that would be stopping at the feature and not offering an advantage or benefit.
If you want to be able to use FAB in conversation, simply think in terms of the following:
- Feature : what the product has
- Advantage : what the features do
- Benefit : what the features mean Laura Clampitt Douglas, “Marketing Features vs. Benefits,” Entrepreneur , http://www.entrepreneur.com/magazine/homeofficemagcom/2000/december/34942.html (accessed August 4, 2009). , Bryan Eisenberg, “Want The to Buy? Sell Benefits,” ClickZ.com, April 9, 2001, http://www.clickz.com/840121 (accessed August 4, 2009).
Table 6.3 "FAB in Action" gives features, advantages, and benefits for some common products.
Table 6.3 FAB in Action
For example, if you were describing Netflix in terms of FAB, you might say something like the following:
For only $8.99 a month you can watch as many movies as you want and never be charged a late fee. You can order online and have a DVD delivered in about a day and exchange it as many times as you want without a late fee, or you can watch streaming video of your favorite movies online anytime. Now that’s total personalized entertainment. Netflix, http://www.netflix.com (accessed July 12, 2009).
Now look at this FAB statement with the features, advantages, and benefits in bold:
For only $8.99 a month [ feature ] you can watch as many movies as you want and never be charged a late fee [ advantage ]. You can order online and have a DVD delivered in about a day [ advantage ] and exchange it as many times as you want without a late fee [ advantage ], or you can watch streaming video of your favorite movies online anytime [ advantage ]. It definitely saves you time and money [ benefit ] and gives you total personalized entertainment [ benefit ].
It’s easy to remember by using the FAB framework as your guide.
[ Name feature ] means you [ name advantage ] with the real benefit to you being [ name benefit ]. Charles M. Futrell, Fundamentals of Selling: Customers for Life through Service , 10th ed. (New York: McGraw-Hill Irwin, 2008), 116.
Here’s another example, based on research about the 2009 Nissan Cube: Ben Stewart, “2009 Nissan Cube vs. Kia Soul vs. 2009 Scion xB: 300-Mile Fuel-Economy Test-Drive,” Popular Mechanics , February 24, 2009, http://www.popularmechanics.com/blogs/automotive_news/4306145.html (accessed August 4, 2009).
The Nissan Cube has funky, Japanese-like design and is friendly to the environment with a fuel-efficient 1.8-liter, 4-cylinder engine that gets over 30 miles per gallon. It’s hip, cool, and fun to drive. At $15,585, it’s a great value for the money.
How to Use FAB
Now that you know what FAB is, you probably want to know how to use it most effectively in selling. Here are three easy steps to put FAB to work for you:
- Know your customer . Benefits speak emotionally to customers in a way that rational facts can’t. But you need to know what is important to each customer. The health club that’s open twenty-four hours might be attractive to a young professional because he can work out late in the evening after a long day, whereas the club’s day care center might be appealing to a young mother. Similarly, in a B2B selling situation in which a buyer is evaluating warehouse space, one customer might be interested in the warehouse because of its state-of-the-art systems, while another might be focused on location. Know what motivates your customer, and then you can craft an effective FAB statement. Laura Clampitt Douglas, “Marketing Features vs. Benefits,” Entrepreneur , http://www.entrepreneur.com/magazine/homeofficemagcom/2000/december/34942.html (accessed August 4, 2009).
- Think outside your box . If you want your FAB to work for your customer, you will need to deliver value in the form of benefits that she can’t get from anyone else. Think about your product or service in a different way; talk to people, watch the trends, see what else you can bring when you look at your product or service in a different way. Baking soda had traditionally been used as a leavening agent for baking. Arm & Hammer reinvented baking soda as a way to remove odors from refrigerators. Can you be as creative with the application for your product or service? Laura Clampitt Douglas, “Marketing Features vs. Benefits,” Entrepreneur , http://www.entrepreneur.com/magazine/homeofficemagcom/2000/december/34942.html (accessed August 4, 2009).
- Get in touch with your customer’s motivation . Listen, learn, and craft an FAB message that will “have your customer at hello.” IMDB, Jerry McGuire , written and directed by Cameron Crowe, released December 13, 1996, http://www.imdb.com/title/tt0116695 (accessed August 4, 2009). Although that might be an overly romantic notion of how selling works, your goal is to have your customer fall in love with your product or service so much that it’s something he can’t live without. Imagine living without iTunes, your cell phone, or your favorite pair of jeans. That’s how your customer should feel about the product or service you are selling. If you understand his motivation, you can deliver features, advantages, and benefits that not only tell him why he should buy, but why he can’t afford not to.
Key Takeaways
- The traditional B2B buying process has seven steps: need recognition, defining the need, developing the specifications, searching for appropriate suppliers, evaluating proposals, making the buying decision, and postpurchase evaluation.
- The Internet is a game-changer as it relates to the buying process because information is no longer the exclusive domain of the salesperson; the power has shifted from the seller to the buyer.
- Crowdsourcing occurs when a company takes a job that is traditionally done by an employee and issues an “open call,” usually online, to people all over the world to solve the problem. Salespeople can use crowdsourcing to get the best solutions for their customers.
- Emotions such as comfort, security, convenience, pleasure, and vanity are major motivations for buying decisions.
- Trust and fear are especially important in B2B buying because the decision maker has to consider organizational risk and personal risk as part of his buying decision.
- The buying process continues to evolve, which changes the selling process; the traditional selling process provides a foundation and insight into the evolution.
FAB (a.k.a. f eatures, a dvantages, b enefits) is the way to appeal to your customer’s emotions with factual and emotional appeals.
- A feature is what a product has .
- An advantage is what the feature does .
- A benefit is what the features mean to the customer.
- Identify a recent major purchase that you made recently. How did you recognize the need for the product or service? Where did you go to gather information about the options that were available to you? Did you use one method or a combination of methods?
- Contact a buyer at the headquarters of a retailer such as Dick’s Sporting Goods, GameStop, Costco, Urban Outfitters, or another company. Ask him about the process he uses to determine which products to put in the retail stores. Is his process similar to the process outlined in this chapter? How does it differ? How does his postpurchase evaluation impact his decision to buy the product again?
Watch the following video:
Source: Jarad Hill
Based on the comment that “customers don’t want to be sold,” what should a salesperson do to sell to a customer? Identify an example of a good buying experience and a bad buying experience that you have had recently. Did the salesperson “sell” to you?
- Describe a situation in which a salesperson might use crowdsourcing.
- Assume you are a salesperson for a major telecommunications company and you are calling on a major construction company that is considering buying smart phones for the key people in the company. Describe at least one organizational risk and one personal risk that might be involved in the customer’s decision.
Identify a feature, advantage, and benefit for each of the following products and services:
- Kia Sportage
- Virgin Mobile phone
Foundations of Constructivism/Case Examples/Chapter 6.2
CHAPTER 6.2: Constructivism in Chemical Biological, Radiological, Nuclear, (CBRN)
- 1 Introduction
- 2 Course Description
- 3 Constructivist Principles and Pedagogy
- 4 Conclusion
- 6 References and Resources
- 7 Chapter Quiz
Introduction Edit
This unit is to coordinate previous learning into a comprehensive scenario driven Chemical Biological, Radiological, Nuclear, (CBRN) event. The student must be able to use the process of academic inquiry for successful completion of the unit and be employed as a viable response member and leader.
Course Description Edit
The aim of this course is to develop an academic inquiry process designed to enable the learner to develop critical thinking. The learning outcomes are based upon critical thinking and involve: a process that is not random or haphazard but rather focused and structured. If we look at critical thinking, an integral element of academic inquiry, we can find many different models presented in the literature —one of which is found in the "Role of Critical Thinking". If we analyze the methods involved in thinking critically, solving problems, making decisions, and conducting research in preparation for writing a paper or creating a briefing, we will find that each is nothing more than a structured academic inquiry process. The process starts with a question or a problem about which one needs to - gather information and determine assumptions; - analyze the information garnered from various points of view; - draw conclusions or determine solutions; - determine the implications and consequences of the conclusion or solution.
The grade level for this unit is Post Secondary at the Associate through Bachelor Degree level.
The noted philosopher John Dewey (1938) describes the process of academic inquiry as a controlled or directed transformation of discrete bits and pieces of information or situations with no apparent connections or relationships into a unified and meaningful whole.
My assessment method is scenario driven
Constructivist Principles and Pedagogy Edit
The processes for thinking critically, solving problems, making decisions, and conducting research are very structured, not all of the processes are necessarily sequential (or linear).
Knowledge construction; “Given an objective to be obtained a student must have experience that give him the opportunity to practice the kind of behavior implied by the objective .” (Tyler, 1949) The learner must have had previous experience in Hazardous Materials Incident Response at the Operational Level. This certification can be gained either from the International Fire Service Accreditation Congress (IFSAC), Professional Qualification Board (PROBOARD) or Department of Defense CERTEST.
The learner will be guided by Bloom’s Taxonomy and using analysis and Synthesis although they are really two elements of a six stage hierarchy of how we acquire and use information. These six elements are usually titled: Knowledge, Comprehension, Application, Analysis, Synthesis and Evaluation. This unit will require higher order thinking in the realms of analysis, synthesis and evaluation.
creativity and innovation . Leaders have many key roles in developing an organization and having the organization reach its full potential. Leaders must understand that they have responsibilities that are required at various levels within the organization. Just as each person in an organization has distinct personalities and traits, organizational leaders have distinct goals.
In most organizations, a clear mission and vision will be established. The organizational leader focuses on mission accomplishment while the strategic leader focuses on vision. critical thinking, inquiry and problem solving, As part of the critical thinking process, the learner should be able to Analyze, Plan, Implement and Evaluate each course of action to determine the best results and fewest numbers of exposures or casualties at a CBRN Incident. communication, collaboration, and community building, As we look at the organizational leader his focus must not only be on mission accomplishment, but also the team building concept. The organizational leader must ensure his subordinates have a clear understanding of the mission, means to accomplish the mission and resources necessary to ensure mission accomplishment.
The organizational leader may also have multiple missions that require a staff that is capable of interacting with various other staffs and agencies. While organizational leaders primarily exert direct influence through their chain of command and staff, they extend influence beyond their chain of command and organizations by other means (FM 6-22, 11-7, OCT 2006).
Organizational leaders must display various traits of leadership to influence their subordinates, integrity and compassion are key.
Conclusion Edit
Authentic (real-world) learning and assessment, The student will be assessed through numerous interactions with instructors at various phases of their development. Each development point has nationally established forms in the Incident Management System and Incident Command System. The main criteria will be presentation of an Emergency Action Plan and the learner will be assessed on its viability by actually executing the plan in a training environment. The goal is to minimize exposures and casualties. If the students plan is successful, then he has achieved the objective of the course.
Embedded interactive technologies, The interactive technologies are computerized reports, use of the Gas Chromatograph / Mass Spectroscopy (GC/MS), Monitoring Equipment and communications skills written and oral. student initiative and responsibility Student initiative and responsibility are the key to this unit. The student must take the initiative to develop an action plan, ensure all key members are in place i.e. safety officer, incident commander, survey team.
Glossary Edit
All-Hazards Term that encompasses domestic terrorist attacks, major disasters, and other emergencies
Branch Plan A modification to an existing plan that usually adjusts the required resources or concept of operations. However, the end-state normally remains the same. For example, an existing plan calls for delivering medical supplies by rail transport but the situation prevents using rail, delivering the supplies by air transport or a combination of air and road transport represent a “branch” plan. See “sequel plan.” Catastrophic Incident Any natural disaster, act of terrorism, or other manmade disaster that results in extraordinary levels of casualties or damage or disruption severely affecting the population (including mass evacuations), infrastructure, environment, economy, national morale, or government functions in an area.
Contingency Planning Planning that occurs before the incident or in the pre-incident phase. A contingency plan provides guidance for conducting operations.
Course of Action (COA) Means available to the decision maker by which the objectives may be attained. A course of action is a broadly stated, potential solution to an assigned mission. A systems analysis usually considers several possible courses of action, which are then referred to as alternatives or as the decision maker's options.
Crisis Action Planning A planning approach that outlines incident priorities, objectives, and initial actions, and drives the development of supporting plans. Initial activities may include search and rescue, evacuations, communication of key information to the public, restoration of essential critical infrastructure, and provision of community law enforcement, fire, and emergency medical services among others.
Functional Planning Planning approach that identifies the common tasks that the community must perform during emergencies.
Hazard A source of potential danger or harm, often the root cause of an unwanted outcome.
Homeland Security Management System (HSMS) A continuous cycle of four phased activities, including guidance, planning, execution, and assessment and evaluation.
Incident An occurrence or event, natural or manmade, that requires a response to protect life or property. Incidents can, for example, include major disasters, emergencies, terrorist attacks, terrorist threats, civil unrest, wildland and urban fires, floods, hazardous materials spills, nuclear accidents, aircraft accidents, earthquakes, hurricanes, tornadoes, tropical storms, tsunamis, war-related disasters, public health and medical emergencies, and other occurrences requiring an emergency response.
Lessons Learned A collection and analysis of data from a variety of current and historical sources, including operations and training events, that produces lessons for leaders and practitioners, staffs, and homeland security community at large.
National Incident Management System (NIMS) A system mandated by HSPD-5 that provides a consistent nationwide approach for Federal, State, local, and Tribal governments; the private sector; and NGOs to work effectively and efficiently together to prepare for, respond to, and recover from incidents, regardless of cause, size, or complexity. To provide for interoperability and compatibility among Federal, State, Tribal, and local capabilities, NIMS includes a core set of concepts, principles, and terminology. HSPD-5 identifies these as the Incident Command System (ICS); multi-agency coordination systems; training; identification and management of resources (including systems for classifying types of resources); qualification and certification; and the collection, tracking, and reporting of incident information and incident resources.
National Planning Scenario (NPS) An event or threat scenario appropriate for national planning by and among all levels and jurisdictions or government, and in coordination with private, non-profit, and volunteer organizations.
Objective A clearly defined, decisive, and attainable goal toward which a homeland security operation is directed.
Operation A homeland security action or the carrying out of a strategic, operational, or tactical homeland security mission.
Operations Plan (OPLAN) A plan that identifies detailed resource, personnel, and asset allocations in order to execute the objectives of the strategic plan and turn strategic priorities into operational execution. An operations plan contains a full description of the concept of operations, including specific roles and responsibilities, tasks, integration, and actions required, with support function annexes as appropriate.40 It represents a product of the operational planning level.
Scenario-Based Planning Planning approach that uses scenarios as a focal point for developing the actions necessary to prevent, protect against, respond to, and recover from the specific scenario. HSPD-8, Annex I, requires the production of scenario based plans by using the NPSs.
Senior Leader For the purposes of the IPS, the Federal official tasked to oversee homeland security operations under the plan being prepared. For example, the Secretary of Homeland Security would be the senior leader for strategic plans based on the NPSs.
Staff Estimate An estimate that consists of significant facts, events, and conclusions for various functional areas (e.g., information, intelligence, resources, and operations) based on current or anticipated situations.
Task Specific actions that are implemented to achieve the identified objectives.
Tactical Plan The detailed development and identification of individual tasks, actions, and objectives tailored to specific situations and fact patterns at an operational level. Tactical planning is meant to support and achieve the objectives of the operations plan.48 It represents the product of the tactical planning level.
References and Resources Edit
Paul, R. and Elder, L., Critical Thinking
FM 22-100, Army Leadership
FM 101-5, Staff Organization and Operations
Hubbuch, S., Writing Research Papers Across the Curriculum
Cummings, C. (1990). Teaching makes a difference (2nd ed.). Edmonds, WA: Teaching, Inc
Paul, R. & Elder, L. (2001).
Critical thinking: Tools for taking charge of your learning and your life. Upper Saddle River, NJ: Prentice Hall.
Scriven, M. & Paul, R. (2004). Defining critical thinking. A draft statement prepared for the National Counsel for Excellence in Critical Thinking. Retrieved March 29, 2004 from the Foundation for Critical Thinking
RESOURCE: (CAN ALSO BE AN ATTACHMENT)
PROBLEM SOLVING Extracted from FM 5-0
1. Identify the Problem A problem exists when there is a difference between the current state or condition and a desired state or condition. Army leaders identify problems from a variety of sources. These include— • Higher headquarters directives or guidance. • Decision maker guidance. • Subordinates. • Personal observations.
When identifying the problem, leaders actively seek to identify its root cause, not merely the symptoms on the surface. Symptoms may be the reason that the problem became visible. They are often the first things noticed and frequently require attention. However, focusing on a problem’s symptoms may lead to false conclusions or inappropriate solutions. Using a systematic approach to identifying problems helps avoid the “solving symptoms” pitfall.
To identify the root cause of a problem, leaders do the following: • Compare the current situation to the desired end state. • Define the problem’s scope or boundaries. • Answer the following questions: _ Who does the problem affect? _ What is affected? _ When did the problem occur? _ Where is the problem? _ Why did the problem occur? • Determine the cause of obstacles between here and the solution. Many times the causes of a problem are simply obstacles between the current situation and the desired end state.
• Write a draft problem statement.
• Redefine the problem as necessary as new information is acquired and assessed. After identifying the root causes, leaders develop a problem statement. A problem statement is written as an infinitive phrase: such as, “To determine the best location for constructing a multipurpose vehicle wash rack facility during this fiscal year.” When the problem under consideration is based upon a directive from a higher authority, it is best to submit the problem statement to the decision maker for approval. This ensures the problem solver has understood the decision maker’s guidance before continuing. Once they have developed the problem statement, leaders make a plan to solve the problem. Leaders make the best possible use of available time and allocate time for each problem-solving step. Doing this provides a series of deadlines to meet in solving the problem. Leaders use reverse planning to prepare their problem solving time line (see Chapter 1). They use this time line to periodically assess their progress. They do not let real or perceived pressure cause them to abandon solving the problem systematically. They change time allocations as necessary, but they do not ignore them.
2. Gather Information After completing the problem statement, leaders continue to gather information relevant to the problem. Gathering information begins with problem definition and continues throughout the problem solving process. Army leaders never stop acquiring and assessing the impact of new or additional information. When gathering information, Army leaders define unfamiliar terms. Doing this is particularly important when dealing with technical information. Leaders consider the intended audience in deciding what to define. For example: a product for an audience that includes civilians may require definitions of all Army terms. A technical report prepared for a decision maker unfamiliar with the subject should include definitions the reader needs to know to understand the report.
Army leaders gather information from primary sources whenever possible. Primary sources are people with first-hand knowledge of the subject under investigation, or documents produced by them. Methods of gathering information from primary sources include interviews, letters of request for specific information, and questionnaires. Two types of information are required to solve problems: facts and assumptions. Fully understanding these types of information is critical to understanding problem solving. In addition, Army leaders need to know how to handle opinions and how to manage information when working in a group.
Facts Facts are verifiable pieces of information or information presented that has objective reality. They form the foundation on which the solution to a problem is based. Regulations, policies, doctrinal publications, commander's guidance, plans and orders, personal experience, and the Internet are just a few sources of facts.
Assumptions An assumption is information accepted as true in the absence of facts. This information is probably correct, but cannot be verified. Appropriate assumptions used in decision making have two characteristics: • They are valid, that is, they are likely to be true. • They are necessary, that is, they are essential to continuing the problem solving process.
If the process can continue without making a particular assumption, it is discarded. So long as an assumption is both valid and necessary, it is treated as a fact. Problem solvers continually seek to confirm or deny the validity of their assumptions. Opinions
When gathering information, Army leaders evaluate opinions carefully. An opinion is a personal judgment that the Army leader or another individual makes. Opinions cannot be totally discounted. They are often the result of years of experience. Army leaders objectively evaluate opinions to determine whether to accept them as facts, include them as opinions, or reject them. Army leaders neither routinely accept opinions as facts nor reject them as irrelevant—regardless of their source.
Organizing Information Army leaders check each piece of information to verify its accuracy. If possible, two individuals should check and confirm the accuracy of facts and the validity of assumptions.
Being able to establish whether a piece of information is a fact or an assumption is of little value if those working on the problem do not know the information exists. Army leaders share information with the decision maker, subordinates, and peers, as appropriate. A proposed solution to a problem is only as good as the information that forms the basis of the solution. Sharing information among members of a problem solving team increases the likelihood that a team member will uncover the information that leads to the best solution.
Organizing information includes coordination with units and agencies that may be affected by the problem or its solution. Army leaders determine these as they gather information. They coordinate with other leaders as they solve problems, both to obtain assistance and to keep others informed of situations that may affect them. Such coordination may be informal and routine: for example, a squad leader checking with the squad on his right to make sure their fields of fire overlap; or it may be formal, as when a division action officer staffs a decision paper with the major subordinate commands. As a minimum, Army leaders always coordinate with units or agencies that might be affected by a solution they propose before they present it to the decision maker.
3. Develop Criteria The next step in the problem solving process is developing criteria. A criterion is a standard, rule, or test by which something can be judged—a measure of value. Problem solvers develop criteria to assist them in formulating and evaluating possible solutions to a problem. Criteria are based on facts or assumptions. Problem solvers develop two types of criteria: screening and evaluation criteria.
Screening Criteria Army leaders use screening criteria to ensure solutions being considered can solve the problem. Screening criteria defines the limits of an acceptable solution. As such, they are tools to establish the baseline products for analysis. A solution may be rejected based solely on the application of screening criteria. Five categories of screening criteria are commonly applied to test a possible solution: • Suitability—solves the problem and is legal and ethical. • Feasibility—fits within available resources. • Acceptability—worth the cost or risk. • Distinguishability—differs significantly from other solutions. • Completeness—contains the critical aspects of solving the problem from start to finish.
Evaluation Criteria After developing screening criteria, the problem solver develops the evaluation criteria in order to differentiate among possible solutions. Well-defined evaluation criteria have five elements: • Short Title—the criterion name. • Definition—a clear description of the feature being evaluated. • Unit of Measure—a standard element used to quantify the criterion. Examples of units of measure are US dollars, miles per gallon, and feet. • Benchmark—a value that defines the desired state, or "good" for a solution in terms of a particular criterion. • Formula—an expression of how changes in the value of the criterion affect the desirability of the possible solution. State the formula in comparative terms (for example, more is better) or absolute terms (for example, a night movement is better than a day movement). A well-thought-out benchmark is critical for meaningful analysis. Analysis judges a solution against a standard, telling whether that solution is good in an objective sense. It differs from comparison, which judges possible solutions against each other telling us whether it is better, or worse in a relative sense. Benchmarks are the standards used in such analysis. They may be prescribed by regulations or guidance from the decision maker. Sometimes, the benchmark can be inferred by the tangible return expected from the problem’s solution. Often, however, Army leaders establish benchmarks themselves. Four common methods for doing this are— • Reasoning—the benchmark is based on personal experience and his or her judgment as to what would be good. • Historical precedent—the benchmark is based on relevant examples of prior success. • Current example—the benchmark is based on an existing condition, which is considered desirable. • Averaging—the benchmark is based on the mathematical average of the solutions being considered. Averaging is the least preferred of all methods because it essentially duplicates the process of comparison. In practice, the criteria by which choices are made are almost never of equal importance. Because of this it is often convenient to assign weights to each evaluation criterion. Weighting criteria establishes the relative importance of each one with respect to the others. Weighting should reflect the judgment of the decision maker or acknowledged experts as closely as possible. For example, a decision maker or expert might judge that two criteria are equal in importance, or that one criterion is slightly favored in importance, or moderately or strongly favored. If these verbal assessments are assigned numerical values, say from 1 to 4 respectively, mathematical techniques could be used to produce meaningful numerical criteria weights. Additionally, pair wise comparison is an analytical tool that brings objectivity to the process of assigning criteria weights. In performing a pair wise comparison, the decision maker or expert methodically assesses each evaluation criterion against each of the others and judges its relative importance. A computer equipped with simple software easily performs the mathematical algorithms. This process does not in any way diminish the importance of the decision maker's judgment. Rather it enables problem solvers to bring that judgment to bear with greater precision and in problems of greater complexity than might otherwise be possible. Regardless of the method used to assign criteria weights Army leaders state the rationale for each when recommending a solution to the decision maker.
4. Generate Possible Solutions After gathering information relevant to the problem and developing criteria, Army leaders formulate possible solutions. They carefully consider the guidance provided by the commander or their superiors, and develop several alternatives to solve the problem. Several alternatives should be considered, however too many possible solutions may result in wasted time on similar options. Experience and time available determine how many solutions to consider. Army leaders should consider at least two solutions. Doing this enables the problem solver to use both analysis and comparison as problem solving tools. Developing only one solution to “save time” may produce a faster solution, but risks creating more problems from factors not considered. Army leaders follow two steps when developing solutions: • Generate options. • Summarize the solution in writing, sketches, or both. Generate Options Creativity by Army leaders is key to developing effective solutions. Often, groups can be far more creative than individuals However, those working on solutions should have some knowledge of or background in the problem area. The basic technique for developing new ideas in a group setting is brainstorming. Brainstorming is characterized by unrestrained participation in discussion. Its rules include— • State the problem and make sure all participants understand it. • Appoint someone to record all ideas. • Withhold judgment of ideas. • Encourage independent thoughts. • Aim for quantity, not quality. • “Hitchhike” ideas—combine one’s thoughts with those of others. At the conclusion of brainstorming, Army leaders may discard solutions that clearly do not approach the standards described by the screening criteria. If this informal screen leaves only one solution or none, then more options must be generated. Summarize The Solution In Writing And Sketches After generating options, Army leaders accurately record each possible solution. The solution statement clearly portrays how the action or actions solve the problem. In some circumstances, the solution statement may be a single sentence (for example, “Purchase Model XYZ computers”). In other circumstance the solution statement may require more detail, including sketches or concept diagrams. For example, if the problem is to develop a multipurpose small-arms range, Army leaders may choose to portray each solution with a narrative and a separate sketch or blueprint of each proposed range.
5. Analyze Possible Solutions Having identified possible solutions, Army leaders analyze each one to determine its merits and drawbacks. If criteria are well defined, to include careful selection of benchmarks, analysis is greatly simplified. Army leaders use screening criteria and benchmarks to analyze possible solutions. They apply screening criteria to judge whether a solution meets minimum requirements. For quantitative criteria, they measure, compute, or estimate the raw data values for each solution and each criterion. In analyzing solutions, which involve predicting future events, it is useful to have a process for visualizing those events. Wargaming, models, and simulations are examples of tools that can help problem solvers visualize events and estimate raw data values for use in analysis. Once raw data values have been determined, the Army leader judges them against applicable screening criteria to determine if a possible solution merits further consideration. A solution that fails to meet or exceed the set threshold of one or more screening criteria is screened out. After applying the screening criteria to all possible solutions, they use benchmarks to judge them with respect to the desired state. Data values that meet or exceed the benchmark indicate that the possible solution achieves the desired state and thus is "good" with respect to that criterion. Data values that fail to meet the benchmark indicate a solution that is not good in terms of the identified criterion. For each solution, Army leaders list the respects in which analysis reveals it to be good or not good. It is quite possible for every possible solution being considered to fail to reach the benchmark, and so be considered not good in terms of a particular criterion. When this occurs, the Army leader has an obligation to point out to the decision maker that there are no good solutions under consideration in that particular respect. Army leaders are careful not to compare solutions during analysis. To do so undermines the integrity of the process and tempts problem solvers to jump to conclusions. They examine each possible solution independently to identify its strengths and weaknesses. They are also careful not to introduce new criteria.
6. Compare Possible Solutions During this step, Army leaders compare each solution against the others to determine the optimum solution. Solution comparison identifies which solution best solves the problem based on the evaluation criteria. Army leaders use any comparison technique that helps reach the best recommendation. The most common technique is a decision matrix (see Chapter 3). Quantitative techniques (such as decision matrices, select weights, and sensitivity analyses) may be used to support comparisons. However, they are tools to support the analysis and comparison. They are not the analysis and comparison themselves. The quantitative techniques should be summarized clearly so the reader need not refer to an annex for the results.
7. Make and Implement the Decision After completing their analysis and comparison, Army leaders identify the preferred solution. For simple problems, Army leaders may proceed straight to executing the solution. For more complex problems, a leader plan of action or formal plan may be necessary (see FM 22-100). If a superior assigned the problem, Army leaders prepare the necessary products (verbal, written, or both) needed to present the recommendation to the decision maker. Before presenting findings and a recommendation, Army leaders coordinate their recommendation with those affected by the problem or the solutions. In formal situations, Army leaders present their findings and recommendations to the decision maker as staff studies, decision papers, or decision briefings.
A good solution can be lost if the Army leader cannot persuade the audience that it is correct. Every problem requires both a solution and the ability to communicate it. The writing and briefing skills an Army leader possesses may ultimately be as important as good problem solving skills.
Based on the decision maker’s decision and final guidance, Army leaders refine the solution and prepare necessary implementing instructions. Formal implementing instructions can be issued as a memorandum of instruction, policy letter, or command directive. Once Army leaders have given instructions, Army leaders monitor their implementation and compare results to the criteria of success and the desired end state established in the approved solution. When necessary, they issue additional instructions. A feedback system that provides timely and accurate information, periodic review, and the flexibility to adjust must also be built into the implementation plan. Army leaders stay involved, and are careful not to create new problems because of uncoordinated implementation of the solution. Army problem solving does not end with identifying the best solution or obtaining approval of a recommendation. It ends when the problem is solved
Chapter Quiz Edit
1. What does the Acronym CBRN mean?
2. Academic inquiry starts with a question or problem. The process has initial needs, what are they?
3. The process of academic inquiry is a controlled or _________ transformation of discrete bits and pieces of information or situations with _____ apparent connections or relationships into a unified and meaningful whole.
4. What will require a higher order of thinking for this unit? (essay 100 words or less)
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Highway Performance Monitoring System (HPMS)
A continuous process improvement model for the hpms.
The Federal Highway Administration (FHWA) field offices have a very important role in assuring that States submit complete, timely, and accurate Highway Performance Monitoring System (HPMS) data. Headquarters provides overall coordination but must rely on the field offices, which are much closer to the source of the data, to provide technical assistance and support throughout the year. For the most part, States have developed processes that can provide timely and complete data. However, beyond providing timely and complete data, there is a need to assure that HPMS data are of high quality. This may involve further investigation and review of State's processes and procedures used to collect, verify, and manage the data. Division assistance is needed as FHWA examines how these processes are designed, implemented, and improved to achieve better performance and higher quality. This philosophy is the underlying principle of the Continuous Process Improvement (CPI) model.
The Process Review and Product Evaluation (PR/PE) program was used for many years as a compliance based review to assure the data needs of FHWA were being served. This program validated processes and procedures and solved problem areas through product evaluation. While we still have program oversight responsibilities, there is also a new emphasis on relating our oversight activities to factors such as the level of Federal interest in a program, the technical complexity of a program, the local circumstances under which the program operates, the management of program risk, and controlling statutory requirements. To address these areas we must add value to State processes using new tools and techniques to improve what we do today. The CPI model offers various tools and techniques for approaching program oversight; individuals can select those that best meet their needs. This new CPI approach should not be considered an event as was done with PR/PE, a one time review or assistance effort, but an integral part of field office work plans. It is not just a review, but also an effort, a continuous effort, to provide assistance, coordination, support, and interest in data quality.
The HPMS data support the Vital Few and FHWA's performance plan, provide Federal-aid fund apportionment factors, facilitate development and evaluation of legislative proposals, and provide key inputs for performance and other reports to Congress. The FHWA's CPI tools and techniques can be used to improve the quality of HPMS data used for these critical management purposes. The CPI is a means to help FHWA and its partners better understand and improve what they do by focusing on the processes used to accomplish their work. Application of CPI to HPMS will help FHWA add value to State data collection and reporting processes, provide a mechanism for making meaningful process recommendations, and set a framework for supporting and monitoring the implementation of process improvements; all with a goal of improving data quality.
Applying CPI to HPMS
The first step in applying CPI to the HPMS program is to develop a model that moves from the general precepts of CPI to the specifics of an HPMS application. The model developed for the FHWA field organization can be used as a way of managing the HPMS program to achieve continuous quality improvements. Implementation of the CPI model may require changes in the way HPMS programs are managed at both the Headquarters and field level. The discussion parallels the topical areas outlined in the FHWA publication Continuous Process Improvement Tools and Techniques for Practitioners. All field offices were provided copies of this publication in 1997 and updates in July 2001 by the FHWA Office of Corporate Management. That publication should be used as a reference. Attachment A is a flowchart that shows how CPI can be applied to HPMS as it relates to various steps in the process.
Ten key steps in this process are explained in the following discussion:
Define HPMS as a Key Support Process
Identify at-risk hpms areas, select type of review.
- Analyze Processes
Use of HPMS Field Review Guidelines and Other Reference Material
Outline current process and procedure, make recommendations for improvement, prepare implementation plan, follow-up on recommendations, measure process outputs.
A process is defined as a sequence of steps, tasks or activities that convert inputs to outputs and add value to the inputs as they are used to produce something new. In the largest sense, there should be no question that the HPMS is a process, and that within the context of the CPI, it meets the criteria for a Key Support Process. By definition, that is a process upon which the organization depends, but which may not be widely evident to many of the customers; oftentimes, HPMS is simply assumed to be an effective source of high quality data.
Attachment B is a flowchart that shows HPMS as a Key Support Process identified not only by the CPI principles, but also by FHWA's significant reliance on this data to meet many business needs. The business needs HPMS data support include the Vital Few, FHWA's performance plans, Federal-aid Highway Program authorization, Federal-aid apportionment factors, and the national data used for a number of required reports to Congress. The many uses of HPMS data are often overlooked.
The requirement for States to collect and provide data to meet the FHWA business needs is a prerequisite for field office approval of the State's SPR Planning Work Program. The SPR funds are available for data collection and should be used to fund activities that will result in improvements to the quality of data reported to the HPMS. Approval of the Statewide Transportation Improvement Program (STIP) is predicated on the Division Office biennial planning finding that the State meets FHWA's data reporting needs as cited in Title 23, USC 502 and in 23 CFR 450.
These should be useful to show the extent to which HPMS is a Key Support Process for FHWA; the relationships and references to regulations shown in Appendix B provide the statutory basis for HPMS and support the need for field offices to be actively involved in oversight of the HPMS program. The Divisions may find it beneficial to share this information with the State to demonstrate the importance of HPMS to FHWA, to obtain their continued support for quality HPMS data, and to help States justify to management resources budgeted for HPMS purposes, especially for States with severe budget restrictions. A similar flowchart could be developed with the State to show how and where HPMS fits into the State's operation and organization.
Since HPMS is a Key Support Process for FHWA, a further review of the activities, or processes, that are internal to the reporting of HPMS data elements needs to be undertaken to determine which are of highest value. The CPI is intended to help improve products and services so that they have a greater value to the customer, and with limited resources at both the FHWA and States, it is important to concentrate on the high priority areas. High priority areas can be determined in part by assessing customer needs and expectations, determining governing legal or other obligatory requirements, and discussing perceived process problems. Within the context of the Headquarters/field HPMS partnership, the field offices should develop dialog and communications on perceived process problems to aid in identifying and focusing on high priority areas. Data-related process deficiencies will be discovered and changed only by those closest to the source of the data input.
While the recommended priority areas of traffic monitoring, pavement data, and sample adequacy have been identified based on Headquarters perspective, these could be different for some States after a thorough analysis that considers field office experiences. These areas are the greatest at risk since they have the largest impact on the business needs of FHWA and are major data collection activities of all States. Within each of these areas there are specific data items and collection processes that we have been concerned about in the past and that are still important; they should be considered for the kind of continuous monitoring and improvement envisioned in the CPI model. Many of these are in the Appendix to the existing Field Review Guidelines.
At-risk areas should be identified by the field offices considering comments and nationwide perspective from Headquarters so that they will become the focus of attention for CPI related activities. This is not to say that other data item questions or annual trend analyses should be ignored but that in-depth reviews of data processes should focus on identified at-risk areas.
In traffic monitoring, accurate and quality vehicle miles of travel (VMT) both on and off State systems are needed for apportionment and other purposes; traffic volume and classification data needed for the annual average daily traffic, percent trucks, and other data items affecting capacity and design are also of high priority.
The pavement data items related to pavement roughness and serviceability ratings, and pavement type and composition are critical items for the business needs of both FHWA and States.
Sample adequacy is an activity that affects the statistical reliability of the HPMS database for each State. It is not a single data item to review but reflects on the State's overall management of the database. There is a need to periodically review the sample structure to account for changes over time in volume groups, sample revisions, and functional classification changes.
The process to be reviewed, the expertise level of the reviewer on that subject, and resource availability all should be considered in deciding how the review will actually be performed; a single individual up through a team of experts from various levels of FHWA can be used.
The use of a team approach is encouraged when making reviews of HPMS data programs and processes. Division Office Intelligent Transportation System (ITS), pavement, and other specialists have useful knowledge of the State's programs and can be valuable assets when conducting reviews of data quality, collection procedures, and linkages to source data systems. Source data specialists from the State or from other agencies that are providing data should be included in the review team.
Divisions are encouraged to reach out to technical experts in the Resources Center and Headquarters to be members of review teams. Their expertise can be a valuable asset to these teams by sharing their subject area knowledge and experiences from other States. Outreach efforts should be in specific technical areas that relate to traffic, pavement, and ITS, or other inventory or condition source data systems that are used to generate States HPMS database inputs.
If a team approach is used, the team needs to be assembled, team members identified, and a schedule of activities to be accomplished by the team developed. This should be done in sufficient time to allow for proper identification and commitment of resources by team members in their office performance plans.
Analyze Process for Collection, Reporting, and Accuracy of HPMS Data
Attachment C shows how the HPMS is based on data from State data collection programs and contains selected data from statewide databases. These programs also provide needed data for the planning process, engineering applications, and environmental analysis. The focus of CPI activities should be on HPMS data items as well as those much larger and comprehensive databases, which may be a source of HPMS data.
In many States the HPMS data is extracted from existing statewide databases and reformatted to meet HPMS codes and submittal criteria. In these cases, the statewide databases should become the focus of CPI activities; it is important to get to the source of the data collection and reporting processes used to meet HPMS and other important needs. Data quality improvements in these processes should be a major concern for the State because of the impacts on their own data needs; improvements to these processes will eventually be reflected in future HPMS data submittals.
Once at-risk areas have been identified,the next step is to determine which data areas should be reviewed and at what organizational levels within the State. There may be several different processes involved from the raw data collection to data management and update to linking the data to the HPMS submittal that may need to be reviewed to get a complete understanding of the total process and to be able to determine where improvements can be made. Ideally, this should lead to documentation of the process to assure continued success and adherence to accepted procedures. A team approach is encouraged for effectively using resources and expertise that may be readily available. This documentation may help meet staff succession planning objectives (a common concern in many States), may help avoid gaps in management support, and may help the understanding of HPMS and data quality.
The existing HPMS Field Review Guidelines,issued in June 2001, provide useful information for performing meaningful technical reviews. The questions in the Appendix of the Review Guidelines provide information about various subject areas that can be used to review processes and procedures. They are not all encompassing and should not be the extent of a detailed process review. There are references to additional material available for each area that goes beyond the basics. Divisions should determine how they could become educated on these topics using the experts in their office and the Resource Center when planning and executing technical reviews. They should try to understand unique terminology and technical concepts so they can go beyond basic, obvious information that is readily available.
There are other reference materials, tools, and training opportunities that should be considered in performing reviews. This information is readily accessible to all field offices and States and is kept current on the HPMS web site. Some of these are:
- Computer Based Training (CBT) : The use of this CD can provide very useful training to employees with newly acquired responsibilities for HPMS and State data collection and reporting personnel. Data items are discussed with coding instructions and examples given for each code. It is presented as if one was going out into the field to do an inventory and provides some guidance as to how the items are measured and what to look for when determining the proper code. The Divisions are encouraged to use the CBT and promote use of the CBT by State subunits that provide source HPMS data (pavement management section, district offices, etc.) and by local agencies engaged in the collection and reporting of HPMS data elements to the States.
- HPMS New Technology and Techniques Catalog : This source of information, last updated in 2000, will be updated in 2003 and posted on the Community of Practice (COP) site. It will include a method to search on key words or procedures to help make the document more useful and user friendly. This is a valuable source of information for States and can be kept relevant through field efforts to suggest and recognize new, challenging, and significant activities occurring in the State.
- Community of Practice: The COP web page is an effective medium for exchanging and sharing experiences and problems and cataloging contributions from the HPMS Community. States and Division Offices can use the COP as a question and answer forum. Keeping the site current and relevant, and further promoting the site to State and other data collection agencies, will enhance its visibility as an effective source of information. The Travel Monitoring COP should be consulted for discussions on traffic monitoring data, which often pertains to HPMS traffic data.
- HPMS Software Applications: The HPMS submittal software can be used by State and Division personnel to review and query the database. The summary reports are useful in comparing trends in many data items, especially VMT, mileage, and the International Roughness Index. The queries of various data items can be useful in identifying abnormalities by various stratifications, which items have been updated recently, and if the coding is appropriate. Queries can be used to identify if system wide values rather than actual section data are being reported; this is not readily evident from statewide totals. The software can be used to trace edit errors to the segment level, and thereby help determine their cause. Sample management reports can be used to check for missing volume groups as well as volume group over and under sampling problems. Sample length summaries can be used to determine if there are too many very short segments. The queries and reports can be used by Divisions to help identify focus areas for improving data quality.
- TranStats: TranStats is a web-based application maintained by the Bureau of Transportation Statistics that provides centralized access to a wide variety of intermodal transportation data including HPMS. This simplified Geographic Information System application provides access to a number of map displays using 1999, 2000, and 2001 data to view actual HPMS data records for user selected road segments using dropdown menus and simple point and click tools. Features include the use of interactive analysis tools to create tables, charts, and maps; users can summarize results by combinations of variables, statistics, and time periods and download results to a PC. TranStats can be used to view data from adjoining States for comparisons and in identifying gaps in data reporting. It can also be a useful tool to identify data anomalies, data consistency, and reasonableness of reported values on a map basis.
- Traffic Monitoring Guide (TMG) Training Course: The National Highway Institute training course on the TMG is available to any agency and should be requested by those States that have had recent staff changes in either their HPMS or traffic monitoring or local agency data collection offices. The FHWA staff, including the HPMS coordinator, as well as pavement and ITS specialists, should consider attending this course to get background information on the TMG and the difficulties of collecting traffic data.
The review of the HPMS data program should be a continuous process that not only looks at the end result, the data submittal, but the process to collect, verify, and manage the data. A time series diagram linking factors such as data collection schedules, reporting dates, data year, and the time lag required to effect change may be helpful in encouraging continuous monitoring of the HPMS program by the States. Reviews throughout the year may be more timely and useful to the State for the annual submittal and to provide budget support for resource decisions needed for July or October program years. Recommendations and plans for improvement should be included and supported in the State's SPR Planning Work Program to reflect management commitment and permit implementation monitoring.
The existing procedures should be benchmarked based on current available information and understanding of the process. Reviews of past data submittal comments and analysis of individual data items associated with at-risk areas should be identified and reviewed. Those processes associated with the collection, reporting, and management of HPMS data should be the focus of this step. Existing documentation of processes and prior reviews should be a valuable source of information
The generic CPI model offers a number of tools and techniques that can be used directly in an HPMS application. These include the development of subject-relevant review teams, analyzing the current process through process mapping, proposing improvements to the current process through the use of problem solving models and techniques, and reporting relevant conclusions and recommendations. Under this model, the SPR work program documents management support that quality enhancing process improvement recommendations are funded and implemented.
One of the CPI model problem solving techniques that can be used in assessing HPMS data reporting processes is the four-step Focus, Analyze, Develop, and Execute (FADE) model. The following is an explanation of the four steps and how the field offices can use them.
- STEP 1: Focus - This is the need to focus on a single problem or high priority area that is "at risk" Since there can be many problem areas, focus on just one that is capable of being fixed or a process that can be improved rather than trying to address all problem areas at one time. Since resources may be needed to do a thorough analysis it is critical that they be effectively used to focus on a problem area that is currently a high priority area even if the data and results of the process appear to be acceptable.
- STEP 2. Analyze - A detailed analysis of the problem is necessary to understand the issue and to be able to determine what parts of the process (or problem) need to be further investigated. This would involve collecting data, searching for consequences and causes, and determining the influential factors.
- STEP 3. Develop - This step involves generating promising solutions or alternatives to improving the process, mapping a reasonable and effective process; testing solutions when appropriate; selecting a solution; and developing a plan for implementation.
- STEP 4. Execute - The plan is executed and the impacts are monitored. A key element is the commitment of resources to execute the plan. Monitoring implementation of the plan and reviewing the final products or processes are necessary to assure that the plan has been executed.
This may take more than one data (or process) reporting cycle so it is important that not only monitoring but also support and assistance be provided until full execution. Tracking the expenditure of resources committed in the SPR program can be an effective way of monitoring plan execution and implementation.
A plan for implementing recommendations for maintaining and improving the process reviewed should be developed with the State or owner of the process, supported by management, and may be included in the SPR work program. This is a plan that has a description of actions necessary for implementation, responsible offices identified, dates when each action should be completed, and the measures of successful implementation. Since some improvements may take several years to implement and for results to become evident, it is important to develop a plan that includes the complete process and actions necessary. This also serves as a record of what needs to be done, and should be a valuable reference for new staff at both the Division Office and the State.
The success of the implementation plan depends on the owners of the process being receptive and prepared to implement the changes recommended. The State should develop this plan since they will be responsible for following it. This may result in new initiatives requiring additional resources supported by management. The plan may identify a need for additional staff, consultant or research efforts, and funding requirements.
This is one of the most important steps in the CPI process since it cooperatively identifies what actions need to be undertaken and the resource requirements to achieve successful and timely results. It reflects a commitment by the State to continually improve the process.
There should be follow-up and continuous involvement and support from the field offices to assure that recommendations identified in the implementation plan are actually being implemented. Adherence to the schedule and State management support are critical areas that may need attention. The support should be reflected in the SPR work program, which may be a multi year effort before complete changes are made and reflected in future data submittals.
There should be a follow-up strategy that insures the processes are improved. This relies on such activities as communications, avoiding the not-invented-here syndrome, and making it a learning experience for the process owners as well as the CPI reviewers. Like everything else, CPI requires continuous work and attention; nothing magical will happen overnight.
This step reminds everyone of the commitments made which are especially important when there are staff changes at either FHWA or the State. If recommendations are not being implemented, this is another opportunity to review the implementation plan and make changes if necessary to get back on schedule and renew prior commitments.
This last step takes another look at the final product to determine if it reflects the recommended improvements for complete, accurate, and timely reporting of quality data. This could rely on data submittal comments, trend analysis, new procedures implemented, and increased confidence in the data by FHWA and the State.
To measure the success of recommended improvements, there needs to be some means of measuring the performance of the process. The outputs of the process can be measured in terms of criteria such as whether the process is economical, sensitive, useful, and reliable. Economical means that the process allows for cost effective data collection, while sensitive means that it is capable of indicating change in performance. Useful shows how well goals and objectives are being met, and reliable indicates that the process is quantifiable, realistic, and data driven.
The Review Process Map
A flowchart that provides an overview of how the CPI model can be used for HPMS and how it can be incorporated into management activities of the Division Office is shown in Attachment D. CPI should be integrated into the development of performance plans, can make use of multidisciplinary teams, should be used to promote implementation of process improvement activities, and should affect the approval and monitoring of SPR work programs.
Implementing CPI should become a partnership with the State to improve the quality and delivery of data programs and processes. It should also facilitate the sharing of best practices and ensure statewide consistency in program administration, process applications, and standards. The goal is to establish stewardship processes that add value, meet the technical and quality improvement needs of the State and meet the accountability needs of FHWA. The use of CPI is a primary technique for accomplishing this objective.
At least once a year, the Division and the State should jointly identify and prioritize appropriate oversight initiatives based on risks and benefits and allocate resources to undertake quality improvement evaluations using the CPI model.
The CPI model can be applied to HPMS. By definition, HPMS is a Key Support Process for FHWA. The ten-step approach that has been developed links HPMS to a recognized agency management process that furthers FHWA's commitment to the Quality Journey. There is room for improvement in the HPMS data collection and reporting process, and the ten-step approach for implementing the CPI model for HPMS presents a wide range of activities that can be used to better manage the HPMS data program. Some of these activities are easy to implement and others require more in the way of resources and staff time. The more extensive activities involve a field management commitment and support from others within the field office, and may need assistance from the Resource Center and Headquarters in some cases.
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8 characteristics of good management information systems – explained.
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For information to be useful to the decision maker, it must have certain characteristics and meet certain criteria.
Some of the characteristics of good information are discussed as follows:
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i. Understandable:
Since information is already in a summarized form, it must be understood by the receiver so that he will interpret it correctly. He must be able to decode any abbreviations, shorthand notations or any other acronyms contained in the information.
ii. Relevant:
Information is good only if it is relevant. This means that it should be pertinent and meaningful to the decision maker and should be in his area of responsibility.
iii. Complete:
It should contain all the facts that are necessary for the decision maker to satisfactorily solve the problem at hand using such information. Nothing important should be left out. Although information cannot always be complete, every reasonable effort should be made to obtain it.
iv. Available:
Information may be useless if it is not readily accessible ‘ in the desired form, when it is needed. Advances in technology have made information more accessible today than ever before.
v. Reliable:
The information should be counted on to be trustworthy. It should be accurate, consistent with facts and verifiable. Inadequate or incorrect information generally leads to decisions of poor quality. For example, sales figures that have not been adjusted for returns and refunds are not reliable.
vi. Concise:
Too much information is a big burden on management and cannot be processed in time and accurately due to “bounded rationality”. Bounded rationality determines the limits of the thinking process which cannot sort out and process large amounts of information. Accordingly, information should be to the point and just enough – no more, no less.
vii. Timely:
Information must be delivered at the right time and the right place to the right person. Premature information can become obsolete or be forgotten by the time it is actually needed.
Similarly, some crucial decisions can be delayed because proper and necessary information is not available in time, resulting in missed opportunities. Accordingly the time gap between collection of data and the presentation of the proper information to the decision maker must be reduced as much as possible.
viii. Cost-effective:
The information is not desirable if the solution is more costly than the problem. The cost of gathering data and processing it into information must be weighed against the benefits derived from using such information.
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- 9 Characteristics of an Effective Control Systems – Explained!
- Management Information System (MIS): Top 13 Characteristics
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