Know your strengths
The first thing you have to do when deciding on your core equities is to check your ego at the door and forget all preconceivednotions.
“I think if you’ve been in the business for a long time, you may bevery vulnerable to not having clear vision, and I think you need tounderstand that,” he says. “So, if you’ve been in a particular business and that exact brand for a long time, we all begin to acceptthe paradigm we’re in. So, sometimes you begin to believe yourselftoo much.”
You should look to external factors for data to find out where thecompany excels compared to competitors.
“That is finding a good way to talk to your consumers directlywithout a bias, without a filter, without them knowing what thebrand is,” he says. “There are inexpensive ways to doing that. Weuse focus groups a lot here to evaluate ideas, concepts as well asspecific food, and it’s amazing how easy and how relatively inexpensive that can be. Because you can have people sourced thatare, for example, in my segment, we can purposely source consumers that are heavy users of the category. We can purposelysource people that are users of the category but not of our brand.So, we purposely get those insights from people.
“Obviously, external sources beyond the consumer are critical,as well. If you have a board of directors that have smart people onthere that potentially have different industries — there are folksthat can help you figure that out. The other thing is just your ownexperiences.”
Once you have that data, you have to be careful because toomuch data can hinder progress. There are always 100 things thatpeople want you to look at, but there could be only three that arethe most important. The other 97 might be potentially important,but at the end of the day, they aren’t the reasons the customer is orisn’t patronizing your business.
“Information is very valuable,” he says. “Data is the buildingblocks to information.”
You convert data into information first and foremost by theprocess of integrity that ensures that, one, your data is clean, and,two, that you are testing for the right thing.
“You and I both know that you can manipulate data,” he says.
“So, you can look at a set of numbers and say, ‘Wow, this is tellingme this,’ and someone says, ‘It is telling me something else.’
“The way you do it is, first, by making sure it’s clean, making surethat you are asking the right questions, and you limit it to thosethings that are most important.”
Silva says to make sure you have integrity in your process, makesure data comes from reputable sources.
“When you start looking at your own business directly though,you are generally going to have to go out to an independentresource that can help you take data that is out there and potentially get some additional data from your consumers,” he says.
A lot of businesses think they are good at something, but youneed to have metrics in place to factually compare yourself againstthe competition.
“If you don’t have a metric to understand what you’re good at,you’re going to begin to work against the wrong one,” he says.