A journey of a thousand miles begins with a single step

 Lǎozi 老子

I simply had lunch with Shenwei, one in every of my ex-students who had simply taken a job in a mid-sized consulting agency.  After a little bit of catching up I provided he was trying a bit misplaced. “I simply bought handed a mission to assist our agency enter a brand new business – semiconductors. They need me to map out the house so we will determine the place we will add worth.

Once I requested what they already knew about it, they tossed me a tall stack of business and inventory analyst stories, firm names, web pages, blogs. I began studying by means of a bunch of it and I’m drowning in information however don’t know the place to begin. I really feel like I don’t know a factor.”

I informed Shenwei I used to be completely happy for him as a result of he had simply been handed an superior studying alternative – how you can quickly perceive after which map any new market. He gave me a “straightforward so that you can say” look, however earlier than he may object I handed him a pen and a serviette and requested him to write down down the names of firms and ideas he examine which have something to do with the semiconductor enterprise – in 30 seconds. He rapidly got here up with a listing with 9 names/phrases. (See Mapping – First Cross)

“Nice, now we’ve a begin. Now give me a number of phrases that describe what they do, or imply, or what you don’t find out about them.”

After a couple of minutes he got here up with a serviette sketch that regarded like the image in Mapping – Second Cross. 
Now we had some progress.

I identified he now had a starter record that not solely contained firms however the starting of a map of the relationships between these firms. And whereas he had a number of details, others had been hypotheses and ideas. And he had a ton of unanswered questions.

We spent the following 20 minutes deconstructing that sketch and mapping out the Second Cross record as a diagram (see Mapping – Third Cross.)

Be aware that even with simply the sparse set of knowledge Shenwei had, within the backside right-hand nook of his third mapping move, a relationship diagram of the semiconductor business was starting to emerge.

As the knowledge fog was starting to raise, I may see Shenwei’s confidence returning. I identified that he had an actual benefit that his project was in a identified business with a number of obtainable info. He rapidly realized that he may maintain including info to the columns within the third mapping move as he learn by means of the stories and web pages.

My suggestion was to make use of the diagram within the third mapping move as the start of a wall chart – both bodily (or nearly if he may maintain it in all in his head). And each time he discovered extra concerning the business to replace the connection diagram of the business and its segments. (When he identified that there have been current diagrams of the semiconductor business he may copy, I urged that he ignore them. The objective was for him to know the business nicely sufficient that he may draw his personal map ab initio – from the start. And if he did so, he would possibly create a a lot better one.)

When lunch was over Shenwei requested if it was OK if he checked in with me as he discovered new issues and I agreed. What he didn’t know was that this was solely step one in a ten-step business mapping course of.

Epilog

Over the following few weeks Shenwei shared what he had discovered and despatched me his more and more refined and up to date business relationship map. (The 4th  mapping move confirmed up 48 hours later.)In trade I shared with him the information that he was on step one in every of a ten step business mapping program. Different the following few weeks he rapidly constructed on the business map to reply questions 2 by means of 10 beneath.

Two weeks later he handed his management an business report that lined the ten steps beneath and contained a complicated business diagram he created from scratch. A far cry from his unique serviette sketch!

Six months later his work on this mission satisfied his firm that there was a big alternative within the semiconductor house, and so they began a brand new apply with him in it. His work received him the “greatest new worker” award.

The Ten Steps to Map any Business

Primary Business Understanding

1. Diagram the business and its segments
   1. Begin with something
   2. Construct your studying by successive iteration
   3. Who’re the important thing suppliers to every section?
   4. How does this business feed into the bigger financial system?
2. Create a glossary of business distinctive phrases
   1. Are you able to clarify them to others? Are there analogies to different markets?
3. Who’re the business consultants in every section? For all the business?
   1. Financial consultants? E.g. business analysts, universities, suppose tanks
   2. Expertise consultants? E.g. universities, suppose tanks
   3. Geographic consultants?
4. Key Conferences, blogs, web pages, and so on.
   1. What are the very best opensource information feeds?
   2. What are the very best paid assets?

Detailed Business Understanding

5. Who’re the market leaders? New entrants? In income, market share and development price
   1. Within the U.S.
   2. Western nations
   3. China
6. Perceive the expertise flows
   1. Who builds on prime of who
   2. Who’s vital versus who will be substituted
7. Perceive the financial flows
   1. Who buys from who on this business
   2. Who buys the output from this business.
   3. How cyclical is demand?
   4. What are the demand drivers?
   5. How do firms inside every section get funded? Any variations in capital necessities? Ease of beginning, and so on.
8. If relevant, perceive the personnel stream for every section
   1. Do individuals transfer simply between their segments or up and down by means of all the business?
   2. The place do they get skilled?

Forecasting

9. What’s modified within the final 10 years? 5 years?
   1. Diagram the previous incarnations of the business
10. What’s going to alter within the subsequent 5 years?
    1. Any massive perception on disruption?
    2. New entrants?
    3. New expertise?
    4. New overseas suppliers?
    5. Diagram your mannequin of the business in 5 years

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