Leveraging insight: The neglected strategic capability

High quality insights are crucial for telcos

Each year telcos invest in external insights from strategic and tactical research houses, alongside primary research budgets. This investment is a response to the ever-evolving trends that are shaping the industry, the need to understand them and support decision-making. It is therefore critical that telcos develop the capability to leverage them well.

What drives the need for insight?

Learning and seeking evidence drive the insight needs across the business. This ranges from individuals drafting a one-off client proposal, to strategy teams developing the corporate response to an emerging opportunity. The breadth of the insight need has implications for research buying and funding practices, as well as how insight is distributed.

Being in the business of external insights, STL Partners is always keen to understand how telco customers use insights and what research management practices they deploy to derive more value from insight services. STL Partners asked Olga Holin, a seasoned research buyer with recent telecoms experience, to talk to a group of her peers and synthesise their perspectives on what “good” insight practice looks like.

The report examines the drivers for external insight acquisition and the types of insights typically acquired. It outlines the insight management approaches at four telcos (representative of Olga’s sample) and highlights the benefits and challenges of each. It then sets forth several guidelines for operators and other organisations to ensure insight quality and derive more value from insight acquisitions going forward.

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Why are external insights necessary?

Across all the organisations we spoke to, respondents agreed that research insights were necessary and valuable, chiefly to drive learning and aid business decision making. The stated reasons for acquiring research include:

  • To identify future growth opportunities and threats in order to plan and innovate accordingly,
  • To inform and educate employees, thereby complementing existing capabilities,
  • To validate internal assumptions and build a deeper understanding of the business and its environment,
  • To assess business performance in context and validate effectiveness.

While some of this insight could conceivably be generated internally, the value drivers of external research over an internal function are:

  • “We don’t know what we don’t know” – To gain access to topics and trends potentially not on the organisational radar. Drawing on the expertise from external sources allows organisations to capture insight more easily and assures no threats or opportunities are missed.
  • To remove blind spots in internal thinking – To challenge mental models, by providing objectivity to change the way an organisation might perceive a certain technology or topic.
  • To influence senior executives – To strengthen the credibility of business cases and market overviews. The insights of analyst houses with strong reputations make analyses more convincing to senior management. As one telco put it, “They don’t always listen to us, but they usually listen to external reputable sources.”
  • To increase the speed of internal knowledge acquisition and learning – To develop the knowledge of employees quickly (they don’t have to find the information, just contextualise it).
  • To secure quality information – To ensure information is robust, unbiased, consistent with industry definitions (external agencies validate information via multiple sources and have no vested interests to protect).
  • To supplement limited internal insight resources – To answer information einquiries more quickly and through experts versus having to recruit internal experts to understand an emerging area.
  • To get access to information that might otherwise be unattainable (e.g. competitor information).
  • To seed change – The outside and informed perspective of a research house can highlight a need for change that may not be recognised due to internal mindsets and environment.

The value to the organisation of having these insights will be influenced by the extent to which findings can inform learning or decisions in more than one part of the business – and the longevity of the findings (how quickly they go out of date) or whether they have a future focus.

External insights may only be required to address needs in a limited business area at a specific point in time, e.g. where a product team wants to know how a newly launched product is faring versus competitor offerings. This type of insight can be considered tactical insight, as it provides the information to enable quick adjustments and decision making in the shorter term, more likely the type of decisions taken by middle managers.

Strategic insights, on the other hand, can generally inform decision making across the organisation more broadly. The topics are relevant to more than one area (e.g. digital transformation) and over a longer period (they say something about the future).

Strategic insights are able to influence decision making at an executive level, equipping teams for discussions around larger investments and those concerned with long-term returns rather than immediate gains. This is illustrated below.

 Tactical versus strategic research

external insights

Source: STL Partners

The nature of the research has implications as to how it should be managed to maximise value.

Table of Contents

  • Executive Summary
    • Recommendations to maximise insight value
    • Telco insights challenge
    • Next steps
  • Introduction
  • Why are external insights necessary?
  • Insight management across the research lifecycle
    • Basic insight management process
    • Advanced insight management process
  • Telco insight management case studies
    • Telco 1
    • Telco 2
    • Telco 3
    • Telco 4
    • Set-up versus research type
  • How to increase the value of research in organisations
  • Index

Related research

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How to identify and meet new customer needs

Customer-led innovation at Telia and Elisa

In order to secure competitive advantage and long-term growth, telcos need to identify and meet new customer needs. The importance of this is confirmed by the STL Partner’s Telco investment priorities survey published in January 2021. Understanding customer needs and innovation, both essential for addressing new needs and driving growth, featured in the top ten priorities.

Telco top investment  priorities

top-telco-investment-priorities-stl

Source:  STL Partners, Telecoms priorities: Ready for the crunch?

This report seeks to identify best practice for telcos. Through in-depth interviews with senior managers in Elisa and Telia, and an expert in disruptive innovation, we identify the critical success factors and lessons learned in these organisations.

Telia created Division X in 2017, a separate business unit focused on commercialising and growing revenue from emerging businesses and technologies such as IoT (including 5G), data insights, and digital B2C services. Its focus is on customer needs and speed of execution, to spearhead and accelerate innovation, which it deems necessary in Telia’s drive to “reinvent better connected living”.

International Digital Services is Elisa’s third main business division, alongside Consumer and Corporate, which serve the domestic market. As International Digital Services has matured, it has focussed specifically on addressing new needs and developing new services, in both industrial and corporate domains.

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The report is based on interviews with:

  • Liisa Puurunen, Vice President, Brand, CX and start-ups, International Digital Services, Elisa — Liisa has a background in leading new businesses and start-ups in Elisa in the Consumer division and International Digital Services. Liisa’s role is to understand where there are new needs to be met, and to get best practise in place across the whole customer journey, within both industrial and corporate domains.
  • Annukka Matilainen, Development Director for Omnichannel and Smart Automation, Elisa —Annukka led the Consumer team’s response to COVID-19
  • Stephanie Huf, Head of Marketing, Division X, Telia — Stephanie’s role is to support the business lines in Division X to in engaging with customers to identify their needs. For example, her team identifies what customers want, defines the value propositions and works with product and business teams to test these in line with customer insight. (Since participating in this research Stephanie Huf has moved to a new role.)
  • Anette Bohman, Strategy Director, Division X, Telia  — Anette supports and guides Division X in defining Telia’s future.
  • John McDonald, FIRSTEP — John is a strategist in disruptive innovation in the health industry in Canada. He helps leaders create alignment around how the forces of disruption are unfolding and where to place the bets. FIRSTEP works with health organisations searching for fresh insights that spark new opportunities for growth.

Create a separate team to maximise new business opportunities

A separate team has many benefits

New business requires a separate, dedicated team. Its needs are different from day-to-day business and it needs its own focus.

One of the biggest learnings for Elisa in addressing new opportunities, is that there needs to be a ‘sandbox team’ with its own resources and budgets, rules, methods and mindset. It must have access to senior managers for decision making and funding, and strong leadership.

The sandbox team needs to be remote from the demands of day-to-day operations and implementation. If finding new needs is only part of someone’s job it is difficult to manage, as short-term demands will inevitably take precedence. Delivery and experimentation are different functions and they should be separate.

Liisa Puurunen’s team is a start-up in its own right. It is leaner than the usual Elisa approach and people are only brought into the team when there is a test to be done, keeping it flexible.

Rationale for a separate team

separate-team-rationale
Source: STL Partners

Contents

  • Executive Summary
    • Create a dedicated and separate team
    • Take a customer centric approach at all stages of innovation
    • Types of innovation will meet different new needs
  • Introduction
  • Create a separate team to maximise new business opportunities
    • A separate team has many benefits
    • Telia Smart Family: The case for a separate innovations team
    • Evaluate success in relevant ways that may be non-traditional
  • Take a customer centric approach to all stages of innovation
    • Ensure a customer centric culture
    • Start with a customer problem
  • Meeting needs and scaling bets
    • Co-create with customers, but choose them carefully
    • Elisa’s empowered teams enable a successful response to COVID-19
  • Types of innovation to meet different new needs
    • New needs in the core versus new businesses
    • Dedicate some resource to extreme innovation
    • Telia Data Insights: New Business innovation in response to COVID-19
    • The case for disruptive innovation
  • Plan exit strategies
    • Perseverance and pivoting can bring success
    • Be prepared to kill your darlings

Related research

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