Principle of Retrospective Rationality

Principle of Retrospective Rationality

and Effective Market Analysis

Stay calm under pressure: usually, working situations involve pressure and stress. In such situations it is necessary to maintain a positive attitude. If not, your colleagues will perceive your anxiety. Staying calm under pressure also is the basis of good management.

Psychologists call it the principle of retrospective rationality. Your brain likes to believe that you’re behaving in a fashion that is consistent with your beliefs. So if you start behaving as a confident person, your brain tries to explain your behavior by forcing your mind to believe you are a confident person (Rob Yeung, Confidence, The Art of Getting Whatever You want).

However, preparation is crucial to success in business, and there is nothing more damaging to your credibility as a commercial partner than being unprepared. Conversely, being prepared has many benefits, including enhancing your understanding and enabling you to be more effective making you appear more professional.

You can move quickly if you do the background work first, which no one usually sees. You prepare yourself thoroughly, and then when it is time to move ahead, you are ready to sprint.

If you are confident and prepared, the trust that other people have in you, will be increased.

The first thing you should prepare for is an understanding of the market: your research should include the overall industry (is it growing or shrinking, what are the main challenges); the primary players (the key companies); which sector is most suited to your services (banking, legal, engineering, etc.); what executives are the most appropriate for you to target (Marketing Directors, etc.). Understand the overall market will make you much more useful and convincing to your clients.

You only have to do a very few things right in your life, so long as you don’t do too many things wrong (Warren Buffett). Photo: Megan Jorgensen

To complete an effective market analysis, you can follow three phases:

• Desk-based research on Internet and in libraries. You’ll understand everything about a particular topic and you’ll come up with certain ideas about your potential market.
• Validation of findings through real situations: Test the ideas you developed from your desk research by interviewing real people. Ask them their views on your hypotheses.
• Conclusions: upgrade your desk-research with the extra information from the interviews, fine-tune the ideas and make conclusions.

Conduct company research

Before approaching suitable executives of a company, research the company, paying particular interest to the following:

• Company history, mission, branding, values announced
• Services the company offers, the business it performs, what makes it unique
• Annual accounts – if they are available – are particularly helpful in providing information on the company strategy and plans
• Competitors, one of the key areas of concern for your client companies, influencing their positioning in the market and their strategy.
• Executives whose profiles can be understood through Linkedin profiles or corporate news pieces. Understanding their biographies will influence how you position your services and help you build rapport and establish a good working relationship with them.

Rehearse your pitch

Think of any connection you have had with the executives’ biographies. You may have lived in the same city at some point or perhaps you worked at a competitor company in the past. Consider the particular pressures associated with their role in the enterprise (managing director: improving the profit and loss statement, expanding into new areas, increasing penetration of core business, meeting shareholder expectations; marketing director: finding cost-effective advertising, increasing revenues, measuring the impact of campaigns; human resources director: attracting, selecting and retaining employees, implementing effective processes, improving employee engagement, preventing legal disputes).