Fact Based Consulting E SASKorea Strategy. 1 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Table of Contents Fact.

Fact Based Consulting E SASKorea Strategy

1 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Table of Contents Fact Based Consulting Framework Frame the Issue Analyze Facts Communicate Solutions Appendix –Example Analysis Tools –Data Sources –Example Graphic Standards (SAS Version)

2 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Fact Based Consulting Framework Fact Based Consulting * Generate Hypotheses Fact Based Consulting Overview Analyze Facts Frame the Issue Communicate Solutions Structure Analysis * Define the Problem Determine Value Proposition Conduct Analysis Confirm Solution and Value Proposition Form the Pyramid Use Standard Graphics Format Methods Knowledge Management Tools

3 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Overview of Fact Based Consulting Framework What It IsWhat It Isn’t Framework that helps solve client problems and drive significant insight in an efficient and effective manner Tool that can be adapted to be applicable across all industry segments and consulting services Framework which can be used in part or as an all inclusive framework (individual components may be applicable while others are not) Tool which is applicable to support “significant” decision making throughout pursuit and service delivery phases of engagements (i.e., “questions” established in pursuit phase and major supporting decisions such as location of pilot roll-out) Methodology or route map A “one-size fits all” approach to problem solving Tool which must be followed step by step or not used at all Tool that must be applied at all times--creating “extra analysis” Fact Based Consulting Overview Source: E&Y Analysis

4 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Framing the Issue Helps Increase Likelihood of Reaching a Mutually Acceptable Resolution with Client Utilizes understanding of client situation to establish the issues that must be resolved to drive insight What is the “situation” that the client is currently facing? What problems or issues exist for the client based on their current situation? Early agreement on “business critical issues” that client wants to resolve “Our Understanding of Your Situation” in proposal phase Any time “significant” decision must be made during delivery phase Description Define the Problem Frame the Issue Key Questions Benefits Application Structure the AnalysisDetermine Value Proposition Process of developing hypotheses upon which analysis will be based What decisions does client need to make to address the identified issues? What has to be proved to determine correctness of hypotheses? Ensures richer insight in less time due to focused analysis Facilitates structuring communication “Approach” section in proposal phase Any time “significant” decision must be made during delivery phase Documentation of value that will be delivered to the client How will resolving client issues increase shareholder value? Allows opportunity to develop “value sharing” contracts with clients Early demonstration of realizable value “Fees” section in proposal phase Source: E&Y Analysis

5 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Problem Emerges From an Existing Situation Framing the Issue Source: The Minto Pyramid Principle, E&Y Analysis Lists the prospects Write the script Deliver presentation Starting Point/Opening Scene Selling industrial real estate Disturbing Event Quarterly sales projected to be down 10% Situation R1-Current State R2 - Desired State Threat toContinue 10% annual growthannual growth Question / Problem How can we ensure continued growth? Expand the list Revitalize the script Offer the delivery on videotape 10% annual sales growth for the past 30 years

6 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Gap Between “Desired Result” and “Actual Result” Is Problem that Needs Resolving “Thinking” Framework Supports Problem Definition First question that must be answered is--what is the situation facing the client? –starting point or opening scene –disturbing event Answering this question outlines actual result and directly leads to development of the potential complications facing the client Example of likely situation is “quarterly sales projected to be down 10%” Source: The Minto Principle, E&Y Analysis Resolution Answers the complication (i.e., what do we want to do instead--”R2”) Resolution Answers the complication (i.e., what do we want to do instead--”R2”) Complication Problem(s) or Issue(s) Emerge from the Existing Situation facing Client Complication Problem(s) or Issue(s) Emerge from the Existing Situation facing Client Situation Understanding Client Situation Is Critical to Properly “Defining the Problem” Situation Understanding Client Situation Is Critical to Properly “Defining the Problem” “Resolution” column clearly articulates the hypotheses to test “Complication” lays out the issues that must be resolved “Situation” column grounds the reader in the contextual facts Next question that must be answered is--what issues/ complications exist for the client given the current situation? (what don’t we like about current situation--”R1”) Answering this question directly leads to generating the hypotheses that must be tested Example of corresponding complication is “threat to annual growth” (leading to question how can we ensure continued growth?) Defining the Problem

7 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Hypotheses represent logically possible solutions that could be taken to solve a problem--provides the basis upon which analysis will be focused A clear understanding of the client’s problem is required to generate proper hypotheses –What is the “situation” that the client is currently facing? –What problems or issues exist for the client based on their current situation? Answering these questions facilitates development of hypotheses… …with the addition of external considerations such as “best practices” Generating hypotheses is the first step in employing a “Hypothesis Based Approach to Problem Solving” Hypotheses represent logically possible solutions that could be taken to solve a problem--provides the basis upon which analysis will be focused A clear understanding of the client’s problem is required to generate proper hypotheses –What is the “situation” that the client is currently facing? –What problems or issues exist for the client based on their current situation? Answering these questions facilitates development of hypotheses… …with the addition of external considerations such as “best practices” Generating hypotheses is the first step in employing a “Hypothesis Based Approach to Problem Solving” Structuring the Analysis Is All About Generating Hypotheses to Test Frames Potential Solutions to the “Defined Problems” Structuring the Analysis Is All About Generating Hypotheses to Test Generating Hypotheses Encourages Right-to- Left Thinking Hypothesized outcome Left-to-right thinking Right-to-left thinking Sets up question--what is the minimum I have to prove for hypothesis to be right? Analyze Data Generate Hypotheses Validate Hypotheses Gather Data Source: MG Taylor Design Shop Axioms, E&Y Analysis “You can’t get there from here… …But you can get here from there”

8 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Defining the Value Proposition for Client is Directly Linked to Increasing Shareholder Value Shareholder Value Levers Shareholder Value Levers NBD/Product Line Extensions/ and Market Expansion NBD/Product Line Extensions/ and Market Expansion Market Segmentation and Targeting Product/Service Positioning Improve Product Quality/ Performance Improve Services/Convenience Improve Price/Value Relationship Market Segmentation and Targeting Product/Service Positioning Improve Product Quality/ Performance Improve Services/Convenience Improve Price/Value Relationship Vertical/Horizontal Integration In-source/Out-source Joint-Ventures/Partnerships Vertical/Horizontal Integration In-source/Out-source Joint-Ventures/Partnerships Process Innovation Cost Structure (Fixed vs. Variable) Improve Design/Reduce Complexity Reduce Cycle Time/Waste Increase Utilization Process Innovation Cost Structure (Fixed vs. Variable) Improve Design/Reduce Complexity Reduce Cycle Time/Waste Increase Utilization Organizational Structure Roles, Responsibilities and Processes People Development Change Management Processes Performance Metrics/Incentives Decision Making Process Organizational Structure Roles, Responsibilities and Processes People Development Change Management Processes Performance Metrics/Incentives Decision Making Process Growth Effectiveness/ Efficiency Capital Optimization Expand Business Scope Expand Business Scope Improve/Change Value Proposition Improve/Change Value Proposition Improve Promotion/Advertising Effectiveness Enhance Availability of Products Build Brand Image/Strength New Improve Promotion/Advertising Effectiveness Enhance Availability of Products Build Brand Image/Strength New Acquire/Divest Hold/harvest Reinvest in Core Business Reposition Business Acquire/Divest Hold/harvest Reinvest in Core Business Reposition Business Review and Approval Performance Mgmt. & Capital Productivity Self-funding/Utilize Funds/Provide Funds Review and Approval Performance Mgmt. & Capital Productivity Self-funding/Utilize Funds/Provide Funds Strengthen Market Awareness Valuation of Customer Segments Retention Programs Segment Penetration Strategies Focus on Customer Satisfaction Valuation of Customer Segments Retention Programs Segment Penetration Strategies Focus on Customer Satisfaction Improve Competitiveness of Current Business Improve Competitiveness of Current Business Operational Organizational Rationalize/Allocate Capital Structure Risk Profile Solidify Customer Relationships Redesign Value-Chain Reduce Economic Costs and Activities Effectively Manage Assets Ability to Create Value-Based Strategies Ability to Implement Value- Based Strategies Rationalize B.U.’s Appropriate Capital Debt/Equity Off-Balance Sheet Debt/Equity Off-Balance Sheet Foreign Exchange Volatility/ Hedging/ and Liquidity Foreign Exchange Volatility/ Hedging/ and Liquidity Source: E&Y Analysis

9 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Analyzing the Facts Ensures Accurate Resolution of Client Issues Focused analysis to drive insight using knowledge management tools and defined methods to test hypotheses with facts To what extent are defined hypotheses accurate based on gathered facts? Utilization of knowledge management tools and defined methods increases-speed-to value in delivery of quality service Basing analysis on fact, improves likelihood of client accepting proposed solution High level analysis used in proposals to demonstrate type of detail analysis that will be performed during service delivery phase Detail analysis performed throughout service delivery phase Description Conduct Analysis Analyzing the Facts Key Questions Benefits Application Confirm the Solution and Value Proposition Resolution of client issues based results of analysis using facts the client understands and accepts Confirmation of the value proposition What is correct solution to client issues? Have we delivered value proposition previously defined? Client value is delivered in an expedited fashion supported by facts the client accepts Any time analysis is conducted Source: E&Y Analysis

10 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools GrowthEfficiencyCapital Mature markets Flat revenue growth Lack of differentiation Think Build Operate Applying Analysis within GS/02 Matrix Representative E&Y Opportunities –Growth strategy –Market expansion strategy –New business/product strategy “Likely” Analysis Methods –Customer value analysis –Demand analysis –Attractiveness-strength matrix* –Life cycle analysis –Market segmentation –Market sizing and growth –Substitution analysis Possible Tools and Sources –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –Institute for the Future –CBK analysts –External Research / Sources (see appendix) Representative E&Y Opportunities –Growth strategy –Market expansion strategy –New business/product strategy “Likely” Analysis Methods –Customer value analysis –Demand analysis –Attractiveness-strength matrix* –Life cycle analysis –Market segmentation –Market sizing and growth –Substitution analysis Possible Tools and Sources –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –Institute for the Future –CBK analysts –External Research / Sources (see appendix) * Example of analysis is included in appendix Source: E&Y Analysis Question: How should we change our strategy to grow our business?

11 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital Existing strategy Poor track record of implementation Think Build Operate Applying analysis within GS/02 matrix Representative E&Y Opportunities –New Product Development –Product/Solution Testing –Call Center System Development “Likely” Analysis –Focus groups –Resource requirements –Market segmentation –Substitution analysis –Financial ratio analysis* Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –External Research / Sources (see appendix) –Client records/performance reports Representative E&Y Opportunities –New Product Development –Product/Solution Testing –Call Center System Development “Likely” Analysis –Focus groups –Resource requirements –Market segmentation –Substitution analysis –Financial ratio analysis* Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How do we deploy our growth strategy?

12 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital High cycle times Inefficient systems New business direction Think Build Operate Applying analysis within GS/02 matrix Representative E&Y Opportunities –Packaged Enabled Reengineering –Transformation Planning and Implementation –Shared services –Transportation cost reduction “Likely” Analysis –Activity based costing –Competitive cost analysis –Cost driver analysis –Value chain analysis –Root cause analysis (Cause-Effect Diagrams)* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports Representative E&Y Opportunities –Packaged Enabled Reengineering –Transformation Planning and Implementation –Shared services –Transportation cost reduction “Likely” Analysis –Activity based costing –Competitive cost analysis –Cost driver analysis –Value chain analysis –Root cause analysis (Cause-Effect Diagrams)* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How do we achieve lower cost or shorter cycle time?

13 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital High cost structure Lack of required capabilities High cost structure Lack of required capabilities Think Build Operate Applying analysis within GS/02 matrix E&Y Opportunities –Process/Function Outsourcing –JV with client –Transformation Management “Likely” Analysis –Activity based costing –Cost driver analysis –Value chain analysis –Root cause analysis –Profitability trees* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports E&Y Opportunities –Process/Function Outsourcing –JV with client –Transformation Management “Likely” Analysis –Activity based costing –Cost driver analysis –Value chain analysis –Root cause analysis –Profitability trees* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How can we reduce operating costs or cycle times through joint ventures or outsourcing?

14 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute High cost of capital Lack of available capital High cost of capital Lack of available capital Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital Think Build Operate Applying analysis within GS/02 matrix E&Y Opportunities –Merger / Acquisition / Divestiture Assistance –Capital/Core Competency Rationalization –Post Merger Integration “Likely” Analysis –S.W.O.T. analysis* –Core competency analysis –Critical success factors* –Five forces analysis* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports E&Y Opportunities –Merger / Acquisition / Divestiture Assistance –Capital/Core Competency Rationalization –Post Merger Integration “Likely” Analysis –S.W.O.T. analysis* –Core competency analysis –Critical success factors* –Five forces analysis* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How can we create more capital?

15 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Confirming the Solution and Value Proposition Involves Validating Hypotheses Take many different cuts at analyzing data to develop insights Involve key members throughout the organization as much as possible in analysis Acknowledge that there is no such thing as non-existent data –Requires creativity –Need round-about techniques Determine whether analyses support hypotheses –Be objective -- you may have a bias to support your hypotheses because you generated them –Make sure that analyses are not inconclusive –Helps to get additional perspectives If inconclusive, pursue other analyses or data sources Take many different cuts at analyzing data to develop insights Involve key members throughout the organization as much as possible in analysis Acknowledge that there is no such thing as non-existent data –Requires creativity –Need round-about techniques Determine whether analyses support hypotheses –Be objective -- you may have a bias to support your hypotheses because you generated them –Make sure that analyses are not inconclusive –Helps to get additional perspectives If inconclusive, pursue other analyses or data sources Tips to Follow when Validating Hypotheses The Process is Iterative Analysis Builds Until a Complete Story is Told 0 20 40 60 80 100 1st Pass2nd Pass3rd PassFinal Pass Ability to Execute Financial Potential Competitive Position Market Attractiveness Analyze Data Generate Hypotheses Validate Hypotheses Gather Data Source: E&Y Analysis

16 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Communicating Solutions Can Be Improved By Utilizing Two Methods Method of organizing thoughts to communicate a cohesive story that focuses on delivering significant insight What is required story-line that links fact based analysis and proven hypotheses? Complements thought processes of human mind... …Thus increasing the readability of presentations Pyramid Logic Structure should be applied to all deliverables regardless of type Description Form the Pyramid Communicating Solutions Key Questions Benefits Application Use Standard Graphics Format A defined set of guidelines that the firm uses on all deliverables How should story be presented to ensure a consistent look and feel in marketplace? Presents a consistent “look and feel” to deliverables in the marketplace--supports the development of a “branded” image Increases the amount of time consultants can spend solving problems--time is not wasted on deciding how deliverables should be formatted Graphic standards should be applied to all standard “service” deliverables-- appropriate to veer away from standards for proposals and “lecture hall” presentations as necessary Source: E&Y Analysis

17 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Forming the Pyramid Links Fact Based Analysis and Hypothesized Resolution to Create Story-Line Pyramid Logic Structure Resolution Situation Complication Hypothesized resolution to the current situation and complication Story-line links fact based analysis and hypothesized resolution Supporting facts and exhibits Source: E&Y Analysis Main Supporting Ideas Sub Supporting Ideas

18 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Forming the Pyramid “Firm Implications” Example Pyramid Logic Structure Resolution Situation Complication Story-line links fact based analysis and hypothesized resolution Supporting facts and exhibits Source: E&Y Analysis Main Supporting Ideas Sub Supporting Ideas E&Y historic growth outpaced industry and competitors Future growth will be more difficult than in the past Create business opportunities rather than respond to them How? 21st Century Initiatives Leverage E&Y SME & Knowledge Develop new competencies Fact Based Cons. Solution Sets Value Exchange What?

19 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute E&Y needs to focus on creating opportunities Fact base consulting will provide insights needed to identify opportunities Focus should be made on integrating service offerings into “products” Several initiatives to improve product attributes -Solution Sets -Fact base consulting -Value Exchange -Knowledge Management -Blur New sets of competencies will be required focused on managing and creating new businesses GS/O2 goals will require E&Y to continue to take share However, share gains will be more difficult in future -Fewer small players will remain -E&Y undifferentiated with larger players Industry growth rates are uncertain -Analysts are bullish while E&Y partners are cautious -Product lifecycles are shrinking Future growth will be derived from outsourcing segment -Competition will intensify as new competitors enter the market Clients demanding more value from consultants Consulting market is large and growing No one firm controls the market E&Y growth primarily derived by ERP and SD&I Many consulting firms have experienced significant growth Growth driven by adding people and to some extent raising prices E&Y success was driven by industry growth and its ability to take share from smaller players Presenting the pyramid in the E&Y format E&Y historic growth outpaced industry and competitors Create business opportunities rather than respond to them Future growth will be more difficult than the past SituationComplicationResolution E&Y Performance Has Significantly Outpaced Industry Future Growth Will Be More Difficult

20 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Significant Benefits Exist to Utilizing Consistent Graphics Standard Requires Tightly Managed Decisions and Monitoring Key Decisions –Definition of the types of slides –Guidelines for slide content  text slides  charts/graphs  universal guidelines –Guidelines for managing production –File naming convention Monitoring –Initial training is required of consultants and graphics personnel –Process of monitoring compliance must be established to build and maintain a strong brand Key Decisions –Definition of the types of slides –Guidelines for slide content  text slides  charts/graphs  universal guidelines –Guidelines for managing production –File naming convention Monitoring –Initial training is required of consultants and graphics personnel –Process of monitoring compliance must be established to build and maintain a strong brand Consistent “look and feel” in the marketplace Ability to build brand awareness in the marketplace Provides consultants more time to “solve problems” rather than worrying about presentation Easier reusability--”cut and paste” of components is easier Consistent “look and feel” in the marketplace Ability to build brand awareness in the marketplace Provides consultants more time to “solve problems” rather than worrying about presentation Easier reusability--”cut and paste” of components is easier Significant Benefits exist from Implementing a Consistent Graphics Standard... …Requires Tightly Managed Decisions and Monitoring NOTE: See example of graphics standards for SAS in appendix Source: E&Y Analysis

21 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Fact Based Consulting Framework Must be “Taken to Action”... Fact Based Consulting Summary FRAME the Decision ANALYZE the Facts COMMUNICATE the Solution TAKE to Action ValueValue

22 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute …And Applied Throughout Account Lifecycle Fact Based Consulting Summary PursueAssessDevelop PilotImplement First sales call/ create opportunity Close the Deal Project start- up Solution Design (People, Process, Tech- nology) Pilot Design Implementation Design F F A A C C T T Value Proposition, Confirmation and Delivery F F A A C C T T F F A A C C T T

24 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Framing the Issue Helps Increase Likelihood of Reaching a Mutually Acceptable Resolution with Client Utilizes understanding of client situation to establish the issues that must be resolved to drive insight What is the “situation” that the client is currently facing? What problems or issues exist for the client based on their current situation? Early agreement on “business critical issues” that client wants to resolve “Our Understanding of Your Situation” in proposal phase Any time “significant” decision must be made during delivery phase Description Define the Problem Frame the Issue Key Questions Benefits Application Structure the AnalysisDetermine Value Proposition Process of developing hypotheses upon which analysis will be based What decisions does client need to make to address the identified issues? What has to be proved to determine correctness of hypotheses? Ensures richer insight in less time due to focused analysis Facilitates structuring communication “Approach” section in proposal phase Any time “significant” decision must be made during delivery phase Documentation of value that will be delivered to the client How will resolving client issues increase shareholder value? Allows opportunity to develop “value sharing” contracts with clients Early demonstration of realizable value “Fees” section in proposal phase Source: E&Y Analysis Framing the Issue

25 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Problem Emerges From an Existing Situation Framing the Issue Source: The Minto Pyramid Principle, E&Y Analysis Lists the prospects Write the script Deliver presentation Starting Point/Opening Scene Selling industrial real estate Disturbing Event Quarterly sales projected to be down 10% Situation R1-Current State R2 - Desired State Threat toContinue 10% annual growthannual growth Question / Problem How can we ensure continued growth? Expand the list Revitalize the script Offer the delivery on videotape 10% annual sales growth for the past 30 years

26 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Gap Between “Desired Result” and “Actual Result” Is Problem that Needs Resolving “Thinking” Framework Supports Problem Definition First question that must be answered is--what is the situation facing the client? –starting point or opening scene –disturbing event Answering this question outlines actual result and directly leads to development of the potential complications facing the client Example of likely situation is “quarterly sales projected to be down 10%” Source: The Minto Principle, E&Y Analysis Resolution Answers the complication (i.e., what do we want to do instead--”R2”) Resolution Answers the complication (i.e., what do we want to do instead--”R2”) Complication Problem(s) or Issue(s) Emerge from the Existing Situation facing Client Complication Problem(s) or Issue(s) Emerge from the Existing Situation facing Client Situation Understanding Client Situation Is Critical to Properly “Defining the Problem” Situation Understanding Client Situation Is Critical to Properly “Defining the Problem” “Resolution” column clearly articulates the hypotheses to test “Complication” lays out the issues that must be resolved “Situation” column grounds the reader in the contextual facts Next question that must be answered is--what issues/ complications exist for the client given the current situation? (what don’t we like about current situation--”R1”) Answering this question directly leads to generating the hypotheses that must be tested Example of corresponding complication is “threat to annual growth” (leading to question how can we ensure continued growth?) Defining the Problem

28 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Hypotheses represent logically possible solutions that could be taken to solve a problem--provides the basis upon which analysis will be focused A clear understanding of the client’s problem is required to generate proper hypotheses –What is the “situation” that the client is currently facing? –What problems or issues exist for the client based on their current situation? Answering these questions facilitates development of hypotheses… …with the addition of external considerations such as “best practices” Generating hypotheses is the first step in employing a “Hypothesis Based Approach to Problem Solving” Hypotheses represent logically possible solutions that could be taken to solve a problem--provides the basis upon which analysis will be focused A clear understanding of the client’s problem is required to generate proper hypotheses –What is the “situation” that the client is currently facing? –What problems or issues exist for the client based on their current situation? Answering these questions facilitates development of hypotheses… …with the addition of external considerations such as “best practices” Generating hypotheses is the first step in employing a “Hypothesis Based Approach to Problem Solving” Structuring the Analysis Is All About Generating Hypotheses to Test Frames Potential Solutions to the “Defined Problems” Structuring the Analysis Is All About Generating Hypotheses to Test Generating Hypotheses Encourages Right-to- Left Thinking Hypothesized outcome Left-to-right thinking Right-to-left thinking Sets up question--what is the minimum I have to prove for hypothesis to be right? Analyze Data Generate Hypotheses Validate Hypotheses Gather Data Source: MG Taylor Design Shop Axioms, E&Y Analysis “You can’t get there from here… …But you can get here from there” Framing the Issue

29 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Hypothesis Based Approach Drives Speed-to-Value Focuses the Type and Depth of Analysis Performed Goal Triage: early inclusion/ exclusion of hypotheses –Disproving often as valuable as proving (e.g., “If it’s not A, B or C, it must be D”) Triage: early inclusion/ exclusion of hypotheses –Disproving often as valuable as proving (e.g., “If it’s not A, B or C, it must be D”) Process Identify likely viable outcomes or consequences of each hypothesis –Test those which are easiest to measure –Use results to drive triage Identify likely viable outcomes or consequences of each hypothesis –Test those which are easiest to measure –Use results to drive triage Outcome Early focus on those hypotheses most likely to deliver value provide richer insight in less time Push hypotheses generation as far as possible without gathering additional data -Testing downstream hypotheses can allow you to eliminate entire classes of data gathering and analysis Push hypotheses generation as far as possible without gathering additional data -Testing downstream hypotheses can allow you to eliminate entire classes of data gathering and analysis Framing the Issue Source: E&Y Analysis

30 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Hypothesis Driven Approach Can Be Applied Throughout Project Lifecycle to Frame Issues “Our Understanding of Your Situation” -strengthens articulation of our knowledge of the client’s industry (i.e., What is the situation that the client is currently facing?) -provides opportunity to gain alignment on the “real” issues facing the client (i.e., what problems or issues exist for the client given their current situation?) -clearly outlines the hypotheses that will be tested during the engagement (i.e., what decisions do we want the client to make to address the identified issues?) Any time a decision needs to be made -decisions will have to be made to support the decision making process for the overall major hypotheses laid out for the project will requires (e.g., real estate costs to support shared service center are lowest in Cleveland, Ohio) -unexpected decisions will arise as a result performing our work (e.g., system interface fails and we must determine why--hypothesizing will streamline identification of problem) Framing the Issue Pursuit Phase Service Delivery Phase Source: E&Y Analysis

31 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute You can have several hypotheses in parallel -- á la scenario analysis Hypotheses Are Generated By Following A Cohesive Thought Process Articulate any presumptions, assumptions and insights, as well as the “proof” or “evidence” driving your suspicions –initially, may be driven primarily by logic –over time, should be substantiated by various data and analyses Assemble these hypotheses into a cohesive story –ensure that hypotheses are consistent with each other –articulate key take-aways if hypotheses are valid -- the “so what” Identify information you need to prove or disprove your hypotheses –highlight analyses and data desired –identify potential data/analyses sources Document hypotheses and “evidence” –create storyboard –drive for a presentation format as much as possible -- the presentation will change over time, but you will be prepared to present at all times Framing the Issue Source: E&Y Analysis

32 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Forming the Resolution (Hypothesis Generation) Can Be Made “Easier” By Utilizing Key Frameworks * Example presented in appendix Source: E&Y Analysis Resolution Several “Thinking” Frameworks Can Be Used to Facilitate Hypothesis Generation Resolution Several “Thinking” Frameworks Can Be Used to Facilitate Hypothesis Generation Complication Problem(s) or Issue(s) Emerge from the Existing Situation facing Client Complication Problem(s) or Issue(s) Emerge from the Existing Situation facing Client Situation Understanding Client Situation Is Critical to Properly “Defining the Problem” Situation Understanding Client Situation Is Critical to Properly “Defining the Problem” Framing the Issue “Resolution” column clearly articulates the hypotheses to test “Complication” lays out the issues that must be resolved “Situation” column grounds the reader in the contextual facts Situation-Complication- Resolution (SCR) framework facilitates generation of the “right” hypotheses (i.e., “resolution” captures hypotheses to be tested) Resolution can be intuitively determined if situation and complication are framed correctly Example of resolution is “growth strategy must be developed to combat threat to annual growth” Structuring the Analysis

34 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Defining the Value Proposition for Client is Directly Linked to Increasing Shareholder Value Shareholder Value Levers Shareholder Value Levers Growth Effectiveness/ Efficiency Capital Optimization Source: E&Y Analysis Framing the Issue Value Drivers (Growth, Efficiency, and Capital Optimization) are directly linked to GS/02 “TBO” Matrix

35 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Defining the Value Proposition for Client is Directly Linked to Increasing Shareholder Value (Cont.) Shareholder Value Levers Shareholder Value Levers NBD/Product Line Extensions/ and Market Expansion NBD/Product Line Extensions/ and Market Expansion Market Segmentation and Targeting Product/Service Positioning Improve Product Quality/ Performance Improve Services/Convenience Improve Price/Value Relationship Market Segmentation and Targeting Product/Service Positioning Improve Product Quality/ Performance Improve Services/Convenience Improve Price/Value Relationship Vertical/Horizontal Integration In-source/Out-source Joint-Ventures/Partnerships Vertical/Horizontal Integration In-source/Out-source Joint-Ventures/Partnerships Process Innovation Cost Structure (Fixed vs. Variable) Improve Design/Reduce Complexity Reduce Cycle Time/Waste Increase Utilization Process Innovation Cost Structure (Fixed vs. Variable) Improve Design/Reduce Complexity Reduce Cycle Time/Waste Increase Utilization Organizational Structure Roles, Responsibilities and Processes People Development Change Management Processes Performance Metrics/Incentives Decision Making Process Organizational Structure Roles, Responsibilities and Processes People Development Change Management Processes Performance Metrics/Incentives Decision Making Process Growth Effectiveness/ Efficiency Capital Optimization Expand Business Scope Expand Business Scope Improve/Change Value Proposition Improve/Change Value Proposition Improve Promotion/Advertising Effectiveness Enhance Availability of Products Build Brand Image/Strength New Improve Promotion/Advertising Effectiveness Enhance Availability of Products Build Brand Image/Strength New Acquire/Divest Hold/harvest Reinvest in Core Business Reposition Business Acquire/Divest Hold/harvest Reinvest in Core Business Reposition Business Review and Approval Performance Mgmt. & Capital Productivity Self-funding/Utilize Funds/Provide Funds Review and Approval Performance Mgmt. & Capital Productivity Self-funding/Utilize Funds/Provide Funds Strengthen Market Awareness Valuation of Customer Segments Retention Programs Segment Penetration Strategies Focus on Customer Satisfaction Valuation of Customer Segments Retention Programs Segment Penetration Strategies Focus on Customer Satisfaction Improve Competitiveness of Current Business Improve Competitiveness of Current Business Operational Organizational Rationalize/Allocate Capital Structure Risk Profile Solidify Customer Relationships Redesign Value-Chain Reduce Economic Costs and Activities Effectively Manage Assets Ability to Create Value-Based Strategies Ability to Implement Value- Based Strategies Rationalize B.U.’s Appropriate Capital Debt/Equity Off-Balance Sheet Debt/Equity Off-Balance Sheet Foreign Exchange Volatility/ Hedging/ and Liquidity Foreign Exchange Volatility/ Hedging/ and Liquidity Source: E&Y Analysis Framing the Issue

37 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Analyzing the Facts Ensures Accurate Resolution of Client Issues Focused analysis to drive insight using knowledge management tools and defined methods to test hypotheses with facts To what extent are defined hypotheses accurate based on gathered facts? Utilization of knowledge management tools and defined methods increases-speed-to value in delivery of quality service Basing analysis on fact, improves likelihood of client accepting proposed solution High level analysis used in proposals to demonstrate type of detail analysis that will be performed during service delivery phase Detail analysis performed throughout service delivery phase Description Conduct Analysis Analyzing the Facts Key Questions Benefits Application Confirm the Solution and Value Proposition Resolution of client issues based results of analysis using facts the client understands and accepts Confirmation of the value proposition What is correct solution to client issues? Have we delivered value proposition previously defined? Client value is delivered in an expedited fashion supported by facts the client accepts Any time analysis is conducted Source: E&Y Analysis

38 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute With Properly Framed Hypotheses, Next Step Is to Gather Data to Analyze Grounded in Fact Insight generation requires -deciding what’s important -finding ways to measure it -defining and quantifying the linkages Access to data is prerequisite -find out what is available -grab some overview data to begin developing your knowledge -access associations early -- they are a rich source of data and information -be sensitive to lead times -- get requests in early for data Multiple sources always required -sources rarely agree -use them to triangulate on insights and answers Data gathering requires creativity and persistence -very rare that something you want to know will be cleanly and properly measured by a single authoritative source to which you have access Insight generation requires -deciding what’s important -finding ways to measure it -defining and quantifying the linkages Access to data is prerequisite -find out what is available -grab some overview data to begin developing your knowledge -access associations early -- they are a rich source of data and information -be sensitive to lead times -- get requests in early for data Multiple sources always required -sources rarely agree -use them to triangulate on insights and answers Data gathering requires creativity and persistence -very rare that something you want to know will be cleanly and properly measured by a single authoritative source to which you have access At the start up of the analysis stage, gather a core set of general information –competitor annual reports, 10Ks –analyst reports on competitors –industry overview –key subject matter expertise Identify data sources inside and outside the organization Structure data gathering in a way that enables you to quickly prove or disprove your hypotheses –drive toward giving sources a slide which shows the desired output, as well as format –ask for data in a way that is consistent with your story- line Recognize the iterative nature of data gathering -- leave doors open to return to data sources Get an understanding of what the data means –understand critical assumptions –get context of who, when, and how data was collected and analyzed Acknowledge data sources immediately upon receipt of data and incorporate data sources into presentation At the start up of the analysis stage, gather a core set of general information –competitor annual reports, 10Ks –analyst reports on competitors –industry overview –key subject matter expertise Identify data sources inside and outside the organization Structure data gathering in a way that enables you to quickly prove or disprove your hypotheses –drive toward giving sources a slide which shows the desired output, as well as format –ask for data in a way that is consistent with your story- line Recognize the iterative nature of data gathering -- leave doors open to return to data sources Get an understanding of what the data means –understand critical assumptions –get context of who, when, and how data was collected and analyzed Acknowledge data sources immediately upon receipt of data and incorporate data sources into presentation Critical Guidelines Ensure that Data Gathered Is Grounded in Fact Critical Tips to Data Gathering Ensures Analysis Is Thorough Analyze Facts Source: E&Y Analysis

39 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Combines Two Very Important Principles Strategic analysis tools (e.g., Porter’s Five Forces, substitution analysis, demand analysis) Operational analysis tools (e.g., activity based costing, linear programming ) Methodologies Fact based analysis of industries and accounts (e.g., MEA, SBFA) Global Target Account Watches Global 200 database Goldman Sachs database Market Insights EY/InfoLink EY Excel Link Institute for the Future CBK analysts External Research / Sources (see appendix) Rapid/FX Utilizing Developed Methods* Analyze Facts Conducting Analysis * Methods explained in Powerpacks, Fusion, etc. Source: E&Y Analysis Leveraging Knowledge Management Tools

40 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Knowledge Management Tools Can Help Expedite Analysis Description and Use Analyze Facts Self Service Goldman Sacks database Market Insights EY/Infolink EY/Excel Link Institute for the Future Assisted Service CBK analysts Research –Goldman Sacks –Gardner Group –Industry associations Rapid/FX CBK Tool / Resource TO BE COMPLETED CBK to Complete Source: E&Y Analysis

41 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools GrowthEfficiencyCapital Mature markets Flat revenue growth Lack of differentiation Think Build Operate Applying Analysis within GS/02 Matrix Representative E&Y Opportunities –Growth strategy –Market expansion strategy –New business/product strategy “Likely” Analysis Methods –Customer value analysis –Demand analysis –Attractiveness-strength matrix* –Life cycle analysis –Market segmentation –Market sizing and growth –Substitution analysis Possible Tools and Sources –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –Institute for the Future –CBK analysts –External Research / Sources (see appendix) Representative E&Y Opportunities –Growth strategy –Market expansion strategy –New business/product strategy “Likely” Analysis Methods –Customer value analysis –Demand analysis –Attractiveness-strength matrix* –Life cycle analysis –Market segmentation –Market sizing and growth –Substitution analysis Possible Tools and Sources –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –Institute for the Future –CBK analysts –External Research / Sources (see appendix) * Example of analysis is included in appendix Source: E&Y Analysis Question: How should we change our strategy to grow our business?

42 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital Existing strategy Poor track record of implementation Think Build Operate Applying analysis within GS/02 matrix Representative E&Y Opportunities –New Product Development –Product/Solution Testing –Call Center System Development “Likely” Analysis –Focus groups –Resource requirements –Market segmentation –Substitution analysis –Financial ratio analysis* Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –External Research / Sources (see appendix) –Client records/performance reports Representative E&Y Opportunities –New Product Development –Product/Solution Testing –Call Center System Development “Likely” Analysis –Focus groups –Resource requirements –Market segmentation –Substitution analysis –Financial ratio analysis* Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How do we deploy our growth strategy?

43 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital High cycle times Inefficient systems New business direction Think Build Operate Applying analysis within GS/02 matrix Representative E&Y Opportunities –Packaged Enabled Reengineering –Transformation Planning and Implementation –Shared services –Transportation cost reduction “Likely” Analysis –Activity based costing –Competitive cost analysis –Cost driver analysis –Value chain analysis –Root cause analysis (Cause-Effect Diagrams)* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports Representative E&Y Opportunities –Packaged Enabled Reengineering –Transformation Planning and Implementation –Shared services –Transportation cost reduction “Likely” Analysis –Activity based costing –Competitive cost analysis –Cost driver analysis –Value chain analysis –Root cause analysis (Cause-Effect Diagrams)* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How do we achieve lower cost or shorter cycle time?

44 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital High cost structure Lack of required capabilities High cost structure Lack of required capabilities Think Build Operate Applying analysis within GS/02 matrix E&Y Opportunities –Process/Function Outsourcing –JV with client –Transformation Management “Likely” Analysis –Activity based costing –Cost driver analysis –Value chain analysis –Root cause analysis –Profitability trees* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports E&Y Opportunities –Process/Function Outsourcing –JV with client –Transformation Management “Likely” Analysis –Activity based costing –Cost driver analysis –Value chain analysis –Root cause analysis –Profitability trees* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How can we reduce operating costs or cycle times through joint ventures or outsourcing?

45 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute High cost of capital Lack of available capital High cost of capital Lack of available capital Conducting Analysis Can Be Linked to GS/02 Matrix and Facilitated By Available Methods and Tools (Cont.) GrowthEfficiencyCapital Think Build Operate Applying analysis within GS/02 matrix E&Y Opportunities –Merger / Acquisition / Divestiture Assistance –Capital/Core Competency Rationalization –Post Merger Integration “Likely” Analysis –S.W.O.T. analysis* –Core competency analysis –Critical success factors* –Five forces analysis* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports E&Y Opportunities –Merger / Acquisition / Divestiture Assistance –Capital/Core Competency Rationalization –Post Merger Integration “Likely” Analysis –S.W.O.T. analysis* –Core competency analysis –Critical success factors* –Five forces analysis* –Regulatory consideration analysis Sources and Tools –Goldman Sachs database –Market Insights –EY/InfoLink –EY Excel Link –CBK analysts –EY/Kweb Search Engine (Best Practices, Similar Deliverables) –Rapid/FX –External Research / Sources (see appendix) –Client records/performance reports * Example of analysis is included in appendix Source: E&Y Analysis Question: How can we create more capital?

46 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Confirming the Solution and Value Proposition Involves Validating Hypotheses Take many different cuts at analyzing data to develop insights Involve key members throughout the organization as much as possible in analysis Acknowledge that there is no such thing as non-existent data –Requires creativity –Need round-about techniques Determine whether analyses support hypotheses –Be objective -- you may have a bias to support your hypotheses because you generated them –Make sure that analyses are not inconclusive –Helps to get additional perspectives If inconclusive, pursue other analyses or data sources Take many different cuts at analyzing data to develop insights Involve key members throughout the organization as much as possible in analysis Acknowledge that there is no such thing as non-existent data –Requires creativity –Need round-about techniques Determine whether analyses support hypotheses –Be objective -- you may have a bias to support your hypotheses because you generated them –Make sure that analyses are not inconclusive –Helps to get additional perspectives If inconclusive, pursue other analyses or data sources Tips to Follow when Validating Hypotheses The Process is Iterative Analysis Builds Until a Complete Story is Told 0 20 40 60 80 100 1st Pass2nd Pass3rd PassFinal Pass Ability to Execute Financial Potential Competitive Position Market Attractiveness Analyze Data Generate Hypotheses Validate Hypotheses Gather Data Source: E&Y Analysis Analyze Facts

47 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Table of Contents Fact Based Consulting Framework Frame the Issue Analyze Facts Communicate Solutions Appendix –Example Analysis Tools –Data Sources –Example Graphics Standards (SAS Version)

48 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Communicating Solutions Can Be Improved By Utilizing Two Methods Method of organizing thoughts to communicate a cohesive story that focuses on delivering significant insight What is required story-line that links fact based analysis and proven hypotheses? Complements thought processes of human mind... …Thus increasing the readability of presentations Pyramid Logic Structure should be applied to all deliverables regardless of type Description Form the Pyramid Communicating Solutions Key Questions Benefits Application Use Standard Graphics Format A defined set of guidelines that the firm uses on all deliverables How should story be presented to ensure a consistent look and feel in marketplace? Presents a consistent “look and feel” to deliverables in the marketplace--supports the development of a “branded” image Increases the amount of time consultants can spend solving problems--time is not wasted on deciding how deliverables should be formatted Graphic standards should be applied to all standard “service” deliverables-- appropriate to veer away from standards for proposals and “lecture hall” presentations as necessary Source: E&Y Analysis Communicating Solutions

49 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Traditionally, E&Y Presentations Have Lacked a Cohesive Theme E&Y presentations are typically a summary of fact-based analysis -Major sections of document are not clearly linked together -Individual slides are not clearly linked to each other or a common theme -Individual slides lack a clearly defined or articulated main point or “headline” Communicating Solutions

50 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute E&Y Presentations Require a Cohesive Theme To Be Persuasive and Inspire Action E&Y’s presentations should make a strong recommendation, provide facts and conclusions in support of the desired option, and present the rationale for not selecting other alternatives E&Y’s presentations should create client alignment around our recommendation and convince the client that action is necessary E&Y’s presentations should convey information to build client knowledge regarding the desired outcome E&Y’s presentations should become an integral part of the client’s decision- making process Communicating Solutions

51 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute A Hypothesis-Driven Logic Flow Will Help Create this Cohesive Theme Directs the reader’s attention to the question that does or should exist in his/her mind States a hypothesis to answer that question Develops the context for the more detailed information to come Draw logical conclusions “Prove” the hypothesis Build the logic to support the hypothesis –Introduce facts –Draw conclusions Communicating Solutions Summarize the Argument Developing the Supporting Arguments Introduce the Hypothesis

52 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute This Hypothesis-Driven Logic Flow Is Referred to as the Pyramid Logic Structure Supports Hypotheses Both Vertically and Horizontally Communicating Solutions Vertical Relationship Rules Ideas at any level in the pyramid must always be summaries of the ideas grouped below them Ideas with support always have at least two supporting points Supporting points must be necessary and sufficient to logically "prove" the summary point Horizontal Relationship Rules Ideas in each grouping must be the same type of idea (e.g., inductive, deductive) Ideas should be grouped with similar ideas, and each grouping of ideas should be distinct Each grouping of ideas should be comprehensive, and the logic used in across groupings must be consistent Horizontal Relationships Vertical Relationships * The pyramid will have as many levels as needed to support the logical hierarchy Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996)

53 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Forming the Pyramid Links Fact Based Analysis and Hypothesized Resolution to Create Story-Line Pyramid Logic Structure Resolution Situation Complication Hypothesized resolution to the current situation and complication Story-line links fact based analysis and hypothesized resolution Supporting facts and exhibits Source: E&Y Analysis Main Supporting Ideas Sub Supporting Ideas Communicating Solutions

54 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Vertical Relationships Support the Hypothesis by Establishing a Question/Answer Dialogue Example of Vertically Related Ideas Decline in traditional business RBOCs need to improve their growth prospects WHY?WHY? WHY? Similar to cellular Systems in place Increased competition Need for comm. Lower cost than cellular Market trials Access to customers RBOCs Should Invest in the PCS Market WHY? PCS market is extension of RBOCs business PCS market will grow faster than the industry Communicating Solutions Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996)

55 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Horizontal Relationships Support the Summary Point by Logically Relating Facts or Ideas Example of a Horizontal Relationship The fast-growing PCS market provides a good investment opportunity for the RBOCs RBOCs need to improve their growth prospects PCS market will grow faster than the industry PCS market is natural extension of RBOCs business Therefore, RBOCs should invest in the PCS market Communicating Solutions Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996)

56 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Pyramid Logic Structure Complements the Thought Processes of the Human Mind The mind instinctively sorts information into distinctive pyramidal groupings in order to comprehend it. A grouping of ideas is easier to comprehend if it arrives presorted into its pyramid. Thus, every written document should be deliberately structured to form a pyramid of ideas. Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996); George A. Miller, "The Magical Number Seven, Plus or Minus Two," The Psychology of Communication: Seven Essays, ed. George A. Miller (PA: Basic Books, 1967) The mind attempts to impose order on everything it perceives The mind tends to consider any sequence of things that occur together as belonging together (this also applies to listening to or reading ideas) The pattern for ideas is shaped like a pyramid -The pyramid states the logic of the relationships of ideas  Ideas are grouped into a logical hierarchy and the logic of the relationships is shown  A thought at one level suggests the thoughts below it  Thoughts at one level suggest the idea above them It meets the mind's needs to stop at the "magical" number seven -There is a limit to the number of ideas a person can comprehend at any one time -The mind cannot hold more than about seven items in its short-term memory at any one time (some can hold as many as nine, others can hold only five -- a convenient number is three) Communicating Solutions

57 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute All Mental Processes Utilize Pyramids To Categorize Information Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996) A grouping of ideas is easier to comprehend if it arrives presorted into its pyramid. All mental processes (e.g., thinking, remembering, problem-solving) utilize the grouping and summarizing process Information in the mind can be considered as organized into a large conglomeration of related pyramids To communicate most easily to another mind, it is best to ensure that the message fits somewhere into existing pyramids -The reader can clearly grasp the reasoning -The reader can focus more on whether he/she agrees with it than on trying to comprehend it -The reader can more easily raise logical questions regarding the message Thus, every written document should be deliberately structured to form a pyramid of ideas. The mind instinctively sorts information into distinctive pyramidal groupings in order to comprehend it. Communicating Solutions

58 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Effectiveness of Communication Is Improved by the Pyramid Logic Structure Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996) The mind instinctively sorts information into distinctive pyramidal groupings in order to comprehend it. A grouping of ideas is easier to comprehend if it arrives presorted into its pyramid. Thus, every written document should be deliberately structured to form a pyramid of ideas. The structure helps the reader to "see" the groupings of ideas the same way the author intended, increasing communication effectiveness Use of the pyramid structure provides other benefits for the writer and reader as well -Reduces time needed to produce a quality final draft -Decreases the length of final drafts -Ensures that the argument and support are complete and logical Communicating Solutions

59 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Thus, the Pyramid Logic Structure Results in a Well- Organized, Persuasive Presentation Pyramid Logic Structure Supporting facts Sub-supporting ideas Main supporting ideas Hypothesized resolution to the current situation and complication Presentation Communicating Solutions Horizontal Relationships Vertical Relationships

60 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Using the Pyramid Logic Structure Requires Separating the “Thinking” and “Writing” Processes Complete the thinking and develop logical structure Write the document CRYSTAL CLEAR May 1, 1991 Contents Introduction Chapter 1 Use a format which reflects the logical structure and appears professional Separate Thinking and Writing Processes Communicating Solutions

61 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute When “Thinking” About a Presentation, Use the Pyramid Logic Structure To Create an Outline Hypothesis: Mining Co. must simultaneously reposition itself for near-term survival and long-term success I.Purpose of this document II.Overview / Summary A.Desired outcomes for “Strategy Retreat” at the ASE B.Primary “Strawmodel” is review of Mining Co.’s current situation C.“Strawmodels” augment ASE facilitation process D.Mining Co. facing dramatically changing market fundamentals -- focused strategy required for future survival and success III.Mining Co.’s current situation A.Canadian mining industry changing dramatically B.Significant industry changes -- competition increasing has a global focus C.Significant industry changes -- large deals continue to drive industry consolidation D.Significant industry changes -- multitude of financial resources required for site development resulting in pooling of resources E.Significant industry changes -- competition for assets has been aggressive F.Hypothesis: Mining Co. must simultaneously reposition itself for near-term survival and long-term success IX.Strategic option evaluation / selection criteria Illustrative Breaker Slides “Vertical Relationships” Slide Titles “Horizontal Relationships” Communicating Recommendations

62 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Using this Outline, a Storyboard Should Be Created To Begin “Writing” the Presentation Section Introduction / Executive Summary Main Story Next Steps Appendices Executive SummaryTitle or Summary Story FindingsRecommendationsConclusions Summary Story Next Steps Analysis Detail Strategic Options Industry / Competitor Customer / Market Cost Market Research Detail Market Segments “Vertical Relationships” “Horizontal Relationships” Communicating Solutions

63 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Introduction Should Convey the Situation, Complication and Resolution * There is only one overall hypothesis to a document -- if there are two, they must be related. Situation: -Revenue growth for the Regional Bell Operating Companies (RBOCs) has been slowing over the past five years -The majority of the RBOCs revenues come from access fees paid by long-distance service providers Complication / Question: -The FCC is considering an auction of additional radio spectrum to be used for short- distance cellular telephone service (personal communication service -- PCS) -This additional radio spectrum will allow long-distance carriers to bypass the RBOCs in gaining access to customers -The RBOCs must improve their growth prospects to increase their stock price Resolution / Hypothesis*: -The RBOCs should invest in the PCS market to improve their growth prospects and avoid losing additional market share Illustrative Communicating Solutions

64 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Situation Complication Resolution Resolution Situation Complication Complication Situation Resolution OrderEffectExample Relaxed Considered Direct No-nonsense Urgent Concerned Concert Hall was built to be a home for the City Symphony Orchestra. Recently, however, Concert Hall has sponsored, promoted, and managed a number of visiting productions, none of which covered their costs. In view of the Hall's financial situation and the risks involved in such visiting productions, the wisdom of the Concert Hall's impresario role must be questioned. This document presents a program for bringing visiting productions to the city without risk to the Hall. Concert Hall must consider ending its sponsorship of visiting productions. Originally built to house the City Symphony Orchestra, the Hall has recently presented a number of visiting groups under its sponsorship. However, none of these sponsored productions covered their costs, and this aggravated the Hall's continuing financial problems. This document presents... In the last year, Concert Hall has lost money on all 20 of the visiting productions it sponsored. Sponsorship of these productions is a departure from the Hall's original role as the home of the City Symphony Orchestra. Since the Hall now faces a growing deficit, the time has come to decide whether it can afford to act as impresario for the city. This document presents... The Introduction Sets the Tone for the Presentation Consider Three Alternatives Three Approaches to Introductions * The solution includes the question and the answer, or governing thought of the document Communicating Solutions

65 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Slide Titles Should Tell the “Main Story” by Developing Horizontal Relationships Action Oriented Title Story Action Oriented Title Titles Create “Horizontal Logic” Communicating Solutions * Values expressed can be absolutes or percentages Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)

66 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute There Four Possible Logic Groupings for Building These Horizontal Relationships * Ordered by largest to smallest, west to east, functionally by process order, etc. Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996) Deductive / Inductive Chronological Structural Comparative Logic GroupingsUsageSequence Making deductive arguments Grouping steps that represent a process or system Grouping the causes of an effect Dividing a whole into its component parts (e.g., company organization, geographic areas) Classifying/ranking similar items/ideas (order of magnitude, importance, degree, urgency) 1. First in time 2. Second in time 3. Third in time 1. Part A* 2. Part B 3. Part C 1. First most important 2. Second most important 3. Third most important Example 1. Major premise 2. Minor premise 3. Conclusion 1.RBOCs need revenue growth 2. PCS market is growing 3.Invest in PCS 1. Need for communications 2. PCS is lower cost cellular 3. Trials have shown potential 1.RBOCs growth prospects dim 2. FCC auctioning spectrum 3.Competitors entering market 1.RBOCs growth slowing 2.RBOCs stock price will fall 3.RBOCs unable to compete for access

67 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Two Horizontal Logic Groupings Used Most Frequently Are Inductive and Deductive Logic Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996) A set of ideas related by a similar topic -Subject or predicate remains same while other varies -Ideas can be clearly labeled with a plural noun (e.g., reasons, steps) The summary statement draws an inference based on what is similar about the points, or states the effect that a group of causes would create Successive steps in an argument –First idea makes a statement about an existing situation –Second idea comments on the subject or predicate of the first idea –Third idea states the implication of those two situations existing at the same time The summary statement relies heavily on the final point Humans are mortal I am human Therefore, I am mortal American missiles are aimed at Russia French missiles are aimed at Russia British missiles are aimed at Russia Russia is at risk of missile attack by Western powers Because I am human, I am mortal Inductive Grouping Deductive Grouping Communicating Solutions

68 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Body of Each Slide Should Develop the “Supporting Story” for the Slide Title Action Oriented Title Story Action Oriented Title Titles Create “Horizontal Logic” Use the Body of the Slide to Create “Vertical Logic” Communicating Solutions * Values expressed can be absolutes or percentages Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)

69 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute There Are Three Basic Types of Content Slides To Help Develop the “Supporting Story” Slide Categories Graphs Diagrams Text Exhibits Presentation Text Exhibits: Convey specific facts or ideas Eliminate errors in interpretation of the information presented Summarize information on previous or subsequent slides Organize large amounts of information Diagrams: Convey cause / effect, sequential relationships between observations Organize information Explain conceptual ideas Graphs: Summarize numerical data Draw attention to specific facts Explain trends in underlying data Communicating Solutions * Values expressed can be absolutes or percentages Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)

70 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Text Exhibits Are Useful for Organizing Large Amounts of Information Text Exhibit Slide Types Text Exhibits High Med Low MedHigh Matrix Form WEEKLY PLANNING SCHEDULE Table Outline Communicating Solutions * Values expressed can be absolutes or percentages Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)

71 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Diagrams Are Used To Demonstrate Sequential, Cause- and-Effect and Dependency Relationships Diagrams Diagram Slide Types Flow Gantt ConceptualMap GanttOrganization Communicating Solutions * Values expressed can be absolutes or percentages Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)

72 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Graphs Help Draw Attention to Underlying Trends or Relationships in Data Series Graphs Dot CurveSurface/Area Line Single MultipleStacked 100% Bar* Step Sliding Waterfall Pie * May be horizontal or vertical bars Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985) Graph Slide Types Communicating Solutions

73 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Selection of the Appropriate Graph Is Critical To Accurately Conveying the Message Identify the specific point you want to make Should be clear and distinct Select the graph to best depict the comparison you are trying to make There are several alternative chart forms Message selected implies one of five types of comparison: –Component –Item –Time series –Frequency distribution –Correlation Chart FormComparison Message Data Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985) Communicating Solutions

74 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Message Drives the Selection of a Specific Type of Comparison... Five Comparison Types Component Item Time series Frequency distribution Correlation ComparisonExplanationKey words/phrases Shows relative importance of component parts of a whole; emphasizes a total and how each component contributes to it Shows ranking of items; compares sizes/quantities of two or more items to each other but not to the total* Shows variation over time; emphasizes trends, fluctuations, or patterns of change in value or quantity Shows the distribution of an item among various amount categories of progressive size or rank Shows how changes in one variable relates to changes in another variable Contribution, share, percent of total Bigger than, less than, more than, difference, smaller than, rank, variation among Increase, decrease, change, fluctuate, rise, decline, growth, trends, since, year-to-year, month-to-month Frequency, distribution, occurrence, concentration, center Related, increases with, decreases with, changes with, varies with * Values expressed can be absolutes or percentages Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985) Numerical Data Message Communicating Solutions

75 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute...and the Comparison Drives the Selection of the Graph Type Used in the Presentation * Could also be horizontal bar charts ** Could also be step charts *** Could also be a surface graph Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood Illinois: Dow Jones-Irwin, 1985) Line Pie Bar Dot ComponentItemTime SeriesFrequencyCorrelation *** Comparison Type Basic Graph Types * ** Communicating Solutions

76 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute...and Several Slide Writing Rules of Thumb Action titles and subtitles should be short and punchy -Target should be 7 +/- 2 words for the length of your title -Limit all forms of the verb “to be” (am / is / are; was / were) to save room -Focus on the core message of each slide -Points conveyed should be a high level summary of detailed information -Titles should be all “caps”, except for prepositions and connectors -All verbs are capitalized, including “is”, “are”, “can” and “be” -If “to” is part of a verb (To Reengineer) it is capitalized; If “to” is part of a preposition (to the client) it is not capitalized Slides should should be limited to three or fewer key messages Slides should be organized hierarchically -Logic should flow through slide, from general premises to specific implications -Move from easy-to-grasp ideas to hard-to-understand ideas -Make logic parallel -Select words carefully, know your audience Communicating Solutions Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996)

77 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute These Additional Rules of Thumb Should Be Considered When Writing Slides Graphs and diagrams should be used to convey points where possible -Attempt to move beyond basic bullet point slides -Think about alternative ways to present information All sources of data, ideas, and quotes should be identified -Attributing sources builds credibility for the presentation -Sources should be identified with enough detailed to enable specificity if asked Footnotes should be used to provide additional detail or explanation for a point made in the body of the slide -Most commonly used to supplement quantitative analysis -Including footnotes builds credibility for the presentation Bulleted text outlines are easier to read when written as columns Always ensure consistency of font type, font sizes on a page (when possible), table shadings, table style, line and arrow thickness, shadows off-setting, shadow color, font color throughout any document Communicating Solutions Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996)

78 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Using the Pyramid Involves Checking the Vertical and Horizontal Relationships Ensure that sub-points fit their summary point (check vertical relationships) -Sub-points must answer the question the summary point raises, amplifying, clarifying or providing context for the summary point  The answers to "why" questions are reasons  The answers to "how" questions are steps -Sub-points must provide necessary and sufficient logical support to show that the summary statement follows from the sub-points -In chart documents, exhibits also must support their headlines Ensure that the groupings are logical (check horizontal relationships) -Class groupings must be properly defined and grouped  No misfit ideas - those that are at a different level of abstraction or that do not point to the same conclusion  No overlaps (confused logic)  No gaps (incomplete thinking) -Order of the grouping must be validated -Opportunities for further grouping must be explored (esp. if there are more than six points in an inductive grouping or four points in chained deductive argument) Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996) Communicating Solutions

79 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute There Are Two Ways To Communicate Ideas and Their Groupings in the Pyramid Structure Communication Methods From the top down From the bottom up Method of Communicating DescriptionBest ApplicationComments Presenting categories (framework) first and then the items (support) underneath Discussing actions before the arguments for those actions Grouping ideas by logical relationships (i.e., those ideas that are needed to express the single idea of the grouping-- their summary statement) Going up one level of abstraction and thinking of the grouping as having one point rather than several Grouping ideas at this level by logical relationships (needed to express the next higher level of abstraction) Continuing this process until the structure supports only one single thought (the major point) Communicating directly and clearly Providing understanding Thinking (mystery-solving) Communicating when the reader will disagree strongly with the conclusion and must be conditioned in order to accept it Communicating when the reader is incapable of understanding the action without prior explanation, so the reasoning that underlies it must be presented (e.g., paper on how to do risk analysis) Most effective manner to communicate in most circumstances Reader/listener may interpret groupings differently than the author ·People are diverse in background and understanding ·Reader will search for his or her own structure for the grouping Reading/listening is made more difficult because reader must "build" the logic structure as he/she proceeds Source: Barbara Minto, The Pyramid Principle: Logic in Writing and Thinking (London: Minto International, 1996) Communicating Solutions

80 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Pyramid Logic Structure Alone Will Not Ensure a Well-Organized Presentations Create a story line and outline before you write new slides -Storyboard the presentation -Focus on developing logic to reach the “so what” -Remember: All of your analysis does not have to be included Use the storyboard to drive the presentation -Draft slide titles to tell the story -Create blank slides with titles, fill in exhibit or text when available Be aware of your audience -Identify “hot buttons” -Adapt presentation style to the client’s culture (e.g., data vs. clip art) Be aware of your medium -Detailed graphics do not work well on overheads -Some colors do not appear well on overheads or data displays (e.g., yellow) Tips for Effective Presentation Writing Communicating Solutions

81 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute These Slide Writing Conventions, with the Pyramid Structure, Will Improve E&Y’s Presentations The Pyramid Logic Structure enables persuasive, hypothesis-driven presentations to be written A storyboard of each presentation should be created before any slides are written to build the logic for the Pyramid Structure The slide titles should tell the complete story by laying out the horizontal logic of the Pyramid The information included in the body of each slide, as well as the groupings of these slides into sections, should create the vertical logic of the Pyramid Following these slide writing and graph selection rules of thumb will ensure a persuasive, actionable presentation is created Final Thoughts on Presentation Writing Communicating Solutions

82 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Communicating Solutions Can Be Improved By Utilizing Two Methods Method of organizing thoughts to communicate a cohesive story that focuses on delivering significant insight What is required story-line that links fact based analysis and proven hypotheses? Complements thought processes of human mind... …Thus increasing the readability of presentations Pyramid Logic Structure should be applied to all deliverables regardless of type Description Form the Pyramid Communicating Solutions Key Questions Benefits Application Use Standard Graphics Format A defined set of guidelines that the firm uses on all deliverables How should story be presented to ensure a consistent look and feel in marketplace? Presents a consistent “look and feel” to deliverables in the marketplace--supports the development of a “branded” image Increases the amount of time consultants can spend solving problems--time is not wasted on deciding how deliverables should be formatted Graphic standards should be applied to all standard “service” deliverables-- appropriate to veer away from standards for proposals and “lecture hall” presentations as necessary Source: E&Y Analysis

83 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Significant Benefits Exist to Utilizing Consistent Graphics Standard Requires Tightly Managed Decisions and Monitoring Key Decisions –Definition of the types of slides –Guidelines for slide content  text slides  charts/graphs  universal guidelines –Guidelines for managing production –File naming convention Monitoring –Initial training is required of consultants and graphics personnel –Process of monitoring compliance must be established to build and maintain a strong brand Key Decisions –Definition of the types of slides –Guidelines for slide content  text slides  charts/graphs  universal guidelines –Guidelines for managing production –File naming convention Monitoring –Initial training is required of consultants and graphics personnel –Process of monitoring compliance must be established to build and maintain a strong brand Consistent “look and feel” in the marketplace Ability to build brand awareness in the marketplace Provides consultants more time to “solve problems” rather than worrying about presentation Easier reusability--”cut and paste” of components is easier Consistent “look and feel” in the marketplace Ability to build brand awareness in the marketplace Provides consultants more time to “solve problems” rather than worrying about presentation Easier reusability--”cut and paste” of components is easier Significant Benefits exist from Implementing a Consistent Graphics Standard... …Requires Tightly Managed Decisions and Monitoring NOTE: See example of graphics standards for SAS in appendix Source: E&Y Analysis

85 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Porter’s Five Forces Framework Source: Porter, “Competitive Strategy” (1980) BuyersSuppliers Threat of New Entrants. Threat of Substitution Bargaining Power of Suppliers Relative price performance of substitutes Switching costs Buyer propensity to substitute Buyer concentration vs. firm concentration Buyer volume Buyer switching costs relative to firm switching costs Buyer information Ability to backward integrate Substitute products Pull-through Price / joint purchases Product differences Brand identity Impact on quality / performance Buyer profile Decision makers’ incentives Differentiation of inputs Switching costs of suppliers and firms in the industry Presence of substitute inputs Supplier concentration Importance of volume to suppliers Cost relative to total purchases in the industry Impact of inputs on cost or differentiation Threat of forward integration relative to threat of backward integration by firms in the industry Industry growth Fixed (or storage) costs / value added Product differences Brand identity Exit barriers Switching costs Concentration and balance Diversity of competitors Corporate stakes Economies of scale Proprietary product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost advantages Government policies Expected retaliation Potential Entrants Substitutes Industry Competitors Rivalry Among Existing Competitors Bargaining Power of Buyers Appendix

86 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Hypotheses Result from Cause-and-Effect Diagrams Profits Declining Costs Rising? Margins Falling? Sales Declining? Variable Factors Semi-fixed Factors Wrong goods? Wrong layout? Wrong price? Wrong in-store display? Wrong selling staff? Wrong advertising campaign? Falling market demand? Insufficient store locations? Insufficient store size? Decreasing store accessibility? Price too low? Buying costs too high? Wrong mix of goods? Inefficient processes? Poor cost control? Serving costly market segments? Source: Adapted from Minto, The Minto Pyramid Principal, 1996, Exhibit 42. Why? Appendix

87 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute The Relationship Between Financial Ratios Is Depicted Below Divided by Plus Minus Sales COGSSelling Expense General Expense Administrative Expense Cost of Sales + Expenses Operating Profit as % of Sales Sales Permanent Investment InventoriesAccounts Receivable Cash Current Assets Total Investment Turnover Return on Investment Appendix

88 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Market Attractiveness--Business Strength Matrix* Maintain Leader Position (invest) Grow with Industry (selective growth) Try Harder (selective growth) Find Niche (selectivity) HighMedium Market Attractiveness High Medium Business Strength Up or Out (selectivity) Selective Withdrawal (harvest/divest) Harvest (selectivity) Selective Withdrawal (harvest/divest) Abandon (harvest/divest) Low *NOTE: The Attractiveness - Strength Matrix is similar in its recommendations to the BCG Growth / Share Matrix. The difference between the two is that the Attractiveness - Strength Matrix takes more factors into account prior to making this recommendation. Appendix

89 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Critical Success Factors Fall into Four General Categories Marketing-Related CSFsOperations-Related CSFsFinance-Related CSFsOverall CSFs Products:  Brand / product image  Breadth / depth of product line  Dealer/Distribution:  Channel coverage and quality  Channel relationship strength  Ability to service channels  Marketing and Selling:  Skills in the marketing mix (e.g. product, promo, place, price)  Market research skills  New product development skills  Training and skills of sales force  Operations:  Manufacturing cost position (e.g., scale, learning, technology)  Technological sophistication of facilities and equipment  Flexibility  Proprietary know-how  Unique patent or cost advantage  Quality control, tooling skills  Location (e.g. labor and transport cost)  Labor force climate, union  Access to raw materials  Degree of vertical integration  Research and Engineering:  Patents and copyrights  R&D process capability (e.g. product / process research, development, imitation)  R&D staff skills and creativity  Access to external R&D source Financial Strength:  Cash flow  Short- and long-term borrowing capacity (relative debt/equity)  New equity capacity over the foreseeable future  Financial management ability, including negotiations, raising capital, credit, inventories, and accounts receivable  Overall Costs / Other:  Overall relative costs  Shared costs or activities with other business units  Special treatment by governmental bodies  Personnel turnover Organization:  Unity of values and clarity of purpose for the organization  Organizational readiness to accept challenges  Organizational structure and design aligned with strategy  General Management Ability:  Leadership qualities of CEO, ability of CEO to motivate  Ability to coordinate efforts of functional departments (e.g. engineering and manufacturing)  Age, training and functional orientation of management  Depth of managerial talent  Flexibility and adaptability of management  Corporate Portfolio:  Ability of corporation to finance and provide other resources to support planned changes in all business units  Ability of corporation to supplement or reinforce business unit strengths Source: Adapted from Michael E. Porter, Competitive Strategy (1980) Appendix

90 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute S.W.O.T. Analysis Provides Another Framework for Identifying Critical Success Factors Market size and growth potential Customer behavior Segmentation Benefits sought Suppliers Distributors Substitutes Potential entrants Industry profit trends Political Economic Social Technological Ability to conceive / design Ability to source and produce Ability to market and service Ability to finance Ability to manage Description of strategy Performance vs. objectives S.W.O.T. Analysis Framework Source: Adapted from Day, Figure 4-2: Overview of the Situation Assessment ENVIRONMENTAL TRENDS ANALYSIS OF CURRENT STRATEGY DIRECT COMPETITORS COMPANY SKILLS AND RESOURCES MARKET/INDUSTRY TRENDS Performance Capabilities Strategies Intentions EXTERNAL OPPORTUNITIES AND THREATS INTERNAL STRENGTHS AND WEAKNESSES CRITICAL SUCCESS FACTORS STRATEGIC HYPOTHESES Appendix

91 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Profitability Tree Provides A Useful Framework Market size/growth Demand Dom. vs. Intl. Life cycle impact Competitors Number and size of competitors Market share, stability of position Degree of vertical integration Alliances New entrants Customers Segments served, % penetration Segment growth Satisfaction level Macro Trends Political, legal Economic Social, labor Technological Positioning Consumer perception Advertising Placement Distribution strategy Channel margins Sales force effectiveness Pricing Strategy Discounts/ coupons % mark-up Product Quality Variety (SKUs) Substitutes Variable Costs # of suppliers Cost to serve segments Capacity utilz. Scale and scope Experience Inefficient mfg. processes Fixed Costs Capacity expansion Distribution costs Asset value  RR PP VV CC  VC  FC Appendix

93 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Sources of Research Information Literature Searches -Trade magazines -On line library searches -Dialog system (databases)  Trade & Industry Index  ABI-Inform  Promt-Predicast marketing database  Others -Lexis-Nexis -Dow Jones News Retrieval  Company News  News lines Trade Associations -Encyclopedia of Associations -Reference Materials (examples) -Directory of Corporate Affiliations -Dun & Bradstreet’s America’s Corporate Families -Dun & Bradstreet’s Million Dollar Directory -D&B Standard Industrial Classification Manual -Marketshare Reporter -Moody’s Industrial Manual -Standard Industrial Classification Manual, US Government Data Sources

94 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Sources of Research Information (Cont.) Trade Associations (cont’d) -Thomas Register of American Manufacturers -US Census Data -US Industrial Outlook -Ward’s Business Directory of US Private and Public Companies -Others Competitor’s Annual Reports Potential Customer or Competitor Interviews (where useful) Yellow Pages or newspaper advertisements Data Sources

95 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge Guide A brief guide to resources available in the Center for Business Knowledge Where to go to get information on companies, people, industries, topics of interest, and more Data Sources

96 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge (CBK) Table of Contents General business information (company names, addresses, lines of business, officers, number of employees, annual revenues, etc. Financial information (detailed financial information and analysis) Biographical information (background information on corporate officers or directors) Industry information (industry overviews, trends, statistics, analysis, major players, associations, sources of more detailed information, etc.) Other Reference Sources Data Sources

97 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge General Business Information Use these sources to identify a company name, address, phone number, lines of business, officers, number of employees, annual revenues, subsidiaries, etc. 1.Standard & Poor’s Register of Corporations, Directors, and Executives –Volume 1: Alphabetical by company name –Annual publication with updates 2.Dun & Bradstreet’s Million Dollar Directory: America’s Leading Public & Private Companies –3 volumes alphabetical by company name –Annual publication 3.Ward’s Business Directory of U.S. Private and Public Companies –Volumes 1-3 alphabetical by company name –Annual publication 4.Market Guide Profiles –Provides information on U.S. public companies –Contains:  Income and Balance Sheet data  Key Financial and Stock ratios  Debt and Equity figures  Employment and Growth ratios Data Sources Basic Information

98 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge General Business Information (Cont.) 5.Worldscope Profiles –Provides information on non-U.S. public companies –Contains:  Financial data –Key Financial and Growth ratios  Investment Ratios and Stock prices and trends 6.U.S. Private Profiles –This database is essentially the same as Ward’s (item 3 above) –It provides basic information on U.S. private companies Data Sources Basic Information

99 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute These sources will give most of the above information, as well as subsidiary and division-level data 7.Directory of Corporate Affiliations –Divided into U.S. Public, U.S. Private, and Non-U.S. based companies –Master index lists all corporate entities –Annual publication 8.Dun & Bradstreet’s America’s Corporate Families –One volume alphabetical by ultimate parent company name –U.S.-based companies only –Annual publication Center for Business Knowledge General Business Information (Cont.) Data Sources Corporate Structure

100 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute These sources will give a one-page description of the company, its products and its financial history 9.Hoover’s Handbook of American Business –Profiles of 500 Major U.S. companies –One-page description of 500 major U.S. public companies –Gives corporate history, current events, products, competitors –Annual publication 10.Hoover’s Guide to Private Companies –Profiles of 500 major U.S. private enterprises –Similar format as Hoover’s Handbook –One-page description of top 125 U.S. private and non-profit organizations –Brief descriptions of the rest –Annual publication 11.Value Line –Sorted by industry –One page description of major U.S. public companies –Gives basic information, recent events, stock and financial information –Primary target audience is individual financial investors –Updated weekly Center for Business Knowledge General Business Information (Cont.) Data Sources High-Level Descriptions

101 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge Financial Information Use these sources to obtain detailed financial information and analysis Please note: obtaining specific financial information on divisions, subsidiaries, branches, privately-held, or non-U.S. companies is extremely difficult to get and requires more time and extra resources 1.Annual Reports and 10-Ks –Available free-of-charge from all U.S. public companies –Obtained by calling the corporate offices (phone numbers can be found in any of the sources listed in the General Business Information section above) –Typical response time can range from 3 to 10 days –Most companies will ship via FedEx if you give them your account number 2.Annual Reports via Disclosure –Photocopies of all materials filed with the SEC available for purchase –Costs range between $30 to $50 per item ordered –Turn-around time usually is under 3 hours Data Sources Action Reports and SEC Material

102 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 3.OneSource: U.S. Public Companies –Five years financial data available for 10,000 U.S. public held companies –Information includes: complete financials (both annual and quarterly) investment/brokerage house reports, corporate officers and directors, stock reports, and subsidiaries and divisions –Information updated monthly 4.The Research Bank from Investext –Full-image reports from investment banks and brokerage firms on major U.S. firms –Reports may include financial, industry, strategic, or product analysis –Note: Project code required for all printing –Updated weekly 5.Investext Reports –Contains between 3 to 5 analyst reports on U.S. public companies from investments banks and brokerage firms –Reports may include financial, industry, strategic, or product analysis –Contents are the same as reports found in OneSource (number 3 above) Center for Business Knowledge Financial Information (Cont.) Data Sources Financial Analysis and Detail

103 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 6.SEC Text Database contains U.S. public companies’ SEC filings –10-Ks, annual reports (president’s letter, management letter, and consolidated financials), and proxy letters 7.Online Databases via Dialog : –Disclosure: Information includes SEC filings 10-K, 20-F, 10-Q, Proxy Statements, 8-K, Registration Statement, 10-C, and Annual Report –Dun & Bradstreet: Information varies depending upon database searched –May include basic corporate information to D&B’s financial analysis –D&B’s credit reports are also available –SEC Online: Complete full-text reports of all SEC filings –Note: Project code required for all online searching –Contact the CBK staff for more detailed information Center for Business Knowledge Financial Information (Cont.) Data Sources Financial Analysis and Detail (Cont.)

104 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 8. Market Guide Profiles –Provides standardized reports on public U.S. public companies –Contains basic description, Income and Balance sheet data, Key Financial and Stock Ratios, Debt and Equity Figures, and Employment and Growth Ratios 9. Worldscope Profiles –Provides standardized reports on non-U.S. public companies –Contains basic description, financial data, financial and growth ratios, investment ratios, and stock prices and trends –Note: Project code required for all online searching –Contact the CBK staff for more detailed information 10. U.S. Private Profiles –This database is essentially as Ward’s (Item 3 above) –It provides basic information on U.S. private companies Center for Business Knowledge Financial Information (Cont.) Data Sources Industry Rankings

105 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 11.Fortune Industrial 500, Fortune Service 500, Forbes 500, Business Week 1000, Crain’s Top Chicago Businesses, and Advertising Age Top Companies –Special issues that list top U.S. companies by market value, sales, profits, return on equity, etc. –High level, basic information given for each company –Surveys also include ranking by industry group –Material is not kept on shelves –Contact the CBK staff for more detailed information Center for Business Knowledge Financial Information (Cont.) Data Sources Industry Rankings (Cont.)

106 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge Biographical and Industry Information The following sources give background information on corporate officers or directors Please note: In-depth information on most people is not readily available from any source 1.Dun & Bradstreet’s Reference Book of Corporate Managements –Provides educational and work experience for senior management of major U.S. firms –Information given for major subsidiaries and divisions –Annual publication 2.Standard & Poor’s Register of Corporations, Directors and Executives –Alphabetical by individual –Provides brief biographical information, current work title and directorships held –Annual publication with updates 3.Online Databases via Dialog (external dial-up database service): Marquis Who’s Who and Standard & Poor’s Register - Biographical –Note: Project code required for all online searching –Contact CBK staff for more detailed information –Updated on a regular basis Data Sources Biographical Information

107 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute To get industry overviews, trends, statistics, analysis, major players, associations or to locate sources of more detailed information, use the following: 1.Standard & Poor’s Industry Surveys –Two volumes Alphabetical by industry –Twenty-one industries covered –Each industry has a “Basic Analysis” which gives an industry overview and primer, and a “Current Analysis” which updates current events –Contains industry trends, analysis, relevant government regulations statistics, outlook, as well as financial data for major publicly-traded companies –Updated on a regular basis 2.U.S. Department of Commerce’s U.S. Industrial Outlook –Grouped by major industry groups (54 major groups with details on 350 industries) –Information includes basic industry description, recent events, outlook, international competitive issues, and government statistics, and a bibliography of other sources –All information is at the industry level -- no company specific information is given –Annual publication Center for Business Knowledge Biographical and Industry Information (Cont.) Data Sources Industry Information

108 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 3.Best’s Insurance Reports –Four volumes, 2 covering Property/Casualty and 2 covering Life/Health –Provides detailed descriptions of insurance companies operating in the U.S. –Gives asset, liability, and operating, and underwriting statistics, as well as management and operations discussions –Annual publications 4.Best’s Aggregates & Averages –Two volumes, one for Property/Casualty, one for Life/Health –Information includes Balance Sheet, Summary Operations, Time Series, Lines of Business, and Leading Companies and Groups –Also gives premiums written by lines of business and other industry- wide statistics broken out by lines of business –Annual publication 5.Thomas Register of American Manufacturers –29 volumes –Detailed sourcing information on virtually everything manufactured in the U.S. –Sections include Products & Services, Company Profiles, and Catalogs –Format similar to a “Yellow Pages” with mostly advertising –Contains no financials or company background –(Note: this material can be rather difficult to use; contact the CBK staff for assistance) –Annual publication Center for Business Knowledge Biographical and Industry Information (Cont.) Data Sources Industry Information (Cont.)

109 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge Directory and Industry Lists/Rankings 1.Ward’s Business Directory of U.S. Private and Public Companies –Four ranks all companies by sales by 4 digit SIC Codes –Annual publication 2.OneSource: U.S. Public Companies –Five-year financial data available for 10,000 U.S. public-held companies –Data can be screened using almost any criteria to develop custom lists of companies –Information is updated monthly 3.Fortune Industrial 500, Fortune Service 500, Forbes 500, Business Week 1,000, Crain’s Top Chicago Businesses, and Advertising Age Top Companies –Special issues that list top U.S. companies by market value, sales, profits, return on equity, etc. –High level, basic financial information given for each company –Surveys also include ranking by industry group –Contact the CBK staff for more detailed information Data Sources

110 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 4.Consultants & Consulting Organizations Directory 15th edition –Arranged by broad category –Entries contain basic information, principle executive(s), consulting activities, and a brief abstract of services offered (written by firm) –Also indexed by personal name, geography, and service area –Annual publication 5.Directory of Management Consultants –Information alphabetical by company name –Entries contain brief description, principle executive(s), and consulting activities –Textual descriptions written by consulting firms –Includes some advertisements –Annual publication 6.Washington Information Directory –Arranged by subject –Provides name, address, phone and fax numbers, and a brief description of all federal agencies, departments and bureaus –Also includes all private and non-profit organizations in the Washington, D.C. area Center for Business Knowledge Directory and Industry Lists/Rankings (Cont.) Data Sources

111 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge Statistical Information 1.U.S. Department of Commerce’s Statistical Abstract of the United States, 1993 –Annual summary of statistics collected by the government –contains statistics on all aspects of the social, political, and economic organization of the United States –Gives both historical and “most current year available’ (varies with statistic) 2.Economic Indicators Handbook: Time Series, Conversions 1st edition –Documentation contains Gross National Product, Gross Domestic Product, leading business and economic indicators, Consumer Price Index, Producer Price Index, etc. on both the national and city level –Most information is historical through 1991 (varies) 3.Market Share Reporter: An annual compilation of reported market share data on companies, products, and services 1995 –Contains market share statistics by SIC Code –Information is collected from a variety of sources -- mostly items published in trade magazines and periodicals –Provides brief list or chart showing market share by industry 4.The Top 10 of Everything –Arranged by subject –This book lists the “Top 10” of almost everything imaginable (i.e., 10 first…, 10 biggest…, 10 highest selling…, etc.) –Originally published in England, first U.S. publication Data Sources

112 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Center for Business Knowledge Other Reference Sources 1.U.M.I.’s ProQuest CD-ROM database –Indexes and abstracts articles from approximately 900 business journals dating back to 1987 2.Provides the full image of approximately half of the articles indexed –Please note: this system should not be thought of as a replacement for the literature searches performed by the CBK; it is meant to be used as a first place to look for information, or if you want to browse a topic yourself -Contact the CBK staff for more information about all the available databases –Updated monthly 3.Encyclopedia of Associations: Volume 1: national organizations of the United States –Three volumes: Volumes 1 and 2 arranged alphabetically by subject or industry, volume 3 provides in-depth indexes by keyword –There is an association for just about anything, and most are fairly helpful in getting to industry specific information or experts –Describes trade, industry, governmental, social, and cultural associations –Also includes fan clubs, sporting federations, unions, hereditary and patriotic organizations –Annual publications Data Sources

113 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 4.Encyclopedia of Business Information Sources: –A guide to more than 24,000 citations covering more than 1,100 subjects. Information is arranged alphabetically by industry –Contains descriptions and purchasing information for directories, almanacs, encyclopedias, periodicals, databases, etc. specific to given industry –Annual publication 5.Who Knows What: –The essential business resource book –Similar to the Encyclopedia of Business Information Sources –Contains listings by industry/subject of sources information –Includes associations, periodicals, libraries (corporate, non-profit, and government), companies, and government agencies 6.Findex: –The worldwide directory of market research reports, studies, and surveys –Information is arranged by industry –Provides descriptions of major market research reports, studies, and industry specific newsletters –Indexed by subject, geography, and company name –Annual publication Center for Business Knowledge Other Reference Sources (Cont.) Data Sources

114 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute 7.Ulrich’s International Periodicals Directory –Alphabetical by subject –Contains basic information and very short descriptions of all types of periodicals (does not include newspapers) –Annual publication with updates 8.World Almanac and Book of Facts –Indexed by subject –Encyclopedia of facts and statistics on countries, cultural and sporting events, and other current events –Annual publication Center for Business Knowledge Other Reference Sources (Cont.) Data Sources

Strategic Advisory Services Graphics Standards September 1997 Strategic Advisory Services e

117 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Table of Contents Types of slides Content slide guidelines -text slides -charts/graphs -universal guidelines Other slides Guidelines for managing production Proof reader’s symbols File naming convention

118 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute There are Five Basic Types of Slides *Variations include text, graph and diagram Types of Slides Cover PageAgenda/Table of ContentsMapping Pages (optional) Appendix Divider (optional)Content Slides*

120 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Anatomy of an Analytical Slide Six Main Components Content Slide Guidelines Typically takes the form of -bullet point text outlines - graphs or charts -diagrams Text “Call Out” Source : Footnotes : Action Oriented Headline Clarifying Subtitle     Type “Ghosts” Here ‘ Main point conveyed by slide Supporting point Information to support one of the points in the slide body “Evidence” data and analysis Used to draw attention to specific text points or identify categories Body of the Slide “Evidence” title (optional) Strategic Advisory Services Client Confidential - Do Not Distribute## Document Tracker Client & Project Name  Clarification of evidence source

121 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Exhibits are Centered on the Page Centered top to bottom between headline and source/footnote Text or Data Centered left to right between margins Source: SAS Presentation Standards Content Slide Guidelines

122 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Call Out Box Structure of Text Slides Bullet point -sub-bullet Bullet point -sub-point Emphasis box Wording of ghosts should be identical to agenda point Standard capitalization No capitalization Note:Single blocks of text are not usually surrounded by a box Content Slide Guidelines

123 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Text Blocks Bullet point -sub-point Bullet point -sub-point Bullet point -sub-point Bullet point -sub-point Bullet point FromTo Shadow is black, 3 points to the right and bottom Title is centered, standard capitalization Dual boxes of text are surrounded by boxes 2-3 word titles only; longer exhibit headlines go above box Content Slide Guidelines Shade is light gray Text is top justified

124 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Call Out Boxes Call out boxes group text into your main points or topics Text is more visually compelling and easy to grasp Should always be same width on a slide Make same width throughout presentation if space permits Height may be varied to accommodate differing title length Boxes are left justified, flush to top line Text is left justified in box One Line Box Two Line Box Three Line Box Box is light gray, shadow is black, 3 points to the right and bottom Fixed width, variable height First line of bullets lines up with top of call out box Content Slide Guidelines

125 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Emphasis Boxes May be Added to Draw Implications From the Data Say what the page’s content implies for the audience -NOT a continuation of the headline Good emphasis boxes are short and to the point Sometimes used effectively in other ways -to sum up and end a section -to signal a transition -as an exception statement or counterpoint Emphasis boxes are optional; use only when needed -too many emphasis boxes can cause them to lose impact The best emphasis boxes answer the audience’s “so what?” questions Text is centered in box Box is light gray Shadow is black, 3 points to the right and bottom Content Slide Guidelines

126 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Headline: 24 pt. Bold, Caps First Letter Each Word Subtitle: 24 pt. Caps First Letter Each Word Call Out Box Headings: 16 pt., Bold, Caps First Letter Each Word, Center Justified (14 pt., Caps First Letter Each Word) Bullets: 16 pt., first word caps -dashes: 16 pt., lower case text  small bullet: 16 pt., lower case text Emphasis box: 14 pt., first word caps Footnotes; 10 pt., first word caps Source: 10 pt., Caps First Letter Each Word Page Number: 10 pt., Arial TEXT SLIDE TEMPLATE Ghosts: 10 pt., Caps First Letter Of Each Word

127 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute All Charts and Graphs are Surrounded by a Box Content Slide Guidelines Shadow is black, 3 points to the right and bottom

128 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Charts and Graphs Follow Specific Rules Structure All charts/graphs have both horizontal and vertical axes Axes Labels Always horizontal Centered vertically Measure appears in parenthesis - (Percent) - (Millions of Dollars) Content Slide Guidelines

129 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Charts and Graphs Follow Specific Rules (Continued) Axes Measurements Vertical axes always starts at zero - no breaks in axes Axis range extends slightly higher than highest data point - when two charts on page with comparable data, use same scale in each - vertical axis does not extend beyond top increment Numbers on axes should usually be integers Negative numbers indicated by parentheses - “(20)” not “-20” Shorten numbers as much as possible - 2,000,000 becomes 2 with (millions) noted in axes label Use an appropriate number of increments - do not overcrowd - do not allow to appear sparse - target 4-6 increments No % or $ on numbers Hash marks beside all numbers (and only beside numbers) Content Slide Guidelines

130 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Bar Charts Follow Specific Rules Largest element within bar goes at bottom -exceptions: “other”, “overhead” go at top Order of elements remains the same between bars -even if relative size of elements changes Definition of bar elements appears only once -usually in left-most bar -if insufficient space, put labels to right of right-most bar -avoid legends whenever possible When desired, use dotted lines to track between bars All bars should be quantified at top -include “$” or “%” Spacing between bars slightly narrower than bar width No hash marks between bars on horizontal axis Years arranged with earliest on left, latest on right Content Slide Guidelines Overhead SG&A Labor Materials $9.52 $8.31 Product X

131 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Similar Rules Apply to Vertical Bar Charts Content Slide Guidelines Growth Strategy Alternatives Source: Management survey Introduce new products and/or services Expand into new domestic markets Upgrade technology Other Expand into new international markets Acquire/merge with another company

132 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Legends Should Be Used Sparingly Follow Guidelines When Used Legend located in top right corner of chart Title is Legend Definitions in same sequence as in bar chart Content Slide Guidelines Consultants (Percent) 0 20 40 60 80 100 Firm AFirm B Other Tuck Darden Michigan Duke Chicago Kellogg Stanford Harvard Wharton Legend Consultants by MBA School

133 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Line Charts Follow Specific Rules Label lines on chart, if possible -avoid legends whenever possible When more than one line, and differentiation is required, use different types of lines -1st line -2nd line -3rd line -4th line Numerical data should not usually appear on lines Hash marks above years on horizontal axis -never between years Years arranged with earliest on left, latest on right CAGR appears to right of chart -percentages line up beside lines or labels Content Slide Guidelines 1990-1994 CAGR (%) Wal-Mart K-Mart JC Penney May 27 5 9 7 4 Dayton-Hudson

134 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Additional Guidelines for Waterfall Charts Labels appear on horizontal axis Numbers appear above bars if going up Numbers appear below bars if going down Use dotted lines to track Content Slide Guidelines 5 4 3 2 1 0 Comparison of Camry and Taurus

135 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Sources Required for All Data Source all data -numbers -quotes Source line goes on lower left of slide -flush on line Use consistent and generally accepted methods of referring to sources not generally known Titles are italicized For generally known sources, name alone is sufficient, but include date -e.g., Wall Street Journal (August 25, 1997) Use a detailed enough description to enable you to be specific if asked -e.g., Source: Annual Reports; S&P data; 1994 Marketing Plan If E&Y and/or the client team created or added value to the data, so indicate -e.g., Source: E&Y/Client interviews; E&Y analysis Use semi-colons to separate individual sources in source line Source: E&Y Strategy Practice Team Content Slide Guidelines

136 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Footnotes Supplement or Explain Particular Point of Analysis Indicated by either a superscript number 1 or asterisk* -appears at the beginning of the footnote and at the particular item, word or phrase that refers to it -footnotes appear in lower left hand corner (above source) -footnote indicator and definition are separated by one space When more than one footnote, first words of definition line up - * First footnote - ** Second footnote -*** Third footnote Most commonly used in quantitative analysis - 1 Represents 8 months of actual data annualized -* Estimates based on Polk forecast If a footnote appears in bottom left with no notation in body of slide, use “Note:” not “*” or “ 1 ” -“Notes” appear below footnotes and above source Content Slide Guidelines 1 Either numerical or asterisk indicators are acceptable, but do not mix * Footnote definition appears in lower left hand corner Source: SAS Production Standards

137 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Headline: 24 pt. Bold, Caps First Letter Each Word Subtitle: 24 pt. Caps First Letter Each Word Labels: 12 pt. Footnotes; 10 pt., first word caps Source: 10 pt., Caps First Letter Each Word Ghosts: 10 pt., Caps First Letter Of Each Word GRAPH SLIDE TEMPLATE Headings: 14 pt., Cap First Letter Of Each Word, Centered Within The Box

138 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Universal Guidelines Capitalization Text Defaults Punctuation and Location Color Miscellaneous Content Slide Guidelines

139 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Capitalization Guidelines Standard capitalization on all words except prepositions and conjunctions First letter of first word is capitalized -no capitalization in dashes -“e.g.,” should never be capitalized, even if it begins a bullet Qualifiers should be horizontal, all caps with line above and below word Standard capitalization on all words except prepositions and conjunctions -wording of ghosts should be identical to agenda points Content Slide Guidelines ILLUSTRATIVEPRELIMINARY CONCEPTUAL Headlines Bullets Qualifiers Ghosts

140 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Text Defaults Document title Qualifier Date Ghosts Headlines Subtitles Page Titles Exhibit headline Headings Call Out Box Text Emphasis Box Exhibit title Axis titles Axis labels Bar labels Bar totals Bubble labels Line labels Legend Source Footnotes Text Page number Cover Page Headings Word Slides Graphs Appendix Divider Page Numbers Font Content Slide Guidelines Arial, Bold Arial, Italic Arial Arial, Bold Arial Arial, Bold Arial Arial, Bold Arial Arial, Bold Arial Size 24 pt. 18 pt. 16 pt. 10 pt. 24 pt. 24 pt. 12 pt. 16 pt. 14 pt. 16 pt. 14 pt. 16 pt. 12 pt. 10 pt. 20 pt. 10 pt.

141 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Punctuation and Location Standard capitalization for every word No terminating periods Standard capitalization No terminating periods No colons before list of bullets or dashes One sentence per bullet When same footnote required on several slides, ensure consistent wording Standard capitalization No final period Use semicolon to separate individual sources Standard capitalization No final period All caps Do not include “page” or “#” Cover Page Headings* Word Slides Appendix Divider Footnotes PunctuationLocation Centered Headlines and subtitles are left justified Exhibit headlines are left justified Ghosts are right justified Left justified Bottom left-hand corner of text box Above source Last asterisk or digit in footnote align vertically One space between indicators and first word of footnote First words of footnotes line up vertically Bottom left-hand corner of text box Below footnotes Long sources use right margin equal to left margin; second (and subsequent) line(s) line up under first work after “Source:” Centered Centered at bottom of page Every page except cover page is numbered Page Numbers Sources Content Slide Guidelines *Headings include headlines, subtitles, ghosts, exhibit headlines

142 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute SAS Slides Are Virtually Always Black and White Note:On rare occasions, this guideline may be overridden by engagement partner/senior manager; color is normally acceptable (but optional) on the cover page COLOR Content Slide Guidelines

143 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Miscellaneous Guidelines No clip art No 3-dimensional bar charts Limit use of abbreviations or short forms Use acronyms only when well understood by audience Content Slide Guidelines

145 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Title of Company (or Company Logo) Project Name Date Other Slides Qualifier Client name and distribution notes not included All wording centered left to right Title page should not be numbered Logo appears on cover ILLUSTRATIVE Italics

146 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Agendas, Tables of Contents and Mapping Pages Have Distinct Uses Agendas appear at the beginning of presentations Tables of contents appear at the beginning of documents intended for hand out only Mapping pages are used to clarify structure and location within presentation -mapping pages are often the agenda located at appropriate positions in the deck, with current topic noted with an arrow -arrow indicates point to be covered by next set of slides Other Slides Format follows standard text format of bullets and dashes -never numbered Initial capitalization First appearance of agenda has no arrows -next appearance should have arrow next to second topic UsesFormat

147 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Agenda/Table of Contents “Agenda” if a presentation “Table of Contents” if intended as a handout only Items are bullets Other Slides ILLUSTRATIVE Framing the engagement A custom process for ITT -market scan -entry strategy -valuation and structure Strategies for SpeakerKey and Dragonfly Why Ernst & Young? Team member resumes Deliverables, timing and fees

148 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Framing the engagement A custom process for ITT -market scan -entry strategy -valuation and structure Strategies for SpeakerKey and Dragonfly Why Ernst & Young? Team member resumes Deliverables, timing and fees Agenda Other Slides Arrow is gray with black shadow 3 pts. to the right and bottom Use arrow to indicate current position Do not use an arrow on first appearance of mapping page Note:Never insert two mapping pages in a row (for example, agenda with no arrows followed by agenda with arrow beside first bullet) ILLUSTRATIVE

149 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute APPENDIX Other Slides Centered, all caps ILLUSTRATIVE

151 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Guidelines for Managing Production Project manager should assign one “production coordinator” to be responsible for managing production All production and edits should be funneled through production coordinator Production coordinator is ultimately responsible for a complete, error-free deck Create a hand drawn copy of the presentation Put in proper page order Number all slides Take a copy -copy is your control deck -originals go to graphics Always have one designated control copy -full set of slides -mix of hand drawn and produced slides -no exceptions to this rule Submit hand drawn deck/slides to graphics department It is not necessary to wait until a full deck has been assembled to submit slides Complete hand drawn slides should be produced when available This will help avoid backlogs later Assign Responsibility Guidelines for Managing Production Prepare the Control Deck Submitting Slides to Graphics

152 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Guidelines for Managing Production (Continued) Ongoing edits should be made in the control deck in red ink When produced slides are received from graphics -carefully proof slides received by comparing to original submitted -compare to control deck to see if additional edits have been made If errors on produced slide, correct in red ink and take copy -original back to graphics -copy into control deck If new edits in control deck, mark up produced slide in red ink and take copy -original back to graphics -copy into control deck If produced slide is error free and no new edits required -original into control deck Guidelines for Managing Production Managing/ Revising Produced Slides

153 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Slide Production/Proofing Process Guidelines for Managing Production Original Hand Drawn Deck Control To Graphics Additional Revisions to Control Proof Slides from Graphics; Compare to Revised Control Mark on Returned Slides Mark on Returned Slides Returned Copy Original Revisions to control Errors on returned slides No revisions No errors

154 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Guidelines for Managing Production (Continued) At any time, your supervisor must be able to ask and receive, without delay, a state of the art version of the presentation Update the control copy one slide at a time, every time a slide is revised When graphics is working on a large number of slides from a presentation, insist that they print revised slides as slides are revised — do not wait until all edits are complete Immediately file all obsolete versions of a slide in an “obsolete slide” file If team members must continue working on slides during production, ensure that they are working only from the latest revised version -multiple copies can cause missed changes and are generally a disaster -ensure any changes made to a slide are “flowed through” to all other slides that may be affected Ensure all edits have been completed by graphics It is acceptable for consultants to make minor edits Have the project manager review one last time for flow, page order Review entire deck for spelling and typographical errors -ensure consistency between slides When you think the deck is perfect, have fresh set of eyes review it again Copy the deck Bind appropriately -formal presentations/proposals — spiral bound with clear cover/solid back -preliminary results, working sessions — binder clipped -internal meetings — binder clipped Ensure graphics department has the final electronic version on file Keep the Control Copy Up-to-Date Guidelines for Managing Production Finalizing the Deck

155 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Expected Approach to Proofing Produced Slides Proof slides one at a time by carefully comparing hand drawn or marked up slide to produced slide At every iteration, read the entire slide, not just the latest edits Check for 2 things -every word, sentence, label and number is correct and makes sense -typographical errors Check rigorously for -spelling errors (use a dictionary) -typographical errors Go beyond simple, mechanical proofing -does it make sense? -does it fit the story line? -is it consistent with all other slides in the presentation? Sweat the details Guidelines for Managing Production

157 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute a double underline means to capitalize a lower-case Use a carat insert text Strike strike through words to eliminate them A curvy line under words means to make them bold Use ato insert a space Transposed words fixed are using a curve-line between words Let it stand Close-up sp ace A diagonal strike-through means to Make Lower Case Use Standard Proof Reader’s Marks to # Note: See your favorite English text book for more Proof Reader’s Symbols

158 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Run in with previous line Move text left Use Standard Proof Reader’s Marks (Continued) Note: See your favorite English text book for more Proof Reader’s Symbols

160 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Example: Dig.gst.dwmktop.111234 Client: Digital Case: Growth Strategy Title: Data Warehousing Market Opportunities Document number “111234” (assigned by ProTrac) *Consultant produced documents have a tracking number of “000000” [Client name -- up to 3 chars].[case name -- up to 3 chars]. [filename -- up to 8 chars].[document tracking # -- 6 chars*] File Naming Convention for SAS Documents File Naming Convention

Fact Based Consulting E SASKorea Strategy. 1 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Table of Contents Fact.

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Fact Based Consulting E SASKorea Strategy. 1 Strategic Advisory Services e Fact Based Consulting Confidential - Do Not Distribute Table of Contents Fact.

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