Intervention (Hidden)
Respondents previously agreed to participate in business surveys run by the University of Utah, which ask questions about business sentiment. In this context, we will provide the following two treatments to a random subset of survey participants. Each treatment consists of a set of additional questions in the survey that participants are free to either answer or ignore. These additional questions will appear every month for the upcoming month and every month for the past month. We will randomize treatments initially and then persistently bring up the treatment questions in ongoing surveys.
TREATMENT 1: Reactive Learning Treatment
PRE-PERIOD TREATMENT 1
Are your targeted revenues for the next month different from your best guess of you expected revenues? If so, what are your targeted revenues over the next month last year?
POST-PERIOD TREATMENT 1
Last month you predicted that your revenues would be [X] over the coming month. You reported a revenue of [Y] for the last month. This implies a forecast error of [X/Y]*100 % (Positive errors mean you overestimated growth, negative errors mean you underestimated growth). If your forecast error was more negative than -10% or more positive than +10%, what is the most likely reason for this deviation from your goal?
TREATMENT 2: Proactive Learning Treatment
Are your targeted revenues for the next month different from your best guess of you expected revenues? If so, what are your targeted revenues over the next month last year?
This section will ask you to specify how exactly you intend to achieve your set revenue growth goal in the previous question. We will obtain your permission in advance if we are interested in using anonymized quotes in scientific publications. As a reminder, your data will remain completely confidential and will not be released in any way that can be linked to you. Data from this study will be kept locked or password-protected, and will be destroyed when no longer needed for research purposes.
PRE-PERIOD TREATMENT 2
(1) A "competitive advantage" is a strength your company has, which distinguishes you from your competitors and which is hard to copy.
Often such “competitive advantage” results from exploring previously untested ideas. Do you have a unique idea or belief that differs from “conventional wisdom” in your industry? If you hold such a contrarian belief, what is it and how could it help with your growth goal?
For example, you might own a sandwich shop and no other sandwich shop in your neighborhood might offer breakfast, because “conventional wisdom” is that there is not enough foot-traffic in the morning. A contrarian belief might be that many office workers are open to purchasing breakfast, but do not currently do so, because they want to avoid fatigue after eating a heavy and unhealthy breakfast sandwich.
(2) What are the most important problems that prevent your unique idea from being realized? Put differently, what are the reasons your belief is contrarian instead of being widely accepted in your industry?
In the sandwich shop example, among the problems preventing you from offering breakfast is that you do not know demand by office workers for healthy breakfast options. Another problem might be that office workers do not know that healthy breakfast options are available for purchase.
(3) Please list two possible plans that might solve the problems that prevent your unique idea from being realized and which can help with your growth goals. Ideally, these two plans would be two different ways that help you solve a problem that other competitors in your market are not solving.
We recommend that these two plans include: (1) What customer or market segment you will target (2) A list the activities that you will use to deliver the intended results, (3) Optional: What advantage you intend to use or create to solve the problem
In the sandwich shop example, one plan might be to offer healthy breakfast smoothies with caffeine, which prevent customers from being tired after breakfast. The targeted customer segment are nearby office workers, which are more likely to be repeat customers. To deliver such smoothies you would need equipment and freshly purchased ingredients. One potential advantage might be your knowledge of tasty smoothy recipes.
(4) What would have to be true for each of the two plans you listed in the last question, to achieve your growth goal for the next month?
For each of the two plans, please make up a list of conditions, which you could potentially observe, and that can either assure you that your plan worked or make you confident that the plan did not work. Such a list of conditions can enable you to pay attention to the relevant business information in a targeted way and more accurately learn from your experiences.
One way to express this is an IF-THEN statement: IF your conditions are met, THEN your profit increases because of the problem the plan solves.
In the sandwich shop example, your condition might be "IF I can at least attract 45 office workers at $5 per breakfast smoothie every weekday, THEN offering breakfast is profitable". One way this condition might fail is that there are not enough office workers interested to purchase breakfast smoothies every weekday.
(5) For each of the conditions you specified in the previous question, how would you test whether this condition is true?
A "test" involves figuring out if the underlying REASON your plan works is correct or incorrect, just like a “business scientist” would. Understanding the reason your plan works can be important to ensure that you can repeat your success and do not rely on “luck”. It will also ensure you that you solved the problem that prevents other firms from doing the same.
Let’s return to the sandwich shop example with the condition "IF I can at least attract 45 office workers at $5 per breakfast smoothie every weekday, THEN offering breakfast is profitable". Your test might involve offering healthy breakfast smoothies with caffeine and advertise these healthy options in neighboring office buildings. Keeping track of how many of your breakfast smoothie customers are office workers and how many of your office workers are repeat customers can then tell you if you can repeat your success.
For more detail, see this article (which will open in a new tab and not interrupt your survey responses on this tab).
POST-TREATMENT 2
(6) Last month we asked you to come up with two alternative plans that might help you meet your growth target. We also asked you to specify "what would have to be true", for these two plans to succeed and to come up with ways to test whether these conditions are true for your business. Did you have an opportunity to conduct a test of the "what would have to be true" conditions?
(7) Last month you predicted that your revenues would be [X] over the coming month. You reported a revenue of [Y] for the last month. This implies a forecast error of [X/Y]*100 % (Positive errors mean you overestimated growth, negative errors mean you underestimated growth). If your forecast error was more negative than -10% or more positive than +10%, what is the most likely reason for this deviation from your goal and how do you know that this is the most likely reason?