6 LEARNING OBJECTIVE

Identify the three most common ways to organize analytical reports.

Analytical reports are used to assess opportunities, to solve problems, and to support decisions.

Planning Analytical Reports

The purpose of analytical reports is to analyze, to understand, or to explain—to think through a problem or an opportunity and explain how it affects an organization and how the organization should respond. In many cases, you’ll also be expected to make a recommendation based on your analysis. As you saw in Figure 10.1, analytical reports fall into three basic categories:

■Reports to assess opportunities. Every business opportunity carries some degree of risk and requires a variety of decisions and actions to capitalize on the opportunity. You can use analytical reports to assess both risk and required decisions and actions. For instance, market analysis reports are used to judge the likelihood of success for new products or sales. Due diligence reports examine the financial aspects of a proposed decision, such as acquiring another company.

■Reports to solve problems. Managers often assign troubleshooting reports when they need to understand why something isn’t working properly and how to fix it. A variation, the failure analysis report, studies events that happened in the past, with the hope of learning how to avoid similar failures in the future.

■Reports to support decisions. Feasibility reports explore the potential ramifications of a decision that managers are considering, and justification reports explain a decision that has already been made.

Writing analytical reports presents a greater challenge than writing informational reports, for three reasons. First, you’re doing more than simply delivering information—you’re also analyzing a situation and presenting your conclusions. Second, when your analysis is complete, you need to present your thinking in a compelling and persuasive manner. Third, analytical reports often convince other people to make significant financial and personnel decisions, and these reports carry the added responsibility of the consequences of such decisions.

Focusing on conclusions is often the best approach when you’re addressing a receptive audience.

Focusing on Conclusions

When planning reports for audiences that are likely to accept your conclusions—either because they’ve asked you to perform an analysis or they trust your judgment—consider using the direct approach, focusing immediately on your conclusions. This structure communicates the main idea quickly, but it does present some risks. Even if audiences trust your judgment, they may have questions about your data or the methods you used. Moreover, starting with a conclusion may create the impression that you have oversimplified the situation. To give readers the opportunity to explore the thinking behind your conclusion, support that conclusion with solid reasoning and evidence (see Figure 10.7).

When readers want to know what you think they should do, organize your report to focus on recommendations.

Focusing on Recommendations

A slightly different approach is useful when your readers want to know what they ought to do in a given situation (as opposed to what they ought to conclude). The actions you want your readers to take become the main subdivisions of your report.

When structuring a report around recommendations, use the direct approach, as you would for a report that focuses on conclusions. Then unfold your recommendations using a series of five steps:

1.Establish the need for action in the introduction by briefly describing the problem or opportunity.

2.Introduce the benefit(s) that can be achieved if the recommendation is adopted, along with any potential risks.

3.List the steps (recommendations) required to achieve the benefit, using action verbs for emphasis.

4.Explain each step more fully, giving details on procedures, costs, and benefits; if necessary, also explain how risks can be minimized.

5.Summarize your recommendations.

In keeping with the direct approach, the report will open with

the conclusion that the program is a success.

These two sections will support the conclusion with evidence from two key areas.

This section will complete the story by highlighting areas that still

need improvement.

MEASURING QUALITY IMPROVEMENTS

I.Introduction

II.Conclusion: Outsourcing employee training has reduced costs and improved quality

III.Cost reductions

A.Exceeded 15 percent cost-reduction goal with 22 percent savings in first year

B.Achieved actual reduction of 22 percent

C.Reassigned three staffers who used to work on training full-time

D.Reduced management time needed to oversee training

E.Sold the computers that used to be reserved for training

IV. Quality improvements

A.Employees say they are more confident in 7 out of 10 key skill areas

B.Measurable mistakes have dropped by 12 percent V. Areas needing improvement

A.Three skill areas still need improvement

B.Two trainers received approval ratings below 80 percent

C.Outside trainers aren't always aware of internal company issues

D.We have lost some flexibility for scheduling courses

VI. Summary

Figure 10.7 Preliminary Outline of a Research Report Focusing on Conclusions

The bank where human resources specialist Cynthia Zolonka works decided to have an outside firm handle its employee training. A year after the outsourcing arrangement was established, Zolonka was asked to evaluate the results. Her analysis shows that the outsourcing experiment was a success, and she opens with that conclusion but supports it with clear evidence. Readers who accept the conclusion can stop reading, and those who desire more information can continue.

Focusing on Logical Arguments

When readers are potentially skeptical or hostile, consider using the indirect approach to logically build toward your conclusion or recommendation. If you guide readers along a rational path toward the answer, they are more likely to accept it when they encounter it. The two most common logical approaches are known as the 2 + 2 = 4 approach, in which you convince readers by demonstrating that everything adds up to your conclusion, and the yardstick approach, in which you use a number of criteria to decide which option to select from two or more possibilities (see Figure 10.8 on the next page).

Logical arguments can follow two basic approaches: 2 + 2 = 4 (adding everything up) and the yardstick method (comparing ideas against a predetermined set of standards).

Planning Proposals

Proposals can be grouped into two general categories. Internal proposals (see Figure 10.9) request decisions from managers within the organization. External proposals request decisions from parties outside the organization. For example, investment proposals request funding from outside investors, grant proposals request funds from government agencies and other sponsoring organizations, and sales proposals present solutions for potential customers and request purchase decisions.

The most significant factor in planning a proposal is whether the recipient has asked you to submit a proposal. Solicited proposals are generally prepared at the request of external parties that require a product or a service, but they may also be requested by such internal sources as management or the board of directors. Some organizations prepare a formal invitation to bid on their contracts, called a request for proposals (RFP), which includes instructions that specify exactly the type of work to be performed or products to be delivered, along with budgets, deadlines, and other requirements. Other companies then respond by preparing proposals that show how they would meet those needs. In most cases,

7 LEARNING OBJECTIVE

Explain how to plan proposals.

When submitting a solicited proposal in response to an RFP, follow its instructions to the letter.

Unsolicited proposals require more creativity because readers don’t expect them and may not even be aware of the problem or opportunity you want to address.

organizations that issue RFPs also provide strict guidelines on what the proposals should include, and you need to follow these guidelines carefully in order to be considered.

Unsolicited proposals offer more flexibility but a completely different sort of challenge because recipients aren’t expecting to receive them. In fact, your audience may not be aware of the problem or opportunity you are addressing, so before you can propose a solution, you might first need to convince your readers that a problem or an opportunity exists. Consequently, the indirect approach is often the wise choice for unsolicited proposals.

Regardless of its format and structure, a good proposal explains what a project or course of action will involve, how much it will cost, and how the recipient and his or her organization will benefit.

The first paragraph

verifies who requested the report,

when it was requested, and who wrote it.

This section explains how the information used in the analysis was collected.

Phan describes the first problem and explains how it occurred, without blaming anyone personally.

MEMO

TO: Robert Mendoza,Vice President of Marketing

FROM: Binh Phan, National Sales Manager

DATE: September 12, 2012

SUBJECT: Major accounts sales problems

As you requested on August 20, this report outlines the results of my investigation into the recent slowdown in sales to major accounts and the accompanying rise in salesand service-related complaints from some of our largest customers.

Over the last four quarters, major account sales dropped 12%, whereas overall sales were up 7%. During the same time, we’ve all noticed an increase in both formal and informal complaints from larger customers, regarding how confusing and complicated it has become to do business with us.

My investigation started with in-depth discussions with the four regional sales managers, first as a group and then individually.The tension I felt in the initial meeting eventually bubbled to the surface during my meetings with each manager. Staff members in each region are convinced that other regions are booking orders they don’t deserve, with one region doing all the legwork only to see another region get the sale, the commission, and the quota credit.

I followed up these formal discussions by talking informally and exchanging email with several sales representatives from each region.Virtually everyone who is involved with our major national accounts has a story to share. No one is happy with the situation, and I sense that some reps are walking away from major customers because the process is so frustrating.

The decline in sales to our major national customers and the increase in their complaints stem from two problems: (1) sales force organization and (2) commission policy.

ORGANIZATIONAL PROBLEMS

When we divided the national sales force into four geographical regions last year, the idea was to focus our sales efforts and clarify responsibilities for each prospective and current customer.The regional managers have gotten to know their market territories very well, and sales have increased beyond even our most optimistic projections.

However, while solving one problem, we have created another. In the past 12 to 18 months, several regional customers have grown to national status, and a few retailers have

taken on (or expressed interest in) our products.As a result, a significant portion of both current sales and future opportunities lies with these large national accounts.

I uncovered more than a dozen cases in which sales representatives from two or more regions found themselves competing with each other by pursuing the same customers from different locations. Moreover, the complaints from our major accounts about overlapping or nonexistent account coverage are a direct result of the regional organization. In some cases, customers aren't sure which of our representatives they're supposed to call with problems and orders. In other cases, no one has been in contact with them for several months.

The second paragraph highlights the serious nature of the problem.

Organizational problems are

the first "2" in Phan's 2 + 2 = 4 approach.

Commission problems are the second "2" in Phan's 2 + 2 = 4 approach.

Phan concludes the 2 + 2 = 4

approach: organizational problems + commission problems = the need

for a new sales structure.

The regional sales organization is effective at the regional and local levels but not at the national level.We should establish a national accounts group to handle sales that cross regional boundaries.Then we’ll have one set of reps who are focused on the local and regional levels and another set who are pursuing national accounts.

To compensate regional reps who lose accounts to the national team, we will need to devise some sort of payment to reward them for the years of work invested in such accounts.This can be discussed with the sales managers once the new structure is in place.

The summary concisely restates both the problem and the recommended solution.

A subject line with a compelling

promise catches

the reader's attention.

“The Solution” explains the proposed

solution in enough detail to make it convincing, without burdening

the reader with excessive detail.

THE PROBLEM:

Expensive and Slow Response to Customer Information Requests

Our new product line has been very well received, and orders have surpassed our projections.This very success, however, has created a shortage of printed brochures, as well as considerable overtime for people in the customer response center.As we

introduce upgrades and new options, our printed materials quickly become outdated. If we continue to rely on printed materials for customer information, we have two choices: Distribute existing materials (even though they are incomplete or inaccurate) or discard existing materials and print new ones.

THE SOLUTION:

Automated Email Response System

With minor additions and modifications to our current email system, we can set up an automated system to respond to customer requests for information.This system can save us time and money and can keep our distributed information current.

Automated email response systems have been tested and proven effective. Many companies already use this method to respond to customer information requests, so we won’t have to worry about relying on untested technology. Using the system is easy, too: Customers simply send a blank email message to a specific address, and the system responds by sending an electronic copy of the requested brochure.

Benefit #1 : Always-Current Information

Rather than discard and print new materials, we would only need to keep the electronic files up to date on the server.We could be able to provide customers and our field sales organization with up-to-date, correct information as soon as the upgrades or options are available.

Benefit #2: Instantaneous Delivery

Almost immediately after requesting information, customers would have that information in hand. Electronic delivery would be especially advantageous for our international customers. Regular mail to remote locations sometimes takes weeks to arrive, by which time the information may already be out of date. Both customers and field salespeople will appreciate the automatic mail-response system.

Benefit #3: Minimized Waste

With our current method of printing every marketing piece in large quantities, we discard thousands of pages of obsolete catalogs, data sheets, and other materials every year. By maintaining and distributing the information electronically, we would eliminate this waste.We would also free up a considerable amount of expensive floor space and shelving that is required for storing printed materials.

“The Problem” describes the current situation and explains why it should be fixed.

Listing a number of compelling benefits as subheadings builds reader interest in the proposed solution.

She acknowledges one potential shortcoming with the new approach but provides a convincing solution to that as well.

A detailed breakdown

of cost savings provides credible

support for the $145k/year claim

made in the subject line.

Her conclusion summarizes the

benefits and invites further discussion.

Figure 10.9 (Continued)

2

Of course, some of our customers may still prefer to receive printed materials, or they may not have access to electronic mail. For these customers, we could simply print copies of the files when we receive such requests.The new Xerox DocuColor printer just installed in the Central Services building would be ideal for printing high-quality materials in small quantities.

In addition to saving both paper and space, we would also realize considerable savings in wages. Because of the increased interest in our new products, we must continue to work overtime or hire new people to meet the demand.An automatic mail response system would eliminate this need, allowing us to deal with fluctuating interest without a fluctuating workforce.

The necessary equipment and software costs approximately $15,000. System maintenance and upgrades are estimated at $5,000 per year. However, those costs are offset many times over by the predicted annual savings:

Based on these figures, the system would save $130,000 the first year and $145,000 every

year after that.

An automated email response system would yield considerable benefits in both customer satisfaction and operating costs. If you approve, we can have it installed and running in 6 weeks. Please give me a call if you have any questions.