How do informational reports and analytical reports differ

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14 Planning Reports and Proposals LEARNING OBJECTIVES

After studying this chapter, you will be able to

1 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P700101245100000000000000000514E) Adapt the three-step writing process to reports and proposals.

2 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p70010124510000000000000000052bb#P70010124510000000000000000052BF) List the options for organizing informational reports, and identify the key parts of a business plan.

3 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P700101245100000000000000000514E) Discuss three major ways to organize analytical reports.

4 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p70010124510000000000000000053dc#P70010124510000000000000000053E1) Explain how to choose an organizational strategy when writing a proposal.

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COMMUNICATION CLOSE-UP AT Warby Parker

www.warbyparker.com (http://www.warbyparker.com)

When a company sets out to disrupt an entire industry, it’s not surprising that its communication efforts don’t follow all the old rules, either.

Much of the worldwide market for eyeglasses is controlled by the Italian company Luxottica Group, which owns such well-known brands as Ray-Ban and Oakley and manufactures glasses for a host of high-fashion labels, from Dolce & Gabbana to Versace. Luxottica also operates more than 7,000 retail stores, including LensCrafters and Sunglass Hut. If you’ve ever purchased a pair of prescription glasses or sunglasses, chances are you’ve done business with Luxottica in one form or another. And business has been very good for Luxottica, earning it some 80 percent of the global market for glasses.

Much of the remaining 20 percent of the market is in the hands of Costco and Walmart, two companies that compete on cost more than fashion. Between high fashion on one hand and low prices on the other, these three giants seem to have wrapped up the market.

Neil Blumenthal and David Gilboa’s unconventional ideas behind the eyewear startup Warby Parker are reflected in the company’s cheeky communication style.

WENN Ltd/Alamy Stock Photo

Neil Blumenthal and David Gilboa looked at the data and drew a different conclusion, however. They believed an opportunity existed for a company to compete on fashion and price. Together with their University of Pennsylvania classmates Andrew Hunt and Jeffrey Raider, they crafted a business model that combines fashion-forward designs and a brand image that appeals to younger consumers with the operational efficiency of online commerce. Echoing their unconventional aspirations, they named the company Warby Parker after two characters from the works of the Beat Generation writer Jack Kerouac.

The quest to connect with buyers in a market dominated by a handful of major corporations gives Warby Parker’s communication efforts a different look and feel. You won’t find supermodels posing on yachts in the company’s promotional campaigns. You’re more likely to find a blog post about what company employees are reading or a wistful goodbye note to a summer intern heading back to high school.

The company’s “annual reports” are a great example of how unconventional thinking can lead to communications that connect with audiences in fresh ways. All U.S. companies that sell stock to the public are required to issue annual reports that disclose a variety of financial details. Most companies expand on these minimum requirements with glossy, persuasive messages about their operations, products, and prospects. As a privately held company, Warby Parker isn’t required to publish an annual report, but it does so anyway—sort of. Its annual reports are anything but normal. One year, the report was an online calendar of major, minor, and just plain goofy things that happened around the company, from product launches to a survey about how many pairs of pants employees wear in a typical month. The following year, it was an interactive message generator that created personalized reports for website visitors based on how good or bad their year had been.

This tradition-defying approach to communication fits the transparent, social, and conversational style of today’s younger consumers. And it helps position Warby Parker as a different kind of company—one more in touch with those customers and their needs and aspirations. The company won’t dethrone Luxottica anytime soon, but it has already carved out a nice chunk of the eyewear market and continues to grow as it heads toward a possible initial public offering in the stock market. At that point it will have to bend to convention just a little, at least enough to meet government reporting requirements, but it will surely maintain

an offbeat approach in the rest of its communication efforts.1

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P700101245100000000000000000558F)

14.1 Applying the Three-Step Writing Process to Reports and Proposals

LEARNING OBJECTIVE

1 Adapt the three-step writing process to reports and proposals. Whether they are routine documents or the unconventional messages that Warby Parker (profiled in the chapter-opening Communication Close-Up) tends to create, reports (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005499) are written accounts that objectively communicate information about some aspect of a business (see Figure 14.1 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005156) ). Informational reports (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005490) offer data, facts, feedback, and other types of information, without analysis or recommendations. Analytical reports (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005487) offer both information and analysis and can also include recommendations. Proposals (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005496) are a special category of reports that combine information delivery and persuasive communication.

The purpose and content of business reports varies widely; in some cases you’ll follow strict guidelines, but in others the organization and format will be up to you.

The nature of these reports can vary widely, depending on the circumstances. Some of the reports you write will be voluntary, launched on your own initiative and following whatever structure you find most effective. Other reports will be in response to a manager’s or customer’s request, and you may or may not receive guidance regarding the organization and content. You may also write certain reports that follow strict, specific guidelines for content and layout.

Many of your reports will be written for internal audiences, but you may also write reports for a wide range of outside readers.

Your audience will sometimes be internal, which gives you more freedom to discuss sensitive information. Other times your audience might include customers, investors, community members, or news media, any of which can create additional demands as you present company information to such external groups.

No matter what the circumstances, preparing reports requires all the skills and knowledge that you’ve gained throughout this course and will continue to gain on the job. View every business report as an opportunity to demonstrate your understanding of business challenges and your ability to contribute to your organization’s success.

By adapting the three-step writing process, you can reduce the time required to write effective reports and still produce documents that make lasting and positive impressions on your audiences. The concepts are the same as those you explored in Chapters 4 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001f59#P7001012451000000000000000001F59) through 6 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000002ade#P7001012451000000000000000002ADE) and applied to shorter messages in Chapters 10 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000003e00#P7001012451000000000000000003E00) through 12 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000004853#P7001012451000000000000000004853) . However, the emphasis on specific tasks can vary considerably. For instance, planning can take days or weeks for a complex report or proposal.

Figure 14.1 Common Types of Business Reports and Proposals

You will have the opportunity to read and write many types of reports in your career; here are some of the most common.

ANALYZING THE SITUATION

Given the length and complexity of many reports, it’s crucial to clearly define your purpose so you don’t waste time with avoidable rework.

The complexity of most reports and the magnitude of the work involved heighten the need to analyze the situation carefully. With an email or another short message, you can change direction halfway through the first draft and perhaps lose only a few minutes of work. In contrast, if you change direction halfway through a major report, you could lose days of work. To minimize that chance, pay special attention to your statement of purpose. In addition, for anything beyond the simplest reports, take the time to prepare a work plan before you start writing.

Defining Your Purpose

Informational reports often address a predetermined need and must meet specific audience expectations. For example, you may be asked to write reports that verify your company’s compliance with government regulations, that summarize sales, or that monitor a process—all of which have audiences who expect certain information in a certain format. With other informational reports, you will need to uncover audience needs before you can define the optimum purpose.

In some cases you’ll be told the purpose of the report; in others, it’s up to you to identify the purpose.

Analytical reports and proposals are almost always written in response to a perceived problem or a perceived opportunity. A clear statement of this problem or opportunity helps frame the communication challenge by identifying what you’re going to write about, but it’s insufficient to guide your writing efforts. To plan effectively, address the problem or opportunity with a clear statement of purpose (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P700101245100000000000000000549F) that defines why you are preparing the report (see Table 14.1 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005191) ).

The most useful way to phrase your purpose statement is to begin with an infinitive (to plus a verb). Using an infinitive encourages you to take control and decide where you’re going before you begin. When you choose an infinitive (such as to inform, to confirm, to analyze, to persuade, or to recommend), you pin down your general goal in preparing the report. Consider these examples for informational reports:

• To update clients on the progress of the research project (progress report) • To develop goals and objectives for the coming year (strategic plan) • To identify customers and explain how the company will serve them (marketing plan) • To submit monthly sales statistics to management (operating report)

• To summarize what occurred at the annual sales conference (personal activity report) • To explain building access procedures (policy implementation report) • To submit required information to the Securities and Exchange Commission (compliance report)

The statement of purpose for an analytical report often needs to be more comprehensive than a statement for an informational report. For example, a report suggesting ways to reduce employee travel and entertainment (T&E) costs might have the following as a statement of purpose:

. . . to analyze the T&E budget, evaluate the impact of recent changes in airfares and hotel costs, and suggest ways to tighten management’s control over T&E expenses.

If the writer had been assigned an informational report instead, she might have stated her purpose differently:

To summarize the company’s spending on travel and entertainment

You can see from these two examples how much influence the purpose statement has on the scope of your report. Because she was assigned an analytical report rather than an informational report, the writer had to go beyond merely collecting data; she had to draw conclusions and make recommendations. (You can see the full report based on this statement of purpose in Chapter 15 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p70010124510000000000000000055a2#P70010124510000000000000000055A2) .)

Proposals must also be guided by a clear and specific statement of purpose to help you focus on crafting a persuasive message. Here are several examples:

To secure $400k of funding in next year’s capital budget for a new conveyor system in the warehouse (funding proposal) To get management approval to reorganize the North American salesforce (general project proposal) To secure $2 million in venture capital funding to complete design and production of the new line of titanium mountain bikes (investment proposal as part of a business plan) To convince Boeing to purchase a trial subscription to our latest database offering (sales proposal)

TABLE 14.1 Problem Statements Versus Purpose Statements

Problem Statement Statement of Purpose

Our company’s market share is steadily declining. To explore new ways of promoting and selling our products and to recommend the approaches most likely to stabilize our market share

Our computer network lacks sufficient bandwidth and cannot be upgraded to meet our future needs.

To analyze various networking options and to recommend the system that will best meet our current and future needs

We need $2 million to launch our new product. To convince investors that our new business would be a sound investment so that we can obtain desired financing

Our current operations are too decentralized and expensive. To justify closing the Newark plant and transferring East Coast operations to a single Midwest location in order to save the company money

Preparing Your Work Plan

A detailed work plan saves time and often produces more effective reports.

You’re already accustomed to some schedule pressure with school reports. This is good practice for your business career, in which you’ll be expected to produce quality reports quickly and efficiently. Carefully thinking out a work plan is the best way to make sure you produce good work on schedule. By identifying all the tasks that must be performed, you ensure that nothing is overlooked (see Figure 14.2 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P70010124510000000000000000051D0) ).

Figure 14.2 Work Plan for a Report

A formal work plan such as this is a vital tool for planning and managing complex writing projects. The preliminary outline here helps guide the research; the report writers may well modify the outline when they begin writing the report.

If you are preparing a work plan for yourself, it can be relatively informal: a simple list of the steps you plan to take and an estimate of their sequence and timing. For more complicated projects, however, particularly those that involve multiple team members, you’ll want to prepare a formal, detailed work plan that can guide the performance of many tasks over a span of time. For consultants and others whose work output is a formal report, the work plan can also become the basis for a contract if the proposal is accepted. A formal work plan might include the following elements (especially the first two):

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• Statement of the problem or opportunity. This statement clarifies the challenge or opportunity at hand, helps you (and anyone working with you) stay focused on the core issues, and helps everyone avoid the distractions that are likely to arise along the way.

• Statement of the purpose and scope of your investigation. The purpose statement describes what you plan to accomplish and therefore also defines the boundaries of your work. Delineating which subjects you will cover and which you won’t is especially important for complex investigations.

• Discussion of tasks to be accomplished. For simple reports, the list of tasks to be accomplished will be short and probably obvious. However, longer reports and complex investigations require an exhaustive list so that you can reserve time with customers, with executives, or for outside services, such as market researchers or print shops.

• Description of any additional products or activities that will result from your investigation. Often the only outcome of your efforts will be the report itself. In other cases you’ll need to produce something or perform some task in addition to completing the report. Make such expectations clear at the outset.

• Review of project assignments, schedules, and resource requirements. Indicate who will be responsible for what, when tasks will be completed, and how much the investigation will cost. If more than one person will be involved, you may also want to include a brief section on coordinating report writing and production, such as whether you’ll use a wiki to develop the report content. If constraints on time, money, personnel, or data are likely to affect the quality of the report, identify these limitations up front.

• Plans for following up after delivering the report. Follow-up can be as simple as making sure people received the information they need or as complex as conducting additional research to evaluate the results of proposals included in your report. Even informal follow-up can help you improve your future reports and communicate that you care about your work’s effectiveness and its impact on the organization.

• Working outline. Some work plans include a tentative outline of the report, as does the plan in Figure 14.2 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P70010124510000000000000000051D0) .

GATHERING INFORMATION

Some reports require formal research projects in order to gather all the necessary information.

The amount of information needed in many reports and proposals requires careful planning—and perhaps even a separate research project just to get the data and information you need. As Chapter 13 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000004d27#P7001012451000000000000000004D27) emphasizes, you should prioritize your information needs before you start and focus on the most important questions. Whenever possible, try to reuse or adapt existing information to save time.

SELECTING THE BEST MEDIA AND CHANNELS

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In some situations you may be required to use a specific medium for your reports.

In addition to the general media selection criteria discussed in Chapter 4 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001f59#P7001012451000000000000000001F59) , consider several points for reports and proposals. First, audiences may have specific media requirements, and you might not have a choice. For instance, executives in many corporations now expect to review many reports via their in-house intranets, sometimes in conjunction with an executive dashboard, a customized online presentation of highly summarized business information. Executive dashboards are particularly helpful for accessing report content on mobile devices (see Figure 14.3 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005222) ).

Second, consider how your audience members want to provide feedback on your report or proposal. Do they prefer to write comments on a printed document or edit a wiki article? Third, will people need to search through your document or update it in the future? Fourth, bear in mind that your choice of medium sends a message. For instance, a routine sales report dressed up in expensive multimedia could look like a waste of valuable company resources.

Figure 14.3 Executive Dashboards

To help managers avoid information overload, many companies now use executive dashboards to present carefully filtered highlights of key performance parameters. Dashboards are essentially super-summarized reports. The latest generation of software and mobile apps make it easy to customize screens to show each manager the specific summaries he or she needs to see.

ORGANIZING YOUR INFORMATION

Most business reports use the direct approach.

The length and complexity of most reports and proposals require extra emphasis on clear, reader-oriented organization. Your readers might have the patience to struggle through a short, disorganized email message but not through a poorly organized 200-page report. As Chapter 4 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001f59#P7001012451000000000000000001F59) discusses, when an audience is likely to be receptive or at least open-minded, use the direct approach: Lead with a summary of your key findings, conclusions, recommendations, or proposal—whichever is relevant. This “up-front” arrangement is by far the most popular and convenient for business reports. It saves time and makes the rest of the report easier to follow. For those who have questions or want more information, later parts of the report provide complete findings and supporting details. The direct approach also produces a more forceful report. You sound sure of yourself when you state your conclusions confidently at the outset.

Use the indirect approach when you need to build support for your main idea or you want to avoid coming across as arrogant.

At times, however, confidence may be misconstrued as arrogance. If your position is relatively low in the organizational hierarchy, or if your audience is skeptical or hostile, consider the indirect approach: Introduce your findings and provide supporting evidence and reasoning before presenting your conclusions and recommendations. The indirect approach gives you a chance to prove your points and gradually overcome your audience’s reservations.

Although the indirect approach has advantages, some readers will always be in a hurry to get to the answer and will immediately flip to the recommendations anyway, thus defeating your purpose. Therefore, consider length before choosing the direct or indirect approach. In general, the longer the message, the less effective an indirect approach is likely to be.

Long reports sometimes combine direct and indirect approaches, building support for interim conclusions or recommendations along the way.

Because both direct and indirect approaches have merit, businesspeople often combine them. They reveal their conclusions and recommendations as they go along rather than put them either first or last. Figure 14.4 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005239) on the next page presents the introductions from two reports that follow the same general outline. In the direct version, a series of statements summarizes the conclusion reached in relation to each main topic in the outline. In the indirect version, the same topics are introduced in the same order but without drawing any conclusions about them. Instead, the conclusions appear within the body of the report.

Figure 14.4 Direct Approach Versus Indirect Approach in an Introduction

In the direct version of this introduction, the writer quickly presents the report’s recommendation, followed by the conclusions that led to that recommendation. In the indirect version, the same topics are introduced in the same order, but no conclusions are drawn about them (the conclusions and the ultimate recommendation appear later, in the body of the report).

Audience expectations are one of the most important considerations when deciding on the organization of your report.

Regardless of the format, length, or order of your report, think carefully about how your ideas will be subdivided and developed. Take care to choose the most logical argument structure—one that suits your topic and goals and that makes sense to your audience.

As you outline your content, use informative (“talking”) headings rather than simple descriptive (“topical”) headings (see Table 14.2 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005256) ). Informative headings in a question or summary form force you to think through the content rather than simply identifying the general topic area. Using informative headings also facilitates collaborative writing by reducing ambiguity about what each person needs to write.

TABLE 14.2 Types of Outline Headings

Descriptive (Topical) Outline

Informative (Talking) Outline

Question Form Summary Form

1. Industry Characteristics

a. Annual sales b. Profitability c. Growth rate

i. Sales ii. Profit

1. What is the nature of the industry? a. What are the annual sales? b. Is the industry profitable? c. What is the pattern of

growth? i. Sales growth? ii. Profit growth?

1. Flour milling is a mature industry. a. Market is large. b. Profit margins are narrow. c. Growth is modest.

i. Sales growth averages less than 3 percent a year.

ii. Profits are flat.

CHECKLIST Adapting the Three-Step Process to Reports and Proposals

A. Analyze the situation. • Clearly define your purpose before you start writing. • If you need to accomplish several goals in the report, identify them all in advance. • Prepare a work plan to guide your efforts.

B. Gather information. • Determine whether you need to launch a separate research project to collect the necessary information. • Reuse or adapt existing material whenever possible.

C. Select the best medium. • Base your decision on audience expectations or requirements. • Consider the need for commenting, revising, distributing, and storing. • Remember that the medium you choose also sends a message.

D. Organize your information. • Use the direct approach if your audience is receptive. • Use the indirect approach if your audience is skeptical. • Use the indirect approach when you don’t want to risk coming across as arrogant. • Combine approaches if doing so will help build support for your primary message.

For a quick review of adapting the three-step process to longer documents, refer to “Checklist: Adapting the Three-Step Process to Reports and Proposals (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005293) .” The following sections provide specific advice on how to plan informational reports, analytical reports, and proposals.

14.2 Planning Informational Reports

LEARNING OBJECTIVE

2 List the options for organizing informational reports, and identify the key parts of a business plan. Informational reports provide the information that employees, managers, and others need in order to make decisions and take action. Although dozens of particular formats exist, they can be grouped into four general categories:

Informational reports are used to monitor and control operations, to implement policies and procedures, to demonstrate compliance, and to document progress.

• Reports to monitor and control operations. Just as doctors rely on medical reports to see how well the various systems in a patient’s body are functioning, business managers rely on a wide range of reports to see how well the various systems in their companies are functioning. Plans establish expectations and guidelines to direct future action (see “Creating Successful Business Plans (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p70010124510000000000000000052bb#P70010124510000000000000000052E8) ” on page 396 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p70010124510000000000000000052bb#page_396) ). Operating reports provide feedback on a wide variety of an organization’s functions, including sales, inventories, expenses, shipments, and other aspects of company operations. Personal activity reports provide information regarding an individual’s experiences during sales calls, industry conferences, market research trips, and other activities.

• Reports to implement policies and procedures. Policy reports range from brief descriptions of business procedures to manuals that run dozens or hundreds of pages. Position papers, sometimes called white papers or backgrounders, outline an organization’s official position on issues that affect the company’s success.

• Reports to demonstrate compliance. Even the smallest businesses are required to show that they are in compliance with government regulations of one sort or another. Some compliance reports, such as quarterly and annual tax reports, affect all businesses. Others concern particular industries, companies using hazardous materials, specific professional functions, or other special factors. Compliance reports are usually created in specific formats that must be followed exactly.

Progress reports range from simple, informal updates to comprehensive status reports.

• Reports to document progress. Progress reports range from simple updates to comprehensive reports that include such elements as measured progress toward goals, comparisons of budgeted versus actual expenses, and lists of ongoing concerns and risks.

ORGANIZATIONAL STRATEGIES FOR INFORMATIONAL REPORTS

Most informational reports use a topical organization (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P70010124510000000000000000054A2) , arranging the material by topic in one of the following ways:

A topical organization is built around the content itself, using such arrangements as comparison, importance, sequence, spatial orientation, chronology, geography, or category.

• Comparison. Showing similarities and differences (or advantages and disadvantages) between two or more entities • Importance. Building up from the least important item to the most important (or from most important to the least, if you don’t think your audience will

read the entire report) • Sequence. Organizing the steps or stages in a process or procedure • Spatial orientation. Organizing parts of a physical space by their relative locations • Chronology. Organizing a chain of events in order from oldest to newest or vice versa • Geography. Organizing by region, city, state, country, or other geographic unit • Category. Grouping by topical category, such as sales, profit, cost, or investment

Whichever pattern you choose, use it consistently so that readers can easily follow your discussion from start to finish. Of course, certain reports (such as compliance or monitor-and-control reports) must follow a prescribed flow.

CREATING SUCCESSFUL BUSINESS PLANS

A business plan (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P700101245100000000000000000548A) is a comprehensive document that describes a company’s mission, structure, objectives, and operations. In general, business plans can be written during three separate phases of a company’s life: (1) before the company is launched, when the founders are defining their vision of what the company will be; (2) when the company is seeking funding, in which case the business plan takes on a persuasive tone to convince outsiders that investing in the firm would be a profitable decision; and (3) after the company is up and running and the business plan serves as a monitor-and-control mechanism to make sure operations are staying on track.

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Step-by-step advice for developing a successful business plan

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At any stage, a comprehensive business plan forces you to think about personnel, marketing, facilities, suppliers, distribution, and a host of other issues vital to a company’s success. The specific elements to include in a business plan can vary based on the situation; here are the sections typically included in a plan written to

attract outside investors:2

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Formal business plans, particularly those used to solicit outside investment, must meet a specific set of reader expectations.

• Summary. In one or two paragraphs, summarize your business concept, particularly the business model, which defines how the company will generate revenue and produce a profit. The summary must be compelling, catching the investor’s attention and giving him or her reasons to keep reading. Describe your product or service and its market potential. Highlight some things about your company and its leaders that will distinguish your firm from the competition. Summarize your financial projections and indicate how much money you will need from investors or lenders and where it will be spent.

• Mission and objectives. Explain the purpose of your business and what you hope to accomplish. • Company and industry. Give full background information on the origins and structure of your venture and the characteristics of the industry in which

you plan to compete. • Products or services. Concisely describe your products or services, focusing on their unique attributes and their appeal to customers. • Market and competition. Provide data that will persuade investors that you understand your target market and can achieve your sales goals. Be sure to

identify the strengths and weaknesses of your competitors. • Management. Summarize the background and qualifications of the key management personnel in your company. Include résumés in an appendix. • Marketing strategy. Provide projections of sales volume and market share; outline a strategy for identifying and reaching potential customers, setting

prices, providing customer support, and physically delivering your products or services. Whenever possible, include evidence of customer acceptance, such as advance product orders.

• Design and development plans. If your product requires design or development, describe the nature and extent of what needs to be done, including costs and possible problems. For new or unusual products, you may want to explain how the product will be manufactured.

• Operations plan. Provide information on facilities, equipment, and personnel requirements. • Overall schedule. Forecast important milestones in the company’s growth and development, including when you need to be fully staffed and when your

products will be ready for the market. • Critical risks and problems. Identify significant negative factors and discuss them honestly. • Financial projections and requirements. Include a detailed budget of start-up and operating costs, as well as projections for income, expenses, and

cash flow for the first few years of business. Identify the company’s financing needs and potential sources, if appropriate. • Exit strategy. Explain how investors will be able to profit from their investment, such as through a public stock offering, sale of the company, or a

buyback of the investors’ interest.

As Chapter 13 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000004d27#P7001012451000000000000000004D27) ’s Communication Close-Up on page 363 (M18_C13.xhtml#page_363) notes, not everyone believes a conventional business plan is the right approach for every start- up company. If a company still needs to prove the viability of its business model or key product, the time it would take to write a full business plan might be better spent on getting the product or service operational and in front of customers in order to prove its viability. A regular business plan would make more sense after that, when the company needs to transition from start-up to ongoing operations.

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14.3 Planning Analytical Reports

LEARNING OBJECTIVE

3 Discuss three major ways to organize analytical reports. The purpose of analytical reports is to analyze, to understand, or to explain a problem or an opportunity and figure out how it affects the company and how the company should respond. In many cases you’ll also be expected to make a recommendation based on your analysis. As you saw in Figure 14.1 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p700101245100000000000000000514a#P7001012451000000000000000005156) , analytical reports fall into three basic categories:

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

• Reports to assess opportunities. Every business opportunity carries some degree of risk and requires a variety of decisions and actions in order to capitalize on the opportunity. For instance, market analysis reports are used to judge the likelihood of success for new products or sales initiatives by identifying potential opportunities as well as competitive threats and other risks. 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 what can be done to fix the situation. 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 are called for when managers need to explore the ramifications of a decision they’re about to make (such as replacing an advertising agency or switching materials used in a manufacturing process). Justification reports justify 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 problem or an opportunity and presenting your conclusions. The best writing in the world can’t compensate for flawed analysis. Second, when your analysis is complete, you need to present your thinking in a credible manner. Third, analytical reports often convince other people to make significant financial and personnel decisions, so your reports carry the added responsibility of the consequences of these decisions.

In some situations the problem or opportunity you address may be defined by the person who authorizes the report. In other cases you will have to define it yourself. Be careful not to confuse a simple topic (quarterly profits) with a problem (the decline in profits over the past six quarters). Moreover, if you’re the only person who thinks a particular issue is a problem, your readers won’t be interested in your solution unless your report first convinces them that a problem exists. As with marketing and sales messages, sometimes you need to “sell the problem” before you can sell the solution.

To help define the problem that your analytical report will address, answer these questions:

Clarify the problem in an analytical report by determining what you need to analyze, why the issue is important, who is involved, where the trouble is located, and how and when it started.

• What needs to be determined? • Why is this issue important? • Who is involved in the situation? • Where is the trouble located? • How did the situation originate? • When did it start?

Not all these questions apply in every situation, but asking them helps you define the problem being addressed and limit the scope of your discussion.

Use problem factoring to divide a complex problem into more manageable pieces.

Another effective way to tackle a complex problem is to divide it into a series of logical, connected questions, a process sometimes called problem factoring (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005493) . You probably subconsciously approach most problems this way. When your car won’t start, what do you do? You use the available evidence to organize your investigation and to start a search for cause-and-effect relationships. For example, if the engine doesn’t turn over, you might suspect a dead battery. If the engine does turn over but won’t fire, you can conclude that the battery is okay, but perhaps you’re out of gas. When you speculate on the cause of a problem, you’re forming a hypothesis (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P700101245100000000000000000548D) , a potential explanation that needs to be tested. By subdividing a problem and forming hypotheses based on available evidence, you can tackle even the most complex situations. With a clear picture of the problem or opportunity in mind, you’re ready to consider the best structure for your report.

Whenever you are preparing an analytical report, make sure you are clear in your own mind about whether you are advocating one particular line of thought or

objectively exploring all the available options.3

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005593) Even if advocating one position is appropriate in the circumstances, your readers will expect you to have considered the other options so that you can help them understand why your answer is preferred.

ORGANIZATIONAL STRATEGIES FOR ANALYTICAL REPORTS

Before you choose an approach, determine whether your audience is receptive or skeptical.

When you expect your audience to agree with you, use the direct approach to focus attention on conclusions and recommendations. When you expect your audience to disagree with you or to be hostile, use the indirect approach to focus attention on the rationale behind your conclusions and recommendations.

The three most common structural approaches for analytical reports are focusing on conclusions (a direct format), focusing on recommendations (another direct format), and focusing on logical arguments (an indirect format) (see Table 14.3 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005316#P7001012451000000000000000005348) ).

Focusing on Conclusions

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

When writing 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 a direct approach that focuses immediately on your conclusions. This structure communicates the main idea quickly, but it presents 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. You’re generally better off taking this direct approach in a report only when your credibility is high—when your readers trust you and are willing to accept your conclusions (see Figure 14.5 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005316#P7001012451000000000000000005383) on the next page).

Focusing on Recommendations

When readers want to know what you think they should do, organize your report to focus 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). You’ll often be asked to solve a problem or assess an opportunity rather than just study it. 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 or verify the need for action in the introduction by briefly describing the problem or opportunity

2. Introduce the benefit that can be achieved, without providing any details

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

5. Summarize your recommendations

Whenever a recommendation carries some element of risk, you owe it to your audience to make this clear.

TABLE 14.3 Common Ways to Structure Analytical Reports

Element Focus on Conclusions or

Recommendations

Focus on Logical Argument

Use 2 + 2 = 4 Model Use Yardstick Model

Reader mindset

Are likely to accept Hostile or skeptical Hostile or skeptical

Approach Direct Indirect Indirect

Writer credibility

High Low Low

Advantages Readers quickly grasp conclusions or recommendations

Works well when you need to show readers how you built toward an answer by following clear, logical steps

Works well when you have a list of criteria (standards) that must be considered in a decision; alternatives are all measured against the same criteria

Drawbacks Structure can make topic seem too simple

Can make report longer Readers must agree on criteria; can be lengthy because of the need to address all criteria for every alternative

If your recommendation carries any risks, be sure to clearly address them. Doing so not only makes your report more ethical but also offers you some protection in the event that your recommendation is implemented but doesn’t work out as you had hoped. In short, make sure your readers know the potential disadvantages as well as the potential benefits.

Figure 14.5 Preliminary Outline of a Research Report Focusing on Conclusions

A year after a bank decided to have an outside firm handle its employee training, an analyst was asked to prepare a report evaluating the results. The analysis shows that the outsourcing experiment was a success, so the report 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

Two common logical patterns arguments are the 2 + 2 = 4 approach (adding everything up) and the yardstick approach (comparing solutions against criteria).

When readers are likely to be skeptical or hostile to the conclusion or recommendation you plan to make, use an indirect approach. If you guide people along a logical 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 and the yardstick approach.

The 2 + 2 = 4 Approach

The 2 + 2 = 4 approach (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P70010124510000000000000000054A8) is so named because it convinces readers of your point of view by demonstrating that everything adds up. The main points in your outline are the main reasons behind your conclusions and recommendations. You support each reason with the evidence you collected during your analysis.

Start by considering using the 2 + 2 = 4 approach; it’s familiar and easy to develop.

Because of its natural feel and versatility, the 2 + 2 = 4 approach is generally the most persuasive and efficient way to develop an analytical report for skeptical readers. When organizing your own reports, try this structure first. You’ll find that many business situations lend themselves nicely to this pattern of logical argumentation.

The Yardstick Approach

The yardstick approach compares a solution or several solutions to a set of predetermined standards.

The yardstick approach (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P70010124510000000000000000054A5) is useful when you need to use a number of criteria to evaluate one or more possible solutions. These criteria become the “yardstick” by which you measure the various alternatives. With this approach, you begin by discussing the problem or opportunity and then list the criteria that will guide the decision. The body of the report then

evaluates the alternatives against those criteria. The main points of the outline are either the criteria themselves or the alternatives (see Figure 14.6 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005316#P70010124510000000000000000053B3) ).

The yardstick approach is particularly useful for proposals when the audience has provided a list of criteria the solution must meet. Imagine that your company has been asked to bid on a contract to design and install a factory-floor distribution system for a large corporation. The client has listed the requirements (criteria) for the system, and you’ve developed a preliminary design to meet them. In the body of your proposal, you could use the client’s list of requirements as the main headings and under each one explain how your preliminary design meets the requirement.

The yardstick approach has two potential drawbacks. First, your audience members need to agree with the criteria you’re using in your analysis. If they don’t, they won’t agree with the results of the evaluation. If you have any doubt about their agreement, build consensus before you start your report, if possible, or take extra care to explain why the criteria you’re using are the best ones in this particular case.

Second, the yardstick approach can get tedious when you have many options to consider or many criteria to compare them against. One way to minimize repetition is to compare the options in tables and then highlight the most unusual or important aspects of each alternative in the text so that you get the best of both worlds. This approach allows you to compare all the alternatives against the same yardstick while calling attention to the most significant differences among them.

Figure 14.6 Outline of an Analytical Report Using the Yardstick Approach

This report was drafted by a market analyst for a company that makes irrigation equipment for farms and ranches. The company has been so successful in the agricultural market that it is starting to run out of potential customers. To keep growing, it needs to find another market. Two obvious choices to consider were commercial buildings and residences, but management needed to evaluate both carefully before making a decision.

EFFECTIVE ANALYTICAL REPORTS: AN EXAMPLE

As national sales manager of a New Hampshire sporting goods company, Binh Phan was concerned about his company’s ability to sell to its major accounts, the giant national chains that now dominate retailing. Even though these customers are getting bigger, the company’s sales to them are dropping, and it’s critical to figure out why and propose a solution. Phan’s boss, the vice president of marketing, asked Phan to analyze the situation and make a recommendation.

Phan’s troubleshooting report appears in Figure 14.7 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005316#P70010124510000000000000000053CE) . The main idea is that the company should establish a separate sales team for each these major national accounts rather than continuing to service them through the company’s four regional divisions. However, Phan knew his plan would be controversial because it requires a big change in the company’s organization and in the way sales reps are paid. His thinking had to be clear and easy to follow, so he used the 2 + 2 = 4 approach to focus on his reasons.

Figure 14.7 Analytical Report Using the 2 + 2 = 4 Approach

The 2 + 2 = 4 approach lets this writer present a logical argument that is both clear and compelling.

14.4 Planning Proposals

LEARNING OBJECTIVE

4 Explain how to choose an organizational strategy when writing a proposal. Proposals are written for both internal and external audiences. Internal proposals request decisions from managers within the organization, such as proposals to buy new equipment or launch new research projects. Examples of external proposals include grant proposals, which request funds from government agencies and other sponsoring organizations, and sales proposals, which suggest individualized solutions for potential customers and request purchase decisions.

The most significant factor in planning any proposal is whether the intended 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. When organizations require complex products, services, or systems, they often prepare a formal invitation to bid on the contract, called a request for proposals (RFP) (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P700101245100000000000000000549C) , 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. To attract a large pool of qualified bidders, organizations send RFPs to firms with good records of performance in the field, print them in trade publications, and post them on the web.

Buyers often solicit proposals by publishing a request for proposals (RFP).

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To write a proposal in response to an RFP, begin by reviewing the requirements. Next, define the scope of the deliverables, determine the methods and procedures to be used, and estimate time requirements, personnel requirements, and costs. Then put it all in writing—exactly as specified in the RFP, following

the precise format it requires and responding meticulously to every point it raises.4

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005595) RFPs can seem surprisingly picky, even to the point of specifying the paper size for the proposal and the number of copies to send, but you must follow every detail.

Unsolicited proposals are created by organizations attempting to obtain business or funding without a specific invitation from a potential client. Such proposals may also be initiated by employees or managers who want to convince company insiders to adopt a program, a policy, or an idea. In other words, with an unsolicited proposal, the writer makes the first move. Even so, an unsolicited proposal should not come as a surprise to the recipient, but rather should be the

summation of an ongoing conversation between the sender and the recipient.5

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000005475#P7001012451000000000000000005597) This approach helps ensure acceptance, and it gives you an opportunity to explore the recipient’s needs and craft your proposal around them.

Unsolicited proposals require additional persuasive elements because the audience isn’t expecting the proposal and might not even be conscious of the problem you propose to solve.

Unsolicited proposals differ from solicited proposals in another important respect: Your audience may not be aware of the problem you are addressing, so your proposal must first convince readers that a problem or an opportunity exists before convincing them that you can address it. Thus unsolicited proposals generally spend considerable time explaining why readers should take action and convincing them of the benefits of doing so.

Every proposal competes for something: money, time, attention, and so on.

With virtually any proposal, keep in mind that you are always competing for something—money, time, management attention, and so on. Even if yours is the only proposal on the table, you are still competing with all the other choices your audience members could make with their time, money, and attention.