Introduction
This is part of the How to Use ChatGPT For Business series we have been covering on our blog.
In this instalment, we're exploring a unique angle: What if ChatGPT played the role of your business adversary who is looking to destroy your business?
But fear not! The goal is to fortify your business by intentionally uncovering its vulnerabilities.
What is Red-Teaming?
Think of it as your business's ultimate stress test. Originating in the military, red teaming involves taking an adversarial stance to rigorously challenge your company's plans, policies, and assumptions. It's about viewing your operations from the outside in, pinpointing every possible crack in the armour. And who better to do this than an unbiased, emotion-free AI?
In this edition, we’ll delve deep into how to red-team your FMCG direct-to-consumer brand using ChatGPT. We're tasking our AI to deliberately hunt for those weak spots so that you can armour up and face any external shock with confidence.
Benefits of this exercise
Failing to prepare is preparing to fail. — Benjamin Franklin
FMCG brands that rely on external partners for sourcing ingredients, manufacturing, storage, and delivery face significant challenges. Introducing novel products brings its own unique hurdles, especially when regulations are still evolving and can change rapidly.
Those in the industry have likely encountered such shifts, be it regulatory changes, negative publicity, or product recalls. Recall the news related to illicit vape-juice fatalities that plunged the vaping industry into turmoil. Events of this magnitude necessitate significant business transformations. At times, the impact can be so profound that businesses never recover. In the best cases, it results in financial loss, time wastage, and irate customers.
Contemplating potential low-probability events might not seem appealing, especially when things are going smoothly. The mindset of "We'll address it when it happens" is prevalent. Yet, the business landscape can shift quickly, leaving us scrambling for solutions when crisis strikes.
It's wise to anticipate potential business pitfalls, yet with the daily challenges we face, this can be daunting. Decision-makers need to allocate their energy judiciously. Fortunately, AI offers a way to fortify your red teaming efforts, efficiently, using astute prompts we'll delve into shortly.
You might wonder, "Why the emphasis on ChatGPT?”. As mentioned in a previous article, ChatGPT is not just a tool to rewrite or summarise words. It can be viewed as an intelligence extension. It's an extension of your cognitive process, thinking analytically for you.
ChatGPT will represent your red team. In a sense, we will use ChatGPT to find potential fail points in your business process (so you better be nice to it to not end up on the wrong side of it 😀)
See some benefits of using ChatGPT for red teaming.
Unbiased Perspective*: provides an unbiased perspective since it doesn't have vested interests or prior beliefs.
Diverse Scenarios: generates a range of scenarios, assumptions, and outcomes, enhancing the robustness of Red Teaming.
Additional cognitive capacity: Don’t rely only on your team's competencies
* We admit that ChatGPT comes with some biases but still think that on average will be objective, especially on non-polarizing topics.
Practical Steps on Using ChatGPT for Red Teaming
Let's dive into the practical side of things. To safeguard your business against unexpected setbacks, follow these three steps:
Understand your business
Generate adverse scenarios
Create strategies to respond to selected adverse scenarios
This article will address the first two points in depth. We’ll cover the last point in a separate article.
Understanding your business
Are you set to let ChatGPT dig deep into your business's potential vulnerabilities? To achieve this effectively, we need detailed context. Below are questions that will equip the AI to comprehend your business more holistically. Try to answer as many questions as possible; the more information, the better.
If you feel there's a pertinent question missing that could provide significant insights, by all means, add it in! You know your business best, after all.
For an organised approach, consider transferring these questions to a Google Doc and jotting down your responses beneath each bullet point, in this manner:
Which product has the highest demand in your lineup?
ANSWER:
"Skin hydration product" in our skincare line-up
The more clarity and depth in your inputs, the sharper and more tailored ChatGPT's guidance will be in pinpointing potential weak spots.
Or simply duplicate this template Google Doc .
Questions
Product Lineup
Which product has the highest demand in your lineup?
What share of total sales does it represent?
Have there been any products that were discontinued? If so, why?
Are there seasonal variations in the demand for any of your products?
Ingredient Sourcing
Are any ingredients or materials sourced from regions prone to political instability or environmental hazards?
How often do you reassess or audit your ingredient sources for quality and reliability?
Are any ingredients under scrutiny for environmental or health concerns?
Supply Chain
How do you monitor the health and efficiency of your supply chain?
Have there been any disruptions in your supply chain in the past two years?
Are there backup plans in place for supply chain interruptions?
Storage and Preservation
What are the potential risks associated with product storage?
How do you handle products nearing the end of their shelf life?
Have you had any instances of product spoilage or contamination?
Regulations
How do you stay updated with regulatory changes in your industry?
Are there upcoming regulations that might impact your product formulations or packaging?
Have there been past instances of non-compliance, and how were they addressed?
Manufacturing Process
How frequently do you audit your manufacturing facilities for quality control?
Are there any automation processes in place?
What are the primary challenges faced during manufacturing?
Delivery and Distribution
What's the average time taken to deliver products to their final destination?
Are there any regions or areas where distribution is particularly challenging?
How do you handle product returns or recalls in the distribution network?
Market Position
What challenges do you face in maintaining or improving your market position?
Are there any emerging competitors or technologies threatening your position?
How does consumer perception affect your position in the market?
Marketing and Branding
Which marketing channels have the highest return on investment?
How do you handle negative publicity or crises?
What measures are in place to ensure consistent branding across all touchpoints?
Sales Channels
Are there plans to expand into new sales channels?
How do offline and online sales compare in terms of profitability?
Do you sell your products in retail stores?
What % of total revenue comes from sales in retail stores?
Do you sell your products in online retailers?
What % of total revenue comes from sales in online retail stores (e-commerce)?
Do you sell your products on your own e-commerce?
What % of total revenue comes from your own e-commerce?
Are there any partnerships or collaborations enhancing sales channel efficiency?
Competitors
What strategies have been effective against competitor campaigns?
Are there potential collaborations or mergers with competitors?
How do you monitor competitor activities and innovations?
Customer Feedback
What mechanisms are in place to gather customer feedback?
How is feedback incorporated into product development or improvement?
Are there recurring issues highlighted by customers?
Product Development
What's the feedback loop like for product testing and refinement?
How do you prioritize which products to develop next?
Are there collaborative efforts with other brands or companies for product development?
Sustainability and Environmental Concerns
How do you measure your carbon footprint?
Are there initiatives in place to reduce waste or promote recycling?
How are sustainable practices communicated to consumers?
External Dependencies
How frequently do you review and update the technologies and tools you rely on?
Are there any single points of failure in terms of external dependencies?
How do you ensure data security with external tools and services?
Risk Management
How do you identify new risks or threats to your business?
Are there contingency plans for major operational disruptions?
How frequently do you conduct risk assessment exercises?
Pricing Strategy
How sensitive are your customers to price changes?
Do you employ dynamic pricing based on demand and supply?
How do your prices compare to competitors for similar products?
Human resources
How much do wages represent of total cost?
What is your reliance on freelancers and agencies for daily work?
Could your business continue its operations normally if a few of your key team members left immediately?
How would you describe your team's chemistry?
Technology:
Is there any technology that you rely on to conduct your business?
Generating adverse scenarios
Preparation
Before diving deep into generating scenarios with ChatGPT, ensure you've comprehensively filled out the aforementioned questions about your business. This will serve as vital data for ChatGPT to understand the unique intricacies and challenges of your business model.
With just a few instructions (prompts) we order ChatGPT to look at potential holes in your business operations.
In addition, you can use those as the starting point to generate scenarios yourself.
Instructing
Open a new ChatGPT window and input the following prompt:
Assume the role of a highly experienced business analyst. Based on the following business information presented in a question-answer format, conduct a thorough analysis. Identify and assess potential risks, vulnerabilities, and areas for improvement. Do not return anything as you will be provided additional set of instructions later on.
After entering this prompt, copy and paste the answers from your Google Doc to provide the necessary context.
To generate the adverse scenarios paste this instruction to the same window:
Based on the provided business context and potential challenges, please create adverse scenarios following the format below:
Scenario Name: A concise title that encapsulates the essence of the adverse scenario.
Trigger Event: What event(s) or conditions could initiate this scenario?
Potential Impact: How might the business be impacted by this event?
Affected Stakeholders: Identify the key individuals, teams, or external parties that would be impacted by this scenario.
ChatGPT will proceed to generate a variety of scenarios that your business might encounter. Some of these scenarios may include:
1. Scenario Name: Political Turmoil Disrupts Ingredient Sourcing
Trigger Event:
Political unrest escalates in the Middle East, causing disruptions in supply chains and making it difficult to source natural extracts.
Potential Impact:
Production may halt due to ingredient shortages, leading to stockouts, decreased sales, and potential brand damage.
Affected Stakeholders:
Production team, sales team, distributors, suppliers, and end consumers.
2. Scenario Name: Regulatory Clampdown on Plastic Packaging
Trigger Event:
Governments worldwide have decided to enforce strict regulations on single-use plastics, giving companies a short window to adapt.
Potential Impact:
Increased costs in redesigning packaging, potential stock delays due to repackaging, and potential non-compliance fines.
Affected Stakeholders:
Regulatory affairs team, product design team, marketing team, distributors, and end consumers.
Review and Filter the Results
ChatGPT will give you a list of possible scenarios. Look through them and pick the ones that make sense for your business. Remove any that don't fit or seem unlikely.
Strategy Generation for the Selected Adverse Scenarios
After pinpointing potential adverse scenarios with the help of ChatGPT, the next step is crafting robust strategies to navigate them.
In an ever-evolving business landscape, preparing for the unforeseen is not just beneficial; it's imperative. The FMCG industry, with its intricate supply chains and evolving regulations, demands that brands think steps ahead.
By integrating tools like ChatGPT into our red teaming efforts, businesses can harness AI's vast analytical prowess to detect vulnerabilities and pave the way for fortified strategies. While contemplating potential pitfalls can be unnerving, it's the anticipation and readiness for these adversities that differentiate resilient businesses from the rest. In the words of Sun Tzu, "Opportunities multiply as they are seized." So, as we unveil vulnerabilities, we also uncover opportunities to be more robust, adaptive, and ultimately successful.
Stay tuned for our next instalment where we'll navigate the path of crafting strategies for the uncovered scenarios, ensuring your business is not only prepared but primed for future success.
