The Outward Insights blog has been up and running for about two years, and we have been very pleased with the level of engagement and activity with our readers. As we continue to improve the quality and provocativeness of the blog, we have moved it to a new platform to allow for even more engagement and interaction.
Tuesday, January 19, 2010
Friday, January 8, 2010
What a year 2009 was. As the US economy emerges from the worst recession in generations, how should strategy and competitive intelligence practitioners prepare to contribute to their company's growth and performance in the new year? While I'm not a big fan of new years resolutions, over the next few days I'll offer five ways you can improve your company's CI and competitive strategy capabilities in 2010. Here's number 1:
- Commit to providing perspective, not precision. It is not the job of competitive intelligence to know, with three-decimal-place accuracy, competitors' market share, profitability, or cost structure. Nor is it the job of competitive strategy to tell the CEO that his company will achieve 12.46% CAGR growth over the next five years. It is our job to provide perspective on the types of competitive challenges and market opportunities likely to emerge in the months and years ahead that will directly impact the organization's growth strategy. Leave the quantitative precision for the guys in accounting. You should be speaking the language of strategic goals and objectives, competitive plausibilities, and future threats and opportunities.
Wednesday, November 4, 2009
Popularized in the early 1990s by Robert Kaplan and David Norton, the Balanced Scorecard methodology (BSC) is a system of interdependent, strategically derived goals, measures, and activities that summarize a corporation, its strategy and its actions. Said another way, the BSC methodology is an integrative instrument for strategy execution comprised of a communication system, a measurement system, and a management system. The BSC helps an organization translate its often vague and easily misunderstood mission and vision statements into specific, results-oriented actions. Doing so engenders transparency, responsibility, and accountability within the organization with a view towards creating satisfied shareholders and customers, effective and efficient processes, and a motivated and engaged workforce aligned with the company’s strategic goals and objectives.
If one of the goals of a company’s competitive intelligence function is to inject intelligence into the strategic plans of the organization, it is important to position competitive intelligence as a critical component of the company’s balanced scorecard initiative. Because the initial stage of the BSC model requires that the organization identify specific strategies, measures of success, goals and targets, and activities required to reach those targets, positioning CI as an important component of organizational success is important.
For example, assume that an organization has identified four strategic goals: improving revenue mix, creating a “cutting edge” image for its customers, becoming the leader in industry research and development, and improving operational capabilities. In this organization, competitive intelligence can help evaluate competitor channel and promotion strategies, helping the organization optimize its revenue mix. CI can also help monitor and evaluate customer perceptions of the company compared to its competition, as well as identify competitor product pipelines so that the firm keeps on top of competitive research developments. Finally, CI can also help the organization evaluate the production efficiencies of its competitors to help the company establish operational baselines.
Competitive intelligence frequently supports the development of strategy in an organization, but if management fails to realize that CI can help the organization achieve its strategic objectives, then the organization is only realizing half the potential value of competitive intelligence. By integrating CI findings and outputs into the application of the BSC methodology can forge a stronger link between CI and the strategic success of the company. The Balanced Scorecard methodology thus provides a framework to measure the contribution and value of competitive intelligence in not just helping set strategy, but also from the company’s ability to meet specific strategic goals and objectives.
Thursday, October 15, 2009
One of the greatest frustrations that routinely plague competitive intelligence analysts and managers is to deliver world-class actionable intelligence -- with clear strategic and decision impact to the company -- only to have management ignore it. Where does the problem lie: with the quality of the intelligence, or with how managers perceive it? The truth is, both parties share in the responsibility of ensuring that credible intelligence is recognized and used.
First, let's revisit what is meant by the term "actionable intelligence." This term has become so axiomatic that we may have lost sight of its true meaning. In his book Good to Great, author Jim Collins notes that companies that consistently out-performed their peers did not necessarily have access to more, or better, information than their comparison companies. Instead, Collins notes, "not in better information, but in turning information into information that cannot be ignored." Now, Good to Great has come under some criticism of late as many of his "great" companies today are sucking wind. Still, the notion of "information that cannot be ignored" strikes me as a good benchmark against which to judge actionability. (Collins, Jim. Good to Great: Why Some Companies Make the Leap, and Others Don't. Collins, October 2001, p. 79)
Tuesday, September 29, 2009
The hallmark of an effective corporate competitive intelligence function is how it communicates important CI findings to company decision-makers. There are a variety of ways to communicate key intelligence findings: newsletters, ad hoc reports, email, posts to a CI portal, to name a few. But, one of the most effective methods is a scheduled executive briefing.
Monday, September 21, 2009
We all know, intuitively, that competitive intelligence isn’t really intelligence unless it is actionable. If a piece of intelligence doesn’t compel a decision-maker to take action, we are told, it is just another piece of information. But what constitutes action? And, what is the process by which competitive intelligence prompts a decision or strategy that is implemented and subsequently managed? Frequently, even companies that possess world-class competitive intelligence functions struggle with turning credible, insightful, actionable intelligence into a clear strategy, decision, or course of action.
Why is good intelligence often not incorporated into strategic plans or operational decisions? The problem, I believe, rests with reluctance among management to clearly define the role it expects intelligence to play in company decision-making, to define key decision components that are influenced by intelligence, and to track progress against them.
Too often, strategic planning is an exercise in reaffirming what is known or comfortable, or what has worked in the past. Similarly, decision implementation is often an exercise in executing what has worked before. In today's uncertainty, companies are hard-pressed to take new, bold, and decisive action even when all the intelligence “signals” point to the wisdom of pursuing a new course of action. To understand how competitive intelligence can improve both sides of this problem, we need to consider each separately.
CI and Strategic Planning
The successful integration of competitive intelligence into a company’s strategic planning process requires that strategic planning be based on a well-defined framework that clearly defines the role competitive intelligence is expected to play. It doesn’t matter whether the framework is based on popular techniques like scenario planning, is based on ones invented and perfected by your company, or has a particular objective – such as growth – in mind. With a well-defined planning framework, it is easier to define CI’s specific role, and how CI will be considered when developing and implementing the strategy.
What if your company has no identifiable planning framework, or no strategic planning process at all? In these cases, CI can do little more than provide general industry or competitor assessments in the hope they will generate questions that result in a more disciplined approach to strategic development.
CI and Decision Execution
Frequently, competitive intelligence points to the need for a specific decision that is not necessarily a part of a pre-conceived strategic plan. Intelligence early warning, for instance, that describes new competitive developments not directly addressed during the strategic planning process can require managers to make decisions “off plan,” and do so quickly.
In these cases, it is important for the CI manager to identify an issue champion. This is an individual in a decision-making or leadership role whose corporate function is most impacted by the intelligence. For the issue champion to successfully act on new intelligence, the CI manager must brief him or her on the content of the intelligence, and discuss the implications for the company and for his or her function directly. Sometimes, the prospective issue champion will defer to someone else, or include others in the initial discussion about potential decision options once the intelligence is delivered.
The appointment of the issue champion is hardly based on a formal process. The means for identifying the issue champion will differ from issue to issue, and is based on candid conversations between the competitive intelligence manager and the intelligence function’s consumers. One thing, however, is certain. The issue champion must have the authority to determine a course of action based on the intelligence, marshal and manage appropriate resources for decision implementation, and then oversee its execution.
In sum, effective decision implementation following the delivery of an intelligence report requires a sound framework for strategic planning, and the appointment of a decision-level issue champion charged with the task of marshaling the resources for effective decision execution. Simply preparing good intelligence reports is not enough; companies must pay close attention to particular strategic planning frameworks, and how to oversee decision execution over an extended period of time.
Wednesday, September 16, 2009
Kenneth Knight describes his job as helping the president of the United States and his administration "avoid surprise." As the national intelligence officer for warning, Knight oversees a small team of analysts who serve as an institutionalized safeguard against risk-monitoring and challenging the analyses and assumptions of the broader intelligence community. In this interview, he discusses evaluating threats, overcoming cognitive biases, and constructing scenarios -- challenges familiar to most private-sector strategists. McKinsey's Drew Erdmann and Lenny Mendonca spoke with Knight in Washington, DC, in June 2009.
Outward Insights' business early warning services are modeled on many of the same techniques as used by the US Intelligence Community, including scenario building, indicator definition, and the proactive communication of warning assessments.