Achieving Actionability: How to Get Decision-Makers to Pay Attention to Intelligence

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)

Why, then, does intelligence regularly seem to miss the mark? I believe there are three forces at work.

First, decision-makers may have the wrong expectations for intelligence. For competitive intelligence to be useful in setting strategy, it needs to be anticipatory. That is, good intelligence should provide a reasoned judgment about future competitor, market, and/or industry behavior. Because predicting the future is impossible, managers have to take actions based on intelligence that is, by definition, speculative and subjective. For many managers, making decisions on anything less than hard facts is extremely difficult.

Second, I would contend that most intelligence deliverables that managers receive are heavy on facts and data, and light on insights and judgments. Despite their best intentions, competitive analysts have a hard time providing their opinions, assessments, and conclusions about the data they are examining. There are several reasons. Perhaps they have not been trained to do so, or the company does not value well-reasoned opinions, or they are unwilling to open themselves to criticism and disagreement. Whatever the explanation, intelligence that does not speculate about likely future conditions is bound to be ignored.

Last, even good intelligence is often communicated poorly. Business analysts have been conditioned to produce and present long, heavy reports that present fact after fact, and to deliver any conclusions or opinions only at the end of the report or presentation. Time-pressed managers simply do not have the luxury of plodding through page after page, or slide after slide, of graphs, figures, and quotes to reach a conclusion. If a piece of competitive analysis does not provide the chief conclusion and implications for the company right up front, chances are decision-makers will stop reading or listening before the analyst can get to the grand conclusion.

What, then, can CI analysts and company decision-makers do to increase the chances that intelligence will be taken into consideration and applied to corporate actions? First, senior executives and intelligence practitioners must together come to agreement on the pressing issues facing the company for which sound, forward-looking intelligence is necessary. This requires not only coming up with a list of key intelligence topics that reflect external business conditions, but also understanding the accountabilities, corporate culture, and personal objectives that influence how each senior executive makes decisions.

Second, intelligence analysts must address intelligence issues with a higher degree of rigor. This requires regularly using proven analytic methodologies to help move from summarizing facts and data to expressing judgments, opinions, and implications. Over time, this means that the portion of a competitive intelligence product devoted to facts and figures should diminish, while the share devoted to insights and judgments should increase.

Last, intelligence must be delivered more effectively. Analysts must be trained in expository writing techniques that clearly state conclusions up front, and support them with carefully selected facts and evidence that lend support to analytic reasoning. Intelligence reports and briefings must be short, to the point, and open to disagreement and debate. Taking the safe road and avoiding controversy in intelligence deliverables serves neither managers nor analysts well.

Achieving true actionability -- or providing managers with information that cannot be ignored -- is not far out of reach. If competitive intelligence practitioners identify or anticipate management's needs, present plausible judgments and assessments clearly, and offer decision options and alternatives, then I believe executives will listen, and will find it hard to ignore intelligence when setting competitive strategy.

Competitive Intelligence Driving More Corporate Decisions

It's a classic good news / bad news report: more US corporations are using competitive intelligence to drive critical strategic and tactical decisions than ever before, but an alarming number of companies still do not have structured way to deliver intelligence to decision-makers in their organizations. Is the chasm between companies that value CI and those that don’t growing?

Outward Insights conducted its second “Ostriches and Eagles” CI best practices survey, which gauges the effectiveness and use of CI among US companies across industries. The first survey was conducted in 2005. The biggest finding this time around? More and more companies are “getting” the value of competitive intelligence. Most reassuring was the growth among respondents who said that CI was “an integral part of operational or tactical decisions” over the 2005 survey.

Another positive finding was the 72% of respondents that claimed to use CI to “anticipate and thwart competitor strategies” compared with 64% in 2005. This uptick reflects the increasing value executives place in the early warning applications of competitive intelligence.
Among other key findings:

• More respondents (28%) integrate likely competitor reactions into their plans for launching new products than in 2005 (21%)
• The use of scenario planning nearly doubled from 30% in 2005 to 59% this year
• The percentage of respondents who believe CI is “an integral part of the strategic planning process” was at 85%, the same as in 2005.

Despite these findings, obstacles still impede corporations from realizing the full value of competitive intelligence. For example, the survey found that nearly half of respondents say that their CI programs are not sufficiently funded. In addition, 37% of respondents said that CI does not have “sufficient stature” within their organizations. The gains that are evident in the strategic application of CI may be short-lived if these programs are not funded adequately and given proper stature in the organization. The survey also found that almost one in five executives believes that senior managers do not value the competitive intelligence they receive, and 24% of respondents said that their companies lack a formal CI process altogether.

There were some notable differences in the responses from the seven industry groups surveyed: consumer products, energy, financial services, insurance, high-tech, manufacturing, and pharmaceuticals. For example, consumer products companies were least likely to have an organized intelligence function (62% vs. 76% of all respondents), while energy companies were least likely to make CI an integral part of their strategic planning process (71% vs 85% of all respondents).

We conducted the survey in June and July 2008. The survey consisted of telephone interviews with 100 senior executives at US corporations. More than two-thirds of the companies participating had revenues of $1 billion or greater. To request a complete survey report, contact us at info@outwardinsights.com.

Fly Swatting and Competitive Strategy

Recent findings from a Cal Tech research study, published in the journal Current Biology, and reported today by the BBC, reveals interesting parallels between the neurological make-up of houseflies and effective competitive strategy.

According to the BBC report, researchers think that the fly's ability to avoid being hit by a flyswatter is due to its fast acting brain and an ability to plan ahead. High speed, high resolution video recordings showed that the insects quickly work out where a threat is coming from and prepare an escape route.

"Most people will have experienced the frustrating experience of carefully attempting to swat a fly, only to swing and miss while the intrepid insect buzzes off to safety. The research suggests that the best way of swatting a fly is to creep up slowly and aim ahead of its location," the BBC reports.

The article goes on to note that over the years there have been different theories put forward to explain the fly's uncanny ability to outwit human attempts to swat them, but the research says it is about quick-fire intelligence and good planning. Specifically, the researchers discovered that, long before the fly leaps, it calculates the location of the threat and comes up with an escape plan.

Any strategic planner frustrated at his or her company's inability to best a nimble competitor can empathize with unsuccessful human efforts to swat flies. What sets leading companies apart? A fast-acting, nimble nature, sound planning, and an uncanny ability to spot threats before they impact their interests. As with the fly, quick-fire intelligence and good planning are required if any company is to develop keen instincts and an uncanny ability to avoid threats and leap to a new, safe position.

Surprise: Strategic Planning's Achilles Heel

Think of all the ways your company manages its internal information – sales forecasts, ERP systems, and so on. Now, think about the resources spent tracking external events. If your company is like most, it is spending a fraction of its time and effort on the external as it is on the internal. Yet, isn’t the greatest source of strategic surprise found in the events and conditions that lie beyond the corporate walls?

Strategy guru Peter Drucker once said, “ninety percent of the information used in organizations is internally focused and only ten percent is about the outside environment. This is exactly backwards. “ At the heart of Drucker’s comments is the notion of competitive surprise. By failing to monitor external information, companies raise the likelihood of being surprised by external developments.

Research conducted by the Wharton School of Business found that two characteristics of surprise affect companies’ responses: the source of the surprise and the company’s ability to react. The source of the surprise can be looked at in two ways – is it from unknown sources (for example, terrorism) or is it a familiar surprise, such as the timing of a recession? While known threats such as recessions can be anticipated better than sudden ones, successful companies are the ones that can adapt to both.

Surprise acts as a risk-multiplier. It’s bad enough for companies to be confronted with an external development that complicates their strategy. However, if companies at least have an indication that such developments could occur, they can focus on remediation. When such developments happen by surprise, the company’s ability to act in a thoughtful and effective way is compromised. Surprise takes what could be a manageable – though perhaps unpleasant – situation and makes it almost completely unmanageable.

Why do companies do such a poor job of keeping tabs on information that has the potential to cause severe strategic disruptions? I believe there are two causes:

• First, companies have a hard time knowing what to monitor. Given the wide range of industry participants and conditions that can be at the root of external threats, firms struggle just determining what is significant. As a result, many companies attempt to monitor everything, and build elaborate “environmental scanning” systems that crumble under the weight of the mountains of information they accumulate.

• Second, even if companies are able to isolate those external conditions that pose a threat, there are few effective means by which to monitor those conditions. News alerts and filters usually are not precise enough to capture information that is truly diagnostic for assessing a developing threat. At the same time, knowledge management efforts that attempt to encourage employees to share information and observations related to strategic threats have for the most part been a failure.

The solution, I believe, lies in a system that combines structured analysis of plausible threat scenarios with a simple and effective approach to information monitoring. Both elements form the basis of a business early warning system that can allow strategy analysts to provide credible warning of external threats, thereby minimizing the effect that surprise has on executives’ ability to respond.

The early warning indicators a company will monitor may include areas such as technology disruption, competitive shifts, regulatory changes, environmental factors, consumer or social changes, economic conditions and political influences. Analysts should collect industry information from a mix of published and human sources. The information collected can be further synthesized through an IT application designed for just this purpose.

As analysts determine that certain indicators are behaving in such a way so as to present a developing threat, they can generate early warning alerts that argue for a particular strategic option – ideally one considered during the scenario-planning phase. This way, the element of surprise is almost completely eliminated from the equation, and managers can focus on deploying a response.