As a corporate director, one of your primary responsibilities is to make strategic and ethical decisions that will maximize shareholder value and grow the company on whose Board you serve. Often times however, the information you need to make the optimal decision is unique to the company’s business and not easily available, putting millions of dollars at risk. Enter the concept of strategic intelligence.
Unlike competitive analysis or other investigative techniques, strategic intelligence it is not a reactionary, fact finding expedition. It requires expert sources and sophisticated analytical techniques that are not available to the general public. Strategic intelligence operates outside the boundaries of time and place by providing executives with insight into the motives and decision making processes of competitors. Quite simply, strategic intelligence allows executives to make the optimal business decision – and evaluate its potential impact on their business – in advance of a competitive event versus responding with 20/20 hindsight.
All Fortune 500 companies, large R&D facilities and the U.S. Government are dealing with strategic intelligence in one form or another. However, the degree of understanding and acceptance of this concept varies widely among companies. As a Board member, what information challenges do you face that prevent you from making the optimal decision, and how can strategic intelligence help you lead your company in new directions? Consider the following real life comments and queries posed by corporate directors that have been in your shoes.
“I don‘t think that the company on whose Board I serve uses intelligence.”
This comment is indicative of one of two situations. Either the company truly does not have an intelligence program in place, or the program is buried so far down the organization that it is not visible to the Board. In the first instance, the company is operating at a strategic disadvantage. Experience demonstrates that all well-managed global companies use strategic intelligence in one form or another. Companies that do not have an intelligence program in place are condemned to dealing with a continuous stream of competitive surprises and crisis management situations.
In the second instance, if corporate directors cannot take advantage of intelligence resources than they are at the same disadvantage as companies that do not have an intelligence program in place. If however, executive management can demonstrate that key decisions were influenced by intelligence gathering and evaluation, than this disadvantage is significantly reduced. In either case, it is well worth asking your management team how intelligence is or is not used in their company.
“We are a global market leader and do not need an intelligence program. We set industry direction and competitors follow.”
If you are the dominant player in your market than you can most likely predict competitive responses to strategy changes. However, maintaining market dominance requires continued innovation, a supportive market environment and insight into the motives and decision making processes of your competitors. Over the past several decades, a number of dominant firms have watched their markets slip away as they continued to do little or nothing from an intelligence standpoint to monitor competitive behavior.
Polaroid is one company that comes to mind that appears to have ignored competitive inroads by Fuji to the point where their dominance in the instant film industry was effectively lost.
“Our intelligence system was set up by our corporate librarian and is tied to the Internet and other databases. Anything that happens in our industry is forwarded to executives real time via customized dashboards on their PCs.”
Getting business critical data to executives real time is a laudable step towards developing an intelligence program. However, the system described above relies exclusively on secondary information sources that are available to the general public and report on events after the fact. Sophisticated intelligence programs focus on substantiating future events that are likely to occur as well as the potential impact on your business. Knowing this information in advance allows companies to craft responses that will minimize potentially adverse consequences of competitive actions. Stated differently, systems that report on events that have already occurred leave no time for evasive action.
“Our in-house intelligence department is headed up by an ex-CIA professional and has over 100 employees that monitor electronic and print documents from all over the world. Having an inhouse team is more cost effective than hiring external, high-priced consultants.”
Having an in-house team of multi-lingual professionals will certainly expand the amount of secondary information you can provide executive management. However, excluding outside consultants from your team prevents you from gathering intelligence from primary sources and pursuing valuable lines of inquiry that legal principles and corporate etiquette preclude. External consultants are unbiased, third party resources and the means by which primary intelligence can be legally and ethically pursued. A policy that excludes using outside consultants is a tacit admission by a company that their intelligence program has major gaps.
“I would never sit on the Board of a company that uses outside intelligence consultants. No legitimate company wants to be associated with a bunch of ‘Dumpster Divers’!”
The common wisdom among some corporate directors is that strategic intelligence programs fall into two categories. The first category involves programs that focus on gathering and analyzing data available in the public domain. These programs are perceived to be ‘legitimate’ by those who espouse them. Some people however, perceive outside consultants as falling into the second category of performing illegal or unethical activities that regularly violate the privacy of others. Unfortunately, isolated incidents of seamy behavior by individuals who call themselves intelligence consultants have worked their way into the press to reinforce the notion of intelligence professionals as ‘dumpster divers’. However, there are a select group of strategic intelligence organizations whose sources and collection processes meet the highest levels of integrity and ethical standards.
“The corporation whose Board I serve has had a long standing arrangement with an outside intelligence consultant. We were so pleased with them that we put them on an annual retainer several years ago. ”
To put this comment into context, a brief case study is in order. The director who made this comment was asked what he knew about the account manager that the intelligence firm had assigned to his company. The director was surprised to learn that the account manager was a recent graduate with a degree in economics who spoke several languages. The account manager’s language capabilities were used extensively to contact key individuals at a major global competitor half way around the world. When the director was asked how he might respond to a phone call from someone who asked a lot of strategic questions and whose accent was not local he responded with a laugh, “I might hang up on them, or, better yet, tell them something that was 180 degrees different from what I really knew!”
The director’s laugh soon turned into a grimace when it dawned on him that this was most likely the reason why his company had missed two recent strategic moves by their competitor causing them to lose market share. The director closed the discussion by saying, “I always thought that consultants used local people to gather competitive data for us.” Without a doubt, having a global network of local, professional sources would have provided this client with substantiated insight into competitive behavior.
In an increasingly competitive world, many corporate directors have a need for a powerful intelligence program but few have access to one. We know this because, at Strategic Insights, we have helped many companies set up intelligence programs to obtain primary source intelligence legally and ethically on their behalf. We are highly regarded by clients for our ethical processes and discretion, as well as our proprietary intelligence models and business acumen. Our global intelligence network of expert sources reaches places that others cannot, and is widely recognized as the ‘best kept secret’ for industrial, competitive, strategic, economic and marketing expertise. In today’s business environment, it is impossible to get timely, accurate strategic intelligence without having an existing, reliable network of experts and mechanisms in place; or the finances and know-how to develop one.
© 2006 – 2014, Den Taylor. All rights reserved.