|
|
Enron Mail |
Steve:
During our chat I mentioned Amy Oberg was attending a competitive=20 intelligence conf. I've pasted her Session Notes below. I think you will= =20 find them interesting - I've asked Amy to get on your calendar to discuss a= =20 "CI 101" education project with you. This effort will help address some of= =20 the concerns you raised. As I mentioned she is currently working with eThi= nk=20 to implement a global "Enron Edge" collection effort and I think the CI 101= =20 project would dovetail very well. Amy has other material available from th= e=20 conference when you need it. Enjoy the notes - Pete III. Session Notes: (sessions attended by A Oberg) What Should You Tell Mgmt When They Ask About the Value of CI? Ben Gilad ? Case study, Levi Strauss: example of extremely damaging blindspots - =20 ? Levi Strauss market value went from $14b to $8B in three years ('96-'99) ? Market share went from 48% ('90) to 25% ('98) ? Shut down 29 factories, laid off 16,000+ people in '98 as sales dropped 1= 3% ? Blindspots =3D competitors - didn't know them (GAP, Calvin Klein, etc);= =20 trends - didn't understand them (kids don't wear what their parents do, one= =20 size does not fit all, etc) ? Cost for Levi's to set up really, really good CI function =3D $500,000=20 annually ? Cost for Levi's to call in consultants and problem still not solved =3D= =20 $$850,000,000 ! ? Case study, GE and Jack Welch: example of CI culture: ? Jack's greatest achievement (per Jack): "we made this company think outsi= de=20 of itself". This is a CI culture. ? CI "is not a program, system, or function ---- it's a culture" ? "Intelligence is all about managing risk" (note: key element of Enron's= =20 culture --- the two are intimately connected) ? "A junior level market analyst is not a BI/CI competency" ? CI professionals "paint the picture of the future" of the company; are=20 "guardians of the future" ? "CI/BI is the total knowledge a company possesses about the environment i= n=20 which it competes. It is synthesized from the vast amounts of bits and piec= es=20 of external information bombarding the firm every day. It paints a whole=20 picture of the present and future competitive arena for management decision= s." ? "This is what a competent CI program should deliver: 1. early warning of competitive threats 2. early identification of competitive growth opportunities 3. benchmarking of best practices 4. quicker response to market moves 5. better understanding of major players: customers, suppliers, politicians 6. future scenarios for strategic planning 7. accurate estimates for tactical decisions 8. improved development activities 9. identification of blind spots ? Bottom line "grand prize" =3D reduced risks, external focus, identificati= on=20 of blind spots (yours and competitors) ? Peter Drucker, Forbes 1998: in the next 10-15 years, collecting outside= =20 information is going t be the next frontier." Building a True Intelligence Capability, Ben Gilad ? How competitive is your company? 1. Does it viscerally know its market? 2= .=20 Can it predict reaction to its initiatives? 3. Is it blind? ? Numerous case studies of when CI could have been a "life saver" but was n= ot=20 utilized - Sears (from #1 retailer in the world to #4 and dropping), Schwin= n=20 (missed mountain bikes market), Goodyear (missed "ugly tire" market), other= s. ? #1 danger =3D competitive blind spots. Classic example: large companies p= ay=20 attention to other large companies; large companies hire large consulting= =20 firms; large consulting firms learn from large companies, "and so on and so= =20 forth until Chapter 11 do them apart"=20 ? #2 danger =3D unchallenged assumptions. Classic examples: corporate myths= ,=20 corporate taboos ? Competitive intelligence is "any information that tells top management=20 whether or not the company is still competitive" ? The role of CI is "the guardian of company competitiveness" ? The CI process is "any organizational design that somehow ensures: ? That CI flows to one place (CI mgr as "weaver"; you see the forest, other= s=20 see the trees) ? That is turned into strategic updates ? That updates reach top mgmt regularly ? That top mgmt discusses, analyzes, debates, and does something w/ the=20 intelligence (key role of CI is to affect thinking, to change the Corp.=20 worldview) ? That the intelligence is used to uncover blind spots (regardless of how= =20 holy they are) ? That the intelligence is used to empower employees (creating a culture of= =20 sharing knowledge; tried tying $ to sharing, putting sharing in PD and=20 neither worked. What worked was recognition via feedback about what resulte= d=20 from their sharing) ? That the most "fearless, most observant, most out of the box thinker" in= =20 the org becomes the Dir. of CI and then VP of Corporate Competitiveness ? That the CI Dir. reports to a powerful and eager exec ? That this exec is the CEO/President" ? Companies organize CI units in two different ways: CI as information cent= er=20 (AT&T, Kraft, Kodak, McDonald Douglas, Ameritech, Dupont, Citicorp) or as= =20 decision based intelligence (Motorola, Pfizer, Corning, NutraSweet, 3M,=20 Xerox, Marriott, Shell, IBM, others) ? Best Foods has "one of the best CI units today" ? Charge back of CI activities to units "doesn't work because if it costs,= =20 units won't use it" ? Building awareness works - General Mills trained 120+ people about CI ? Bottom line: company needs to be competitively oriented, so awareness and= =20 attitude are what count. ? Intelligence input should be mandatory across the organization ? Intelligence should be personally delivered once a week to the exec=20 committee ? "If you accept your role as that of passive competitor tracking, you'll b= e=20 collecting coupons till the end of time" Successful CI =3D Impact, John Hovis ? "CI must be part of the company's strategic management system because =01= ( it=20 lights up the targets" ? Case study of Avnet Inc. (note: John Hovis is Sr VP, Investors Relations = &=20 Corp. Planning for Avnet) ? Evolution of Strategic Mgmt Process: Stage 1 (1997) =3D no research or=20 intelligence activities, little or no strategic planning; Stage 2 (1998) = =3D=20 limited library or research function, strategic planning a separate activit= y;=20 Stage 3 (1999) =3D intelligence system in place, strategic management funct= ion=20 fairly well developed; State 4 (2000) =3D comprehensive intelligence system= in=20 place and working effectively with full integration; comprehensive strategi= c=20 management system in place and working effectively ? Tool: "SLAM" chart =3D strategic leverage matrix. Used among other analys= is=20 techniques ? Strategic positioning of CI enables company to "play the game differently= "=20 and produce "discontinuous innovation". Crucial. CI Analysis: Get Real! Liam Fahey ? Competitor analysis (aka: "CA")=20 ? CA driving questions: which competitors should we analyze? What should we= =20 learn about them? How can we leverage CA to learn more about customers,=20 suppliers, marketplace changes, etc? How can we integrate CA into decision= =20 making? ? CA principles: 1. Purpose: not to learn about competitors, but to enable thinking, decisio= n=20 making, action 2. Always focus on the future 3. Insights are the value! 4. Focus analysis on assessments, insights, implications - and NOT on=20 description ? Strategy Domains: outwitting (thinking), outmaneuvering (doing), and=20 outperforming (results) - of current, emerging, and potential competitors ? Strategy Arenas: factors (suppliers, materials, HR, etc. channels=20 (distribution), end customers, institutions (political, legislative, courts= ,=20 etc. ? Which competitors to focus on?=20 ? Which do we understand the least? ? Which has strategies most different to our own? ? Which are affecting strategic change? ? Which are failing? ? Which are potential harbingers of emerging / future marketplace? ? Competitor analysis framework: assets & capabilities, the organization,= =20 firm in the environment, mind set=20 ? Knowing current strategy is not enough - must identify future strategy ? Activity/value chain analysis must be future focused ? Identifying and assessing competitor's assumptions is extremely important= =20 (as well as own) ? "We over estimate what we are and under estimate what we are not" An Advanced Intelligence Training Model, Lenny Fuld, Ben Gilad, Jan Herring ? "Aha! Means intelligence, not data" ? Data =3D unconnected bits; information =3D knowledge built by looking at= =20 several data points; intelligence =3D the implications of the organized=20 information. ? Each industry as its own set of key drivers for costs; a cost driver is a= n=20 extrinsic factor that affects costs; to analyze costs, you need to focus on= =20 the right drivers (ex: cost drivers of PG&E, fixed asset intensive, highly= =20 regulated) ? Question to determine cost drivers: is the competitor in the same=20 business? - apples to apples ? Competitor analysis based upon Porter's Five Forces - barriers to entry,= =20 suppliers, buyers, substitutes, rivalry ? Strategic options are those that fight the forces; reducing/fighting the= =20 forces is the essence of competitive strategy; anything that doesn't, isn't= =20 strategy ? CI's job is to watch all five forces ? 4 quadrant analysis: drivers, strategy, mgmt assumptions, capabilities ? 4 main CI questions every company needs to answer: 1. is the competitor happy? (w/ its strategy, position, etc. =3D degree of= =20 complacency) 2. what are the competitor's likely moves (what should the competitor do?= =20 What will the competitor likely do?) 3. what are the things your companies does that make the competitor really= =20 mad? (their hot buttons - these will cost you a lot of $ if things go bad) 4. what are the competitors blindspots? (where strategy doesn't fit reality= =20 any longer? If you know mgmt assumptions, you can know these) ? Parties that need CI =3D management as users, existing management procedu= res=20 (operations), selves (CI people) ? Types of KITS (key intelligence topic questions): strategic issues &=20 decisions (should be 40% of time), early warning topics (40% of time), key= =20 players - competitors, customers, others (20% of time)=20 ? Measuring CI/BI effectiveness: examples =3D time savings, cost savings, c= ost=20 avoidance, revenue increase, value added, combined values, other. ? "foster cultural acceptance of intelligence activities" CI and the Web: What We Know about Knowledge Management Over Distance, Bruc= e=20 Kogut ? "Intelligence is more necessary now than ever before in business" ? Digitization of context ? Open sourcing - the Linux model: worked because of dislike of MicroSoft;= =20 "gift giving" culture between developers, modular development of software ? CI and "digital anthropologists": web is changing the coordination of=20 space; control and ownership are not the same thing; social context is the= =20 challenge. Developing a Successful CI Program, John Prescott ? Review of recent APQC study on CI ? Some sponsors of study: Entergy, Southern, Shell ? Usually a "critical event" ("Big Bang") happens to the company before a C= I=20 unit/function is initiated ? CI must be planted in the culture ? Key findings of study: ? CI structure emerges from Big Bang ? Need a well defined focus for CI ? Need a standardized process for CI ? Need a champion ? CI is a social process=20 ? CI needs to be supported by technical processes ? Need to build trust and credibility to be effective ? French model of CI =3D human network; practiced by Concordia Executive Roundtable: Moderator; Max Downham, former VP, NutraSweet;=20 Participants: Steve Necessary, CEO, PowerTV; William Maiola, VP, Coca Cola;= =20 Michael Pticher, VP B2B Marketing, i2go.com, formerly Nat'l Sales Dir for= =20 Bitney Bowes. ? Maiola: most useful intelligence is on emotions of competitor's decision= =20 makers; Coke has done a lot of scenario development; "everyone is in the=20 intelligence business"; most appealing to executive users - what is your=20 hypothesis? what is your insight? ? Necessary: follow the 3 B's - be brief, be reliable, be gone; E strategy = =3D=20 E competitive advantage. ? Pitcher: be sure to include in research 3 Ps: partnerships, people,=20 passions. These influence decisions; question to ask - is it a signal or is= =20 it just noise?
|