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 Chapter 13: How to Build Your Own Intelligence System Nathan Rothschild, the famous British Merchant banker, received early warning of Napoleon's defeat at Waterloo through a message sent by carrier pigeon from one of his correspondents on the Continent. Making it appear as if he had heard Britain would lose the war, he quickly dumped all his British-backed government securities on the market. Other investors, following Rothschild's lead, did likewise. However, as soon as Rothschild saw the market bottom out, he bought back every piece of paper at fire sale prices and made a killing. If Nathan Rothschild could receive early warning of Napoleon's defeat at Waterloo in 1815 by using nothing more than his carrier pigeon network, then the modern corporation -- large or small -- with lightning-fast technology at its disposal, can do the same in today's corporate battlefield. There is no excuse for competitive surprises. All any company needs is an organized network of people. This chapter offers a step-by-step approach for building a simple, efficient intelligence system.1 The guidelines I am proposing are based not on fiction, but on actual cases and experiences with various clients. In most instances, the framework of a successful intelligence system is built on and around the culture of each organization. In other words, intelligence systems -- despite the all the potential computer-based applications this concept conjures up -- are very much a human issue. Note how the five stories below seem to reflect this perspective. Corning . . . Look, See and Learn "A pallet of the competitor's ceramic product sat on the shop floor, displayed for everyone at Corning's Erwin, New York plant to see. Until that moment, most in the facility were satisfied with Corning's equivalent product. Yet, after reviewing the competitor's sample and its characteristics, Corning realized it had to improve Corning's product to compete successfully . . . "2 Banc One . . . Turning Bankers into Shoppers "Banc One has begun to regularly collect the direct-mail solicitations sent by its competitors to the bank's own employees. The program to date has yielded invaluable information on competitors' pricing, new products, and target markets."3 Xerox . . . Hands On "Evaluation begins as soon as the engineers lay eyes on a machine . . . The engineers never try to fix a broken machine and, when available buy a service contract. Servicemen from Kodak, for instance, will install the Kodak 150 copier at Xerox, while Xerox engineers stand by, watching every move, even photographing the process to see what's involved."4 Canon . . . Reading and Reporting "At Canon Corporation we have analysts, who have been trained in British schools, to translate and interpret technical articles published in the United States and in Europe."5 Kraft/General Foods . . . Finding the Pack Rats "The Kraft CMIC group has created an in-house database called RECAP (Research Capsules) that has fully indexed millions of dollars worth of research purchased or produced for the Kraft organization. RECAP is extremely flexible and allows the user to search for a report by analyst, code word, title, date, or even the purpose of the research. For the first time Kraft has a handle on the market research that was becoming buried in its organization."6 The best-run intelligence systems highly leverage their people resources. Some do so by incorporating a giant web of computer-based, client-servers; some through low-tech means of intelligence storage and delivery. Whatever path these successful programs have taken, they all have done do so by following three basic steps. They are:
Step #1: Prepare The Organization Intelligence systems succeed because of people, not machines, not computers. If you had to place the topic of intelligence systems in a business school curriculum, you would place it under the category of Organizational Behavior -- not under Marketing, Control, or Systems. The successful intelligence system works because all employees are primed to share, communicate and use their own hard-won market information. Companies that place barriers to this information flow, or think that a high-tech electronic mail network will substitute for good employee communications, are mistaken. You cannot just take a software package out of its shrink-wrapping and hope that it will organize all your information. First you must find ways to share and communicate vital information. Storing that information comes later. If the organization does not share information, no technology will help. On the other hand, if the organization has begun to share and use its own vital intelligence, then a computer-based system may be the next step in the process. Observation #1: You're Bigger Than CNN CNN may have hundreds of affiliate stations and scores of reporters. Yet, this cannot compare to multinational conglomerates of the world with their hundreds of thousands of employees. Such large corporations -- General Electric, Fujitsu and Siemens, among them -- have armies of well-trained individuals who are immersed in a market. These intelligence/news-gathering experts include scientists, networks of independent brokers, sales people, purchasing managers and many others. You need to harness this capability both for the quantity and the quality of the industry news these internal experts can offer. In contrast, think about the intelligence potential represented even in the smallest of companies. A 20-person firm spends each business day dealing with customers, suppliers and competitors. Business Week or The Economist may devote one article a year to your industry and its competition. Who do you think will delve more deeply -- and in a more timely manner -- into your market, you or the news magazines for whom this is but one small item? The reason many companies have problems establishing successful intelligence programs is not a lack of internal knowledge, but the fact that they have not yet figured out how to harness that knowledge to analyze the competition. Observation #2: Intelligence Never Travels In a Straight Line Chances are that a vital piece of intelligence will have entered your company many different ways and take many different directions as it travels through the organization. A piece of news is seldom known by only one individual. Noting this fact, you need only try to capture that piece of intelligence once. You can do so by building a broad network of communications vehicles that can capture and speed along the critical intelligence. Like a fisherman who is generally far more successful throwing a wide net into the ocean than casting 20 individual fishing lines, each with its own hook, you too need to spread your corporate information net wide. Remember, you only need to capture the intelligence once. Lay down a wide enough net and you will be able to do so. Later in this chapter I will describe the types of electronic and manual nets you want to consider. Adopting The Three-Part Philosophy In a two-year study my firm conducted in the mid-1980's and in subsequent consultations, three immutable principles guide any successful intelligence system or program. They are:
Should the system be centralized, or decentralized? This is probably the most frequently asked question I hear from clients interested in establishing an intelligence system. It is also the most misunderstood. If this were thirty years ago, when information had to be controlled from a central location, I would advise a client to adopt a centralized system, where all files -- electronic and manual -- would be kept in one place. I say this because of the way information was maintained. Mainframes controlled the data flow, there were few terminals available, electronic mail was in its infancy and the few photocopiers that existed were tightly controlled by the print shop or copy manager. In short, information had to be kept in one place in order for it to be managed and ultimately found. Today, the information flow has reversed itself. The individual now controls the flow and --to a large extent -- the storage of information. Personal computers (stand-alone or networked through client-servers), personal copiers, electronic mail, voice mail and other personalized technologies allow anyone to manage his or her own information base. The corporate intelligence system must recognize this fact of life and build a system that leverages the dynamics of this new information age. Because your company's experts are literally everywhere your company is -- in the field, the R&D labs, the shop floor, the customer service desk -- you need to coordinate the information flow, not create a bottleneck by centralizing it. The intelligence system manager needs to take on the role of a circus ringmaster, recognizing the system's goal as that of an information traffic cop. The intelligence system needs to provide the company with a means to find the information already located within its own walls. Examine the two charts below: The organization chart and the intelligence chart. The organization chart describes a typical, vertical company structure, where employees report to superiors or speak to subordinates. The intelligence chart describes the same organization that removes the strict vertical barriers and creates an atmosphere of information exchange. The great irony of many large corporations, is that by encouraging individual business unit profitability, management often ends up building information barriers. As a consequence of employees wanting their own business unit to succeed, they will often withhold information from another business unit. In such instances, good business practice can work against good intelligence practice. The intelligence system manager, or Ringmaster, can break down these barriers and foster healthy information exchange by:
For a more detailed review, I refer you to: 1 Monitoring The Competition: Find Out What's Really Going On Over There (Leonard M. Fuld, John Wiley & Sons, New York, 1988). 2 "Achieving Total Quality through Intelligence," Leonard M. Fuld, Long Range Planning, Vol.25, No. 1, pp. 109-115. 3 Monitoring The Competition: Find Out What's Really Going On Over There, Fuld, John Wiley & Sons, 1988, page 28. 4 Rochester NY(USA), Democrat & Chronicle, January 29, 1984 5 Fuld & Company "Intelligence Sources, Techniques & Systems" Seminar 6 Monitoring The Competition: Find Out What's Really Going On Over There, Fuld, John Wiley & Sons, 1988, page 131. Order your copy today. |
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