How Intelligence Helps Business Make Better Decisions in Unpredictable Times

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The Intelligence Collaborative
http://IntelCollab.com #IntelCollab

Intelligence Has Always Been About Improving Decision-Making


Strategic Decisions
 What Business are We in and Where are New Opportunities for
Growth?
 Operational Decisions
 How do we structure and align those business units to most
effectively compete for and win Market Share?

Tactical Decisions
 Which customers are available to us and how can we convince
them to select us over any and all functional equivalents?

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Deep-Dive HUMINT
Insights delivered through Human Intelligence…

Intelligence
Part 1: Often discrete strategic and/or tactical information obtained ethically and legally
Part 2: Abstraction, evaluation, and understanding of such information
Part 3: Distribution and application of contextual analysis to inform decision makers to gain
an advantage in commerce

Human Intelligence Intelligence gathered through the use of interpersonal
(HUMINT) contact as opposed to other technical or secondary methods

Environment -
Competitors Operations
Market
 Executive Strategy/Profiling  Human Resources  Market Sizing
 Mergers & Acquisitions  Marketing & Sales  Market Forecasting & Sensing
 Alliances & Partnerships  Research & Development  Market Forces Analyses
 Products & Services  Planning & Logistics  Disruptive Forces
 Sales Force  Customer Care / Service  Strategic Issues
 Go-to-Market  Partner Evaluations  Country Opportunity & Risk
 Supply Chain  Public Affairs / Regulatory  STEEP / PESTEL
 Order Logistics  Internal Networks  Emerging Trends
 Order Fulfillment  Growth Vectors
 Post-sales Service & Support

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Three Key Business Trends Driving Intelligence Evolution

Human Capital & Enterprise Collaboration
Everyone in the Firm becomes a Virtual Member of the
Intelligence Apparatus, Better Engagement by Rank &
File, Shared Visibility of Issues & Actions

Corporate Governance & Risk Oversight
Board-level Priority Ensuring Reliability of Management’s
Earnings Forecast & Assessing Risks to Status Quo

Business Model Disruption & Value Innovation
Predicting the Outcome of Competitive Battles by
Anticipating Changes in Product/Strategy Dynamics

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Competing head-to-head can be cutthroat
especially when markets are flat or growing
slowly.
Managers caught in this kind of competition almost
universally say they dislike it and wish they could find
a better alternative. They often know instinctively
that innovation is the only way they can break free
from the pack. But they simply don’t know where to
begin.

Chan Kim and Renee Mauborgne

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Success Breeds Complacency

“It is a classic conundrum for business titans: How much
money and attention should be focused on a new, but
growing, operation that is far less profitable than the core
business?”

- Prof. Clayton Christensen, The Innovator's Dilemma

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Disruptive Innovation Theory
Sustaining Innovations
Better Products Brought to
Performance Established Markets

Difference
Performance
Measure

Low-End Disruptions
Target Overshot Customers with a
Lower Cost Business Model

New-Market Disruption
Compete Against Nonconsumption

Time
Nonconsumers or Nonconsuming Contexts

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Customer Demand & Signals of Change

1. Non-Market Contexts: External Forces (Government, Economics,
etc.) Increasing or Decreasing Barriers to Innovation

2. Undershot Consumers: Opportunities for Up-Market Sustaining
Innovations

3. Overshot Consumers: Opportunities for Low-End Disruption, Shifting
Profits by Specialist Displacements (Modularity) and the Emergence
of Rules
4. Non-Consumers: Opportunities for New Market Disruptive Growth

Established Companies almost always
Lose to Disruptive Innovators

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THE STARFISH & THE SPIDER

The Unstoppable Power of Leaderless
Organizations

Although spiders and starfish may look alike, starfish have a
miraculous quality to them. Cut off the leg of a spider, and you have
a seven-legged creature on your hands; cut off its head and you
have a dead spider. But cut off the arm of a starfish and it will grow
a new one, and the severed arm can grow an entirely new body.
Starfish can achieve this feat because, unlike spiders, they are
decentralized; every major organ is replicated across each arm.

But starfish don’t just exist in the animal kingdom. Starfish
organizations are changing the rules of strategy and competition
and are organized on very different principles than we are used to
seeing in traditional organizations.

Spider organizations are centralized and built around org charts; on
the other hand, Starfish organizations tend to organize around a
shared worldview or ideology.

And the Internet has helped them flourish.

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THE BLACK SWAN

The Impact of the
Highly Improbable

The human mind suffers from three ailments as it comes into
contact with history, called the triplet of opacity:

1.the illusion of understanding, or how everyone thinks they
know what is going on in a world that is more complicated (or
random) than they realize;

2.the retrospective distortion, or how we can assess matters
only after the fact, as if they were in a rearview mirror
(history seems clearer and more organized in history books
than in empirical reality); and,

3.the overvaluation of factual information and the handicap
of authoritative or learned people, particularly when they
create categories – or "Platonify."

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U.S. Intelligence Community
Failed to Evolve

Unexpected new threats
from non-traditional enemies
like al Qaeda emerged on the
geopolitical stage in the
vacuum of America's return
to international economic,
political and cultural
hegemony after the end of
the Cold War.

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Bias for familiarity leads
management to ignore important
indicators of change

Strategy should be a response to
intelligence…
not the other way around
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Strategy is focused on what the organization wants to do in the world;
intelligence is focused on what the world wants next.

Unsound Strategy, Policy and Decisions are the Product of an Intelligence
Agenda Dictated from Above
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Intelligence 2.0
The Era of Asymmetric Interpretation

• Intelligence 1.0 was about acquiring short-lived information advantages
(Competitive Advantage through Asymmetries of Information), though
fleeting and risky to the firm's reputation and ethics.
• The transition is now complete to an open source world of "info-glut"
where asymmetric information gaps are increasingly difficult to obtain and
maintain and interpretation becomes far more important as everyone
looks at the same corpus of data but sees something different.
• Web 2.0 and Enterprise 2.0 pinpoint a shift in organizational culture – the
“Facebooking” of the workforce means everyone in the enterprise can
become a casually-engaged virtual member of the intelligence apparatus
and should be instructed how to help most productively.
• Intelligence will extend into aspects of organizational culture and
workforce engagement – which I differentiate from full-time intelligence
staff as “reconnaissance” – but centralized, specialist intelligence staff will
persist and embed themselves into the domains of organizational
problem-solving.

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Intelligence 2.0
Asymmetric Interpretation Depends on Both Decisive & Incisive Sensing

Decisive Incisive
Frame of Reference is the Scanning for Trends, there may be
Decision no Decision made
Compares Options & Outcomes Historical Patterns & Anomalies
Recommendations & Trust Implications for the Reader
Top-Down Imposition Bottom-Up Exposition
Driven by Issues Driven by Trends
Product is Decision/Action Product is Observation
Factual & Hypothetical Emergent & Skeptical
Confidential & Proprietary Open Source

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Intelligence 2.0 Engages the Workforce in Collaborative Sensing to
Anticipate and Act on Industry Change

Signals
of
Change

Likely Outcome of Strategic Choices
Competitive Influencing
Battles Success

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Evolving toward Analysis 2.0
The Prior Generation Analysis 2.0

Individual expertise  Collaborative expertise
 Heavy System 1 thinking  Heavy System 2 thinking
 6-10 MBA-type methods  Master 24-36 CI methods
 Unstructured techniques  Structured analytics
 Convenient contacts 
Managed intel networks

Use KITs? Misapplied? 
KITs+1

Data drives methods 
Methods drive data

Limited multi-media  Heavy social media
 Scheduled/as-needed  Real-time analytics
 “Weak-ened” warriors  Analytic fitness
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KITs+1
The Framework
Early Warning Key Players Strategic Issue KITs+1

Diagnostic test for placement at program entry and pre-course module
QUALIFIER

Forecasting Competitor Profiles Porter's Five Forces Analysis Deliverables

Event & Timeline Customer SWOT/TOWS Basic Statistics for
Segmentation Analysts
S-curve (Technology Financial Ratio and STEEP/PESTEL Goals of Analysis
Life Cycle) analysis Statements
BRONZE

Experience Curve Four Corners Critical Success Alternative
analysis analysis Factors (CSF) Competing
analysis Hypotheses (ACH)
Growth Vector Functional McKinsey 7S Communicating
analysis Capabilities & analysis Analysis -- Visually
Resource analysis
Product Life Cycle Win-Loss analysis Stakeholder analysis Guiding Data
analysis Collection Efforts

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Developing Peak
Analytical Fitness (AF)
• Aim: To create “fit” analysts who are able to perform at highest levels in their
fields of endeavor
• Analogy: You can train and develop analysts in much the same manner as
Olympic-class athletes are trained
• Process elements include:
1. Initial diagnosis of the individual’s AF level, calibration
2. Customized mapping out of L/T AF improvement plan and shorter-term
“game plans”
• Supported by KITs+1 framework
3. Participate in regular analytical conditioning
4. Identification of analytical “plays” needed to be run
5. Establishment of practice routines
6. Provision of analytical coaching, instruction
• Often adds mentoring by more senior analysts
7. Participation working with other same-company practitioners on “live
fire” analytical exercises
8. Regularly scheduled AF testing

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Implications for Intelligence Practitioners
Under Analysis 2.0 Practitioners will:
1.Perform analysis more frequently as part of teams (which are
going to be more multi-disciplinary or functional), as opposed to
on an individual basis
2.Learn and employ a greater range of analytical methods, tools
and techniques
3.Actively help inform the choice of enterprise-level data
gathering systems & solutions in support of intelligence activities
4.Continually train and develop their analytical thinking
5.Match KITs to methods and use more planning effort to drive
data acquisition to populate their choices
6.Work more closely with colleagues in knowledge management,
HR and communication to achieve cross-functional synergy

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Performance
Driven
Organizational
Reconnaissance
Based on Performance
Management
Perspectives such as
the Balanced
Scorecard

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Startup Intermediate Peak
Roadmapping 3-Phases of Readiness
TASKING What? COLLECTION So What? ANALYSIS Now What? DISSEMINATION
Intel Team Audit SME Profiling / OSINT Intel Fitness Assessments, Client Definition, Push-
Team Fundamentals & Demand Generated
Delphi Interviews with Key HUMINT / Willingness to Training
People
Executive Clients share/contribute Asking Better Questions Client Fitness
&
Culture Enterprise-wide Recognition Ability to Protect Confidential Intel Community, Internal & Pull-Demand Action
of Intel Value by the IP, Elicitation Across the External
Workforce Workforce
Who?
OSINT Self-Service (Email, SWOT, Industry, Five Forces, Email, Asynchronous
Market Research Derivative /
Google) Competitor Financials -
Ad-Hoc
Reactive
Methods Client-Driven / Defined SME Nets, Ad-Hoc Field Benchmarking, Win/Loss, Intranet / Portal
& HUMINT, Portals STEEP, 4Cs - Proactive
(Intranet/SharePoint)
Systems Real-Time, Two-Way
Scenarios & Simulations,
Systematic / Initiative / Crowdsourcing, Mobile, SME
Value Chain & Business Model Persistent Apps
Metrics Nets Formalized
- Predictive
How?
Stick-fetching / Service Free Subscriptions, Google Reports / Alerts / Profiles Newsletters, Key Players
Bureau / Responsive Alerts, SharePoint
Products Network Hub,
Summarized Situational,
Events, Issues & Decision
& More Intuitive, KIT & Market & Industry Analyses
Hand-Off to Execs Support
KIQ-driven
Services Interactive, Business Early Warning, Detection &
Invited to Decision Forums,
“Consigliere” / G2 Performance Focused, Drives Anticipation of Industry
Ability to Tap SME Nets “at
Strategic Advisor Problem-Solving Change
What? will” with Success
Unstructured Known Needs
Competitor Activity & Plans Situational Assessment Mostly Push, Basic Reporting
Convenient, Limited Clients
(Reactive)
Mission Market & Industry Internal / External Mix of Early Warning, Strategic Push / Pull “Balancing Act”
& Trends (Defensive) Some Key SBU’s Issues, Key Players
Priorities Systematic, Real-time Balanced Scorecard, and Client-Pull, Customized to
Scenarios, Futures, Problem-Solving, Other BPM-driven Individual Preferences and
Why? Disruptions (Offensive) Enterprise-wide Applications Needs

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What’s Next?

Leadership to Act is
Based on Confidence

Intelligence Combats the Paralysis that
Accompanies Uncertainty

Aurora WDC is at work building the Intelligence Collaborative as a
destination from the web and mobile for sharing the best
intelligence ideas, fortnightly webinars with intelligence experts
and visionaries, high-intensity “interval training” via the exclusive
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 While we build IntelCollab.com please express your interest in
joining us at http://go.aurorawdc.com/intelcollab

 Questions after conclusion:

 Email: Arik.Johnson@AuroraWDC.com
 Phone: +1-715-450-5130
 Twitter: @ArikJohnson

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How Intelligence Helps Business Make Better Decisions in Unpredictable Times

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How Intelligence Helps Business Make Better Decisions in Unpredictable Times