Quick takes

Citation

Gorrell, C. (2006), "Quick takes", Strategy & Leadership, Vol. 34 No. 6. https://doi.org/10.1108/sl.2006.26134fae.003

Quick takes

Catherine GorrellPresident of Formac, Inc. a Dallas-based strategy consulting organization (mcgorrell@sbcglobal.net) and a contributing editor of Strategy & Leadership.

These brief summaries highlight the key points and action steps in the feature articles in this issue of Strategy & Leadership.

The model for integrating strategy and intelligence: the Executive Intelligence OfficerMark Little and Liam Fahey

Good strategy is forged from the carefully articulated and well-managed integration of diverse and often conflicting viewpoints. Intelligence professionals need a place at the table so they can call attention to the weak but crucial marketplace signals of discontinuity and help change the mental model the organization has of the evolving future. Unfortunately, there is a dysfunctional disconnect in many large companies between the process of strategy making and that of intelligence gathering and delivery, and it puts the enterprise at risk:

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  A major cause: the absence of an intelligence-focused executive position at the senior levels of the organization.

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  Corrective action suggested: create a new intelligence role model – the Executive Intelligence Officer (EIO).

Overview of the EIO position

The EIO is the person who manages the executive team’s collection of worries and opportunities posed by the evolving external environment and then is the orchestrator of the appropriate analysis and response. Therefore, the key tasks are to:

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  Assume the explicit responsibility for generating the intelligence needed for the CEO and executive team to do their jobs.

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  Work as a collaborator and partner with the executive team.

The authors describe the EIO’s seven roles of content leadership, intelligence quality, decision relevance, voice of realism, education enabler, safe harbor, and dot connector. Top intelligence executives at leading companies have pioneered these roles as they learned to operate effectively.

Informing and changing the CEO’s point of view

A key responsibility for the EIO is to introduce the CEO to viewpoints that lie outside the firm’s “party line.” The CEO’s thinking thus can be challenged, stretched, and extended by an EIO who has both the credibility and expertise to question the executive team’s current assumptions. To achieve this goal, each of the seven EIO roles requires a specific interaction with the CEO and other senior executives. These are discussed.

Two bonus benefits

In addition to advising the CEO, the EIO would help executives such as CMOs, CFOs, heads of strategic planning or executive vice-presidents integrate intelligence into their own roles. A further benefit is that intelligence professionals – for example, any individual leading a business intelligence (BI) or competitive intelligence (CI) function – will use this EIO job description to evaluate and enhance their contribution to executive decision making.

Ten steps to get more business value from knowledge managementStephen Denning

How is the firm to capture the promise of knowledge management (KM) while sidestepping the pitfalls? Why did KM disappoint in the past? How can leaders exploit its true potential? Here are ten practical steps for an executive to take:

1. Slice through the hype

Knowledge isn’t necessarily a sustainable competitive advantage: while low-value knowledge is often “sticky” and not easily imitable or appropriable by competitors, high-value knowledge is very “leaky”, and tends to fly out the door at the speed of light.

2. Fight off the IT firms’ aggressive selling

While data and information can be transferred by technology, knowledge has the human dimension of understanding. This means that technology is never the total answer.

3. Find out what’s causing your organization’s knowledge problem

Why don’t people share knowledge? Effective sharing of knowledge generally entails changing the organization’s culture and only indirectly managing knowledge.

4. Set your knowledge management strategy

What is important is to get clear on the strategy to be pursued, and what benefits it will generate, and then make an explicit decision to proceed.

5. Use narrative techniques to communicate your KM strategy

The fundamental obstacle to knowledge sharing in an organization is typically lack of demand for sharing knowledge, not lack of supply of knowledge.

6. Pay special attention to organizational values

There must be present in the company the “value of sharing” for KM to succeed. Knowledge requires a supportive value system. Think of knowledge management as “values management.”

7. Encourage communities and cross-communities

To promote knowledge sharing, nurture communities of affinity interests and experiences, where practitioners face a common set of problems in a particular knowledge area, and have an interest in finding, or improving the effectiveness of, solutions to those problems.

8. Set your incentives (carefully!)

It’s wise to make sure that the behavior you seek is the behavior you really want, in both the short team and long term.

9. Measure progress (carefully!)

Measuring progress is essential for a sustainable knowledge-sharing program. The relevant metrics will depend on the objectives of the knowledge management program. But there is also a measurement paradox to address: the more the organization is successful in mainstreaming knowledge sharing as the normal way of conducting the business of the organization, the more difficult it will be to isolate the impact of any particular actions or expenditures in knowledge management.

10. Recognize the limits of knowledge

Expert knowledge becomes a barrier to disruptive innovation when communities of practice become bastions of support for the status quo, at the expense of high-value innovation. Management’s support for expert knowledge management must thus be conditional.

In the final analysis, knowledge management may not transform the business landscape, but it is an essential element of the modern organizations. If these ten basic principles are followed, managers should be able to capture its much of knowledge management’s potential while avoiding its most serious pitfalls.

Using tactical intelligence to help inform strategyMartha Culver

Gaining effective tactical intelligence about competitors can be critical to running a company’s day-to-day operations, and to informing higher-level strategy. When analyzed in the aggregate, tactical intelligence offers an insightful picture of where competitors and the marketplace seem to be heading. By using the industry expert sources to see the unique detail and nuance of the competitive environment, tactical intelligence provides richer detail than the typical competitive overview that uses only secondary information.

Use for daily operations

Tactical intelligence is the finished analysis about competitors that directly supports the daily operations of a company. Key is both the data gathering and the value-generating analysis (the insights that the data suggests). Examples of the most valuable tactical intelligence products are cited. To measure effectiveness, test whether two broad objectives are being met:

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  To increase the margin of the win against competitors, and thus contribute to the company’s top-line revenues.

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  To find ways to help reduce the company’s costs, primarily through competitor benchmarking.

Most tactical intelligence comes from mining databases and from debriefing people working in or monitoring the industry. Building and maintaining a network of such knowledgeable people sources is of critical importance to effective tactical intelligence. Fortunately, up to 70-80 percent of the competitive intelligence you need may reside in your own company. The challenge is to identify the right internal people and to tap into their information just when it is needed. The best practice is to reach out to them regularly and personally.

Use to inform strategy

Strategists can use tactical intelligence to inform a number of strategic issues, including decisions about new or current investments in product or service development; major investments in technology, professional services and outsourcing; merger/acquisition; or divestment. All of the findings of tactical intelligence can be aggregated and connected to help form an analysis of competitors’ overall direction, where competitors think the market is headed, and what action your company can take to anticipate and respond to market changes. This kind of strategic CI empowers the leadership’s strategic thinking because they are set up beforehand to correctly anticipate competitor responses and market reactions.

A case study is presented to illustrate the linking of strategy and intelligence.

Interview: the leader’s handbook to the futureRobert M. Randall

Bill Ralston and Ian Wilson have written an invaluable resource for corporate leaders – The Scenario Planning Handbook: Developing Strategies in Uncertain Times (Thomson/Southwestern, 2006). Strategy & Leadership editor Robert M. Randall asked them how they saw the CEOs role in the scenario planning process. Here are some sample questions and responses:

Why should CEOs and other corporate leaders read all about the practices, processes and methodology described in your new Scenario Planning Handbook? Why does scenario planning deserve special top management attention?

Ian Wilson: Vision, strategy and culture are the main responsibilities of a CEO. What the CEO can do, and must do, is to provide the leadership required to get the board and senior managers to see the need for change, provide the needed resources and commitment and champion the results to the organization and its stakeholders. The Scenario Planning Handbook provides a CEO with guidance on how the organization goes about the task of considering the need for change, and then how it undertakes to develop and implement a new strategy in the face of a highly uncertain environment.

This handbook is designed to provide CEOs and other top managers with critical insights on just how scenario planning can change the way strategy is created, often challenging senior managers’ strongly held beliefs.

Does this mean that scenario thinking and the management of scenarios should be considered a core strategic leadership skill?

Bill Ralston: The greatest problem we have seen in corporations and major government agencies is the lack of long-term strategic thinking and planning. One of the reasons for this is that the strategic management processes in most organizations still needs to evolve to fit the challenges faced by senior management. When CEOs, senior management teams and boards begin to see the benefits of using scenario planning to help address the problems created by uncertain environments and create innovative strategies for those environments, then – and only then – will they begin to view scenario thinking as a core leadership skill.

But do executives really need to get involved with the nuts and bolts of scenario development? Will that really help them with the management of strategy which is clearly their prime responsibility?

Ralston: Unequivocally, yes! Scenario planning makes people aware of the uncertainties, threats and opportunities of the external environment, the implications of not being prepared for change, and the benefits of being prepared. The more that executives are involved in the development of the scenarios, the greater is their understanding of them and their commitment to the strategies that evolve from them.

We have found that scenario planning is an excellent way to “rehearse the future.” By thinking continuously about the future, and how we might react to major changes, we are better prepared to respond quickly to extraordinary events when they do occur.

Using scenarios to improve marketingAndrew Curry, Gill Ringland and Laurie Young

Marketing forecasts are always risky because past events or previous buyer behaviors are not reliable indicators of future action. Anticipating which products or services the customer will want before the competition does is the goal. Such marketing breakthroughs can come from challenging the “official” future with alternative models of the world. This is the strength of scenario planning. So the question is, how can scenarios be used to create the alternative world models useful to marketing managers and the product development team?

Scenarios as valuable tools for marketers

Marketers respond to frequent and short-term changes in consumer demand. Scenarios are for long-term perspective. How are these two points compatible?

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  Many of the significant issues that affect the success of fast-moving companies and sectors unfold over a number of years, though with many sudden changes of direction. These include regulation, talent acquisition, environmental issues, technology, property, logistics systems, and industry evolution. In all of these areas, for most companies, there are “inevitable surprises.”

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  Many of the techniques used in scenario development are useful in helping think about changing customer needs, about product and marketing innovation and about risk. Building the skills for strategic futures work inside the company helps many areas of the business, not just the strategy department. And often, after a futures exercise, marketing can spot the relevant behavior in groups of current consumers.

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  The use of scenarios encourages people to be more outward looking, going beyond the confines of a single brand or category and providing a vehicle that encourages thinking across multiple brands, categories and sectors. Scenarios allow marketers to ask, “How will our product be valued compared with potential competitors from other industries, and given the needs and desires of future consumers?”

Integration with other tools/teams

Scenario planning can be combined with other marketing analysis tools to realize valuable results. These include The Ansoff Matrix, customer research, market analyses, and brand valuation. Many examples are cited.

Corporate leaders need to encourage the use of scenarios by marketers and, for their part, marketers need to share scenarios of potential new near-term futures and the insights gained from considering these alternatives with top management. Organizations that do this create a culture that anticipates and adapts to change readily and innovatively, and creates competitive advantage in the process.

How leaders can use Zero-Gravity Thinkers to stimulate successful innovationCynthia Barton Rabe

The paradox with innovation is that, in most fields, expertise is required for innovation; but innovation is inhibited when corporate experts are dismissive of incipient ideas. Recognizing this paradox as a major dilemma, the question becomes how does an established organization simultaneously escape from and use its accumulated knowledge? A solution implemented at Intel involved introducing Zero-Gravity Thinkers to company teams looking for innovative solutions to challenges.

Traits of Zero-Gravity Thinkers

To be effective, Zero-Gravity Thinkers must be temporary (never permanent) team members with three characteristics:

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  Psychological distance from the team.

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  Renaissance tendencies – strong intellectual curiosity combined with an inventive/creative streak.

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  Related expertise – knowledge relevant to the particular challenge to allow contribution of meaningful insights from a different perspective. With their mix of naïveté and smarts-in-a-different-field, related experts help combat unproductive ExpertThink.

Research and case studies suggest that people with such characteristics can help teams take flights of imagination. When problems are complex, even the insertion of a single, smart non-expert into a working group can have a positive impact on its performance.

The best role for Zero-Gravity Thinkers

Outsiders can play five roles when they are added to an innovation team. The first two are “teacher” and “facilitator.” Outsiders performing the teach and facilitate roles help organizations with the ‘process’ of solving a problem.

A third role is “inform,” when teams want input on a specific challenge and need to use outside “counselors” for opinions and insights.

The fourth role is that of “collaborator.” Zero Gravity Thinkers excel at this role, and it has the potential to be the most powerful in helping a team address a specific challenge. When teams invite a Zero Gravity Thinker to play this role, they benefit from having an outsider participate intensively with them as both a partner in developing innovative ideas and as a catalyst for stimulating the team to think about a challenge from a different perspective.

The fifth role is that of “doer.” Outsiders in the inform and do roles participate to some degree in the innovative thinking that will solve the problem. As distinct from the teach and facilitate roles, they are focused on content more than process.

With the active sponsorship of wise leaders, Zero-Gravity Thinkers become a powerful weapon in the arsenal against innovation killers.