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Driving Organizational Intelligence

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Driving Organizational Intelligence

  1. 1. Implementing Intelligence Capability at the Organizational Level By KaSandra Husar and Rom Gayoso, Intel Most industry players strive to develop an advanced organizational intelligence capability, since in many cases this capability creates a competitive advantage in the marketplace. Intelligence development success can be achieved by artfully utilizing multiple transition methods combined with strong program management and a clear vision of what exactly this success looks like. In this article we discuss the steps necessary for the creation of your own Market Intelligence Dossier, which is a structured approach to managing the intelligence effort in any organization. We will also help you locate your firm in the market intelligence maturity curve, and finally we will work together on some of the best ways to move your firm through the maturity curve using tried methods. Figure 1:The PCAA Model THE PLAN-COLLECT-ANALYZE-ADAPT MODEL Before your company embarks on an effort to develop intelligence capabilities at multiple organizational levels, Volume 13 • Number 4 • October/December 2010 www.scip.org 27
  2. 2. implementing intelligence capability at the organizational level deliverables scoped in the Plan phase. In essence, the PCAA Model is one large feedback loop of continuous improvement. Also determine that the intelligence organization has the business knowledge and the ability to properly integrate that knowledge into marketing intelligence and that they can influence stakeholders to drive decisions that impact the bottom line (Husar & Gayoso 2010). One way to guide decision-makers through the robust development of their requisite knowledge base and industry expertise is by implementing the Market Intelligence Dossier Development Process (see Figure 2). MARKET INTELLIGENCE DOSSIER DEVELOPMENT PROCESS The Market Intelligence Dossier Process basically outlines the knowledge areas that decision-makers must have strong acumen in so that they can most effectively impact the business. In reality, as the organization’s eyes and ears are on the external environment, market intelligence practitioners need to have command of the macro forces surrounding the firm, as Figure 2: MI Dossier Development Process well as a deep knowledge of the product offerings and an established process to capture and process intelligence. first ensure that the organization’s individual decision- By following this process one can be assured of makers involved in this effort are thoroughly trained and obtaining a substantial knowledge base in the desired educated on the Market Intelligence Process Plan-Collect- area of business and industry. In essence it guides the Analyze-Adapt (PCAA) Model (see Figure 1). development of the appropriate knowledge required to Adopting the PCAA Model is a wise investment make optimal business decisions. Once the individuals in of your resources for many reasons. First, the primary an organization have developed these requisite personal benefits of the Plan phase reside in its ability to assess the market intelligence and business acumen skills, they can task at hand, and to define the scope of the deliverable. then consider moving the organization as an entity to a The plan also serves as a rallying point for the troops, as desired state of market intelligence capability. its development requires greater engagement and closer collaboration among different stakeholders. The Collect phase is an important step in the effort since it translates the data discovery process into the STAGES OF ORGANIZATIONAL MATURITY tactical execution. It is also an excellent opportunity to One way to categorize the current status of intelligence reach out and involve other members of the organization in an organization and map its progression path towards in the process. In the Analyze phase you concentrate the desired end state is to apply the Organizational Market your effort not only on processing the data, but also Intelligence Maturity Stages matrix in Figure 3. The on translating the key findings into a way your own matrix serves two purposes: one is to help you use defined organization can understand and apply it. categories to best describe the current stage of market intelligence development in your organization; and the Finally, on the Adapt phase the effort is focused other is to help you draw a plan to help the firm progress on feedback that makes the necessary changes to the from point to point. 28 www.scip.org Competitive Intelligence
  3. 3. implementing intelligence capability at the organizational level Stage 2: Containment The next stage of organizational maturity is that of containment. In this stage, the firm’s decision-makers are expected to develop optimal decisions with some input from benchmarking or market intelligence in order to develop a more complex understanding of the industry environment. They also apply data and information which contributes to their Figure 3: Organizational MI Transformation PIT Model strategic planning decisions. In addition, these decision-makers occasionally use market Stage 1: Beginning intelligence to focus on opportunities developing in their The first stage of organizational market intelligence outside environment. maturity is characterized by rudimentary and basic Some established infrastructure usually exists in the attempts at developing the intelligence processes. form of a website that decision-makers can access to find Individuals at the top of the organization or key leadership information and data. In some cases a personal knowledge have minimal expectations for the intelligence capability. infrastructure is in place to help drive organization-wide The organization participates in ad-hoc benchmarking and competencies and best known methods. applies some attention to the external environment for decision-making purposes. At this stage, strategy deliverables require some element of benchmarking and market intelligence to Pockets of stronger capability in business acumen be accepted by upper management. Even though some exist, but for the most part the organization is inwardly knowledge is produced through these two activities, it is focused and tends to make business decisions in an still not sufficient to enable the firm to develop a stronger information vacuum. Some individuals may make token market orientation or a competitive advantage as Wang efforts to build an infrastructure that enables data and (2010) envisioned it. information gathering. In this stage, market intelligence creates a slight-to-nonexistent effect on or input to the Stages 1 and 2 of market intelligence maturity development of cost strategies. are characteristic of an organization which is in a reactionary state. In most cases this type of organization In many cases, the company bases its future strategic finds itself reacting to changing environmental factors and objectives or goals on an extension of its historical or operating in a ‘firefighting’ mode because of its lack of current goals. Then, the market intelligence function is strategic insight into changes in the environment existing a far from acting as a strategic multiplier of corporate outside of the company’s four walls. performance as Wolfberg (2006) envisioned it to be. Neither can it operate as the analytical base necessary to develop an operational competitive intelligence system Stage 3: In Control as Hou and Chen (2008) thought it should be as the The next phase of maturity exists when the required organizational, inter-personal, and informational organization has developed, implemented, and applied a networks at this stage would either be non-existent or not full intelligence process. In this phase the top leadership developed enough to allow the market intelligence activity levels convey in a clear and articulated tone that strong to flourish. Volume 13 • Number 4 • October/December 2010 www.scip.org 29
  4. 4. implementing intelligence capability at the organizational level business acumen, which incorporates knowledge of the knowledge of impact factors is an integral part of “how” company’s environment, is expected when developing one goes about making decisions. This knowledge is strategy. Forward looking planning, anticipation of market embedded in the fabric of an individual’s job role and the trends, and an understanding of environmental impact culture of the organization. factors (PEST) are beginning to be the “way we do our Sufficient human and financial resources are provided jobs,” replacing the event driven and reactionary approach. to ensure that the right information is available to the right In most cases an established central group of people, and it assists them in making the right decisions. intelligence experts are heavily involved in managing and Appropriate data sources, analytical tools, and planning reporting results from an ongoing monitoring of external expertise are in place and funded. elements that can impact strategy or be an impetus for The decision-makers themselves have been thoroughly reassessing its direction. In some cases, this central team trained in how to utilize advanced analytical tools such as of experts serves a dual function, also operating in an multivariate factor analysis, wargaming, scenario planning, enabling role for the organization. Porters industry analysis, SWOT techniques, and PEST Here the central team is responsible for developing monitoring. In addition, every decision-maker has a and managing the intelligence information backbone and continuously updated dossier in their area of responsibility. infrastructure based on people, information, and tools. This state of knowledge is advanced and proactive in Included in this infrastructure is the means to apply the nature. more advanced analytical toolsets and predictive scenario Based on the availability of strong expertise, at this planning. This infrastructure is designed, developed, level internal business partners recognize both the market and implemented for the use of the entire organization. intelligence team and its individuals as the “go to” sources However its operations are primarily focused on for business and market knowledge. This results in developing and driving strategy and decisions. corporate strategy development benefitting from a highly In this stage the company has created a robust business collaborative front end engagement. acumen and intelligence training, and employees have In the role model stage the intelligence infrastructure access to skill-set up-leveling tools. When developing drives value creation throughout the organization. The strategic objectives and targets, market intelligence market intelligence function not only enables strategy, but becomes an integral part of this goal setting. In many is also an integral part of the feedback loop, responsible for cases, corporate leaders decide to achieve this stage for monitoring and introducing operational corrections much 80% of the individuals and planning efforts in their the same way Peterson & Wofford (2007) envisioned it. organization(s). They move only a few select critical groups of decision-makers to the final stage of role modeling, based on a cost benefit analysis of the time and resources Stage 5: Thought Leaders required to reach the stage 4 level. The final stage of organizational maturity can be characterized as that of a role model but with added impact across industry lines which can completely change Stage 4: Role Model the way the company conducts business. In this case, This organizational maturity stage is achieved the decision-makers are thought leaders. They push the when the firm’s strategic decision-making and market envelope by developing new ways to do business and intelligence functions are recognized as an industry driving the industry with innovative strategies at the role model. In this stage, senior management not only leading edge of thought and development (and in many expects decision-makers to be knowledgeable about their cases across industry lines). For example, when a market business, but also to be viewed as the leading experts in intelligence professional in Delta Company develops a new their respective industries. In many cases, these individuals and innovative type of analytical tool or method that is not publish white papers, speak at industry conferences, hold only useful in Delta Company’s markets but also across patents, process copyrights, and author books. unrelated industry lines, this would be characteristic of the At this stage the organization operates with the game-changing stage. implied understanding that including environmental An organization operating at this level considers its market intelligence capability a competitive advantage with 30 www.scip.org Competitive Intelligence
  5. 5. implementing intelligence capability at the organizational level direct impact on the company’s success in the marketplace. It would be viewed by others as best-in-class in the practice of market intelligence. This company’s employees would be actively recruited to impart cutting edge knowledge by participating in global consortiums and cross-industry forums such as the Corporate Executive Board (CEB), Strategic and Competitive Intelligence Professionals (SCIP) and more. At this stage, senior managers utilize the market intelligence functions to sustain strategic competitive advantage (Vanoy & Salam 2010). Their individual experts work to continuously create decisions that Figure 4: Organizational MI Maturity Stages ensure sustainable superior corporate performance (Tang & Liao 2010). Stages 3 through 5 of the market intelligence The need to focus on people as change agents is not maturity curve are characteristic of an organization new (see Perme 1999). But over time the focus on people which is in a proactive state. In this state an organization has evolved to include an understanding of how those is operating a strong early warning system to identify empowered employees actually became a source of creative potential threats and opportunities on the horizon. Its disruption (Prewitt 2001). Currently Transition Change managers develop or adjust the company’s strategy so as to Management is viewed as a more holistic process (Prosci intercept these potential blips on the radar. 2010). It encompasses not only managers and senior leaders in the organization, but also includes a focus on individual employee capabilities as well as on teams. Much of the focus on enabling people can be LEADING AN ORGANIZATION THROUGH THE understood by analyzing the Awareness Desire Knowledge MARKET INTELLIGENCE MATURITY STAGES Ability Reinforcement (ADKAR) model (Hiatt, 2006). It is a substantial challenge to lead an organization This model basically organizes a combination of awareness, through the market intelligence maturity stages and desire, knowledge, ability, and reinforcement to produce a transition it from ‘Beginning’ to ‘Thought Leader.’ structured way to bring about change. In essence, a central One of the methods to drive this type of fundamental intelligence team should drive the organization through intelligence change is to apply the organizational market the phases of maturity utilizing both the PIT and the intelligence transformation People-Information-Tools TCM methodologies in tandem. (PIT) Model. (see Figure 4) This transformation method provides the basis on which to develop the backbone infrastructure for the three main pillars of organizational knowledge: people, PEOPLE INFRASTRUCTURE information, and tools. In tandem, this approach is also This pillar of organizational structure refers to the applicable to the industry methodology of Transition actual individuals who must be dedicated to harnessing Change Management (TCM) which helps transition the knowledge of the entire company. They ensure that individuals through the changes in expectation and valuable and accurate knowledge is developed, retained, performance that will lead to their creating the desired and shared among the various parts of the organization. By results. identifying a market intelligence lead role for each segment Volume 13 • Number 4 • October/December 2010 www.scip.org 31
  6. 6. implementing intelligence capability at the organizational level of the business, these individuals ensure development and TOOLS INFRASTRUCTURE operation of the proper TCM, communications, leadership The final pillar, tools infrastructure, is the most engagements, sub-org intelligence build, and infrastructure straightforward one. It includes all analytical tools, maintenance. methodologies, constructs, systems, and training required People infrastructure also refers to building networks to ensure that those individuals who drive business for strategy development and intelligence. These can exist strategy can not only locate but also utilize these available within multiple partner organizations and across a larger resources. This ensures making the right decisions at division or corporation. Whenever effective intelligence the right time in the most effective and efficient way networks are required, team members must become possible. These tools can include a regression analysis masters in the art of influencing (Husar & Gayoso 2010). engine, comprehensive secondary research engines, The goal of an effective people infrastructure is providing primary research and benchmarking templates, real-time access to both overt and tacit knowledge and expertise feeds of market indicators and analysis, access to external across a large organizational span. This creates reduced consortiums, secondary research firms, and more. search costs and increased transparency, leading to more Equally important is providing robust training in effective collaboration. these tools. This ensures that experts not only know how to utilize the existing resources, but can also find and process the data and information. The goal is to bring them to the point where they can combine the located INFORMATION INFRASTRUCTURE data and information with their own market expertise to The pillar of information structure rests largely on produce key intelligence. This intelligence can then be ensuring that decision-makers who are responsible for applied to decision-making and strategy development. strategy and its execution can quickly find and access One appropriate methodology is the market Dossier the data and information required to make optimal Development Process (see Figure 2), which governs the decisions for the bottom line. This infrastructure information-to-action process. usually encompasses a robust ‘one-stop-shop’ for the The business environment has become so complex benchmarking and market intelligence needs of these that it is even difficult for very experienced decision- decision-makers. makers to process all the available information in an The information infrastructure may incorporate effective way (Gayoso & Husar 2008). Fortunately the streaming data which is centrally managed, and updated recent confluence of data analysis and computer science analysis on areas that impact multiple parts of the business has generated one of the most powerful tools in recent (such as fuel cost expectations or economic predictions). times, data visualization. This reduces the replication of high-level analysis across Data visualization was originally developed for multiple areas of the business, a common issue within applications such as creating 3D models of cities and geo- decentralized organizations. Optimally, each part of visualization (Hotta & Hagiwara 2009) and as tools to the organization should collaborate with as many other process climate data (Ladstadner & Steiner 2010), with yet divisions as possible to draw the maximum benefit from other practical applications to come. The ability to detect enterprise-wide licensing or open data sources. and exploit pattern structures in large data sets (Kuznetsov In many cases, the information pillar can be the most 2009) resulted in applying data visualization and mapping difficult element to create. Although sufficient systems displays as a creative way to present complex information and software capability may already be available, the and help individuals process vast amounts of information human element in sharing information may not be. If in record time (Chen & Ebert 2009). individuals or the corporate culture have not developed In fact Luboschik & Schumann (2007) postulated a ‘mature organizational’ perspective, issues concerning that data visualization tools can not only deal with massive data hoarding can arise. In addition, project managers data sets, but also aid in the comprehension of very within the market intelligence team must understand complex relationships. In addition Sackett & Williams that both data security requirements for information at (2006) found specific applications for data visualization in the individual level and database integrity are essential the manufacturing environment. A clear example of data elements of culture transformation success. visualization tools can be found within Egwuekwe’s (2010) 32 www.scip.org Competitive Intelligence
  7. 7. implementing intelligence capability at the organizational level work, which is an illustrated map of the unemployment Hiatt, Jeffrey (2006). ADKAR: A model for change in levels in the United States from January 2007 to August business, government and our community – how to 2010. implement successful change in our personal lives. Prosci As the old adage says, a picture is worth a thousand Research. words. www.amazon.com/ADKAR-Government-Community- Successful-Professional/dp/1930885504 Hotta, Hajime; Hagiwara, Maafumi (2009). “On line geo visualization with fast kernel density estimator.” SUMMARY Proceedings of the 2009 IEEE/WIC/ACM In this article we discussed how market intelligence International Joint Conference on Web Intelligence is important only to the extent that it is applied and and Intelligent Agent Technology - Volume 1. p622- contributes to the decision-making process. In reality even 625. the most impactful intelligence becomes irrelevant if it is not acted upon and used to determine strategic direction http://portal.acm.org/citation.cfm?id=1632436 based on environmental factors. Hou, Kaihu; Chen,Ting (2008). “Study on a model Market intelligence practitioners can add value to about competitive intelligence system of enterprise an organization as they adopt a structured approach to based on data mining under electronic commerce advancing a large organization through the phases of the environment.” IEEE Computer Society in Proceedings market intelligence maturity curve to create competitive of the 2008 International Seminar on Business and advantage. The maturity curve charts a complex but Information Management, p203-206. critical path to developing a strong early warning system www.computer.org/portal/web/csdl/doi/10.1109/ that identifies potential threats and opportunities on the ISBIM.2008.75 horizon. It also provides one recognized way to transition Husar, KaSandra, Gayoso, Rom (2010). Influencing for a group of executives from reactionary mode to that of a success. Competitive Intelligence Magazine, v13n2, proactive mentality, and empower them to make optimal p7-14. decisions that impact the bottom line. www.scip.org/Publications/CIMArticleDetail. cfm?ItemNumber=11032 Jin-Fu, Wang (2010). “How organizational learning REFERENCES strengthen market orientation: Findings and case Chen, Min; Ebert, David (2009). “Data, information and study.” IEEE Computer Society in Proceedings of knowledge in visualization.” IEEE Computer Graphics the 2010 International Conference on Challenges in and Applications, January, p12-19. Environmental Science and Computer Engineering, www.cs.swan.ac.uk/~cschenm/ftp/Chen2009CGA.pdf March p307-310. Egwuekwe, Latoya (2011). The decline: geography of the http://ieeexplore.ieee.org/xpl/freeabs_all. recession. January 12 updated. jsp?arnumber=5493288 www.latoyaegwuekwe.com/geographyofarecession.html Kuznetsov, Sergei (2009). “Pattern structures for analyzing complex data.” Rough Sets, Fuzzy Sets, Data Mining Gayoso, Rom; Husar, KaSandra (2008). Buy-side market and Granular Computing: Lecture Notes in Computer intelligence practice: reflections form high tech Science, v5908/2009, p33-44. manufacturing. Competitive Intelligence Magazine v11n2, March-April p26-32. www.springerlink.com/content/953q330184319l35/ www.scip.org/Publications/CIMArticleDetail. Ladstadner, Florian; Steiner, Andrea (2010). Climate data cfm?ItemNumber=3146 using interactive visualization. Journal of Atmospheric & Oceanic Technology, v27n4 p667-679. http://journals.ametsoc.org/doi/ abs/10.1175/2009JTECHA1374.1 Volume 13 • Number 4 • October/December 2010 www.scip.org 33
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