Keep It Positive: Using Competitive Intelligence to Enhance Business Development

Keep it positive Using competitive intelligence to enhance business development Eric Garland Competitive Futures, Inc @ericgarland #scip09

Why we’re here I DON’T WANT YOU TO BE FIRED I WANT YOU TO HAVE MORE BUDGET I WANT YOU TO SEE THE UPSIDE OF CHANGE FOR FUN AND PROFIT

What we will talk about • State of competitive intelligence, scenario planning, futures • Executive psychology of positive & negative information • Frameworks to combine CI & business development • Exercises you can take home

WHY IS IT SO EASY TO FIRE/IGNORE INTELLIGENCE? Perfect, now we can get back to improving “shareholder value”

The Future Intelligence Method 5 – 15 years 1 – 5 yrs. Today Major demographic Competitive shifts product Stock launches performance Technology revolutions Industry dynamics Sales data Political movements Regulatory response Personnel retention Infrastructure investment/ Consumer collapse preferences

What to do with future intelligence 5 – 15 years 1 – 5 yrs. Today Hire new people Plan for loss of talented Aging populations workforce? Global climate Upcoming restrictive change Launch new environmental Disruptive business legislation? technologies Emergence of “world- Globalization class” Asian industries? Form partnership

EXECUTIVES: There is only one fundamental question today: Is this incremental or is this transformative adjustment... change?

Transformation sounds nice, but... Welcome to the future! Your old business model is trashed!

Transformative change and business models 1 - 5 years Wildcards Business Model Business Model Trends A B Today: Making Future: Maybe money making money

Transformative change and business models 1 - 5 years Wildcards Trends Today: Making Future: Maybe money making money

MY LAST COUPLE OF YEARS: 2007 - 2008 Anyhow, all I was saying was doubling the that Case-Shiller Index is bad for banking, why is everyone freaking out?

TIME TO GET HAPPY For CI to survive and thrive it must blend with psychological reality and focus on business development, not just Cold War “enemy tracking”

PSYCHOLOGY OF BAD NEWS/GOOD NEWS

Two fundamental insights: The brain is designed for fear. Companies proﬁt from opportunities. Gain maximization is more attractive than risk management. NOTICE: these are at odds.

THE WETWARE Modern Stone age world design

How does the brain handle long-term threats? “Our updated simulations continue to illustrate that the long- term fiscal outlook is unsustainable. Despite a 3-year decline in the unified budget deficit, the federal government still faces large and growing structural deficits driven primarily by rising health care costs and known demographic trends. Last month, a baby boomer claimed Social Security retirement benefits for the first time, and this cohort will be eligible for Medicare benefits in less than 3 years. According to the Social Security Administration nearly 80 million Americans will become eligible for Social Security retirement benefits over the next two decades--an average of more than 10,000 per day. Although Social Security is important because of its size, the real driver of the long-term fiscal outlook is health care spending. Medicare and Medicaid are both large and projected to continue growing rapidly in the future.” Former Comptroller General David Walker

HUMANS PREFER POTENTIAL GAIN TO RISK REDUCTION Cost: $5 Cost: $9 Potential gain: $1,000,000 Potential gain: $100 Likely outcome: -$5 Likely outcome: $50 - 100

THREE CULTURES OF NEWS INTERPRETATION Good News Bad News Academic

GOOD NEWS CULTURE • American, Western Europe • Best news gets to the boss, more money invested in upside • Negative implications = “not “Leverage the bank to 40 a team player” times over fractional reserve? Sounds like a plan • Best case: Put man on for ﬁnancial success to me, moon, entrepreneurial spirit boss!” • Worst case: Run into brick walls at 300 mph

BAD NEWS CULTURE • Finland, Korea, anyplace regularly invaded • Worst news gets to boss ﬁrst, alternate plans made • Negative implications = looking out for tribe • Best case: React quickly to threats • Worst case: Alcoholism, “Hi, do you have any unguarded pickled herring consumption monasteries around?”

ACADEMIC • Government agencies, France • News arrives once a year • Negative implications = To be discussed to full depth of Cartesian logic • Best case: Well considered “We are not amused” ideas, less susceptible to fad. Also, liberal vacation time. • Worst case: Minitel vs. Internet

TECHNIQUES TO CONNECT CI TO $$$

IF YOU CAN’T HEAR THE CASH REGISTER RING NEAR YOUR DESK, THERE IS NO ROI GET NEAR THE MONEY: Support SALES Give insights to BIZ DEVELOPMENT or PRODUCT DEVELOPMENT

Uh, this isn’t futures studies, it’s BUSINESS DEVELOPMENT 5 – 15 years 1 – 5 yrs. Today Major demographic shifts Technology revolutions one billion 10,000 10 100 good dollar business launches ideas Political business ideas movements Infrastructure investment/ collapse

CONNECTING MARKET ANALYSIS TO $$$ CI Advanced CI Capital assets IP Current Competitive Implications Scenarios Forecasts Trends Brand Cash Flow Connect insight back to business Current 3 - 10 year 1 - 3 year business forecast Delta model

TURN HORRIBLE SCENARIOS INTO BUSINESS IDEAS “When life hands you lemons, make lemonade. Next, ﬁnd someone to whom life handed vodka. Now, you have a party.” -Ron White

The Lemonade Questionnaire 1. Pick a transformative trend 2. Talk about all the people who will be affected, for good, bad or indifferent 3. Think about what they will need, want, dislike, etc. 4. Do your current assets match this reality? 5. Which companies are best poised to create new businesses - if none, will there be start- ups? 6.Where are your competitors? Do they even matter?

GET READY FOR HORRIBLE NEWS AND THINK ABOUT HOW TO MAKE $$$.

What’s a bubble and what’s a strategic trend THE BUBBLE: THE REAL TRENDS: Water Education shortage Infotech increases in Housing power Talent crisis Retail Credit Aging

Why we’re taking a trip to the YEAR 1998 Derived from debt alone FLAT from here on

MASSIVELY EXTENDED CREDIT. Just in the United States. Housing, leveraged business deals, Iraq spending, credit cards, student loans Great depression, New Deal

Debt vs. GDP

The housing sector will collapse, or inﬂation will rise to meet it

U.S. retail glut likely to collapse 30 22.5 20.2 15 7.5 3.3 2.5 2.3 1.1 0 U.S. Sweden U.K. France Italy Source: Square footage retail per person Shopping Centers Today

Commercial real estate to collapse (actually, just its value) Funny growth, given our GDP remaing ﬂat, wages staying ﬂat, moving manufacturing base to Asia

Education prices, fueled by debt, will drop or lose enrollment

Aging populations

Healthcare budgets will explode: U.S. expenditures from $2 trillion to $4 trillion That stings a little... Well, I’m sucking $400,000 out of your blood.

Talent crunch - YES, STILL

Cities to create even more GDP; Rural areas left behind Cities will have 52% of the population, 90% of the GDP by 2015

Immigration of billions of young people

Infotech: More powerful, radically cheaper (still!)

Energy still scarce, even with recession Barely over capacity: Over capacity = speculation, price ﬂuctuation stable

Water scarce around the world Andalucia Ogalalla Near East: Acquifer Jordan, Syria, Israel – drinking from the same aquifer! China - $11 billion in lost manufacturing due to polluted water! Egypt Mexico city Subsaharan Africa N.S.W. Australia

U.S. retail glut likely to collapse 30 22.5 20.2 15 7.5 3.3 2.5 2.3 1.1 0 U.S. Sweden U.K. France Italy Source: Square footage retail per person Shopping Centers Today

The Lemonade Questionnaire: RETAIL 1. Assume a scenario in which retail space shrinks by 40% 2. Talk about all the people who will be affected, for good, bad or indifferent 3. Think about what they will need, want, dislike, etc. 4. Which companies are best poised to create new businesses - if none, will there be start-ups? 5. Where are your competitors? Do they even matter?

NS STIO QUE UR YO

Let’s stay in touch and really discuss this • Forum: competitivefutures.ning.com Thanks for • Twitter: @ericgarland coming! • Blog: www.competitivefutures.com/ blog • Phone: 202.508.1496 • In person: 1317 F St. NW, Washington DC, about a block from the guys giving away nine trillion dollars

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Keep It Positive: Using Competitive Intelligence to Enhance Business Development

by Eric Garland

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