Strategic intelligence represents the "intelligence necessary to create and implement a strategy, typically a grand strategy, whether at the corporate, divisional, or business unit level." It illuminates the road ahead for executives and helps reduce uncertainty in decision making. However, few companies generate intelligence estimates to support strategy creation on par with National Intelligence Estimates produced for policymakers. The global recession highlighted the failure of companies to understand threats and opportunities based on strategic intelligence. Regular dialogue with intelligence staff can help executives respond better to changing conditions.
Presentation at Web Analytics Wednesday, Budapest - March 30 2011. Sponsored by Yahoo! Web Analytics
Topic - Web Analytics Association & Analysis Exchange
Presentation at Web Analytics Wednesday, Budapest - March 30 2011. Sponsored by Yahoo! Web Analytics
Topic - Web Analytics Association & Analysis Exchange
Competitive Intelligence: From being the “eyes and the ears” to becoming “the...Dr. Avner Barnea
Competitive Intelligence:
From being the “eyes and
the ears” to becoming “the
brain” of companies, by Bisson and Barnea, Competitive Intelligence Magazine, Sep. 2018
Intelligence Solutions Design - ATELIS-ICI Keynote 20110407Arik Johnson
Slides from April 6, 2011 keynote speech by Arik Johnson, Founder & Chairman of Aurora WDC and Managing Director of the Center for Organizational Reconnaissance (COR) to the Institute for Competitive Intelligence / ATELIS Conference in Bad Nauheim, Germany
Devil’s Advocate: A Methodology to Improve Competitive IntelligenceDr. Avner Barnea
Creating an influential CI unit, with strong capabilities in analysis. The methodology of Devil’s Advocate can Improve Competitive Intelligence performance
Shaping the Future: Product Strategy in the Age of UncertaintyAggregage
In this webinar, we'll explore product strategy obstacles and present practices to overcome them while driving clarity and alignment across your executive team.
Get Strategy Smart - In a disruptive world, what skills do strategists really...emmersons1
A recent APG event examined an APG study around planning skills and engaged a panel of experts to debate the question: “In a disruptive world, what skills do strategists really need to survive?” Here's what you need to know.
This Thought Leadership Paper explores how Small and Large companies might work together more effectively by setting out what each side needs to understand about the other. It seeks to communicate what makes a successful collaboration
Analytical Storytelling: From Insight to ActionCognizant
Merging the ancient art of storytelling with digital-era data journalism, analytical storytelling makes data-based insights accessible and thus informs and guides skillful and effective decision-making.
Capital biasReducing human error in capital decision-makingTawnaDelatorrejs
Capital bias
Reducing human error in capital decision-making
A report by the
Center for Integrated Research
Deloitte’s Capital Efficiency practice helps organizations make better and faster decisions by
assisting them in improving the quality of their capital allocation decisions to enhance robustness,
efficiency, and return on investment.
Capital bias
The balancing act | 2
Choreographing the optimism bias, expert bias,
and narrow framing | 3
Mitigating biases in planning: The US Navy | 7
Prioritization: Leveling the playing field | 9
Stripping away your own organization’s biases | 11
Endnotes | 12
CONTENTS
Reducing human error in capital decision-making
1
A look at the S&P 500 suggests just how dif-ficult it can be to consistently drive positive results. Take one measure, return on in-
vested capital (ROIC). In a Deloitte study, neither
the amount of capital expenditures (as a percentage
of revenue) nor the growth in capital expenditure
demonstrated any kind of meaningful correlation
with ROIC.1 Regardless of industry, individual com-
panies can often have a difficult time maintaining
high and steady returns on their investments year
over year.
Given such uncertainty in capital allocation re-
sults, it may not be surprising that more than 60
percent of finance executives say they are not con-
fident in their organization’s ability to optimally al-
locate capital.2 After all, many companies are bal-
ancing competing priorities, diverse stakeholder
interests, and a complex variety of proposals that
can make capital allocation decisions even more dif-
ficult to execute in practice.
Why is this? On paper it seems practical enough
for everyone throughout the organization to be on
the same page. In an ideal world, a company estab-
lishes the goals and priorities; then, from senior
managers to frontline employees, everyone is ex-
pected to act in a manner that supports these man-
dates.
However, behavioral science, and possibly your
own experience, suggest it’s likely not always that
simple. Individuals at any level of an organization
may be overly optimistic about certain courses of
action, rely too much on specific pieces of informa-
tion (and people), or simply interpret the objective
through too narrow a lens (that may even run coun-
ter to other views on how to achieve these goals).
Within the behavioral science field, these are
referred to as cognitive biases and they exist in
many endeavors, not just capital planning. These
same biases can explain why we are too optimistic
about our retirement portfolios, can rely solely on
the opinions of experts in matters of health, and
narrowly frame our car buying decisions based on
a single attribute, such as fuel efficiency—ignoring
safety features, price, and aesthetic design. In the
language of the behavioral sciences, these translate
into the optimism bias, expert bias, and narrow
framing, respectively.
Though these biases, an ...
Competitive Intelligence: From being the “eyes and the ears” to becoming “the...Dr. Avner Barnea
Competitive Intelligence:
From being the “eyes and
the ears” to becoming “the
brain” of companies, by Bisson and Barnea, Competitive Intelligence Magazine, Sep. 2018
Intelligence Solutions Design - ATELIS-ICI Keynote 20110407Arik Johnson
Slides from April 6, 2011 keynote speech by Arik Johnson, Founder & Chairman of Aurora WDC and Managing Director of the Center for Organizational Reconnaissance (COR) to the Institute for Competitive Intelligence / ATELIS Conference in Bad Nauheim, Germany
Devil’s Advocate: A Methodology to Improve Competitive IntelligenceDr. Avner Barnea
Creating an influential CI unit, with strong capabilities in analysis. The methodology of Devil’s Advocate can Improve Competitive Intelligence performance
Shaping the Future: Product Strategy in the Age of UncertaintyAggregage
In this webinar, we'll explore product strategy obstacles and present practices to overcome them while driving clarity and alignment across your executive team.
Get Strategy Smart - In a disruptive world, what skills do strategists really...emmersons1
A recent APG event examined an APG study around planning skills and engaged a panel of experts to debate the question: “In a disruptive world, what skills do strategists really need to survive?” Here's what you need to know.
This Thought Leadership Paper explores how Small and Large companies might work together more effectively by setting out what each side needs to understand about the other. It seeks to communicate what makes a successful collaboration
Analytical Storytelling: From Insight to ActionCognizant
Merging the ancient art of storytelling with digital-era data journalism, analytical storytelling makes data-based insights accessible and thus informs and guides skillful and effective decision-making.
Capital biasReducing human error in capital decision-makingTawnaDelatorrejs
Capital bias
Reducing human error in capital decision-making
A report by the
Center for Integrated Research
Deloitte’s Capital Efficiency practice helps organizations make better and faster decisions by
assisting them in improving the quality of their capital allocation decisions to enhance robustness,
efficiency, and return on investment.
Capital bias
The balancing act | 2
Choreographing the optimism bias, expert bias,
and narrow framing | 3
Mitigating biases in planning: The US Navy | 7
Prioritization: Leveling the playing field | 9
Stripping away your own organization’s biases | 11
Endnotes | 12
CONTENTS
Reducing human error in capital decision-making
1
A look at the S&P 500 suggests just how dif-ficult it can be to consistently drive positive results. Take one measure, return on in-
vested capital (ROIC). In a Deloitte study, neither
the amount of capital expenditures (as a percentage
of revenue) nor the growth in capital expenditure
demonstrated any kind of meaningful correlation
with ROIC.1 Regardless of industry, individual com-
panies can often have a difficult time maintaining
high and steady returns on their investments year
over year.
Given such uncertainty in capital allocation re-
sults, it may not be surprising that more than 60
percent of finance executives say they are not con-
fident in their organization’s ability to optimally al-
locate capital.2 After all, many companies are bal-
ancing competing priorities, diverse stakeholder
interests, and a complex variety of proposals that
can make capital allocation decisions even more dif-
ficult to execute in practice.
Why is this? On paper it seems practical enough
for everyone throughout the organization to be on
the same page. In an ideal world, a company estab-
lishes the goals and priorities; then, from senior
managers to frontline employees, everyone is ex-
pected to act in a manner that supports these man-
dates.
However, behavioral science, and possibly your
own experience, suggest it’s likely not always that
simple. Individuals at any level of an organization
may be overly optimistic about certain courses of
action, rely too much on specific pieces of informa-
tion (and people), or simply interpret the objective
through too narrow a lens (that may even run coun-
ter to other views on how to achieve these goals).
Within the behavioral science field, these are
referred to as cognitive biases and they exist in
many endeavors, not just capital planning. These
same biases can explain why we are too optimistic
about our retirement portfolios, can rely solely on
the opinions of experts in matters of health, and
narrowly frame our car buying decisions based on
a single attribute, such as fuel efficiency—ignoring
safety features, price, and aesthetic design. In the
language of the behavioral sciences, these translate
into the optimism bias, expert bias, and narrow
framing, respectively.
Though these biases, an ...
Similar to Strategic Intelligence for Executives (20)
Capital biasReducing human error in capital decision-making
Strategic Intelligence for Executives
1.
2. Strategic
intelligence
for executives
By Douglas Bernhardt
I
T IS UNLIKELY that any senior manager today would its double-digit growth in sales. As the music industry
dispute the proposition that organisational strategy suffers steadily declining sales of physical recorded
is – or should be – “all about managing to achieve music, more music than ever before is making its way
superior performance”.1 Although the pathway to to consumers through electronic distribution channels
what Professor Richard D’Aveni of the Tuck School that the record companies do not, and cannot, control.
of Business refers to as “strategic supremacy” (or And although Microsoft’s suite of Office applications
failure?) is, in part, defined by the underlying strategic still dominate the desktops of millions of users, Google
notions that shape the views of a firm’s leadership, it Docs – which admittedly does not provide as many
is, in equal measure, a function of the extent to which features as the Microsoft product – does offer three big
top management embrace and integrate strategic advantages: it’s free, it’s simple, and for many of us it’s
intelligence into their decision-making processes. “good enough”.
In one sense, we argue, a corporate strategy cannot In a business world that bears virtually no resemblance
exist without a strategic intelligence component. The to the one we knew just 10 short years ago, and which 10
reality of the world in which most of us do business years from now will almost certainly be unrecognisable Strategic
is increasingly one where external forces – social, from the one in which today’s battles for market share
technological, economic, political and more – continue and profits are fought, executives do not have the luxury intelligence
to play a major, and often decisive, role in the success or of ignoring or marginalising strategic intelligence. in particular
failure of the firm. So what exactly is the role of intelligence – whether
Yes, in many countries there remain powerful, often in a national security context or in the business arena? represents the
state-owned monopolies that exercise a full or partial In part, it is “to provide [decision] makers with the “intelligence
stranglehold over one or more industry sectors but, information and analysis [including warning analysis]
in the 21st century, their long-term sustainability is needed to formulate effective... policies”2, while strategic
necessary to
very much in doubt. While the political rhetoric of left- intelligence in particular represents the “intelligence create and
wing populists such as Venezuela’s President Hugo necessary to create and implement a strategy, typically
Chávez may, for some population groups and in some a grand strategy”3, whether at corporate, divisional
implement
markets, play well in times of financial disequilibrium or business unit level. Put another way, strategic a strategy,
and uncertainty, seldom do monopolies – or any other intelligence is information designed to provide decision- typically a grand
manner of artificial trade barriers – serve the best makers “with the ‘big picture’ and long-range forecasts
economic interests of customers or the taxpayer. they need in order to plan for the future”.4 Intelligence is strategy”, whether
In 2010 and beyond, companies have no option but not market research or “news”. at corporate,
to face the challenges of a growing host of intensifying But isn’t the importance of intelligence simply a matter
competitive forces – in all forms and from all quarters – of what today’s teenager might call a “no brainer”? After divisional or
in what today, if we’re brutally honest, is nothing less than all, what CEO would be foolish enough to put his or her business unit
global economic warfare. Consider that, while GM, once “stamp of approval” on a strategy that does not, for
the world’s largest automaker, was filing for bankruptcy example, include a comprehensive assessment of the level.
protection in June 2009, Tata Motors of India continued firm’s rivals – their capabilities, intentions, objectives and
www.wbsjournal.co.za • vol 3, 2010 • issue 22 65
3. Enhancing business
STRATEGIC INTELLIGENCE FOR EXECUTIVES
plans? To develop and proceed with a “grand” strategy and act upon the dangerous array of misalignments that
based on flawed or untested assumption, gut instinct, or exist between economic fundamentals and the world as
Now think, when just plain intellectual arrogance is pure folly at a time when we have for too long chosen to perceive it. How could we
every facet of business is changing and moving at Internet have been so wrong? Where was the strategic intelligence
was the last speed. Thus, the big question that corporate leaders in, say, late 2007 that could, and should, have triggered
time your CEO need to ask themselves is this: do we routinely demand the ringing of alarm bells in boardrooms from London,
or executive and receive information “combined with analysis that is to New York, to Tokyo? How many CEOs can you name
pertinent to [our] decision making in gauging threats”5 that based their “take” of how the future was unfolding,
board requested against our interests? Even the most accomplished at least in part, on “all source” information, evidence and
an intelligence chief executive will benefit from analytically derived impartial analysis? More worryingly, how many business
“insights based on detailed knowledge of obstacles and leaders can you point to that persist in “escalating their
estimate intended opportunities and enemies and friends”.6 commitment to losing endeavours that they have an
for use in support Another question: to what extent are your company’s emotional stake in”?8
intelligence analysts – if there are any – tasked with Although professional intelligence analysts cannot,
of strategy producing equivalents to the National Intelligence of course, predict “the” future, they are equipped to
creation? Estimates (NIEs) prepared for senior American critically evaluate and report information, compiled from
policymakers? An NIE represents the US intelligence both “open” (public domain) and human sources, which
community’s most authoritative and coordinated written helps reduce residual uncertainty and provides decision-
assessment of a specific national-security issue. While makers with value-added insight and foresight.
“NIEs usually provide information on the current state of For decades, policymakers in Australia, North America,
play” of a strategic topic, they “are primarily ‘estimative’ – the UK and most European nations have relied upon
that is, they make judgments about the likely course of strategic intelligence to help them better anticipate and
future events and identify the implications”7 for policy. understand the threats they face to national security, as
Now think, when was the last time your CEO or executive well as the opportunities they might grasp to advance their
board requested an intelligence estimate intended for goals and protect their countries’ interests. Businesses,
use in support of strategy creation? Or are they satisfied too, face a myriad threats to their ambitions, plans and,
with basing their decisions upon existing, typically static ultimately, their own economic security. Should not
and outdated assumptions? Regretfully, only a handful of our most important engines of economic growth and
companies appear to generate a “product” similar to an prosperity – enterprises big and small – also begin to
NIE. The reason? The financial pay-off for an investment take strategic intelligence a little more seriously? The
in strategic intelligence estimates cannot be “quantified” archetypical Englishman would never think of leaving
in advance. And since intelligence focuses on the future, home without his umbrella, even when storm clouds are
and can never, therefore, be perfectly accurate – it is nowhere in sight, “just in case”. Why should executives
sometimes wrong. Try selling that to your company’s behave any differently? Their competitors don’t.
“number crunchers”.
Strategic intelligence serves as a powerful “force
Douglas Bernhardt is a 1 RM Grant, 2005. Contemporary Strategy Analysis. 5th
guest lecturer at WBS, multiplier”. Its impact on an organisation’s medium-
ed. Oxford, UK: Blackwell Publishing.
where he teaches MBA to long-term success, and on occasion its very survival 2 JJ Wirtz, 2007. The Intelligence-Policy Nexus. In: LK
electives on competitive can be profound. Rather like the headlamps of a car Johnson (ed). Strategic Intelligence: Understanding
intelligence and on travelling at night, it illuminates the road ahead, albeit the Hidden Side of Government. Westport, CT: Praeger
industry and competitor imperfectly. Even though intelligence does not – nor Security International, pp. 140-150.
analysis. He also teaches 3 JG Heidenrich, 2007. The Intelligence Community’s
should it – dictate company policy or a particular course Neglect of Strategic Intelligence. Studies in
at the University of of action – that’s senior management’s job – it can make Intelligence, 51(2), pp. 15-25.
Stellenbosch Business an invaluable contribution to your leadership’s strategic 4 BD Berkowitz and AE Goodman, 1989. Strategic
School and other leading thinking and actions. It also helps to ensure that decision- Intelligence for American National Security. Princeton,
business schools in NJ: Princeton University Press.
makers do not hang their imaginations on the coat racks
Europe and South Africa. 5 RL Russell, 2007. Sharpening Strategic Intelligence:
Previously, he served outside their office doors. Moreover, regular dialogue Why the CIA Gets it Wrong, and What Needs to be Done
as managing director with intelligence staff ensures that executives are more to Get it Right. Cambridge, UK: Cambridge University
for the Geneva-based likely to be responsive to changing their opinions if the Press.
consultancy Business strengths of alternative analyses and arguments suggest 6 JG Heidenrich, 2007.(posted)
7 National Intelligence Council, 2007. Iran: Nuclear
Research Group SA, and that that is the smarter course. Intentions and Capabilities. Washington, DC: Office of
before that he worked Unfortunately, the worldwide recession from which the Director of National Intelligence.
for the international we are all emerging, still bloodied and shocked, and 8 M Sorrell, 2010. How We Do it: Three Executives
marketing arm of a major which apparently took even the bluest of the “blue Reflect on Strategic Decision Making. McKinsey
defence manufacturing chips” by surprise, reflects, if nothing else, the failure of Quarterly [online], March.
group.
companies (and governments) everywhere to understand
66 www.wbsjournal.co.za • vol 3, 2010 • issue 22