1©Jerry P. Miller

Outline:

• How the CI function emerges in a firm

• Behaviors, Values, & Support Structures

• How to Change Corporate Cultures

• Where to place the intelligence function

• Creating the intelligent firm

• Roles & skills in the intelligence function

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How the CI function emerges in a firm

• Marketplace events triggers CI needs (loss of market chare, lower revenues, competitor movements, or any significant event)

• Decision Maker requests intelligence product (from R&D, marketing, strategic or product development)

• Request more frequently & urges other to use intelligence

• CI staff size increases

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Cultural Values to Pursue:

• People acquire information that’s easy to access regardless of its quality (Zift’s law of least effort)

• Unfiltered access btw DMs and CI staff– Fast food firm

• Information sharing– Address: What’s in it for me!

• Decision makers welcome staff input• Understand different DM style (Myers-Briggs)• Willingness to adjust organizational processes

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Structural Factors to Pursue:

• Interaction btw DMs and CI staff

• Knowing where to route information

• Secure organizational processes

• Integrate CI function & staff across the firm

• Close proximity of CI staff to DMs– Digital technologies redefined proximity, if all

parties use them!

How to Change the Culture:

Behavioral Modification

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Organizational Behaviors to Address:

• Where will values shift?

• Who must be trained?

• How will the intelligence function impact jobs?

• Whose jobs will be impacted?

• How will responsibilities shift - corporate and/or operational?

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Norm

• The extent to which individuals act in a certain way and are punished when seen not to be acting in this way

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Create a Behavioral Model

• What are the behavioral characteristics of the function that you want to model? (use adjectives to clearly describe)

• Develop a realistic system of rewards and punishments based on the previous definition of a norm

• Develop a method for monitoring the model behavior

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Growing the Intelligence Staff

• Ask staff: “How can we help you grow your career?”

• Determine how competencies relate to the various roles within the staff

• Encourage staff to identify growth areas

• Encourage staff to attend training sessions

• Establish a mentoring process

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Where to Place the Intelligence Function:

• Determining factors

• Best practices

• Organizational options

• Intelligence staff needs

• Criteria not to be overlooked

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Determining Factors

• Strategic and operational needs are both important

• Decentralization of decision-making withl networking among staff and coordination at corporate level and in each business unit

• Address specific competitively important issues wherever they have the greatest impact in the firm

Best Practices:

How a Major Pharmaceuticals Firm Considers Key Factors before

Locating the Intelligence Function

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The Firm Recognized that it was Organized Around Key Value Chain

Components:• R & D

• Marketing

• Demand Creation

• Supply

• Therefore, they decentralized the intelligence function

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At its Corporate Level They:

• Maintain common practices and methodologies

• Address strategic needs of top management• Establish an early warning system to

monitor trends that may impact near- to medium-term future

• Place the intelligence function in the strategic planning department

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At the R & D Level They:

• Provide input to long-range technology planning

• Help direct the application of research moneys in the areas of:– defining promising internally developed

products– evaluating the value of externally available

technologies

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At the Product Marketing Level They:

• Provide support to the development and execution of product marketing strategies within an informal intelligence process

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At the Sales Level They:

• Maintain their own intelligence capabilities to guide day-to-day operational issues related to the sales process

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Three Operational Optionsfor Structuring the Intelligence

Process:• Centralized

• Decentralized

• Hybrid

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Centralized Intelligence Functions

• Presume strategic needs dominate

• Report to a senior corporate officer who– provides resources for intelligence– defines and refines intelligence requirements

• Rely on input from across the firm

• Deliver forward-looking analysis

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Decentralized Intelligence Functions

• Use multiple staff across the firm

• Serve operational requirements, rarely to senior management

• May or may not have small, corporate staff to coordinate activities and to provide strategic products derived from operational findings

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Hybrid Intelligence Functions

• Use aspects from centralized & decentralized

• Establish multiple intelligence units where needed

• Executive needs dominate, yet ad hoc, operational needs are also met

• Use consistent methods for collection and analysis

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Intelligence Staff Needs:

• Access to and support of decision-making

• High visibility

• Links across the firm

• Nurturing

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Access to & Support of Decision-Making:

• Position intelligence staff so they can:

– Provide competitive insight

– Present alternatives

– Offer compelling actions

• Remove filters between intelligence staff and the decision makers to whom they report

• Place staff physically or technologically close to decision makers

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High Visibility

• Do not mask their existence• Cover-up attempts can lead to poor image• Government intelligence staff focus 80% of

their efforts on threats and 20% on opportunities

• Corporate intelligence staff focus 20% of their efforts on threats and 80% on opportunities

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Links Across the Firm:

• Access internal information as about 70% of the information needed for an intelligence report already resides in the firm

• Interact with other corporate components from sales, marketing, planning, purchasing, manufacturing, finance, etc.

• Establish direct and indirect reporting lines

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A Hard & Fast Rule:

• Locate intelligence close to decision makers who:– express a need for intelligence and– will provide requirements and targets for the

intelligence function

• Here are some choices though to guide you…

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Four Variations:

• 1) If strategic and operational needs exist, establish multiple staff groupings. If dispersed decision making exist, then disperse intelligence functions.

• 2) Monitor intelligence needs and shift structure of intelligence to meet shifting market and strategy requirements.

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Four Variations Con’t.:

• 3) Maintain a balance between strategic and operational intelligence needs. Operational needs will dominate, so separate the “more important” strategic needs.

• 4) The higher number of separate intelligence units will require more resources to ensure the consistency of operations among them.

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Criteria Not to be Overlooked:

• Balance strategic & operational needs

• Determine locus of decision making

• Recognize the company’s structure

• Recognize its corporate culture

• Recognize shifts in its market environment