1. Get me information and analysis on time, so I can make an informed decision.  It it is late, I will decide without it.  You must know my agenda and calendar, know what decisions I am facing, and know when I need your intelligence.
2. Tell me something I do not already know.  Bring me new news, or show me a different way of looking at a situation or issue.  Know what I know and know what I need.  If I ask you for something, consult with me to make sure I am asking the right questions.  Tell me what I did not ask for that I need to understand the issue, and give it to me.
3. Give me fact-based analysis, and let others write op-ed pieces.  You need to organize facts in a way that reveals patterns, notes change, and has insight.  Make your analysis transparent.  Tell me what you know, how you know it, and how confident you are in your judgments.
4. Don’t be afraid to be wrong.  If you are wrong, tell me so.  I am more likely to respect you and have confidence in you than if you do not tell me when you are wrong.
5. Tell me not only what I should be worried about, but also what opportunities exist.  If you over-warn, I will ignore you at your peril.  Keep me honest with any bad news, but you will have to persuade me.  If I misunderstand an issue, figure out a way to make me listen.

However, what does “good intelligence” look like?  For many companies, it’s hard to know without a strong war-game design.  Any good war-game design must address two critical factors:

1. How will the war-game simulation proceed?  Organizations must determine the focus and objective of the war-game, and then design independent but related “rounds” of competitive simulation that help participants get to the defined objective.  Options for the various “rounds” of the game can include specific stimuli to which war-game participants react — such as a new product launch, new competitor entry, and the like — as well as market disruptors including regulatory or technology developments, in addition to the basic strategy formulation that characterizes most war-games.  There is no “rote” formula for a good war-game, and each needs to be designed with your unique set of objectives in mind.
2. Who should participate?  Which functional departments — marketing, competitive intelligence, strategic planning, product development, R&D, etc. — should be included?  What role should senior managers play?  Should we invite outside participants such as advertising agencies or market research firms?  Again, there are no textbook answers to these questions; each game should include a unique set of participants, thoughtfully considered given the game’s objectives.

Only after addressing these war-game factors does it become clear what intelligence is required ahead of conducting the game.  Knowing the answers to these questions will make your intelligence gathering more focused and relevant for those who are participating.

UnitedHealth Group’s acquisition in September of the management arm of Monarch HealthCare, an Irvine, California association that includes approximately 2,300 physicians in a range of specialties, underscores the importance payers are placing on such deals ahead of the full implementation of healthcare reform in the United States in 2014.  The deal establishes United’s Optum health-services unit as a significant presence in southern California.  According to the Wall Street Journal, Optum had previously acquired the management arms of two smaller southern California groups, AppleCare Medical Group and Memorial HealthCare Independent Practice Association.

Many insurers are investing in providers, according to the Wall Street Journal, though not all plan to make those operations available to other health plans. WellPoint recently closed its acquisition of senior health provider and Medicare Advantage plan CareMore Health Group, which is also based in southern California. Last December, Humana Inc. bought Concentra, which has urgent- and occupational-care clinics. In June, Pittsburgh insurer Highmark Inc. struck a deal to buy West Penn Allegheny Health System, a five-hospital operator that was struggling financially.

As this competitive churn likely intensifies, certain players could find themselves left out.  Hospitals, in particular, may be at risk as payers may calculate that they can do better controlling costs in partnership with physicians, who are typically not strongly loyal to any particular hospital and may be happy to refer patients to several hospitals, at payers’ discretion, that can demonstrate lower costs.  To avoid being left behind, innovative healthcare providers are using tools like war-gaming and scenario planning to explore the implications of these alignments, identify implications, and strategize to achieve the best positioning possible amid the turmoil.

As far as I can tell, the pro-network advocates have won this argument.  Most CI professionals would agree that a key criteria for a world-class intelligence function is the existence and active utilization of one or more internal human networks.  The debate today is over how to manage and maintain such networks.  Typically, this debate focuses on whether intelligence networks ought to be formal or informal.  Formal networks would entail designating specific individuals to serve as members of the network, and would explicitly designate them as members of the network in job descriptions, performance evaluations and the like.  Internal networks would be comprised of individuals who support the intelligence function largely voluntarily, finding reward in doing so from the exchange of information that may benefit them personally.

I think the formal-informal labels miss some of the nuance associated with using internal intelligence networks.  Perhaps a better way to look at the role of networks in intelligence functions is to determine whether they operate explicitly or implicitly, both within the organization and with the intelligence function.  Explicit networks can be managed both formally or informally, but in either case they would be clearly working on behalf of the intelligence function and overseen by a member of the intelligence team.  Implicit networks would be more fluid and more representative of company cultures in which individual networking, mentoring, and information exchange were a hallmark of how the company operates.  Again, they could be either formal or informal, but would be more reflective of internal behaviors around information sharing, career advancement, and mentoring.

Why does this distinction matter?  It is hard to know how to engage an intelligence network without first knowing whether it should be an explicit or implicit network.  That is the first determination the CI manager or director should make when organizing the CI function.  Making this determination requires knowledge of the organization’s culture, expectations around collaboration and information sharing, and personal reward systems, all qualities that can be hard to identify and define.  However, doing so will enable the CI function to chart out the most effective manner for organizing, leveraging, managing, and rewarding network participants, no matter whether the networks are organized formally or informally.

Cassandra, from Greek mythology

In Greek mythology, Cassandra was the daughter of King Priam and Queen Hecuba of Troy.  Her beauty caused Apollo to grant her the gift of prophecy, but when she did not return his love, Apollo placed a curse on her so that no one would ever believe her predictions.

“Cassandra cried and cursed the unhappy hour, foretold our fate, but by the god’s decree, all heard, and no one believed the prophecy.”  – Aeneid 2.323, Dryden Translation

Experts cite Cassandra as a figure of tragedy, where her combination of deep understanding and powerlessness exemplify the ironic condition of mankind.  And, it can be argued, of competitive intelligence professionals.

For competitive intelligence to be valued, it must go beyond providing a description of past and current competitive conditions. High-value competitive intelligence that is relevant to strategic decision-making must also anticipate future conditions, identify signposts of future competitive activity, and give senior executives a credible outlook of what external conditions may impede or help their company’s competitive positioning.

Sadly, it is often the case that the best anticipatory intelligence goes unheeded, just as Cassandra’s prophecies did.  Why? Because most senior executives require data and evidence to support competitive intelligence predictions.  This, naturally, comes with its own irony; how can there be data and evidence about things that have yet to happen?

What, then, can competitive intelligence professionals do to break Cassandra’s curse and compel senior executives to heed their warnings and predictions?

• Be transparent in your logic.  When offering scenarios about future competitive conditions, or describing a likely outcome to a competitive situation, be clear about how your arrived at your conclusions.  Using structured analytic techniques like Porter’s Four Corners Analysis or Opportunity Analysis makes it easy to describe the logic and reasoning behind your judgments, making it more likely that senior executives will place more confidence in your assessments.
• Find opportunities to repeat and re-communicate your forward-looking judgments.  By identifying signposts of likely future activity, every time you observe a signpost occurring, it provides an opportunity for you to alert senior management as to the occurrence of the signpost, and to reiterate your underlying conclusions about the anticipated outcome of a competitive circumstance.
• Find alternative ways to deliver your message.  Don’t rely on a single report or presentation.  Instead, make yourself available to sit down with your intelligence consumers to go over your analysis and address any questions they might have.  Behave as an internal consulting resource that can not only perform good forward-looking analysis, but that can also help management use your judgments and develop and implement strategy based on them.

To effectively strategize against the competitive conditions likely to confront a new product introduction, companies must consider external forces, and come up with counter-strategies, far earlier in the innovation process.  A good time to start evaluating likely competitive forces and challenges is roughly one to two years before your targeted product launch date.  This timeframe ensures that your company will have adequate strategic flexibility to alter product design, features, or marketing strategies, but avoids considering competitive forces too early, when external variables are likely to still be in flux and subject to change.

There are a variety of methodologies available to organizations seeking to consider competitive realities earlier in the innovation process, including:

• Scenario Analysis, in which organizations can explore a range of plausible future conditions and identify strategies most likely to be effective against a wide range of external conditions
• Trend Impact Analysis, a forecasting method that permits extrapolations of historical trends to be modified in view of expectations about future events
• Effective war-gaming, in which game design is well thought out, uncovers and acknowledged weaknesses in product design, and/or launch and marketing strategies, and is intended to craft specific counter-competitive strategies that can be incorporate into the larger product development and launch strategy.

Thankfully the web is full of cheap – often free – utilities that can help intelligence professionals sift through the quagmire of noise to help them better understand the treasure trove of information that is readily available to them on a daily basis. One such product we’ve discovered, www.wordle.net — a free service — allows users to create on-the-fly word-clouds that can help analysts understand the thrust of a document by visually arraying the words or phrases that are used most commonly within it. All a user needs to do is to copy and paste relevant text into the text box on Wordle’s main page and within a few seconds an easy to read and interpret graphic appears. In fact, it only takes the site a few moments to parse through documents that can be dozens of pages long.

Using word-clouds in this fashion can make it incredibly easy to identify topics or issues that are most salient to the competition, an industry, or even an individual. In addition, it can allow intelligence professionals to glean insights into the mindset of the competition that would have been nearly impossible only a few years ago.

Here are some other tips on using word clouds to better understand the competition:

• Use Wordle on your competitor’s twitter feed by copying and pasting its text – this practice can often identify consumer facing themes and perspectives that can get lost in the sea of social networking, giving ci professionals a clearer window into exactly how a competitor firm speaks to its customers.
• Word clouds can help generate hypotheses about competitor intent, and help guide research planning to help analysts confirm or refute those hypotheses.
• Word clouds can also be used to identify relevant search terms for ongoing intelligence monitoring and early warning indicator development – just use a site like Wordle to parse through a market or industry research document.

One flaw of the Wordle platform is that it only lets users input text manually. In other words, there is no automation involved which makes tracking trends particularly difficult. Because of this, Wordle is best suited to one-off projects or those that only need periodic updating. There are however, paid products that will allow firms to automate Wordle-like functionality as well as track trends over time.

To be sure, while the use of word clouds themselves can’t answer important questions about the competition, they can be used to help us make certain that we are asking the right ones. And while days of information overload may be here to stay, that doesn’t mean that smart usage of new tools like Wordle can’t help make the information we get more relevant.

Senior decision-makers who understand competitive intelligence processes and methodologies know how to make the most out of the intelligence they receive.  In speaking about the savvy government consumer of intelligence, former CIA Acting Director John McLaughlin said, “Policymakers who knew how to use intelligence generally had a realistic view of what it could and could not do.  They understood, for example, that intelligence is almost always more helpful in detecting trends than in predicting specific events . . . They were not intimidated by intelligence that ran counter to the prevailing policy but saw it as a useful job to thinking about their courses of action.” (John McLaughlin, Analyzing Intelligence, Washington DC, Georgetown University Press, 2008, page 72)

It’s probably not a stretch to say that most CEOs and senior managers are undereducated on the use of intelligence, and have no systematic understanding of their companies’ competitive intelligence function (if they even have one).  If so, then they are almost certainly ill equipped to ask the right questions about competition, market trends, and other external forces that could enable a competitive intelligence staff or consultant to provide meaningful and actionable insights.

Perhaps unfairly, the burden is on the competitive intelligence practitioner to provide the education necessary to make top managers better intelligence users.  How?  Corporate competitive intelligence practitioners ought to look for every opportunity to educate their consumers about what intelligence can and can’t do for them, such as:

• When taking an intelligence request.  Never, never take an intelligence tasking from senior managers at face value.  It is imperative that the intelligence provider and consumer spend time together framing and reframing questions, discussing what the organization already knows about the particular situation, and discussing what aspects of a competitive issue competitive intelligence can and can’t address.  Doing so will result in an intelligence project that is achievable and that will satisfy the consumer’s needs.  In the course of framing the request, the intelligence consumer can learn about the tools, methodologies and processes likely to be employed to address his or her needs.
• When communicating intelligence findings.  Look for opportunities to describe how certain pieces of information were gathered, or how certain conclusions were drawn, when communicating the results of an intelligence project.  Avoid getting into too much detail about methodology and process, and certainly never lead a briefing or presentation with a description of your methodology.  But, highlight certain nuggets of information or insights with brief description of how you got there.
• During the strategic planning process.  The annual planning cycle often creates an opportunity to discuss with your leadership the role intelligence can play in the strategic planning process.  It’s also a time when senior executives are in a frame of mind to talk about external forces and to brainstorm ways to learn about competitive conditions and fill information gaps.  Competitive intelligence practitioners can use the planning process as an opportunity to prepare a proposal of what competitive intelligence can do to support the process, describing the “hows” of that support along the way.

• The most-actively traded gold contract, for June delivery, rose $14.10, or 0.9%, on April 27 2011, to settle at a record $1,531.20 a troy ounce on the Comex division of the New York Mercantile Exchange.  Gold is seen as a safe store of value in troubled economic and political times and has been smashing records in recent weeks in response to rising global inflation.
• Geoffrey Mutai won the Boston Marathon in April 18 2011 and established a new record, crossing the finish line in 2:03:02.  The Boston Athletic Association, the race organizer, said after the race that although Mutai’s time is the fastest marathon ever run, it is not a world record because Boston is not a record-eligible course.  Still, there is now talk of the possibility of a sub-2-hour marathon in the not-too-distant future.
• Japan continues to recover from a devastating earthquake and tsunami, and the world has focused its attention on the disruptions to the global supply chain that has resulted.  Manufacturers of automobiles, electronics, pharmaceuticals, and dozens of other products now face uncertainty in the sourcing of key inputs to their production processes.

Developing a set of industry scenarios that describe plausible future external developments related to the behavior of competitors, customers, distributors, suppliers, and other market participants helps reveal which of the countless trends and developments an organization can monitor are the most significant.  In particular, this approach can identify those “low probability, high impact” events that may defy traditional trend monitoring approaches.

A scenario-based intelligence early warning system can not only identify otherwise unforeseen future trends that are worth analyzing, but can also reveal different facets of known and even obvious trends.  For example, a health insurance provider with which I recently worked used a scenario-based early warning framework to organize its efforts to keep tabs on the implementation of the 2010 Patient Protection and Affordable Care Act, otherwise known as healthcare reform.  While it may seem obvious that a health insurance provider would want to monitor such ground-breaking legislation, the scenario development process revealed uncertainties related to the establishment of key facets of the legislation that were highly variable.  In addition, the scenario approach allowed the health insurance provider to examine the impact of different provisions of the law on changeable and volatile local market circumstances.

Organizations that have pursued the scenario-based early warning approach say that their information gathering and analysis efforts are more focused, compared to traditional, unstructured methods for environmental scanning.  Because the methodology requires analysts to pre-determine the significance of industry and competitive developments for their organization, it becomes easier to identify the key pieces of information — the indicators — that must be monitored for, allowing an organization to place less emphasis on gathering lower-priority information that carries a lower degree of relevance.