10 Jun 11 Surprised by surprise?
Doing business is getting riskier. Increased globalisation, rapid technological changes, regulatory shifts, etc. have increased the competitive pressures that companies face. Knowing that their environment has more variables, it is logical that companies take actions to mitigate risks. In this case, the action is to keep track of all the changes that impact them, and factor those into their own plans.
In short, companies need competitive intelligence to mitigate business risks. Theoretically, companies need not be surprised by any business event at all. All events are predictable, if you look out for advance signals.
In fact, it may be argued that there are really very few external events that are entirely unanticipated. Even volcanoes, earthquakes and hurricanes are not really surprise events. It is known that California lies on a fault line. So if there is an earthquake there tomorrow, should you be caught unprepared? The timing may be unpredictable, but the risk is known.
Early warnings signalling business risks are almost always out there – it is just a matter of being able to see them. Admittedly, it is easier to see them in retrospect. “I should have seen it coming. The signs were there…..”
Some companies don’t look for early warnings at all. Others look for them, but sometimes miss them.
They may miss warnings if they are looking in the wrong place. For example, a company may be monitoring all competitors known to it, but a threat may emerge from an unknown competitor. Or a company may see the early warning, but not recognise it as such. Decision makers don’t always take trends and signals seriously – preferring to explain them away in some way instead.
In order to be able to track all relevant early warnings and take adequate cognisance of the signals, what is really necessary is a better definition of the company’s “key intelligence topics” (KITs). KITs are the topics/ themes that a company wants to keep track of in order to ensure that it is not caught on the wrong foot.
If the KITs are too broad, there is information overload from too many irrelevant inputs (also wasted resources). On the other hand, if they are too narrow, the company risks missing vital signals.
Optimal KITs can be developed through brainstorming and debate amongst a team of people who understand the company well. The team must have imagination, creativity, insight and awareness of developments in the business environment. It should be multifunctional with individuals who understand various aspects of the business such as technology, finance, HR, operations, etc., so that all the sources of risk for a company are identified. Moreover, the team must have members who are not submissive and agreeable, but willing to question their superiors and also the accepted opinions and views within the company. This is admittedly a fairly tall order, which is not always easy to meet.
Most companies don’t really recognise the criticality of this first step in their competitive intelligence process and are often in denial – “we already know what we need to know”. Yet, if the first step is ill defined, no amount of CI effort can protect them from surprises!