Is CI the only place where you practice CI?


September 25, 2013

 

I recently read an interesting article, “the fraud Detective”. It was about Jim Chanos, a legendary “short” seller. The article covers his history of uncovering what he describes as fraud and then profiting from those discoveries through short-selling on the stock market. The case studies alone make this a good read.

Janos now teaches a course at Yale School of Management on short-selling. That course is described as follows:

      “[He teaches students to] look for tip-offs, look for patterns of bad behavior that repeat from one scandal to the next…. [His methodology] typically comes down to basic financial detective work. He seems to rely largely on a heightened instinct for bad behavior, a willingness to follow up with phone calls and legwork, and an inordinate appetite for hieroglyphic footnotes and disclosures buried deep in corporate 10-Q and 10-K reports.”[1]

Sound familiar?


[1] Richard Conniff, “the fraud detective”, Yale Alumni Magazine, Sept/Oct. 2013, 38, 44-45.


POV

September 17, 2013

The recent Microsoft – Nokia transaction has drawn wide variety of comments. Some have looked for a reason why Nokia has fallen so quickly since 2007 in the cell phone market place.

Some of these observers evidently attribute its decline to the fact that Nokia was somehow a “hardware” company, while its competitors were either “software” companies or regarded hardware and software as a seamless combination. That may be one reason.

However, when I see one company described with one adjective while its competitor or competitors are described differently, I always wonder whether or not its competitive intelligence people are hindered by their employer’s POV, or point of view. (Also known as perspective, bias, blinders, etc.)

When looking at your competitors you must never assume that they see the world the way you do. If they really did, they would be you. It should be a given that they look at the world somewhat differently from the way you do. Therefore, you must take a look at their activities through the prism of their POV of the competitive environment, rather than your employer’s view of the same competitive environment. This is true even if your are certain that your POV is the “right” or “proven” one. Actually, it is always more important.

Your competitors act on the basis of what they see in the world and how they analyze it , given their own POVs. You cannot correctly establish why they are doing things now and what they may be doing in the future if you do not determine what their POV is, and then view the competitive environment through that rather than your own POV. Failing to do this results in, well, failure.


Use it or just don’t collect it

September 11, 2013

Recent news reports about Syria have contained more than a few troubling bits of information. One report indicates that the US government actually had intercepts about what was then a pending, and now a past, gas attack in Damascus. It also appears that personnel at NSA did not have time to get to it because they were spread too thin.

Let’s assume that this is in fact true. So what we have is the collection of raw data, but a parallel inability to process it in a timely manner.  In this case, that meant that the US government may have had an early warning about the deadly mass gas attack in Syria, but failed to figure that out. In fairness, it did not fail to figure that out – that would imply it worked on it and was wrong; it never worked on it.

For those of us involved with competitive intelligence, there is an important lesson in this: do not collect data for the sheer sake of collecting data. If you’re going to collect it, then use it in a timely manner. Why? There are at least 4 good reasons:

  1. Analyzing raw data well after collecting it is often a waste of not only of your time, but of your financial resources. You know it is dated, so you (hopefully) will first update it, before using it. The effort spent collecting it and then later updating it is probably not much different from the effort you would expend just starting from scratch.
  2. What is even worse is collecting data when you “have the time”, then reviewing it at a significantly later date without updating it. Why? Intelligence has a half-life, just like radioactive compounds. In CI, that means there is a period of time after which the data you’ve collected and the CI you generated from it will lose some and eventually all of its value. Take, for example, collecting information on interest rates paid by competitor banks. Collecting it today and not analyzing until next week means that you have no actionable useful CI. Why? Because banks usually change interest rates weekly. So the CI developed from your week and a half old data will automatically be out of date.
  3. If you collect competitor data regularly, you or others in your firm may erroneously assume that somehow you are therefore “on top of it”. Why? Because focusing on the target is “ongoing”.  But unless the analysis is also ongoing, you have a very serious problem.
  4. Having raw data produces a false sense of security, supporting the misconception that you have everything you need at your fingertips, so it is “just a matter of time until you get the answer”. That brings to mind a story told by a friend of mine about a project many years ago. He was called in to help a CI unit improve. He came to headquarters, and was brought to the CI manager. In this pre-Internet era, the manager proudly told him that they just needed some help straightening out the way they ran the unit’s analysis and reporting. He then pointed to several file cases (remember those?) which he indicated were filled with reports, catalogs, SEC filings, news clippings, and all sorts of other raw data on the competitors. My friend turned to the CI manager and claims he said “My God man, I’m too late.” The manager was crippled by having old data that he felt was valuable, when it merely served to consume too much time in reviewing it.

The lesson: collect the data when you need and it and use it when you collect it.


More learning about learning

September 4, 2013

In this blog, I continually comment about learning and about analysis. That is because they are both critical elements in becoming an analyst as well as maintaining your analytical ability, whether for competitive intelligence or for any other subject matter.

Let me give you a couple of other examples about learning and analysis.

The first is a recent blog by Professor Kirsten Wheaton. In there, Professor Wheaton pointed out that his life may well have been saved by the fact that he had taken a course about early Christian and Byzantine art. His point was that you can never tell where your learning will turn up to help you.

I think the point actually goes deeper. Professor Wheaton obviously learned the subject, in this case art, so well that he could recall at least a little of it at a point in time when he really needed it. How did he do that? He obviously had learned how to learn, because learning includes not only taking in data but retaining and reusing it.

An additional perspective comes from a recent encounter. I had occasion to talk with a man about the American educational system. He had found many problems with it. Specifically, he found that he was very mechanically gifted, but the education he was provided on mechanical subjects was wholly inadequate.

The traditional way mechanical subjects are taught is by referencing the principles, then looking at diagrams, and then, and only then, working in hands-on manner. That did not work for him. Fortunately, he found out on his own after leaving school that he learned best when working directly hands on, and then, after being familiar with the engine, or whatever, turning to diagrams and other aids. As he put it “If I relied on the way I was taught, I would never have learned anything. I had to learn to teach myself.”

The third was my own experiences in law school. One of my friends, who did very well in law school ,was awe-inspiring for the tremendous amount of time and effort that he put into studying every day and every evening. He never seemed unprepared and always seem to have mastered the subject matter every day. When it came to final exams, he took some time to review the coursework, but always made time to read books completely unassociated with law. In other words, he also relaxed. His grades improved every year during law school.

Another student found his own way was entirely different. He did a little basic preparation work on a daily basis, but for a number of reasons, including other activities, he did put in the preparation time the first individual did. He was legendary for his habits during the exam weeks. He literally disappeared; he put all of his course books and other materials, including notes, on one side of a chair and then read through each and every text, workbook, hand-out, note, and previous exam, until there was nothing left on the side of the chair. He did nothing else (okay, he did sleep and eat). He did equally as well.

The point is that we all learn differently. You have to figure out how you learn best