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