Generalist versus Specialist

April 3, 3018

What headlines in the health insurance industry! It is an industry which has traditionally looked at itself as relatively protected from outsiders. (Remember the concept of “barriers to entry”?) First, Obama Care turned the individual market upside down and may have threatened its very existence. Then, there is massive change is coming or pending due non-insurance firms including CVS, Walmart, JPMorgan Chase, Amazon, Berkshire Hathaway.

Question – did the competitive intelligence teams at the major health insurance companies foresee this sea change and warn their management? I do not know for certain, but having spent time there, I am guessing not. Why?

I think that the health insurance industry, like too many others, erroneously favors experience in the industry over CI experience/training in its CI providers, both inside and out. And that preference for industry specialist over generalist is widespread.

Let me give an example. Some time ago, a head hunter contacted me looking for a candidate to fill a slot in another “health” industry. The client’s detailed specifications required x years of direct CI experience in that industry – only. The client was willing to drop back on time in CI, but not in time in the industry. It was non-negotiable. I told the recruiter that there were not just very few people that met that standard, but in fact there was only one. And that person I knew was soon retiring. I pressed, and soon learned that the headhunter’s client was the very firm where that person worked.

I told the recruiter that I knew of many excellent candidates with extensive CI experience, but their industry experience was in related industries. The recruiter replied that the client was adamant. So, the client ultimately found no one, by ignoring more general experience in favor of specialized industry experience. Over time, the CI unit basically dissolved.

Sometimes generalists have it over specialists. Listen to the late Joseph Campbell, world-renowned expert on myths (and regarded by some as inspiring the Star Wars sagas):

“Specialization tends to limit the field of problems that the specialist is concerned with. Now, the person who isn’t a specialist…sees something over here that he has learned from one specialist, something over there that he has learned from another specialist – and neither of them has considered the problem of what this occurs here and also there. So the generalist…gets into a range of other problems….” [1]

[1] Joseph Campbell with Bill Moyers, The Power of Myth, Doubleday, NY, 1988, p. 9


Early Warning

I am a proponent of the “early warning” use of competitive intelligence. However, any early warning program requires an inclusive, rather than selective, definition of competitors and what constitutes potential competitors.

Let’s look at a recent event from the perspective of the health insurance market.

“Two mega-health insurance mergers terminated” [1].

Would/could early warning pick that up? Almost certainly. Why? Because these transactions involved the 4 dominant players in the group health insurance market. Any/every health insurer should have been watching all 4 of these firms and should have been on top of the legal and financial drivers which might enable/hinder these transactions, probably without much additional research.

What about these two other recent events impacting the same market?

 “CVS Health [owners of the pharmacy company] to Acquire Aetna; Combination to Provide Consumers with a Better Experience, Reduced Costs and Improved Access to Health Care Experts in Homes and Communities Across the Country”[2].

“Amazon, Berkshire Hathaway, JPMorgan Chase to tackle employee health care costs, delivery”[3].

I doubt that any early warning mechanisms in this market  picked these up, for any one or more of several reasons (disclosure, before coming to CI, I previously worked in the health insurance industry):

It is unlikely that most firms in this market have heavily invested in early warning activities because their regulatory structure establish high barriers to entry. Firms regard this as virtually eliminating the entry of new or expansion of existing competitors, at least without some notice from monitoring filings with state regulators.

People move relatively freely from one competitor firm to another, producing an underlying sense that “we sort of know what is probably going on”. That undermines the effort to advance early warning, at least by limiting its focus to the “usual suspects”.

The focus of the industry has been on monitoring the political and regulatory activities at the state and federal level, inducing and supporting a short-term vision of structure and marketing. Short-term stress does not work well with long-term early warning.

The same focus would preclude any early warning system from considering the likelihood that non-insurance firms could/would take steps that might fundamentally change the health insurance industry.

The CI focus in the industry is most often on new products and their marketing, technology acquisitions, and changes in relationships with brokers and agents. Did you see the concept of structural change or existential threat? I didn’t.

Lesson? Come to an early warning system with as few preconceptions as possible. Recall the analogy of the lookout at sea: the lookout surveys all directions (not just on either side), constantly (not only periodically), and for anything that could become a potential threat (not merely any anticipated and identified threat).

[1] https://www.bizjournals.com/milwaukee/news/2017/02/14/two-mega-health-insurance-mergers-terminated.html.

[2] https://cvshealth.com/newsroom/press-releases/cvs-health-acquire-aetna-combination-provide-consumers-better-experience.

[3] https://www.usatoday.com/story/money/americasmarkets/2018/01/30/amazon-berkshire-hathaway-jpmorgan-chase-tackle-employee-health-care-costs-delivery/1077866001/. This event reportedly caused an immediate 5% drop in the stock prices of major health insurers.


Reports versus Rumors versus Research

January 3, 2018

The December 2017 issue of Fortune discussed rumors and reports about what Amazon might buy – evidently an endless subject – including a “possible health care play” as indicated by “reports that the company was hiring people with pharmacy backgrounds”.[1]

So? If it is potentially important to you, good CI practice demands that you check this out and not just rely on this piece as “fact”. Remember, it is a report of speculation included in an article mentioning rumors. Sounds less great, no? It is not the reporter’s fault – he is laying it out, and quite fairly. It is still up to you to take it further.

How? Think about where the data that supports or undercuts this hypothesis might be found. For example, try using LinkedIn.com to see who is now working at Amazon who used to work at say, CVS. Now see if they are

  • recent hires or hires more than a year or so ago?
  • coming with experience or skills that are not easily transferable to Amazon’s existing businesses or are they bringing easily transferable skills and more generic management expertise?
  • are they now located in one area or are they distributed throughout the US?

That is the difference, taking it further.

[1] Jonathan Vanian, “Best Bogeyman: Amazon”, Fortune, Dec. 15, 2017, p 24.


Presenters and Presentations

May 27, 2014

A while ago, Bloomberg BusinessWeek ran a piece title “Why Bezos Bought The Post”[1]. It contains a lesson for presenting your competitive intelligence findings. Brad Stone, the author, observed that

“[a] decade ago, frustrated with the pace of meetings at his company [Amazon], Bezos banished PowerPoint and proclaimed that all future Amazon meetings would begin with the presenter passing out a narrative document that outlined the topic being discussed. The first papers were endless, spanning dozens of pages, so Bezos decreed a six-page limit. Many of his colleagues still thought this managing-by-writing approach would fade. It didn’t.“

So?

The lessons here are several:

First, PowerPoint is not the only way to convey information at a business meeting. In fact, there are those that argue, in my words not theirs, PowerPoint serves less to communicate than to conceal[2]. So, master other ways. Or at least practice what you want to say, relying on PowerPoint only as a reminder – to you of what you want to say and to the attendees of what you have said.

Second, present your case the way that senior management wants, simply because they may pay less attention to your message if they are not comfortable with the way it is delivered. If that means PowerPoint, it means PowerPoint.

Third, whatever means you employ, master the subject before your presentation. At the actual meeting, you may not be able to present what you want, when you want, and/or in the order you want. The form of your presentation is a tool; the content is the key. A corollary to this is that you should avoid presenting where the presentation and the work behind it were largely (or exclusively) done by someone else.

Fourth, shorter is almost always better than longer. Longer presentations may be more detailed, but that risks losing attention – as well as actual attendees.

[1] By Brad Stone, August 8, 2013, http://www.businessweek.com/articles/2013-08-08/why-jeff-bezos-bought-the-em-washington-post-em.

[2] For more on that, see Edward R. Tufte, Beautiful Evidence, Graphics Press, LLC, 2006, p. 181: “Our comparison of various presentation tools in action indicate that PowerPoint is intellectually outperformed by alternative tools.”


A Name Worthy of a James Bond film?

October 15, 2013

 In the most recent issue of Bloomberg BusinessWeek, there is a fascinating article about Amazon.com, “The Secrets of Bezos”. It includes in it a particularly strange statement:

     “Amazon has a clandestine group with the name worthy have a James Bond film: Competitive Intelligence.”

The name “Competitive Intelligence” is worthy of James Bond film? Are you kidding me?

James Bond films have much better names than something as mundane as “Competitive Intelligence”. How about an organization such as SMERSH, from the Russian for death to spies? Or SPECTRE (SPecial Executive for Counter-intelligence, Terrorism, Revenge and Extortion)? How can “Competitive Intelligence” compare with Auric Goldfinger, Ernst Stavro Blofeld, Le Chiffre, or Dr. No? Not at all well (unfortunately).

Perhaps the author meant that the concept of “competitive intelligence” is worthy of a James Bond film. No, I doubt that. Tracking how fast and well competitors fill online orders is too plain for a series starring a character with a “license to kill”, working for a character known only as “M”.

How about the fact that one company is checking out its competitors on a regular basis? If the author really means that “competitive intelligence” is such an unusual term for that reason, then we have a major problem – as a character in the movie “Hud” once noted “What we’ve got here is failure to communicate.”

You see, competitive intelligence has been around as a business and academic subject since the 1980s. Since the organization of SCIP, Strategic and Competitive Intelligence Professionals, formerly the Society of Competitive Intelligence Professionals, in the 1980s, many, many books have been written on the subject in several languages,. And, thousands of workshops and seminars on competitive intelligence have been held  around the globe by organizations ranging from those covering pricing to strategic planning, and libraries to industrial security.

If anything, a lack of familiarity with “competitive intelligence” may reflect the failure by those of us involved with competitive intelligence to advance its visibility on institutional basis. There is much hard work that is being done by businesses, and based on the article, very effective work, by those involved full time with competitive intelligence and those using competitive intelligence as an effective tool. We just need to do more.