AN EXECUTIVE'S FIGHTING STANCE

Four basic rules to help you face highly competitive situations

By Yves-Michel Marti

During the Vietnam War, American psychologists attempted to understand why some pilots were shot down. They identified a character trait shared by all the survivors - "Situational Awareness". Pilots with this faculty drew dynamic mental maps of the hostile environment in their minds. “As soon as that Mig 21 behind me has finished its Immelmann I’ll get a burst of shells up my rear”. But videos recovered from planes shot down had filmed pilots overwhelmed by information noise. They did not even hear the deafening warning siren of a missile locked-on to their plane.

Learning to manage their time or their stress is simply treating the symptoms, not the cause of the affliction gnawing into business leaders. They have to organise the intelligence in their surroundings. This is the Competitive Intelligence approach (Business and Competitive Intelligence). Less noise, easily-identified signals - at last, a path towards peace of mind!

ASKING THE RIGHT QUESTIONS TO REDUCE THE RISK

Business history reveals that failed companies rarely succumbed to onslaughts from the usual, direct competitors; they had learned to cope with them. They perished from an inability to identify and analyse new threats. The French watchmaker Lip was not killed by Swiss watchmakers but by Japanese electronics companies producing quartz watches. Digital Equipment inflicted tremendous damage on IBM’s sales of mainframe computers with its departmental computers, before being bought out in its turn by Compaq and its office PCs. Compaq let Toshiba get a firm grip on the laptop market, however Toshiba was then forced to relinquish the market to Dell with its direct selling system. All these companies were bombarded by the competition in their strategic thinking "blind spots".

In 1754, Sir Horace Walpole, the English philosopher, came up with the concept of "serendipity" to describe some people’s faculty of chancing on the correct information without particularly looking for it. A novel of the day narrated the adventures of three Princes of Serendip (the island of Ceylon) who extricated themselves from tricky situations using information picked up by accident.

Some organisations have found their own Serendipity to reduce these traditionally unpredictable competitive risks.

The Bourbaki Group, for example, which revolutionised mathematics after the Second World War, formed the habit of inviting young, talented colleagues to its conferences and asking them to make presentations on areas where, they had no experience. Bourbaki was banking on new ideas from their fresh but capable minds.

IBM uses a Business Intelligence technique known as “honeypot”, offering free access to patents the world over on its site www.delphion.com. The unsuspecting surfer has no idea that his most minute requests, every patent he views, are recorded, providing IBM with invaluable indications of technological trends. The surfer from a competitor can be identified if he is not careful to neutralise his IP address.

This unexpected information is found by chance, but chance can be organised. You have no hope of winning the Lottery without buying a ticket. The 3M Group - that champion innovator - has even put a price on this ticket: its scientists must spend 15% of their time on research other than the official Research and Development lines.

CULTIVATING INFORMAL SOURCES TO GET ONE STEP AHEAD

When I was starting out as a salesman, I spent considerable time before my appointment with a potential customer finding out about his company. I consulted press archives in online databases and tried to form an idea of the concerns of the decision-makers I was about to meet. Why ever did I bother?! I was always well wide off the mark. My customers had settled on unexpected focal points that I had not anticipated. What was worse, I did not listen to my customer, being far too keen to flaunt my freshly-acquired knowledge. These days I read nothing. I arrive with an empty mind and I listen.

Everything published in newspapers is hopelessly old hat. As soon as information is on paper its loses its potential to create competitive value, for it has been read by other people. Information is dead as soon as it is written down! No way can I learn my competitor’s strategy by reading the newspapers, for he is already writing the headlines for next quarter. I need to know the workings of his mind if I want to get ahead of him and there are only two ways of doing that - listening to him talking or encouraging him to talk.

Informality is the essence of strategic information. The only way to obtain informal information is through human contact (in our jargon we call this “mammal meetings”).

Photocopier manufacturers like Xerox and Konica have understood this. They train their star service engineers to strike up a conversation with customers’ secretaries, to hang around their coffee machines and report any information they may glean. This is how Xerox, for example, was able to submit a tender for which it had not been consulted.

Similarly, a French electronics group won back its position as market leader by having any machine delivered to a customer anywhere in the world being accompanied by a member of staff acting as the "eyes and ears" for his colleagues.

The Human Ressources Department of a food-processing group scans all the CVs it receives by keywords, like competitor and customer names and strategic technologies. Applicants with potential information are systematically debriefed. Interesting applicants, but over-talkative and who “betray” their former employer, are rejected. Applicants not being considered for a job are offered a deal: “Let’s discuss this and I will help you in your job hunting”. This has never been refused.

ANALYSING THE WEAK SIGNALS AS WARNING SIGNS

A few years ago the directors of a Hewlett-Packard Group division were stunned by the disastrous failure of a major computer project despite all indications of a green light. By the time they realised that things were not going so well it was far too late. Their formal reporting systems had not picked up any cause for concern. Since then they have added an informal project review system to the formal project reviews, where everyone expresses their feelings anonymously by drawing a smiling or scowling face. Too many scowls launch an enquiry.

An engineer does not always dare tell his boss that he is uncomfortable with his technical choices. A customer who is disappointed with the functions of the prototype he is assessing does not always care to raise questions over specifications. A manager does not always admit to his superior that he is running behind schedule and may be tempted to gloss over the truth in the interests of his annual review.

Thousands of weak signals never reach the Chairman. Organisations have a tendency to encourage only the bearers of good omens and ignore those with bad. Good news fizzes up to the boss like champagne bubbles, whereas bad news gets buried in the hierarchical depths. The Chairman bathes in optimism while his teams teeter on the brink of depression. When President Pompidou appointed Comte de Marenches as Head of the Secret Service, he told him “For Heaven’s sake, just bring me bad news, for everyone else makes sure I have the good!”.

Weak signal detection can be organised. You have to train your staff to pick the signals up. You should designate a central point to collect and analyse them.

Thus the Canadian telecommunications group, Teleglobe, was able to identify innovative start-ups for acquisition. Thus L’Oréal organises its “induction meetings”, so that the sales staff can present their observations and intuitions in the field to analysts and decision-makers. Thus Procter and Gamble was able to detect a network of doctors organised by a competitor to monitor its marketing strategy and medical visitors.

MONITORING SEMANTICS FOR INNOVATIVE PURPOSES

The first step in knowledge is to give something a name. In 1758, the Swedish botanist Carl Von Linné, devised a classification system providing naturalists of the time with a common language based on rational rules. Suddenly, knowledge could be shared with the certainty of being understood! There ensued a truly “taxonomic fever”, the forerunner to the blossoming biology science.

Business lacks such a common language. Workers live on planets knowing little about each other and not speaking the same language.

For example, the marketing team in a major detergent manufacturer had attempted to list innovations in its field by in-depth Internet research. It spent weeks inputting keywords like “detergent”, “research”, “new” etc. into internet search engines, with a total lack of success. Ultimately it realised that scientists rarely used the word “detergent”, preferring more precise terms like "solvent" or "surfactant". The team immediately obtained results using these new keywords.

Sharing a common language is not enough. It has to evolve.

Take the steam engine. It was called the “iron horse” when first invented in 1804. An increasingly rich technical vocabulary was built up as development continued. This technical vocabulary was at its height when the steam engine was supplanted by the diesel locomotive in the 1950s and disappeared from our landscapes.

The sad thing is that our computer management systems for knowledge rely on vocabularies that reflect the past, not the future. Innovation unceasingly creates neologisms. Take the example of all the new words that the average citizen has assimilated since Internet broadcasting - “web”, “html”, “cookies”, "discussion forum”, “e-mail”, “broadband”, “java”, etc. The creation of neologisms requires careful monitoring, thereby drawing conclusions as to market segmentation and new product creation.

For example, a Canadian communications agency filters its staff's e-mails using robot software to detect new keywords that do not figure in the corporate thesaurus. Beyond a certain threshold, the employees using them are invited to write a short article for the company's Intranet. Interested readers can click on a box at the bottom of the article to add this new keyword automatically to their centres of interest profile.

An American cosmetics group analysed comments from users of its fabric deodorants in Internet discussion forums. Displaying a semantics map of thousands of Internet chats revealed two unexpected consumer groups: teenagers, using them to cover up suspicious marijuana smells on their T-shirts to avoid upsetting their mothers, and unfaithful husbands, to hide the scent of their mistresses on their shirts. The marketing teams had the innovative idea of selling the same chemical formula under various brand names through unconventional outlets - sex shops and surfboard and roller blade stores.

IN BRIEF

• The blind spot poses the greatest threat to a business. This is the unperceived, and therefore unaddressed, danger. It is the area of deepest ignorance. Hence the importance of introducing information gathering systems with diverse topics from a variety of sources.
• Nothing is more valuable than informal information to keep one step ahead. This requires networks of internal and external informers. Marketing teams in particular are awesome watchmen.
• Specific organisation is needed to detect weak signals, with a central collection and analysis point. Priority should be given to searching out negative signs, as group directors are normally inundated with positive information by their entourage.
• Sharing information and knowledge is firstly sharing a common vocabulary. One way of organising innovation is to monitor new words.

REMEMBER

Good news fizzes up to the boss like champagne bubbles, whereas bad news gets buried in the hierarchical depths.

The inventor of the “director’s fighting stance” formula is Mr. Olivier Grégoire, Director of Business Intelligence, FCI Group (industrial connectors).