keep it positive: using competitive intelligence to enhance business development

Keep it positiveUsing competitive intelligence to enhance business development

Eric GarlandCompetitive Futures, Inc@ericgarland#scip09

Why we’re here

I DON’T WANT YOU TO BE FIRED

I WANT YOU TO HAVE MORE BUDGET

I WANT YOU TO SEE THE UPSIDE OF CHANGE FOR FUN AND PROFIT

•State of competitive intelligence, scenario planning, futures

•Executive psychology of positive & negative information

•Frameworks to combine CI & business development

•Exercises you can take home

What we will talk about

WHY IS IT SO EASY TO FIRE/IGNORE INTELLIGENCE?

Perfect, now we can get back to improving “shareholder value”

5 – 15 years1 – 5 yrs.

TodayMajor

demographic shiftsCompetitive

product launches

Industry dynamics

Technology revolutions

Political movements

Infrastructure investment/

collapse

Stock performance

Regulatory response

Sales data

Consumer preferences

Personnel retention

The Future Intelligence Method

5 – 15 years

Aging populationsGlobal climate changeDisruptive technologiesGlobalization

1 – 5 yrs.

Plan for loss of talented workforce?Upcoming restrictive environmental legislation?Emergence of “world-class” Asian industries?

Today

Hire new people

Launch new business

Form partnership

What to do with future intelligence

EXECUTIVES:There is only one fundamental question today:

Is this incremental adjustment...

or is this transformative change?

Transformation sounds nice, but...

Welcome to the future! Your old business model is

trashed!

Transformative change and business models

Business Model A

Business Model B

Wildcards

Trends

1 - 5 years

Today: Making money

Future: Maybe making money

Transformative change and business models

Wildcards

Trends

1 - 5 years

Today: Making money

Future: Maybe making money

MY LAST COUPLE OF YEARS: 2007 - 2008

Anyhow, all I was saying was doubling the that Case-Shiller

Index is bad for banking, why is everyone freaking out?

TIME TO GET HAPPYFor CI to survive and

thrive it must blend with psychological reality and focus on

business development, not just Cold War “enemy tracking”

PSYCHOLOGY OF BAD NEWS/GOOD NEWS

Two fundamental insights:

The brain is designed for fear. Companies profit from opportunities.

Gain maximization is more attractive than risk management.

NOTICE: these are at odds.

THE WETWARE

Stone age design

Modern world

“Our updated simulations continue to illustrate that the long-term fiscal outlook is unsustainable.

Despite a 3-year decline in the unified budget deficit, the federal government still faces large and growing structural deficits driven primarily by rising health care costs and known demographic trends.

Last month, a baby boomer claimed Social Security retirement benefits for the first time, and this cohort will be eligible for Medicare benefits in less than 3 years. According to the Social Security Administration nearly 80 million Americans will become eligible for Social Security retirement benefits over the next two decades--an average of more than 10,000 per day. Although Social Security is important because of its size, the real driver of the long-term fiscal outlook is health care spending. Medicare and Medicaid are both large and projected to continue growing rapidly in the future.”

How does the brain handle long-term threats?

Former Comptroller General

David Walker

HUMANS PREFER POTENTIAL GAIN TO RISK REDUCTION

Cost: $5Potential gain: $1,000,000Likely outcome: -$5

Cost: $9Potential gain: $100 Likely outcome: $50 - 100

THREE CULTURES OF NEWS INTERPRETATION

Good News Bad News Academic

GOOD NEWS CULTURE

•American, Western Europe

•Best news gets to the boss, more money invested in upside

•Negative implications = “not a team player”

•Best case: Put man on moon, entrepreneurial spirit

•Worst case: Run into brick walls at 300 mph

“Leverage the bank to 40 times over fractional

reserve? Sounds like a plan for financial success to me,

boss!”

BAD NEWS CULTURE

•Finland, Korea, anyplace regularly invaded

•Worst news gets to boss first, alternate plans made

•Negative implications = looking out for tribe

•Best case: React quickly to threats

•Worst case: Alcoholism, pickled herring consumption “Hi, do you have any unguarded

monasteries around?”

ACADEMIC

•Government agencies, France

•News arrives once a year

•Negative implications = To be discussed to full depth of Cartesian logic

•Best case: Well considered ideas, less susceptible to fad. Also, liberal vacation time.

•Worst case: Minitel vs. Internet

“We are not amused”

TECHNIQUES TO CONNECT CI TO $$$

IF YOU CAN’T HEAR THE CASH REGISTER RING NEAR YOUR DESK, THERE IS NO ROI

GET NEAR THE MONEY:Support SALES

Give insights to BIZ DEVELOPMENT or PRODUCT DEVELOPMENT

Uh, this isn’t futures studies, it’s BUSINESS DEVELOPMENT

5 – 15 years1 – 5 yrs.

TodayMajor

demographic shifts

Technology revolutions

Political movements

Infrastructure investment/

collapse

10,000 business

ideas

100 good ideas

10 launches

one billion dollar

business

CONNECTING MARKET ANALYSIS TO $$$

Capital assets

IP

Brand

Cash Flow

Current business

model1 - 3 year forecast

3 - 10 year Delta

Current Forecasts

Competitive Trends

Implications Scenarios

CI Advanced CI

Connect insight back to business

TURN HORRIBLE SCENARIOS INTO BUSINESS IDEAS

“When life hands you lemons, make

lemonade. Next, find someone to whom life handed vodka.

Now, you have a party.”

-Ron White

The Lemonade Questionnaire

1. Pick a transformative trend

2. Talk about all the people who will be affected, for good, bad or indifferent

3. Think about what they will need, want, dislike, etc.

4. Do your current assets match this reality?

5. Which companies are best poised to create new businesses - if none, will there be start-ups?

6.Where are your competitors? Do they even matter?

GET READY FOR HORRIBLE NEWS AND THINK ABOUT HOW TO

MAKE $$$.

What’s a bubble and what’s a strategic trend

Education

Housing

Retail

Water shortage Infotech

increases in power

Talent crisis

Aging

THE BUBBLE:

Credit

THE REAL TRENDS:

Why we’re taking a trip to the YEAR 1998

FLAT from here on

Derived from debt alone

MASSIVELY EXTENDED CREDIT. Just in the United States.

Great depression, New Deal

Housing, leveraged business deals, Iraq

spending, credit cards, student loans

Debt vs. GDP

The housing sector will collapse,or inflation will rise to meet it

U.S. retail glut likely to collapse

0

7.5

15

22.5

30

U.S. Sweden U.K. France Italy

1.12.32.5

3.3

20.2

Square footage retail per person Source: Shopping Centers Today

Commercial real estate to collapse(actually, just its value)

Funny growth, given our GDP remaing flat, wages staying flat, moving

manufacturing base to Asia

Education prices, fueled by debt,will drop or lose enrollment

Aging populations

Healthcare budgets will explode:U.S. expenditures from $2 trillion to $4 trillion

That stings a little...

Well, I’m sucking

$400,000 out of your

blood.

Talent crunch - YES, STILL

Cities to create even more GDP; Rural areas left behind

Cities will have 52% of the population, 90% of the GDP by 2015

Immigration of billions of young people

Infotech: More powerful, radically cheaper (still!)

Energy still scarce, even with recession

Over capacity = stable

Barely over capacity: speculation, price fluctuation

Water scarce around the world

Mexico city

Near East:Jordan, Syria, Israel – drinking from the same aquifer!

Egypt

Andalucia

Subsaharan Africa

Ogalalla Acquifer

N.S.W. Australia

China - $11 billion in lost manufacturing due to polluted water!

U.S. retail glut likely to collapse

0

7.5

15

22.5

30

U.S. Sweden U.K. France Italy

1.12.32.5

3.3

20.2

Square footage retail per person Source: Shopping Centers Today

The Lemonade Questionnaire:RETAIL

1. Assume a scenario in which retail space shrinks by 40%

2. Talk about all the people who will be affected, for good, bad or indifferent

3. Think about what they will need, want, dislike, etc.

4. Which companies are best poised to create new businesses - if none, will there be start-ups?

5. Where are your competitors? Do they even matter?

YOUR QUESTIONS

Let’s stay in touch and really discuss this

• Forum: competitivefutures.ning.com

• Twitter: @ericgarland

• Blog: www.competitivefutures.com/blog

• Phone: 202.508.1496

• In person: 1317 F St. NW, Washington DC, about a block from the guys giving away nine trillion dollars

Thanks for coming!