collaborative forecasting and insights€¦ · 2. undershot consumers: opportunities for up-market...

JPK

Gro

up

June 14-15 • Boston, MA

Collaborative Forecastingand Insights

Establish integrated business planning throughsynchronized forecasting processes

June 15, 8:30am

View presentation online at:

https://jpkgroupsummits.com/attendee3

Arik JohnsonFounder and Chairman at Aurora WDC

Arik Johnson is Chairman of Aurora WDC, the intelligence advisory firm he founded in

1995. After stepping aside as CEO in late 2009, today Arik serves as Managing Director

and lead architect at Aurora’s R&D lab, think tank network and intelligence policy institute,

the Center for Organizational Reconnaissance (COR). Arik is a Fellow of the Strategic and

Competitive Intelligence Professionals society and has chaired SCIP’s annual international

conference (2006), served on SCIP’s board of directors (2004 – 2006), won SCIP’s

Catalyst award (2005), and served as a chapter coordinator, as well as, trustee and

development committee chair of the CI Foundation.

Business Forecasting and Analytics Forum

Powered byThe Intelligence Collaborativehttp://IntelCollab.com #IntelCollab

Angles of Attack:Collaborative Forecasting, Analytics and Insights to Unite Strategy with Organizational Intelligence

Arik Johnson

Founder & ChairmanAurora WDC [AuroraWDC.com]

Managing DirectorCenters for OrganizationalReconnaissance [COR.vc]

The Intelligence Collaborativehttp://IntelCollab.com #IntelCollab

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Aurora WDC

HistoricalContext

ProspectiveFuture

Understand

Uncertainties

Blind Spots and GAPsAurora WDC

Subject-Matter Expertise & Experience

Enables Planning to

Outthink/Outcompete Competitors

Acquire

A Clear Contemporary View of the Current

Market

Plan

Prediction of a Future StateHistorical Context + Contemporary View = Forecast of Trends for the Future

Clear Historical Context of the Past

Understanding Today (and 1-3 Years

Forward)

Current Macro and Micro View of the

Competitive Environment


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Strategy should be a

Response to Intelligence

Not the other way around…

What, exactly, IS “strategy”?


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Competitive Intelligence Analysis Failure: Diagnosing Individual Level Causes and Implementing Organisational Level Remedies by Fleisher & Wright

Abstract:It is anticipated that any Competitive Intelligence (CI) professional would want to perform the analysis task and execute their responsibilities successfully over time. Such competencies would normally come with added experience on the job, as should the ability to reduce the risk of failure by diagnosing potential pitfalls. This paper presents: (a) a unique four-level hierarchical model of analysis failure; (b) identification of common causes of failure at the individual level; (c) 10 key continua of CI analysis skills which we believe an analyst has to master to become competent in their work; and (d) guiding principles for an enlightened firm to follow if they wish to discharge their organisational level responsibility of reducing the potential for analysis failure. We believe that the issues raised in this paper are of significance and should ultimately contribute towards creating a more successful analysis function. This can only be of benefit to educators, practitioners and others who rely on skillful CI output to inform their decision making.

Journal of Strategic MarketingVolume 18, Issue 7, 2010Special Issue: Competitive Intelligence, Analysis & Strategy


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Strategic, Market & Competitive Intelligence has 3 Primary Operational Roles

Signals

of

Change

Strategic Choices

Influencing

Success

Likely Outcome of

Competitive

Battles


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STOCHASM

The difference betweenwhat you think you know andwhat you actually know.

Intelligence lives in this chasm, creating new knowledgeAND

disputing false assumptions.


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U.S. Intelligence CommunityFailed to Evolve

Unexpected new threats from non-traditional enemies like al Qaeda emerged on the geopolitical stage in the vacuum of America's return to international economic, political and cultural hegemony after the end of the Cold War.


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Three Key Business Trends Driving Business Strategy Evolution

Human Capital & Enterprise CollaborationEveryone in the Firm becomes a Virtual Member of the Intelligence Apparatus, Better Engagement by Rank & File, Shared Visibility of Issues & Actions

Corporate Governance & Risk OversightBoard-level Priority Ensuring Reliability of Management’s Earnings Forecast & Assessing Risks to Status Quo

Business Model Disruption & Value InnovationPredicting the Outcome of Competitive Battles by Anticipating Changes in Product/Strategy Dynamics


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In selling the Xiaomi smartphone, Xiaomi employs a strategy that is very unlike other smartphone makers such as Samsung and Apple. Lei Jun, Xiaomi CEO, said that the company prices the phone almost at bill-of-material prices, without compromising the component quality and performance compared to other premium smartphones. To profit from the narrow margin, Xiaomi sells a model for up to 18 months instead of the short 6 months used by Samsung to profit from the fall in the costs of components that occurs over time. It also profits by selling phone-related peripheral devices, smart home gadgetry, in addition to apps, online videos and themes. In the long term, the company sees the hardware sales just as a means of delivering software and services, as explained by Hugo Barra, "We are an internet and a software company much more than … a hardware company.


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Managers caught in this kind of competition almost universally say they dislike it and wish they could find a better alternative. They often know instinctively that innovation is the only way they can break free from the pack. But they simply don’t know where to begin.

Chan Kim and Renee Mauborgne

Competing head-to-head can be cutthroat especially when markets are flat or growing slowly.


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Knowing Why They Buy“Companies may know a good deal about their customers. They know nothing, as a rule, about their non-customers -- the people who should be their customers but buy from someone else. Why do they do that? And yet it is the non-customer where important changes always start first.”

Look Beyond the Current Business


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Success Breeds Complacency

“It is a classic conundrum for business titans: How much money and attention should be focused on a new, but growing, operation that is far less profitable than the core business?”

- Prof. Clayton Christensen, The Innovator's Dilemma


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Disruptive Technology

http://upload.wikimedia.org/wikipedia/en/8/8e/Disruptivetechnology.gif

http://upload.wikimedia.org/wikipedia/en/8/8e/Disruptivetechnology.gif


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Disruptive Innovation StrategySustaining InnovationsBetter Products Brought to Established Markets

Low-End DisruptionsTarget Overshot Customers with a Lower Cost Business Model

New-Market DisruptionCompete Against Nonconsumption

DifferencePerformanceMeasure

TimeNonconsumers or Nonconsuming Contexts

Performance


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Customer Demand & Signals of Change

1. Non-Market Contexts: External Forces (Government, Economics, etc.) Increasing or Decreasing Barriers to Innovation

2. Undershot Consumers: Opportunities for Up-Market Sustaining Innovations

3. Overshot Consumers: Opportunities for Low-End Disruption, Shifting Profits by Specialist Displacements (Modularity) and the Emergence of Rules

4. Non-Consumers: Opportunities for New Market Disruptive Growth

Established Companies almost always

Lose to Disruptive Innovators


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Customers “Hire” Products to Do

“Jobs” for Them

Concentrate Less on

What Customers “Want” and

More on What Customers “Need”


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Decision / Selection Map is used to identify:• Customer needs/wants• Which competitor represents the most serious threats now and potentially

in the future• Which strengths should be emphasized• Which of our weaknesses will competitors exploit• What new needs/wants should we try to create

Probability / Impact Grid is used to:• Ensure goals are aligned to those of key stakeholders• Highlight those competitor moves that the company should take action to

counter and monitor• Create group consensus on the potential contribution that this planning

effort would have, and the likelihood that we could make it happen

Why Wargames?


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Wargame Example - Strategic

Ch

23.

25

Improve ROI of our R&D

Determined our risk profile was substantially more conservative than our competitors, and that this was unexploitable.

Consolidated R&D under the corporate umbrella, ending internal conflict for resources and reducing inefficiencies.

Group consensus on using consistent measures to track market opportunities and consumer trends.

Deliverables

Purpose

Industry Consumer Products

Company size Fortune 500

Planning level Strategic

Wargame Purpose Company was looking to increase throughput from their R&D unit, which was not keeping pace with competitors

on launching products.

Wargame Outcome The wargame showed that it wasn’t just one problem that was slowing things down. As expected, the company’s

risk profile played a part. What also became apparent was that R&D had no clear reporting format and ended up

working on many projects that were either not likely to go to market, or were pet projects with little or no market

opportunities. Understanding who their true stakeholders were, the BUs, was a key learning that lead to change.


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Wargame Example - Tactical

Ch

23.

26

Industry Pharma/Biotech

Company size Fortune 500

Planning level Tactical

Wargame Purpose Company was launching a product with new MOA into a crowded market. They were looking for ways to counter

messaging from existing competitors before they launched. They also wanted projections on how long it would take

to capture significant share.

Wargame Outcome What the game showed was that it was unlikely that their new product was going to displace any of the existing

products, given the safety profile and demonstrated efficacy. They were unwilling to play with price too much, and

decided to delay launch. The competitor that “won” the game had production issues in the real world, and this lead

to the company purchasing the “winning” product at a bargain.

Prepare for launch

Determined customer was more price sensitive than previously thought.

Wargame “opened eyes” about home team being significantly behind competitors in terms of safety and efficacy.

EWI tracking set up because of the game allowed them to respond quickly when chief competitor ran into problems.

Purpose

Deliverables

The Market Team took assessment of their more significant needs, by Customer group, and decided which were Drivers (more is better), and which were Satisifers.

The critical point here is that when you over-deliver on a particular need or want, you face diminishing returns and you don’t have the resources to address those issues that the customer has validated as Drivers.

They then ranked each of the Competitors on how well they meet these needs today, from the Customer’s perspective.

The Competitor’s job was to move the needle on these performance metrics.

Unsatisf’d Satisfied Happy

Need or Want

Customer

Groups Comp 1 2 3 4 5 6 7 8 9 10 11 12

Home

Cost Institutional R1

Corporate R2

Post-secondary R3

Home

Portfolio Profile Finance heads R1

Actuaries R2

R3

Benefit Admins Home

Ease of Client Uptake /

Application Processors R1

Regulators R2

Service Agents R3

Home

Convenience Plan Members R1

Service Agents R2

R3

Home

Marketing Plan members R1

Retire admins R2

R3

Home

Services / Support Beneficiaries R1

Service agents R2

R3

After Action Sample: Using a

Decision / Selection Map

27

This critical tool helps the competitor teams clarify the most important needs and wants of their various customers groups.

27


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After Action Sample:

Key Issues and Outcomes

Key Issue Competitor Will… Our Response

Defend lack of customer service data

Competitors message this issue to mitigate launch

• We will set up feedback loop for representatives and customer account team to gauge impact of lack of time-series data at launch; share best practices on how to handle

• Develop rep response indicating that several other recent product launches did not have time-series data at launch

Messaging • Tout their longevity in the product class.

• Claim our product is “too radical,” untested, barely passing regulatory review

• 5 successful beta clients• Rivals products have had negative returns for 5 years cumulative • Educate on what is required and how to manage• Can utilize heavier social media communication, particularly via our large

FaceBook and Twitter presence

Competitor Increase in Ad Spend

We expect that the incumbents will increase their spend in an effort to lock up key institutional clients

• Leverage consumer demand for new retirement options• Maximize the impact of the news event around the availability of a new

class of product

Feet on the Ground and Selling

We expect at approval that there may be some financial options data that we won’t be permissible in promotion.

• Right-size the new prods team to a competitive size • Via the Blue Guide can we share product data that is still under review• Ability to communicate regularly with speakers via intel network wiki on

relevant product data

The issues highlighted below were derived from our Contribution / Feasibility Grid exercise.

28


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Contribution / Feasibility Grid Example

• The following 2 slides show an example of how we begin the Planning Round, the most important component of a wargame.

• Everyone is brought back to the main room, where as a plenary group, we discuss the various competitor moves, and more importantly, the actions that you should take to proactively disrupt them.

• Once the group has reached consensus on what these scenarios are, the Sponsors meet to select those that they feel are most impactful and the teams head back out to the break-out rooms to develop Action or Contingency Plans to deal with them.


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Scenario # Scenario Title Feasibility Contribution

1 Disruptive low cost systems for WHO become a catalyst 75 2

2 Chief competitor drops price significantly ahead of schedule 25 3

3 Development of non-invasive solution 50 2

4 ABC seeks additional indication 25 4

5 FDA certification lost for plant in Ireland 75 1

6 Black box warning issued for competitor’s product in this therapy 50 2

7The Street expects us to gain additional indication within 3 yrs and we deliver 25 6

8 We convince customers that we are a front-line therapy 10 3

9 ABCs looses litigation to XYZ 50 3

10Healthcare reform makes price more important than function impacting our products 80 5

11 ABC acquires XYZ 10 3

12 ABC partners with DEF for worldwide distribution 20 2

13 Competitor locks in large healthcare network essentially freezing us out 50 ?

14 DEF acquires local India company 70 1

Contribution / Feasibility Grid

The above table has been truncated and sanitized to provide an example of what the exercise might look like. Those that are highlighted were selected for planning activities.


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Feasibility

ContributionCode

0

1

2

3

4

5

6

0% 75%

7

13

31

98

23

33b

22

6

11

12

24

25

27 28

3

19

18

45 20

1

5

2

4a

29

25% 50% 100%

32

33a

16

1715

2130

34

26

?

14a

14b

10b

10a

The Grid


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Dr. Craig S. Fleisher


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Related Techniques

Scenario Analysis

Competitor Analysis

Blindspot Analysis

Johari Windows

Financial Ratio / Statement Analysis

STEEP and Industry Analysis

Executive Profiling / Shadowing

Value Chain Analysis

Supply Chain Analysis

SWOT Analysis


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Reconnaissance Roles in Value Chain of Every Customer Offer

Pricing

Buy, Build or Partner

Operational Metrics

BusinessModel & Case

SalesProcess

Thought Leaders

Market Requirements

MarketSizing

MarketingPlan

Product Roadmap

Awareness Bldg. Plan

Market Research

Market Problems

Distinctive Competence

Product Performance

Customer Acquisition

Positioning

Customer Retention

LaunchPlan

Product Contract

Innovation

Market Messaging

Channel Training

Win/Loss Analysis

Competitive Battle Cards

EventSupport

Collateral & Sales Tools

Presentations & Demos

WhitePapers

User Personas

“Special”Calls

Release Milestones

AnswerDesk

Technology Assessment

Competitive Analysis

Lead Generation

Buyer Personas

Win-Loss

Market Analysis

Product Strategy

Program Strategy

Product Planning

Quantitative Analysis

Channel Support

SalesReadiness

Stra

tegi

c Tactical

Channels Analysis

Life Cycle Strategy

Capabilities & Resources

Supplier Analysis

Sales Training

Sales Automation

MarketSegments

Sell Against


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Era of Asymmetric Interpretation [Reconnaissance]Asymmetric Interpretation Depends on Both Decisive & Incisive Sensing

Incisive

Scanning for Trends, there may be no Decision made

Historical Patterns & Anomalies

Implications for the Reader

Bottom-Up Exposition

Driven by Trends

Product is Observation/Commentary

Emergent & Skeptical

Open Source

Decisive

Frame of Reference is the Decision

Compares Options & Outcomes

Recommendations & Trust

Top-Down Imposition

Driven by Issues

Product is Decision/Action

Factual & Hypothetical

Confidential & Proprietary


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Asymmetric Interpretation Engages the Entire Workforce in Collaborative Sensing to Anticipate and Act on Industry Change

Signals

of

Change

Strategic Choices

Influencing

Success

Likely Outcome of

Competitive

Battles

Why Reconnaissance?


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Feel free to ask for help:

Email: [email protected]

Phone: +1-608-630-4242

Twitter: @ArikJohnson

LinkedIn: www.linkedin.com/in/ArikJohnson

Skype: ArikJohnson

Web: www.IntelCollab.com & www.AuroraWDC.com


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Collaborative

Insights Team


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Observer Collaborator Provocateur

TASKING COLLECTION DISSEMINATIONANALYSIS

People &

Culture

Methods &

Systems

Products &

Services

Mission &

Priorities

Intel Team Audit

Delphi Interviews with Key Executive Clients

Enterprise-wide Recognition of Intel Value by the Workforce

SME Profiling / OSINT Intel Fitness Assessments, Team Fundamentals & TrainingHUMINT / Willingness to

share/contribute

Ability to Protect Confidential IP, Elicitation Across the Workforce

Market Research Derivative / Ad-Hoc

Client-Driven / Defined

Systematic / Initiative / Metrics

Stick-fetching / Service Bureau / Responsive

More Intuitive, KIT & KIQ-driven

“Consigliere” / G2 Strategic Advisor

Competitor Activity & Plans (Reactive)

Market & Industry Trends (Defensive)

Scenarios, Futures, Disruptions (Offensive)

OSINT Self-Service (Email, Google)

SME Nets, Ad-Hoc Field HUMINT, Portals (Intranet/SharePoint)

Crowdsourcing, Mobile, SME Nets Formalized

Free Subscriptions, Google Alerts, SharePoint

Network Hub, Hand-Off to Execs

Invited to Decision Forums, Ability to Tap SME Nets “at will” with Success

Unstructured Known Needs Convenient, Limited Clients

Internal / External Mix of Some Key SBU’s

Systematic, Real-time Problem-Solving, Enterprise-wide

Asking Better Questions

Intel Community, Internal & External

SWOT, Industry, Five Forces, Competitor Financials -Reactive

Benchmarking, Win/Loss, STEEP, 4Cs - Proactive

Scenarios & Simulations, Value Chain & Business Model -Predictive

Reports / Alerts / Profiles

Summarized Situational, Market & Industry Analyses

Interactive, Business Performance Focused, Drives Problem-Solving

Situational Assessment

Early Warning, Strategic Issues, Key Players

Balanced Scorecard, and Other BPM-driven Applications

Client Definition, Push-Demand Generated

Client Fitness

Pull-Demand Action

Email, Asynchronous

Intranet / Portal

Real-Time, Two-Way Persistent Apps

Newsletters, Key Players

Events, Issues & Decision Support

Early Warning, Detection & Anticipation of Industry Change

Mostly Push, Basic Reporting

Push / Pull “Balancing Act”

Client-Pull, Customized to Individual Preferences and Needs

Who?

How?

What?

Why?

What? So What? Now What?

Roadmap 3-Phases of Readiness


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Training

Research

Systems

Three (3) Keys to Unlock

Intelligence Potential

Key Intelligence Topics &

Questions Development

Scenarios, Simulations, & Early Warning

Professional & Program

Development Roadmaps

Technology, Industry,

Competitor, & Customer Analysis

Profiling Engine of

Key Players

Storage & Retrieval of Historical

Intelligence

External Secondary

Awareness & Monitoring

Map & Manage

Internal Source Networks

Human Source

Universe for Elicitation

Analytical Methodology

& Tool Selection

Intelligence Project

& Program Design

Business Problem

Diagnostics


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Performance

Driven

Organizational

Reconnaissance

Based on Performance

Management

Perspectives such as

the Balanced

Scorecard

43


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What’s Next?

Leadership to Act isBased on Confidence

Intelligence Combats the Paralysis that Accompanies Uncertainty

Reconnaissance Transforms Your Workforce into a Force to be Reckoned With

Feel free to ask for help:

Email: [email protected]

Phone: +1 (608) 630-4242

Twitter: @ArikJohnson

LinkedIn: http://linkedin.com/in/ArikJohnson

Skype: ArikJohnson

Web: http://IntelCollab.com & http://AuroraWDC.com

http://linkedin.com/in/ArikJohnson

http://intelcollab.com/

http://aurorawdc.com/

collaborative forecasting and insights€¦ · 2. undershot consumers: opportunities for up-market...

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