It is interesting to see how Jeff Immelt created parts of his strategic intelligence picture. After Jack Welch’s period of leadership (from 1980 to 2001), Jeff Immelt transformed the 125-year-old GE into a start-up, a digital industrial company. “We compete in today’s world to solve tomorrow’s challenges”, he said, quoted in HBR September/October 2017.
Most of us recognize this ‘annually recurring ritual’ in the company planning cycle which in most cases is based on an inside view. It becomes a breeding ground for all sorts of biases that subconsciously give more weight to facts that back management’s view than inconvenient ones that don’t. Being inwardly-focused and not anticipating competitors’ moves is remarkably superficial and is another breeding ground for competitive surprises. To overcome this, management is forced to think ‘strategically’ and needs evidence-based strategic intelligence.
Biases are predispositions of a psychological, sociological and physiological nature that can influence decision-making. We may acknowledge their existence, and yet we often believe that we are not prone to bias; in itself this is a type of bias – ‘overconfidence’.
The IT-world would like us to believe that Big Data is a success, with the emergence of all kind of data-management functions, data scientists, chief data officers and others. You might ask yourself how effective all of this is in the absence of a coherent strategy for organizing, governing, analyzing and deploying an organization’s information needs. The quote by the renowned author of the famous book “The Black Swan” is also clear in this regard. In the 2017 May/June issue of Harvard Business Review, Thomas Davenport draws a distinction between data defense and offense, and other crucial dimensions.
The potential hostile takeovers of Unilever and AkzoNobel were a wake-up call for their respective boards of management and boards of directors, providing a reason for both companies to act, however, both moved in the wrong direction, by selling-off parts of their companies, and of course via cost-cutting. Two easily-implemented actions which helped improve shareholder value. The Big Egos at the top were no doubt very proud of themselves to have made a decision. Together with my co-author, Dr. Antoinette Rijsenbilt, we described those too Big Egos in numerous cases in our 2015 book “Big Boys Big Egos and Strategic Intelligence”.
Asking the right questions is the biggest issue to challenge top management. Examples of crucial questions include: how long will our sources of competitive advantage survive in the face of technological shifts? How will changing customer and societal expectations affect our business models? What does it mean to be an international company when the benefits of international integration are under intense scrutiny?
The French writer Charles Maurras (1868-1952) believed there were ‘Two Frances’: one was the ‘real’ France, and the other the ‘legal’ France. The ‘real country’ is the rural France of church clocks, traditions and native people fused with their ancestral soil, versus the ‘legal country’ which is the secular republic run by functionaries conspiring for foreign interests. When sufficient people in the country come to understand the failure of ‘legal’ France, they will want the ‘real’ France back. That will be true in countries all over Europe. As Marine Le Pen stated: “France will be led by a woman, either me or Mrs. Merkel”
It has been instructive to see the following three things happening which people tend to accept far too easily: how effective are Boards of Directors, and what of their responsibility and accountability in controlling and monitoring their Boards of Management? It seems they are not effective at all, most have no idea of what is really going on, and what new challenges that are facing.
Economic indicators have improved since the summer of 2016, resulting in an accelerating positive level of economic performance in Europe and the other OECD-countries. Entrepreneurs and consumers are getting back into a good mood. The professionals in government, banks and other institutes did not see this coming. In our strategic intelligence best practices, we use the ‘Strategy as Active Waiting’ management tool to identify early indicators of change and create possible courses of action.
An important issue in HBR in March/April 2017, dealt with information that challenges your assumptions and allows you to perceive a looming threat or opportunity. When a dramatic shift is on the horizon, the first indications may usually appear in ambiguous events on the fringes of the market. A key problem is getting information that senior management have not demanded because they do not know how to ask for it. Often, this may be a development brewing that may ultimately redraw the lines of competition for the future. One way to describe the unanticipated risks became famous in 2002 as ‘unknown unknowns’, thanks to Donald Rumsfeld, the former US Secretary of Defense.