Steve:

During our chat I mentioned Amy Oberg was attending a competitive 
intelligence conf.  I've pasted her Session Notes below.  I think you will 
find them interesting - I've asked Amy to get on your calendar to discuss a 
"CI 101" education project with you. This effort will help address some of 
the concerns you raised.  As I mentioned she is currently working with eThink 
to implement a global "Enron Edge" collection effort and I think the CI 101 
project would dovetail very well.  Amy has other material available from the 
conference when you need it.

Enjoy the notes - Pete


III. Session Notes: (sessions attended by A Oberg)

What Should You Tell Mgmt When They Ask About the Value of CI? Ben Gilad
? Case study, Levi Strauss: example of extremely damaging blindspots -  
? Levi Strauss market value went from $14b to $8B in three years ('96-'99)
? Market share went from 48% ('90) to 25% ('98)
? Shut down 29 factories, laid off 16,000+ people in '98 as sales dropped 13%
? Blindspots = competitors - didn't know them (GAP, Calvin Klein, etc); 
trends - didn't understand them (kids don't wear what their parents do, one 
size does not fit all, etc)
? Cost for Levi's to set up really, really good CI function = $500,000 
annually
? Cost for Levi's to call in consultants and problem still not solved = 
$$850,000,000 !
? Case study, GE and Jack Welch: example of CI culture:
? Jack's greatest achievement (per Jack): "we made this company think outside 
of itself". This is a CI culture.
? CI "is not a program, system, or function ---- it's a culture"
? "Intelligence is all about managing risk" (note: key element of Enron's 
culture --- the two are intimately connected)
? "A junior level market analyst is not a BI/CI competency"
? CI professionals "paint the picture of the future" of the company; are 
"guardians of the future"
? "CI/BI is the total knowledge a company possesses about the environment in 
which it competes. It is synthesized from the vast amounts of bits and pieces 
of external information bombarding the firm every day. It paints a whole 
picture of the present and future competitive arena for management decisions."
? "This is what a competent CI program should deliver:
1. early warning of competitive threats
2. early identification of competitive growth opportunities
3. benchmarking of best practices
4. quicker response to market moves
5. better understanding of major players: customers, suppliers, politicians
6. future scenarios for strategic planning
7. accurate estimates for tactical decisions
8. improved development activities
9. identification of blind spots
? Bottom line "grand prize" = reduced risks, external focus, identification 
of blind spots (yours and competitors)
? Peter Drucker, Forbes 1998: in the next 10-15 years, collecting outside 
information is going t be the next frontier."

Building a True Intelligence Capability, Ben Gilad
? How competitive is your company? 1. Does it viscerally know its market? 2. 
Can it predict reaction to its initiatives? 3. Is it blind?
? Numerous case studies of when CI could have been a "life saver" but was not 
utilized - Sears (from #1 retailer in the world to #4 and dropping), Schwinn 
(missed mountain bikes market), Goodyear (missed "ugly tire" market), others.
? #1 danger = competitive blind spots. Classic example: large companies pay 
attention to other large companies; large companies hire large consulting 
firms; large consulting firms learn from large companies, "and so on and so 
forth until Chapter 11 do them apart" 
? #2 danger = unchallenged assumptions. Classic examples: corporate myths, 
corporate taboos
? Competitive intelligence is "any information that tells top management 
whether or not the company is still competitive"
? The role of CI is "the guardian of company competitiveness"
? The CI process is "any organizational design that somehow ensures:
? That CI flows to one place (CI mgr as "weaver"; you see the forest, others 
see the trees)
? That is turned into strategic updates
? That updates reach top mgmt regularly
? That top mgmt discusses, analyzes, debates, and does something w/ the 
intelligence (key role of CI is to affect thinking, to change the Corp. 
worldview)
? That the intelligence is used to uncover blind spots (regardless of how 
holy they are)
? That the intelligence is used to empower employees (creating a culture of 
sharing knowledge; tried tying $ to sharing, putting sharing in PD and 
neither worked. What worked was recognition via feedback about what resulted 
from their sharing)
? That the most "fearless, most observant, most out of the box thinker" in 
the org becomes the Dir. of CI and then VP of Corporate Competitiveness
? That the CI Dir. reports to a powerful and eager exec
? That this exec is the CEO/President"
? Companies organize CI units in two different ways: CI as information center 
(AT&T, Kraft, Kodak, McDonald Douglas, Ameritech, Dupont, Citicorp) or as 
decision based intelligence (Motorola, Pfizer, Corning, NutraSweet, 3M, 
Xerox, Marriott, Shell, IBM, others)
? Best Foods has "one of the best CI units today"
? Charge back of CI activities to units "doesn't work because if it costs, 
units won't use it"
? Building awareness works - General Mills trained 120+ people about CI
? Bottom line: company needs to be competitively oriented, so awareness and 
attitude are what count.
? Intelligence input should be mandatory across the organization
? Intelligence should be personally delivered once a week to the exec 
committee
? "If you accept your role as that of passive competitor tracking, you'll be 
collecting coupons till the end of time"

Successful CI = Impact, John Hovis
? "CI must be part of the company's strategic management system because ( it 
lights up the targets"
? Case study of Avnet Inc. (note: John Hovis is Sr VP, Investors Relations & 
Corp. Planning for Avnet)
? Evolution of Strategic Mgmt Process: Stage 1 (1997) = no research or 
intelligence activities, little or no strategic planning;  Stage 2 (1998) = 
limited library or research function, strategic planning a separate activity; 
Stage 3 (1999) = intelligence system in place, strategic management function 
fairly well developed; State 4 (2000) = comprehensive intelligence system in 
place and working effectively with full integration; comprehensive strategic 
management system in place and working effectively
? Tool: "SLAM" chart = strategic leverage matrix. Used among other analysis 
techniques
? Strategic positioning of CI enables company to "play the game differently" 
and produce "discontinuous innovation". Crucial.

CI Analysis: Get Real! Liam Fahey
? Competitor analysis (aka: "CA") 
? CA driving questions: which competitors should we analyze? What should we 
learn about them? How can we leverage CA to learn more about customers, 
suppliers, marketplace changes, etc? How can we integrate CA into decision 
making?
? CA principles:
1. Purpose: not to learn about competitors, but to enable thinking, decision 
making, action
2. Always focus on the future
3. Insights are the value!
4. Focus analysis on assessments, insights, implications - and NOT on 
description
? Strategy Domains: outwitting (thinking), outmaneuvering (doing), and 
outperforming (results) - of current, emerging, and potential competitors
? Strategy Arenas: factors (suppliers, materials, HR, etc. channels 
(distribution), end customers, institutions (political, legislative, courts, 
etc.
? Which competitors to focus on? 
? Which do we understand the least?
? Which has strategies most different to our own?
? Which are affecting strategic change?
? Which are failing?
? Which are potential harbingers of emerging / future marketplace?
? Competitor analysis framework: assets & capabilities, the organization, 
firm in the environment, mind set 
? Knowing current strategy is not enough - must identify future strategy
? Activity/value chain analysis must be future focused
? Identifying and assessing competitor's assumptions is extremely important 
(as well as own)
? "We over estimate what we are and under estimate what we are not"

An Advanced Intelligence Training Model, Lenny Fuld, Ben Gilad, Jan Herring
? "Aha! Means intelligence, not data"
? Data = unconnected bits; information = knowledge built by looking at 
several data points; intelligence = the implications of the organized 
information.
? Each industry as its own set of key drivers for costs; a cost driver is an 
extrinsic factor that affects costs; to analyze costs, you need to focus on 
the right drivers (ex: cost drivers of PG&E, fixed asset intensive, highly 
regulated)
? Question to determine cost drivers: is the competitor in the same 
business?  - apples to apples
? Competitor analysis based upon Porter's Five Forces - barriers to entry, 
suppliers, buyers, substitutes, rivalry
? Strategic options are those that fight the forces; reducing/fighting the 
forces is the essence of competitive strategy; anything that doesn't, isn't 
strategy
? CI's job is to watch all five forces
? 4 quadrant analysis: drivers, strategy, mgmt assumptions, capabilities
? 4 main CI questions every company needs to answer:
1. is the competitor happy? (w/ its strategy, position, etc. = degree of 
complacency)
2. what are the competitor's likely moves (what should the competitor do? 
What will the competitor likely do?)
3. what are the things your companies does that make the competitor really 
mad? (their hot buttons - these will cost you a lot of $ if things go bad)
4. what are the competitors blindspots? (where strategy doesn't fit reality 
any longer? If you know mgmt assumptions, you can know these)
? Parties that need CI = management as users, existing management procedures 
(operations), selves (CI people)
? Types of KITS (key intelligence topic questions): strategic issues & 
decisions (should be 40% of time), early warning topics (40% of time), key 
players - competitors, customers, others (20% of time) 
? Measuring CI/BI effectiveness: examples = time savings, cost savings, cost 
avoidance, revenue increase, value added, combined values, other.
? "foster cultural acceptance of intelligence activities"

CI and the Web: What We Know about Knowledge Management Over Distance, Bruce 
Kogut
? "Intelligence is more necessary now than ever before in business"
? Digitization of context
? Open sourcing - the Linux model: worked because of dislike of MicroSoft; 
"gift giving" culture between developers, modular development of software
? CI and "digital anthropologists": web is changing the coordination of 
space; control and ownership are not the same thing; social context is the 
challenge.

Developing a Successful CI Program, John Prescott
? Review of recent APQC study on CI
? Some sponsors of study: Entergy, Southern, Shell
? Usually a "critical event" ("Big Bang") happens to the company before a CI 
unit/function is initiated
? CI must be planted in the culture
? Key findings of study:
? CI structure emerges from Big Bang
? Need a well defined focus for CI
? Need a standardized process for CI
? Need a champion
? CI is a social process 
? CI needs to be supported by technical processes
? Need to build trust and credibility to be effective
? French model of CI = human network; practiced by Concordia

Executive Roundtable: Moderator; Max Downham, former VP, NutraSweet; 
Participants: Steve Necessary, CEO, PowerTV; William Maiola, VP, Coca Cola; 
Michael Pticher, VP B2B Marketing, i2go.com, formerly Nat'l Sales Dir for 
Bitney Bowes.
? Maiola: most useful intelligence is on emotions of competitor's decision 
makers; Coke has done a lot of scenario development; "everyone is in the 
intelligence business"; most appealing to executive users - what is your 
hypothesis? what is your insight?
? Necessary: follow the 3 B's - be brief, be reliable, be gone; E strategy = 
E competitive advantage.
? Pitcher: be sure to include in research  3 Ps: partnerships, people, 
passions. These influence decisions; question to ask - is it a signal or is 
it just noise?