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The Business Forum Journal

 

Learn Before You Burn
Leadership Demands Good Decisions the First Time

 

By Seena Sharp

 

Ask any management guru to define “leadership” and you’ll get an earful about how an effective leader must have a clear vision, communicate well, and be able to motivate and influence others to move the company forward. What is missing is the expectation of good decisions from the leader. Leadership is directly related to effective decisions - and competitive intelligence is the direct link between making smarter decisions and minimizing risk.

Leaders cannot succeed in a knowledge vacuum. They must anticipate and recognize all outside market forces that impact the business or industry as they are unfolding – and do so before competitors become aware of what’s changing.  In an unpredictable business environment, experience and gut are increasingly less reliable in a changing world. External input is no longer nice-to-know.

The renowned management consultant, Peter Drucker, stated “Ninety percent of the information used in organizations is internally focused and only ten percent is about the outside environment.  This is exactly backwards.”  What did he mean?  Opportunities and threats exist outside the industry.  A concerted effort to keep up with the external not only provides competitive advantage, it’s a relatively easy way to keep customers satisfied and to secure your company’s reputation as one that is current with market demands.

 

The last decade – and some say even longer – has borne witness to the collapse of many formerly successful companies. Does this suggest that the leadership did not possess the proverbial “right stuff?”  Or, did they just have a failure of the right intelligence so they did not see what was happening all around them?  After all, the signs are always there. The question is: Who will seize the advantage? Which company will notice the changes, analyze how it will impact their company, and prepare a strategy to successfully deal with the changes? 

 

This is what competitive intelligence is and the benefit it brings to your company. It provides the necessary input and basis for decisions that meet today’s needs and expectations. 

Many company failures can be attributed to the fact that executives looked at the wrong information and, therefore, made the wrong decisions that ultimately led to their downfall.  So, how do you elevate the level of intelligence to immediately improve the decision-making process and results?  Here are some tried and true methods:

 

1.    Expand your knowledge base. Look beyond competitors, who are only a small element of the forces operating on your bottom line. Customers (B2B and B2C) are far more important in determining what the market wants and what customers are buying – today and tomorrow. If competitors are so smart, then how do new companies (small, underfinanced, unknown) gain customers, sales, and traction?  Simple.  The new companies are satisfying a need that the existing, established companies do not recognize.  Don’t be misguided by the fact that these new companies are small and therefore, not a threat.  What’s important is WHY they are attracting customers. 

2.    Base decisions on intelligence – not data.  Intelligence is having the full picture, not just the statistical elements, which only reveal the past. Data doesn’t include the non-quantitative elements, which are often more relevant.  The right information is current, accurate, relevant, objective, and sufficient. But, wait; that’s not enough. The intelligence must be analyzed for understanding and implication for your company. Does it make sense for your firm?  Do you have the necessary capabilities (staff, distribution channel, etc.)?

3.    Don’t assume you “know” what the customers want. If they stay with you, continue to verify that they are satisfied.  If they abandon you, don’t blame them.  Find out what went wrong.  Too many executives claim to know what customers want better than the customers themselves.  And when the executive is wrong about his/her view of the customer, the customer is viewed as the problem and as being disloyal.  The reality is that the company has abandoned the customer by not improving or addressing customer concerns. Customers prefer to stay with the product or service they know and, once a customer, they will give you considerable leeway before defecting.

4.    Start by addressing what you do not know.  It is all too easy to dismiss or underestimate the importance of a knowledge gap.  Almost every company we speak with acknowledges that changes are pervasive and constant.  Yet, they can’t identify changes in their own industries or with their customers – or the changes they cite are old or incorrect.

For example, has a new company offered a successful product, service, feature that your company never considered?  Can you identify customers who don’t fit your target profile?  Has a company achieved success with a marketing approach that is atypical for your industry? Have you explored the possibilities from an alternative use, a way that your offering is used that is different from the company’s intent?

Management is often dismissive of their own “ignorance” and can’t imagine that they may be unaware of any information that is really important to know about their industry. This is a direct path to outdated assumptions and to decisions that don’t produce the desired results. In Rick Waggoner’s last days as CEO of General Motors, he blamed the economy for his company’s poor showing.  He still refused to recognize what customers wanted that GM hadn’t produced for decades. One final point; bigger, faster, and easier are rarely changes of significance outside of technology.

5.     Verify what you know, and make sure it remains relevant - still.  What you know might still be current and accurate; but it may no longer have the same import. Redefine to remain relevant. In that case, you have the opportunity to replace it with insight and intelligence that’s more relevant today. Like so many perishables, information has a shelf life; at some point it will be outdated or wrong, and, consequently, so will the decisions based on it.

Management and customers often differ in their views of product or service features.  The company must be in sync with the customer, not the reverse.

6.    Drill into every employee’s thinking that they must view your business from the customer’s perspective. Listen to their complaints, suggestions, alternative uses, and what they like – whether it refers to your offering, marketing, or customer service. The great thing about customers is that they tell the company – over and over and over again – what they want you to do to keep them as a customer.  You just need to listen and make appropriate decisions. 

7.    Take action.  Intelligence without a decision and execution is merely “nice-to-know.” If your company doesn’t act on market changes, another company will.

It really does not take much to become an “intelligence” leader who creates competitive advantage. Constantly challenge yourself to “think different,” and to challenge yesterday – all available with competitive intelligence.  It takes a leader to question what he knows, and to wonder what else he should know.  That shows true intelligence leadership.
 


Seena Sharp is a pioneer in competitive intelligence, founding one of the first companies in the United States, Sharp Market Intelligence.  They provide cutting-edge strategic intelligence to companies entering a new industry, expanding their line, targeting new customers or uncovering unknown customers, launching a new product, purchasing equipment, and finding alternative uses.  Their clients range from Fortune 500 firms to those who are not as familiar – in the US, Europe, Asia and Africa.  She spent her corporate years in New York City with four major companies, including BBDO Advertising and Equitable Life Assurance, while earning a masters degree in mathematics from New York University. She received the Fellows Award from her professional association.  John Wiley & Sons asked her to write the book on this topic, Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World. Seena speaks to corporation and business groups globally, and has written numerous business articles.


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http://www.sharpmarket.com


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