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Intelligence 2.0: Creating New Business Models–SLA 2009

SLA’s Competitive Intelligence division’s breakfast featured visionary speaker, Arik Johnson, CEO of Aurora WDC, based in Chippewa Falls, WI, home of Seymour Cray, founder of Cray Research.

Asymmetric information models are passé and information interpretation is NOW: the ability to understand and anticipate! The open source world and resultant information glut makes analytics and interpretation all the more important. This practice will help you make decisions more quickly than the competition.

Arik shared three trends in Intelligence:

1. Human capital and collaboration – (this is a lot like cooperative intelligence that I preach)!

2. Corporate Governance Oversight – it’s a priority to ensure the reliability of earnings forecasts, yet difficult to predict the unexpected

3. Disruptive & Value Innovation – predict the outcome of competitive battles by anticipating product/strategy dynamics

During his talk Arik had us all squirming as he posited that many of the models and processes that we use to collect competitive intelligence and conduct our various forms of analysis–including voice of the customer and market research–do not lead to innovation. So often these processes concentrate on what customers “want” rather than what they “need,” and they don’t know what they need.

He feels that “fear based” CI concepts like Porters 5 Forces are not as effective as they were developed during the Cold War when it was “us versus them.” He notes that KITs, KIQs and the CI cycle are incomplete for much the same reason: fear based.

Success breads complacency. In the same vein continuous product improvement is too gradual and companies don’t take enough risk in product development. Many companies are crippled by their culture and slowness to adapt to market shifts or create change!

Innovation is most easily defined as productivity. Yet innovation is a sloppy process. Employees innovate most readily within a culture of “learning and growing from mistakes” rather than being punished for making mistakes. According to Larry Keeley, 96% of innovative attempts fail. You need errors to innovate, lots of them!

Here are a couple of tippers from Disruptive Innovation Theory that Arik shared:

Look at different performance measures: where do you see non-consumption? Be willing to put up with less good performance in order to find growth opportunities. Learn how to articulate the truth in ways that management will listen (cooperative leadership).

Arik outlined 5 great practices to encourage innovation (RECON):

1. Risk – Learn how to protect your core (cashflow) while creating anew

2. Efficiency- Be ruthless: when assets become sunk costs, sell them or divest that business

3. Customers – Don’t be too dependent on your best customer’s input. They will tell you why the product was good enough yesterday. You are looking at tomorrow!

4. Outlook – Typically market is research is outdated…only one in seven products survives for one year. Develop based on customers’ needs which they are not great at articulating.

5. Novelty – Differentiation is key. Create less imitable values, products etc. Kill “good” ideas to focus on the GREAT ideas.

For more details about using Innovation in business development, Arik recommends Seeing What’s Next: Using Theories of Innovation to Predict Industry Change  by Clayton Christensen.

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