Jeffrey Immelt’s Ideas on Renewing America’s Competitiveness

As we approach this Independence Day in America, my cooperative spirit pushes me to share Jeffrey Immelt’s ideas about how to renew America. Jeff Immelt, CEO of GE is one of America’s stewards of leadership and innovation and I highly recommend that you view his talk given in late June 09 at the Detroit Economic Club.

America has a myriad of economic problems, not the least of which is it has moved from a technology-driven manufacturing economy to one that is services oriented. We are known as a country where CEOs are viewed as short-term speculators, which has been re-enforced by our “leadership” in the financial global meltdown. There is something seriously wrong when “a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is earning $100,000.”

Jeff thinks the US needs to create an industrial renewal as follows:

1. Invest in new technology

2. Win where it counts in Clean Energy and Affordable Healthcare

3. Become a country that’s good at manufacturing and exports

4. Embrace public/private partnerships

5. Encourage leaders that are also good citizens

During this recession, GE has not reduced its R&D expenditures, which are pegged at 6%, while the US average is only 2% of sales. In 2008, GE exported $19 billion and plans to increase exports each year. GE is partnering with local government to fix the US educational system by investing at inner city schools to improve math and science since only 4% in the US study engineering, which often produces innovators.

GE has two great initiatives to stimulate innovative product development: “eco-imagination” and “health-imagination”. Eco-imagination focuses on alternative, clean energy development and renewable energy products as well as making better use of traditional energy sources. One initiative is a GE + Duke energy coal degasification plant project. America is like the Saudi Arabia of coal supply! Through innovations in health research, GE will launch hundreds of new products in the next few years to reduce the cost of healthcare, particularly in areas like infant care and mammography.

GE invests $1B per year in training. One way this has paid off is that their educated locomotive teams reduced the time it takes to manufacture a locomotive from 100 days to 20. Jeff’s talk is full of these examples of “can do”, which I think is missing from America’s fabric in these tough times.

GE practices what it preaches: it changes with the global demand for its products. Over 50% of what GE produces today didn’t exist 10 years ago. GE will introduce more new products during this recession than any time in its history.

Big business needs to fund small businesses to invent and in the supply chain to compete globally. He states that as “Business leaders we are responsible for the competitiveness of our own country.” This comes from a free marketer and Republican. I wish more of our country’s leadership felt this way. The US is at a competitive disadvantage globally since the private and public sectors are often at odds and do not cooperate like they do in most other countries in the world! The US needs to welcome government as a catalyst for leadership and change. Look at all the creativity and innovation that came from NIH and NASA over the years. The government can be creative and foster cooperation!

I’ll conclude by sharing that Jeff is practicing what he preaches: GE is investing $100 million to develop a manufacturing lab near Visteon Center in the Detroit metro. This will provide 1200 professional jobs to start. Jobs will focus in three areas of innovation: advanced manufacturing technology including applications in aviation and energy products; software applications such as the smart grid; and a training program for information technology. GE is working with the public sector in Detroit and drawing talent from MI universities, in addition to the local work force.

I hope more of America’s leadership adopts Jeff Immelt’s attitudes and practices so America can once again feel proud. US competitiveness will only improve as we become a more self confident society. America’s consumer spending is not going to pull us out of this recession: this alone is not sustainable! America’s business investment in technology, innovation and value-added manufacturing will.

Todd Wille, Turnaround Leader Extraordinaire, A Cooperative Leader

Todd Wille returned to his previous employer, Unify Corporation, a California-based application development, database and migration products company. The date was August 21, 2000 and Unify was in terrible shape.

The former CEO had committed securities fraud & the FBI was investigating.

Major international customers were taking their business elsewhere.

If current trends continued, the company would run out of cash in 90 days.

The stock had dropped from a high of $42 to $1. Employees were demoralized and afraid.

It is interesting to watch great managers rise to the occasion when events are so incredibly stacked against them. Todd adopted many cooperative intelligence practices as he delved into the company’s severe problems and seeked solutions with urgency!  Cooperative intelligence integrates leadership, connection and communication and so many of Todd’s decisions and actions blend these together.

Cooperative Leadership

Todd had to act with urgency since the company couldn’t even afford to pay legal fees to file for bankruptcy. He set his priorities to stop customer defections and earn the trust of his employees. He took immediate steps to regain customer’s trust and confidence and maintain the trust of his employees.

Cooperative Connection

First he appointed the head of customer service to be VP of sales. Who better to connect with customers since he already had earned their confidence and trust?

Second, Todd personally met with key customers and listened to their concerns.

Third, he insisted that product development connect with customers instead of just supporting old products, and use customer input to build new products.

Fourth, he connected with employees weekly during this difficult period.

Cooperative Communication

The VP of sales called, listened and reassured customers that the company was putting practices in place to save the company.

Todd listened to his customer’s concerns and acknowledged them publicly. He put himself in their shoes and mentioned if they changed vendors it could be a long, complicated process.

Todd communicated the absolute truth without filters in his weekly employee meetings with the entire company. Remarkably only 1 staffer left voluntarily during this difficult 18 month period.

A key moment was how Todd handled himself when a customer told him, in front of a large group of other customers, that he was uncomfortable, “signing a $100,000 contract for the following year” since he wasn’t sure Unify would still be in business the next year. Using the full array of cooperative intelligence skills – leadership, connection and communication–Todd answered, “You’re right to feel the way you do. But if you don’t sign your contract, I will be out of business, and your worry will become reality. Then your company will have to find another supplier for database development tools, and it will unfortunately be a long, complicated and potentially expensive process.” His customer agreed to stay with Unity right in front of the group; as did many other customers in time which brought in the badly needed cash flow to survive.

In the last three years, Unify has made 3 acquisitions that have tripled its size, added software tools and solutions and expanded its customer base, which now includes a who’s who of the most admired global companies.

The American Business Association named Todd Wille, CEO of Unify Corp, the best turnaround executive for 2008. Cooperative leadership works!

Read people’s comments on this great turnaround story in Marketing Profs.

Develop Proactive Competitive Intelligence through Business Blindspot Analysis & Executive Personality Profiling

I attended SLA’s annual conference in DC last week where I was reminded about the slow death of print media as I walked around the exhibit hall and noted how much more information is imparted digitally.

I taught a couple of courses on competitive intelligence analytical tools. In the spirit of cooperative intelligence I will share two analytical tools and how using them together can be empowering: business blindspots and executive personality profiling to predict where a company is going, and will use these tools to illustrate the slow death of print media.

In business blindspots, you seek to uncover the biases of your company, competitors or co-workers and recognize that you have them too. We all have blind spots based on our experience in life! When you combine this with executive personality profiling, you can come up with some insightful conclusions.

Here’s one that surprised me. I have been a Wall Street Journal subscriber of both the print and on-line editions for many years. News Corporation’s Rupert Murdoch acquired The Wall Street Journal in Dec. 2007. He has revamped the paper to vie more directly against the New York Times in content. In fact I even get almost the identical on-line news alerts from both papers within minutes of each other.

Here’s News Corporation’s blindspot: they thought I would pay over $400 per year for the print version of The Wall Street Journal when I paid $199 last time which included on-line access. Maybe they thought business people wouldn’t notice since their companies pay for their subscription. Like many I watch how I spend my money in these tentative economic times. I let my subscription lapse.

At a time when on-line media is gaining on print media, and we have a recession The Wall Street Journal raised its price! I couldn’t believe it and wondered what weed they were smoking…that is until recently when I got an invitation to subscribe to both the print and on-line versions of The Wall Street Journal for $149 per year. Presumably they had lost some market share with their inflated rates, and not just to digital media!

If you research & analyze Murdoch’s personality and leadership, you would expect him to intend to improve the profitability of The Wall Street Journal since it has not been contributing to Dow Jones’ profitability in recent times. However, you would also learn that Murdoch is a savvy businessman and is into his media investments for the long-term.

When I decided to discontinue my subscription, I strongly suspected that I would get a better deal, and I did. If I didn’t I wasn’t going to read The Wall Street Journal since I do read the New York Times on-line. I wonder how many subscribers walked like I did and didn’t renew even at the lower rates since they were so incensed by The Wall Street Journal’s doubling of its rate in one year when many of our 401K accounts have been reduced to 201K status!

This is a very simple example in my life, but you can often predict company’s actions, including your competitors by analyzing their leadership and uncovering their business blindspots. Happy Summer!

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.

What’s the Future of SCIP and the Competitive Intelligence Profession?

I’m just back from a holiday in Barcelona, Cadaqués and Southern France, mostly the hill town of Itzac where family lives. As often happens I had time to reflect on recent happenings in my life.

I feel like one of my rocks, SCIP has shifted in my absence due to the merger with Frost & Sullivan’s Institute.  I have been an active member since 1990, participating in most annual conferences, served on its board, helped found the Minnesota chapter. I am a columnist for CI Magazine and have given presentations at most SCIP conferences since the mid-1990s. So you get the drift: I am committed to the CI profession and to SCIP.

How did we get there? I think the reasons are deeper than our weak economy, although it is a contributor.  Competitive intelligence is not recognized enough to keep SCIP afloat on its own.  Corporate members increasingly conduct competitive intelligence as a part of their job, but many are not full time practitioners.  This is also true for many consultants and academics who teach competitive intelligence, often as part of an MBA or other Master’s program.

Many companies include competitive intelligence as part of other business functions which are well defined: product planning, strategic planning, marketing, PR, sales, R&D, but CI really isn’t perceived as a discipline in many companies.

When SCIP was formed in 1986, it was the only game in town, but now there are competitive intelligence divisions and / or CI programs within other organizations such as SLA (Special Libraries Association), AIIP (Association of Independent Information Professionals), American Marketing Association, and Marketing Research Association to name a few.  SCIP has perceived these groups as competitors and has felt more threatened by them rather than acting cooperatively and partnering and learning from them. SLA has implemented a competitive intelligence certificate program within its CI Division, which has been very successful, while SCIP is still working on a certification program. SCIP also competes with social networks where participants act and react quickly to events like the CI Ning, LinkedIn groups and Twitter for written communication on competitive intelligence.

For SCIP to survive, even with Frost’s infusion of cash, it’s imperative that SCIP turn on its marketing machine with urgency and reach out to companies and individuals and educate them on the compelling value of conducting systematic CI.  Many don’t get this and just do CI on an ad hoc basis, when they feel pain.  I know this since I’ve been consulting for a while and mostly get called in when companies are having trouble.

CI needs more recognition in the academic world. I am not a professor, but I know that what people learn in school, they often use at work.  If CI is strongly marketed to schools as part of the curriculum in undergraduate and graduate business programs, this will help the profession and SCIP both. A scholarly journal would be another step in credibility for the academic community.

I came home and spent hours pouring over the posts that had been added on the CI Ning particularly two of them:

SCIP F&SI Moving Forward

Interest in Starting an Online-Only CI Academic Journal?

I hope that SCIP’s leadership is reading the CI Ning. There are so many good ideas posted, so SCIP has a great opportunity to listen and query these individuals more closely and engage them to be part of the solution.

Let’s Hear it for Librarians in Competitive Intelligence!

Our CI Ning brings out so much discussion in competitive intelligence.  Here is one point I shared recently and it bears repeating: I would like to support the role of librarians in the CI field. Often in competitive intelligence there is so much confusion about what we do, that we ram our way into places where we don’t belong somewhat in desperation.

We can learn from librarians about good service, which is a lot what I believe is behind the practice of cooperative intelligence, which promotes a spirit of giving by integrating the practices of leadership, connection and communication.  Many of us in CI are very good at digging up good insightful data and providing relevant analysis.  We’re not so good at the human issues of connection and communication, which is where librarians run circles around many of us.  They learn about this in librarian school both as undergrads and in master’s programs.

Many librarians don’t have extensive analytical skills, while some do.  I have been disturbed over the years by how some in our field seem to put down the library science field, when it’s the first step in most CI projects, and the librarian can be one of the major sources of fuel to feed the CI process so we can spend more time connecting with primary sources and doing the analysis and communication to help our companies be more competitive.

I learned to value librarians back in 1985 when I started our CI function at Bell Atlantic, now part of Verizon. Our corporate librarian was an important part of my CI team, and she threw more good stuff my way…yes, this was before the Internet, email and voice mail…now librarians can do so much more, and watch a librarian connect on social networks. This is just an extension of what they already have been doing for years.

I think these are some of the reasons that SLA’s CI division is so successful.  Librarians get where their role is in the company, that it’s evolving and provide it with a spirit of service and giving. They also know what they don’t know and learn about it: that’s where CI fits in and why SLA’s CI certificate program has been so successful. Another reason is it was developed and executed by a seasoned CI professional, Cynthia Cheng Correia who understands librarian’s needs since she also has her MLS.

Competitive Intelligence Starts with Your Company

I was recently invited to help a customer improve their competitive intelligence process.  I traveled to their headquarters and was given a grand tour of their plant operations and new R&D facility.

The HQ is a lovely building, not too fancy yet decorated with fine art and photography from the owner’s collection and world travels. The management team was warm and positive even in these tough economic times. Their cafeteria served fresh food, and is near the workers, who mostly work on the first floor where the plant is located.

The plant was tidy, and the VP who showed me around was proud of his workers and their operation. The plant had deployed lean manufacturing and most of the employees were cross-trained so they could do “the assembly of the moment” with some exceptions for specialized work. The Just in Time inventory implementation had greatly reduced the company’s need for storage, so much so that there were empty areas at their plant which one year ago had been bursting at the seams.

The owner of the company really cares about his employees, and practices cooperative intelligence, even though he doesn’t call it that. Here’s an example: they’re headquartered in a small town, not that close to a major city. He built a medical clinic for his employees so they would have better medical care since they could walk to it from work. His staff figured out how many hours the clinic should be open for optimal use. Next to the clinic, he put in a gym since the doctor and nurse practitioner recommend exercise programs for employees as preventative maintenance. The workout machinery can be programmed to track an employee’s exercise program. Healthy employees are happier and more productive.

What I really admire about this owner is his combination of caring about the employees while watching the bottom line. Previously, employees would go without care for longer than they should since medical care was too far from the office. Now they routinely visit the doctor when they are ill, and also for maintenance. Medical expenses for the company have decreased in the year since he opened the clinic. It’s also professional in appearance just like you would expect at a regular doctor’s office.

You can just imagine how good morale is working at this company, where its leadership is supportive of employees, has a “can do” approach, and promotes open communication throughout the organization.

Often in competitive intelligence we’re so busy looking externally at the competition and market conditions that we forget to consider how we can improve our own operation by investigating ourselves. Before I look at a company’s competitors, I always like to take a long look at the company which hired me. Their operation, including their management’s behavior and motivation, becomes my yardstick to consider as I learn about the competition.

Are We in a Rut in Competitive Intelligence Innovation? #SCIP09 Post-conference

scip-09-chicagoKen Sawka of Outward Insights led this dialog for our friend, Bill Fiora at #SCIP09’s annual conference in Chicago last week.  Bill had a bike accident which kept him home in Boston. The dialog was a follow-up discussion from Bill’s post on our Competitive Intelligence Ning.

We listed many of the common competitive intelligence tools and techniques such as Porters 5 Forces, 4 Corners, War Games, Scenario Planning, SWOTs and competitor profiles.  There hasn’t been much innovation among competitive intelligence tools and techniques that anyone was willing to share.

The innovation that people shared was around process which involved social networks and more sophisticated monitoring and analysis tools. The cost of information acquisition is really inexpensive today even compared to 10 years ago, so companies can afford to text mine and use tools that provide visualization at a reasonable cost.

Another discussion was around trust: management listens to individuals they trust to get strategic intelligence, such as McKinsey.  This is the kind of relationship we in competitive intelligence need to develop with our management through dialog where we become valued. We need to deliver high quality products that address business needs. Ken told a story about a consultant who listened and advised one of the company’s executives on the Friday before the executive held his Monday monthly briefing. He didn’t charge for this time, but he did gain the executive’s trust. This relationship building supports the practice of cooperative intelligence which integrates leadership, connection and communication.

Ken shared another story where a Best Buy manager openly shared that each of its 983 stores used Web 2.0 technology such as a wiki to share day to day store operations, mystery shopping observations, sales results, and all kinds of good scoop, and how this became part of the company’s DNA. I wasn’t surprised since this is how the retail industry works: it’s more of an open book since you can freely walk into your competitor’s store and buy products and assess their service. Another attendee suggested that Best Buy might have implemented more advanced Web 2.0 processes since sharing their story. A participant in the pharmaceuticals was reluctant to share his company’s Web 2.0 practices since this industry is more secretive due to long lead times to get products approved by the FDA and out to the market place.

We concluded that industry norms can be a deterrent to sharing innovation.  However, as we build our human networks and develop trust, we often share our innovation with others, either one on one or among a smaller group. The Council on Competitive Analysis and Liam Fahey’s Knowledge Leadership Forum were sited as two examples of groups with trusting relationships where innovative competitive intelligence practices are shared.

One fear that some expressed is that we could be replaced by artificial intelligence as described in Jeff Hawkins and Sandra Blakeslee’s  book On Intelligence.

We concluded with a couple of questions:

1. How do we more effectively improve our value?
2. How do we quantify and communicate the benefits of competitive intelligence?

What do you think?  I’ll be blogging about #SCIP09 sessions this week.  Speaking of innovation, look for a summary of Competitive Intelligence Foundation’s book on Competitive Technical Intelligence (CTI) just released at SCIP 09.

Think Before Win Loss Analysis: Stay Connected with Your Customers Before the Sales Event!

I’ve been talking about the sales intelligence practice of win loss analysis a lot lately. It’s the process of interviewing your customers to find out why you REALLY win or lose business, and is one of the best values for collecting market intelligence from your customers. You can get ideas for product development, competitive intelligence, changing account reps, realizing that customers don’t value what you thought they did…the list is as endless as your imagination if you stretch it.

However, many people just interview customers when they have lost business. Be practical: How long will it be before you can do business with them again, unless this loss just represents a portion of the business you do together?

Interview wins since they will give you ideas for product development, and they are interested in maintaining a relationship with you, especially if you can offer products that better meet their needs over time.

Especially in these tough economic times, take the time to develop even deeper relationships with your customers to boost retention rates. This is a key cooperative intelligence practice since your account reps or inside sales will be seen as leaders, connectors and communicators, while the competition won’t since they may be operating with a reduced sales headcount.

If you have the cashflow, don’t lay off your sales force or inside sales: keep them busy connecting with your customers. Here are some processes that you might include in their hardship job description in addition to their periodic account visits:

1. Interview customers one month or a reasonable interval after implementation of the product or service. Keep them happy and engaged, right from the beginning. Work with your marketing and product development people to include some open ended questions so they can vent and you learn what’s on their minds without the bias of closed ended questions.

2. A year after implementation, interview your customers again. They will have had a chance to use the product or service enough to have formed some strong opinions. Listen to their ideas, and let them know that you are considering or have made changes to your product or service based on their feedback. Include open ended questions about market trends, new technology and the competition so you don’t get blind sided.

3. Six months to a year before the contract expires, come back to the customer with another set of questions concerning the product/service, your customer service, you know the drill. Your goal is to influence them to stay with you, and they will be more tempted since you’ve been staying in touch with them…and this is not a last ditch effort just before the sale.

The point it: don’t wait for the sales event and then conduct win loss analysis interviews afterwards to find out what you’re doing right and wrong. Include this as part of the account planning and sales follow-up processes and watch your customer retention soar!

What have you included in your sales intelligence process to increase customer retention in these tough economic times?

Be notified when our book, Win/Loss Analysis: How to Clinch and Keep the Business You Want is published.

Persuading through Competitive Intelligence Tools: the Cooperative Angle

Using Tactical Competitive Intelligence for Decision-Making alluded to the chart below, minus the weighting scales of this Company Comparison analysis. Recall this analysis portrayed and compared the top 3 PBX manufacturers according to customers’ top reasons for buying PBX equipment. These comparisons addressed the strengths that our key dissenter claimed for ROLM, but also illustrated some of the weaknesses that he was not previously aware of. The analysis supported the key dissenter showing that customers were very impressed with ROLM’s technical features. But since ROLM’s architecture differed from the other systems on the market, our installation, maintenance, and repair crews would have to be specially trained to support it, at additional time and expense—news to our key dissenter.

customerweightfeatures

This chart weighted each reason for the customer’s buying criteria. 1 is the highest or most important reason for buying. Customers highly valued Northern Telecom’s (Nortel) reliability and good service, which were perceived as average for ROLM. Our dissenter changed his mind when shown that customers’ buying decisions were minimally swayed by technology but hugely influenced by service and reliability, Northern Telecom strengths, not ROLM’s. With this presentation, the dissenter realized that his reasons for acquiring ROLM were not accurate from a customer’s perspective.

The Cooperative Angle

Our analysis allowed our key dissenter to change his mind with dignity, and illustrates cooperative intelligence practices as follow:

Cooperative Leadership: We acknowledged the leadership of our key dissenter by finding out his reasons for preferring a ROLM acquisition. On the flip side, our leadership skills were valued by our management since they trusted us to conduct the acquisition analysis.

Cooperative Connection: We connected with the key dissenter and addressed each of his reasons point by point, showing respect and acknowledgement. We connected with the right people both within our company, Sales; and outside the company, a reputable consultant, to gather the right information to put together a persuasive analysis in “executive speak”.

Cooperative Communication: The presentation to our executives consisted of just 3 charts which told the story persuasively and understandably: The BCG Matrix Share, The Telco Company Analysis Chart and lastly the Customer Weighting Chart. We could tell a story with each chart which built upon the preceding chart. People like stories, and I notice stories make it easy to avoid ego conflicts. Using the customer’s decision-making criteria rather than our opinions, was a gentle, yet persuasive way to communicate our analysis.

Don’t be so persuasive that you forget about the dignity of the people you are addressing. Tell a good story that leads them to your conclusions, as though your audience had thought them up themselves. This works with everyone I have ever addressed regardless of profession or culture.

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