Analyzing Competitive Intelligence
Hilary McLellan

Too much of anything is not good. Too much ice cream will kill you. I don't think the issue is too much information. More important is decision overload. We believe that every person, or organization, can only make so many competent decisions in a given amount of time. Up until the point that we change our biology, there are some fixed limits on the speed by which we individually process information. However, there are enormously powerful tools by which we can extend the amount and extend the capacity of, for example, how information is organized. The simplest example is our telephone numbers. Why do they come in a grouping of three and four instead of just throwing all seven at you. It's because you can't remember seven very easily, but you can remember three and four. That's a primitive example of what might be called chunking information. We can handle more information if we can chunk it, and we can chunk it at higher and higher levels of complexity, and we can employ better models of organizing information. If you have powerful models, you can just handle a lot more. Alvin Toffler Keeping things simple is profoundly misunderstood. If you begin by honoring the social mind, you engage in what I call cognitive judo. You let the world do more of the work for you. Follow the principle and things that were hopelessly complicated actually start to straighten out in a very interesting way. John Seely Brown, Director of Xerox PARC Very often, people confuse simple with simplistic. The nuance is lost on most. Clement Mok

Introduction

Analysis is important at all stages of the competitive intelligence cycle, but it is especially important at the stage of analyzing and synthesizing the intelligence that has been gathered. The twin processes of analysis (taking things apart) and synthesis (putting things together) are vitally important. And evaluation --- assessing the results of the analysis and synthesis of intelligence --- is also essential. The key is to make the complex clear. As Bill Jensen explains, "our biggest limit is no longer the reach of our imagination. It's our ability to order, make sense of, and connect everything demanding our attention...how we create clarity." (p. 6)

Analysis (Taking apart)

• Divides a whole into component elements.
• Gives reasons and specific evidence to support an argument.
• Analysis is logically sequenced and coherent; provides closure.
• Reflects awareness of reader's questions or alternative evaluations.
• Identifies components of a process.
• Analyzes components of an argument, elements of an event, etc.
• Identifies components of expository and persuasive discourse
• Compares properties of objects, components of processes
• Compare causes and/or effects of separate events, trends, and other phenomena
• Given a generalization, recognizes/explains the evidence that relates to it
• Infers themes, significance, motivations of human behavior and other phenomena.
• Identifies interrelationships of elements.
• Offers depth and breadth of analysis.

Synthesis (Putting together)

• Composes or combines parts to form a whole.
• Combines diverse elements into a coherent whole.
• Combines thesis and antithesis in a dialectic that leads to greater understanding.
• Integrates information systematically.
• Maps the interrelationships of evidence and explains reasons in support of a conclusion.
• Given the evidence/details, comes up with the generalization.
• Identifies several possible perspectives from which evidence/data might be viewed.
• Makes connections between stories in memory and newly encountered stories/incidents
• Identifies links and common patterns.
• Demonstrates ability to negotiate meanings and construct understanding.
• Articulates effective causal structure in integrating/synthesizing information.
• Effectively draws upon personal and/or institutional memory of problems and their solutions.
• Synthesis provides closure --- an endpoint that is satisfying both cognitively and emotionally.
• Demonstrates good design features of coverage, coherence, uniqueness, and goodness of fit.
• Shows ability to thinks about mental models and the implications/side effects that they entail.
• Demonstrates flexibility of ideas, fluency of ideas.

Evaluation (Judging the outcome)

• Evaluates soundness of procedures, credibility of conclusions, significance of findings.
• Evaluates credibility and significance of arguments, decisions, reports.
• Evaluates believability, significance, form, completeness, clarity.
• Judges quality, credibility, worth, or practicality.
• Use established criteria (rules of evidence, etc.) and explains how criteria are or are not met.
• Establishes criteria for judging/verifying the value or logic of ideas, models, theories.
• Specifies goals and constraints, generates alternatives, considers risks and evaluates and chooses best alternative.

Models

In the process of analyzing, synthesizing, and evaluating the intelligence that has been gathered, models can be a valuable tool. Models help to make the complex clear.

Gladwell (2000) presents a fascinating model that is derived from biology --- the spread of an epidemic --- and applied this model to the spread of ideas, behavior, messages, and products. I believe that this model --- about patterns of influence and adaptation --- is especially relevant to competitive intelligence, which is why I have assigned Gladwell's book as a textbook. This book has the added benefit that it presents case studies --- examples of how the epidemic model applies to the analysis of information and patterns in a wide range of contexts. Gladwell's (1997) article about "The Coolhunt" is highly relevant to understanding this model so please read it --- I think you will find it very interesting.

Another model that has come into prominence in recent years that has significance for competitive intelligence is chaos theory. Chaos theory originated in the sciences but it has been perceived to have widespread implications across many domains. This theory attempts to explain the fact that complex and unpredictable results can and will occur in systems that are sensitive to their initial conditions. A common example of this is known as the Butterfly Effect. It states that, in theory, the flutter of a butterfly's wings in Africa could effect the air flow and ultimately the weather patterns in other parts of the world. According to chaos theory, it is possible that a very small occurance can produce unpredictable and sometimes drastic results by triggering a series of increasingly significant events. The theory of chaos explains in terms of a mathematical model how ordered systems break down into chaotic systems. In complex, non-linear systems, small-scale changes in patterns, at critical points, can generate huge chaotic dynamics, with unpredictable long-range effects. This is related to the epidemic model put forward by Gladwell, where the emergence of people with certain personality types (natural pollinators) can have enormous influence on the spread of ideas, trends, and other phenomena if they get involved at certain critical points. Competitive intelligence analysts might be called upon to try to advise how to trigger this kind of pattern in a business context, for example the release of a new product.

Another type of model that can be useful in analyzing intelligence is the narrative. Stories are pattern systems. Stories represent a basic and powerful universal form through which people make sense of the world and their experiences. On a very simple level, stories are interrupted routines. Describe a routine and then interrupt it. Interrupting a simulation, or causing a slight alteration of a prototype to interrupt the routine of its planned use, is a powerful technique for generating new narratives.

Stories originate in problematic situations; they show the way out of these situations. Great stories provide us with a road map or treasure map, which outlines all of the actions and tasks we have to accomplish in order to complete the journey successfully. Stories also provide a toolkit for solving all of the problems that have to be solved along the way. We tell stories to eliminate suspects: who did what when or what caused this technical flameout? Good stories make you feel you've been through a satisfying, complete experience. Stories are a form of "expert system" for remembering and integrating what we learn. Stories are thought machines, by which we test out our ideas and feelings about some thing and try to learn more about it. Rafe Martin, author of the Cluetrain Manifesto explains, "Narrative is a complex, powerful, and mysterious tool, certainly one of the oldest technologies on the planet. Deep in the psyche, the world itself is a tale. Every story partakes of this mystery, every telling renews some recognition of this fundamental delight. At a practical level, stories provide us with given ways to organize, test, and simulate in the mind universal patterns of thought and behavior."

Creating a story or scenario can be a useful way to test different models, different interpretations of intelligence. Dennis Stearns explains, "Scenario learning is about understanding the past, but taking a whole, fresh look at how the future might unfold and making sure that you understand all the different ramifications of what are called 'future worlds.' We often get locked into what we think is one future because it's simpler for us to think of things as linear--what will and won't unfold and when. In reality, however, there are so many decisions we make that tie into what may be completely, radically different futures." (quoted in Opiela, 2000) Stearns further explains, "Scenario learning is as much about getting more in tune with things that might dictate the future as it is about forecasting the future. It helps in the forecasting, of course, but it's much more useful on the learning side." This is highly relevant to competitive intelligence.

1. Structure: Beginning, middle and end.
2. Rhythm: Rhythm of expectation and satisfaction. The rhythm is linked to structure. Stories set up an expectation at the beginning, which is elaborated or complicated in the middle, and satisfied at the end (closure).
3. Coherence: Selection and organization of information supports the structure, makes the meaning clear.
4. Purposefulness: Stories are purposeful.
5. Information relevance: there's no extra baggage.
6. Stories make your subject more real through examples.
7. Stories provide audience engagement.
8. Stories make information memorable.
9. Stories are persuasive, compelling.

Thus, stories are important not only for analysis, but for communicating the results of the competitive intelligence process to decision makers in a compelling way.

References

Daly, J. (2000, September 26). Interview with Alvin Toffler. Business 2.0.
Gladwell. M. (2000). The Coolhunt. The New Yorker.
Gladwell. M. (2000). The Tipping Point: How Little things Can Make a Big Difference. Boston: Little Brown.
Jensen, W. D. (2000). Simplicity: The New Competitive Advantage. Cambridge, MA: Perseus Press.
Opiela, N. (2000, January). Dennis Stearns: From Games of Chess to Financial Planning. Journal of Financial Planning.