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The Development and Use of Business Intelligence (2 of 10)

If networking isn't 'working' don't be surprised. In this series of ten articles I will explain Business Intelligence and how to use it. In this second article I discuss the importance of information quality and timing.
Written Apr 03, 2009, read 990 times since then.
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In the first article in this series, we defined "information" and established its importance. In this article, we will discuss the importance of informaiton quality and timing as well as the vital role of "friends" and networking.

The Quality of Information

After gathering information, how can we be sure it is both valid and reliable? For example, if you take your temperature and the thermometer says your body is at 100 degrees, how do you know if it's right or wrong? Perhaps you would get another thermometer and try again. If both of them read 100 degrees, you might be confident that your temperature is indeed, 100 degrees. However, what if one of them registered 100 degrees and the other one 98.6 degrees? Which one is right? Which is wrong? Perhaps they are both wrong but they certainly cannot both be right. You could then use a third thermometer and once again take your temperature. If the third reading concurs with one of the other two you can determine which thermometer is not working correctly (an inference that may or may not be correct but is probably correct).

To make life, or business altering decisions it is prudent to have at least three sources of information (answers to our questions) before we can suspect the information is valid and reliable. Even if two are congruent and one is not, you now know which of the measurements is more likely to be incorrect. We will soon discover this principle holds true for our business intelligence system as well.

According to Sun Tzu, an executive, business owner, salesperson or even a parent who takes advantage of competitive efforts to gain wealth, fame, or simply get their way, but does not spend the time and money for information about the situation, competitors, or customers is inhumane. You should be asking, "How can not spending time and money for information be inhumane?" Here's how it happens. We prepare for a sales presentation for days or weeks but the presentation takes only minutes. We prepare to win a contract for weeks but the proposal takes only a moment. We spend hours considering a negotiation and the argument lasts an hour. To ask our salespeople, negotiators, and customer service people to go into "battle" with limited information is the hallmark of leadership incompetence. It is inconsiderate, inhumane, and inexcusable. If we are to spend our resources to face a competitor, compete for a contract, save a relationship, or make a sale, we must first ensure our success and only then marshal our resources. To win before fighting requires intelligence of the highest order. As you can see, sending people into battle with unanswered questions is mismanagement.

The key to information is that it must be timely. Timely information alone makes decisions effective or ineffective. Imagine if you had the winning lottery numbers - for yesterday's lottery. You have the right information but it's too late. Knowing which horse will win the race after it's over is at least as useless as not having the information and possibly more dangerous. How many times have you thought of the "perfect retort" after the argument? Having the right information (the answer to our question) is important, but timing is everything. In order to make sound, competitive, business decisions we need the right information at the right time.

This is why we cannot rely on the media for our information. Not only is the media often used for misinformation, but also by the time something makes it into a trade journal or other media format, it's too late. Insiders have already acted on good information and seized the opportunity. While the media can be used to guide us toward the areas in which to direct our information sources, it cannot be depended upon for making decisions. Frankly, only the truly misguided makes decisions based upon what they read in the papers, magazines, or trade journals. This type of person is not a leader of a company or of people and should be relieved of their command immediately. Anyone that has bought a "hot stock" they saw on the news has learned this lesson the hard way. Yes, you can get lucky taking such tips on occasion, but we cannot put the future of our business, and people's livelihood, in the hands of luck. The reason "insider information" is illegal is because it is the only reliable information.

 

Conduits of Information (Friends)

Although Sun Tzu refers to "spies," we must not consider them with suspicion in the modern context. Their ends are not devious. Their role is to gather and manage relevant information about your rivals and competitors with the purpose of preventing or ending conflict quickly, and hopefully, peaceably. People with privileged information are therefore called "agents."

From the perspective of Sun Tzu, agents have a higher purpose and are willing to put themselves at risk to stop damaging conflict and possibly save people's lives, jobs, and reputations. In the "Art of War" Sun Tzu uses the term gaan, which is closer to a "go-between" or a conduit of information rather than a "spy" in the James Bond sense. After all, we're talking about information channels not ninjas.

When considering the use of agents we must also understand that conflict and competition does not affect only ourselves or even our company alone. If a company is overcome by a competitor and must close its doors, the lives of all those employed are devastated. When a sale doesn't go through, the company and the prospect are both deprived of the benefits. The police use informants to arrest criminals without bloodshed. If we can get past the superficial label of what an agent is, we can employ them for the greater good.

With the knowledge gained from agents a leader is able to more quickly, and at less cost in every sense of the meaning, avoid or put an end to conflict. The leader can drive off the competition rather than force them into bankruptcy or put themselves out of business. They can make the sale based on sound information rather than by cutting prices. Remember the aim of classical strategy is not to "beat" competitors. It is to build a strong position and achieve success without fighting. For the classical strategist, fighting with rivals is seen as a failure of strategy.

It is for this reason that a humane and caring leader makes use of agents. What is inhumane is refusing to use agents in order to save money or abide an unexamined moral position about their use. This is why in classical strategy we title them as "Friends" rather than agents. For this is what they truly are, our friends in a mutual pursuit of a higher ideal. They sometimes risk their jobs, relationships, careers, and reputations in the pursuit of being the kind of person who has strong beliefs about this world and acts on them through self-sacrifice. For this, we owe them our gratitude, appreciation, devotion, and just rewards.

As can be discerned, only a sage commander, a true leader, can properly employ agents. When people determine that our motives are just, our intentions are honorable, and they are rewarded appropriately, they willingly become our friend and agent, our "go-between." If they feel a leader has lost his or her way and has become a tyrant or brute, the people turn against them and seek out those who would bring justice upon them. When your cause is noble it will engender support and loyalty. When your cause is selfish or malevolent, it will break the bonds of your "friends" and your business will crumble.

Certainly, there are agents that have nefarious and greedy goals. These agents can be used like any other. However, their life as an agent is short and their gains are rarely realized. Some potential agents will come to you in an effort to gain more power or wealth. Some simply want to settle a score from a former relationship. Although these people can be made use of as agents, it takes a wise leader to know when and how to effectively use them. Only the seasoned strategist should attempt such a relationship. For all others, a quick departure of ways is well advised.

To fulfill our information needs we must seek out diverse sources of intelligence. Most of us associate with others like us. If you are a plumber, you hang out with fellow plumbers. Democrats join other Democrats and Republicans meet with fellow Republicans. The danger here is that people like us only know what we know. If we don't know something, they don't know it either. There is no opportunity for real intelligence gathering. An old saying states that if we both agree on everything, one of us isn't necessary. The purpose of finding friends (conduit's of information) is to obtain a 360-degree view of the market. Without such agents, we are like the blind men and the elephant.

Join me in the next article where I reveal the five "friends" every business needs to remain competitive in any market.

Strategy & Leadership Coach 
Long Beach, California 
Allan Elder

Allan Elder spent 2 years of post graduate study while working on his doctorate at Claremont Graduate University studying information theory and is a master trainer for the Science of Strategy Institute.

Learn more about the author, Allan Elder.

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