How CI Priorities Shift in a World of Zero Sum Competition

The Intelligence Collaborativehttp://IntelCollab.com #IntelCollab

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How CI Priorities ShiftIn a World of Zero Sum

Competition

A Complimentary Webinar from Aurora WDC

12:00 Noon Eastern /// Wednesday 30 November 2016

~ featuring ~

Nat Brooks Derek Johnson


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Nat Brooks

Nat Brooks is the Principal of Strategy Shapers LLC and Managing Partner of SynFiny Advisors. Prior to his current positions, Nat spent 25 years in Fortune 500 management roles in finance, operations, strategic planning, and competitive intelligence. From 2005 to 2012, Nat built Procter & Gamble’s Competitive Intelligence organization, which today is an 850 member global community of practice responsible for competitive analysis, early warning, technical intelligence and strategic analysis.

Through Strategy Shapers LLC, Nat works with clients in a wide range of industries, from consumer products and healthcare to manufacturing and basic materials. He focuses on organization development, intelligence best practices, and war gaming. As Strategy Practice Leader for SynFiny Advisors, Nat leads strategy development and market viability engagements with a wide range of clients. He also helps Midwest area start-ups with business research, business planning and funding pitches.

Nat’s affiliations include: Aurora WDC G2; ASP (Association for Strategic Planning); and SCIP (Strategy & Competitive Intelligence Professionals) Nat is a frequent writer and speaker on the topics of business strategy and competitive intelligence. His articles have appeared in Competitive Intelligence magazine, reconverge.net, and evoke.pro. He blogs at strategyshapers.com.

Email: [email protected]

The Intelligence Collaborative is the online learning and networking community powered by Aurora WDC, our clients, partners and other friends and dedicated to exploring how to apply intelligence methods to solve real-world business problems.

Apply for a free 30-day trial membership at http://IntelCollab.com or learn more about Aurora WDC at http://AuroraWDC.com.


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Agenda

► Welcome to the Age of Zero Sum Competition► Will it continue?► Adapting Intelligence to help Companies Succeed


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Disclaimers

“It’s difficult to make predictions, especially about the future…”

A Danish Proverb often attributed to Neils Bohr or Yogi Berra


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How did we get here?


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Three Driving Factors?

Eco-demographic

s

The Control Dream

The ROI Fetish


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Premises► Eco-Demographics: People are the fundamental raw

material behind prosperity and the most prosperous human populations have peaked.

► ROI Fetish: Our fascination with “return-on-investment” largely drives business decision making.

► Control Dream: Despite a life of change and evolution in our midst, we crave predictability and control and this ambition is often the paramount objective for the organizations and processes we build.


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ECO - DEMOGRAPHICS


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Source: UN and CIA World Factbook


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Source: UN and OurWorldinData.org


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Source: OECD Population Data, St. Louis Federal Reserve Statistics as analyzed by Chris Hamilton at ECONIMICA.BLOGSPOT.COM


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Looking at population as Consumers is

a proxy for estimating

their “wealth contribution”

… fewer producers = less wealth.



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Net additional wealth

production of 0-45 year olds drops to $0.0

by around 2030.



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ECO - DEMOGRAPHICSTHE ROI FETISH


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Ben Franklin meets Bill Gates

“Money makes money, and the money that

money makes, makes more money.”


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Classic Financial Decision Making

$100 Million Investment Option $200 Million Investment Option5 Year Return Expectations 5 Year Return Expectations

PV Cash Flows = $190 Million PV Cash Flows = $300 MillionGoing Revenue = $50 - 70 Million Going Revenue = $80 - 120 Million

ROR = 15% ROR = 12%

Which is the better investment?


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The ROI DilemmaDiscipline

Accountability

DataContext

Deceptive

Goal Seeking

Flawed Assumptions

2 DimensionalTransparent

Rational Irrational

Linear


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ECO - DEMOGRAPHICSTHE CONTROL DREAM


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The Utopian Dream of Business Organization


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Management Science?


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Stuck in 2 Dimensional Space…

The Consultant’s View The Engineer’s View


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No Small Problems

Fragile Supply Chains

Lack of Human Fulfillment

Change ManagementComplexity

Diminished Responsiveness

Announcing the Consulting Software Patch … “The Agile Enterprise”

CODE RED


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Diminishing Economic Raw

Material

Linear Financial

Objectives

Fully Optimized Organizations

Why the Battle is Harder…


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Why the Meek Disrupt…

Established Companies Entrepreneurs / Startups

o Reliant on the “macro”o Corporate culture “de-

institutionalizing”o Market share growth critical

Eco-Demographicso Doesn’t care about “macro”o Attracts creatives and risk takerso Absorbs underemployed assets and

people

o Earnings cycle tyrannyo Increasingly risk averseo Rational choice is “more of the

same” and / or optimizationThe ROI Fetish

o Capital is plentiful and cheapo Has NO ROIo Only direction is UPo Big or Bigger is rational choice

o Change management cost growso Risk management as way of lifeo Optimization promises best ROIo Morally less attractive

The Control Dreamo Doesn’t care … yeto Pivot as a way of lifeo Action compels prioritieso Morally more attractive


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An Intelligent Intelligence Response

► FINANCE FIRST► FINANCIAL PERFORMANCE RISK ASSESSMENT► SUPPLY CHAIN RISK ASSESSMENT► OTHERS


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Finance First!• You need to understand

the accounting in your industry and among your competitors…

• You need to understand to key performance metrics leaders are expected to deliver…

• You need to understand how buyers and sellers value your industry and your rivals….

EBITDA?

Velocity?Revenue

Accounting? Free cash flow?

Gross Margin?Value Chain

Assessment?


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Financial Performance Risk Assessment• What is the math behind

your rival’s commitment to investors?

• What has to be true?• What happens if the rival

fails to deliver?• Where are the key risks /

opportunities for us?• How can we exploit those

risks?


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Financial Performance Risk AssessmentIn the case of merger or acquisition, you need to understand the critical “improvement levers” that new leadership will push to deliver ROI……and then figure out how to exploit the situation!


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Supply Chain Risk Assessment• Where are rival’s supply

chains most likely to break down?- Quality /

Performance?- Logistics?- Finance?- Physical location?

• How can we prepare for and take advantage?


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And much more…

Strategic versus Tactical?

You have to win battles if you want to choose future battlefields!


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Thank you! Now how about a little Q&A?

Email: [email protected]

Web: www.strategyshapers.com

Twitter: @strategyshapers

The Intelligence Collaborative is the online learning and networking community powered by Aurora WDC, our clients, partners and other friends and dedicated to exploring how to apply intelligence methods to solve real-world business problems.

Apply for a free 30-day trial membership at http://IntelCollab.com or learn more about Aurora WDC at http://AuroraWDC.com. See you next time!

How CI Priorities Shift in a World of Zero Sum Competition

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Transcript of How CI Priorities Shift in a World of Zero Sum Competition