Knowledge Value Chain (KVC)

Last week I went on vacation with my “lifemate” Ellen and the rest of my immediate family.  We were on Cape Cod, MA, which is a pretty sophisticated area as far as vacation spots go, so I had assumed that there would be good Internet connections.

Wrong.  No Wi-Fi signals, only one bar (at best) of cell phone, and my cell-powered wireless WAN working only briefly on one very stormy morning.  (Thanks, Verizon!)

I started thinking maybe Ellen planned it this way.  Instead of reading various chat boards, calling people, and posting to my blog, I actually talked to my family and read some of those heavy paper things—oh right, books.

Ellen claims that “vacation” means not only do you vacate your usual PLACE, you also vacate your MIND—and that you can’t do that while constantly being on the phone and the Internet.  So I think she secretly engineered this—to save my sanity.  It’s scary to go “off the grid” for even several hours, let alone several days as I did.  There are stages:  first you panic, then you get angry…but then you start to care less and less, and so on.  Eventually, you settle into a deeper zen-like level based more on the sunsets and the tide patterns than on the latest news morsel.  I wouldn’t want to live there, but it sure is a nice place to visit.

White Swan at Wellfleet

But even if you get away electronically, it’s nearly impossible to totally escape the rush of events.  Especially if you’re a news junkie like me.

On one of the days (June 23, 2009) I was able to find a New York Times at the Brewster General Store in the afternoon.  So I sat down for an uncharacteristically leisurely read of the NYT (which is usually a hurried morning read followed quickly by the Wall Street Journal (for the financial detail) and the Financial Times (for the non-US perspective).

Usually a couple of headlines jump out at me each morning.  That day one did—“U.S. Scrambles for Information on Iran”.  About how, since we don’t have diplomatic relations with Iraq, we don’t have embassies.  No embassies, no embassy cocktail parties—apparently the most effective way we have of finding out what’s really going on.

Excuse me?  The US is said to spend around $60 billion a year on intelligence, and we don’t know in depth what’s going on in Iran?  A country that is in the nuclear “on deck circle”, working hard to be part of the world’s most powerful “club”?  (And which economically viable country isn’t?)  That is constantly threatening the USA’s de facto 51^st state, Israel?  That is in extreme political turmoil in a region where turmoil seems the coin of the realm?

How can this happen?  There’s a clue at the end of the article.  A former Middle East CIA analyst describes his duties as “You look at minutiae”.  NEWS FLASH:  If you’re looking at minutiae—small stuff that doesn’t matter—you’re inevitably going to produce intelligence that is small and doesn’t matter.  That’s OK as long as you have the big stuff too—but there’s always a resource tradeoff, and too often the day-to-day drowns out the strategic.

It’s not that our public servants are so incompetent.  Businesses have exactly the same problem.  The “I need it yesterday” fire drills often squeeze out the longer-term, in-depth looks at the forces actually driving the business.

Next time, to really safeguard my peace of mind, Ellen obviously needs to find a Cape Cod venue that blocks all electronic communications and newspapers.  Hey, didn’t a Harvard guy named Thoreau try that a century and a half or so ago?

A happy summer to you all!

More ideas from the SCIP09 conference in Chicago…

I’ve worked a lot during my career with business-to-business publishing and information services clients—and consider myself in that business as well.  There are basically two business models for this kind of information—customized and syndicated.

Customized information is that which is developed—often at great effort and expense—and which is highly tailored to the needs of a very small audience or number of “users”.  A consultant’s report is a good example.

Syndicated information is that which is developed—again often at great effort and expense—but that is intended to meet the needs of a much wider audience.  A magazine or a mass-appeal web site are good examples.

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Ideas from the SCIP09 Conference in Chicago…

When I was in business school, my dean (William Donaldson—who earlier in his career had founded the brokerage firm Donaldson, Lufkin, and Jenrette) had several homespun sayings that would guide those of us who knew him.  One of these was “You have two ears and one mouth—you can’t use them both at the same time, and you’d be wise to use them in that proportion.”

Listen more, talk less—what a concept!  When you get to be an “expert” in something, it’s too easy to talk without listening, thereby limiting your flow of new information to your own direct experiences.

Last week I attended the annual conference of the Society of Competitive Intelligence Professionals in Chicago.  I had given lectures and workshops for many of their recent conferences, but this time my role was different.  This time, instead of being the “expert”, my job was to moderate and guide a discussion (”Active Dialog”) of the intelligence practitioners in the room.

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“The death of one company is a tragedy; the death of one million is a statistic.”

Originally said of catastrophic human events, so it is too with “The Economy”.  It’s too easy to get lost in the quantified abstractions of the aggregate, and thereby lose focus on the realities that drive individual business enterprises.

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Now the tough get going.  The economy will come back—not because it decides to come back, but because we together make it come back.  How long this will take to happen, no one can say for sure.

This much is clear:  silly season is over.  Things like having not one, but two places on your block that serve expensive coffee that takes a long time to make, are over.  Things like getting funding for business models that are “cool”, but that have no hope of ever making money, are over.

Value creation doesn’t stop in a recessionary economy like this one—but it does change, sometimes dramatically and very fast.  Value can migrate from one economic sector another.  This is because each “value chain” interacts, and displacements in one—like you lost your job—cause displacements in another—like cutting out the overpriced coffee.

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In my last post “Our radar has failed”, I offered the view that the current financial crisis is actually more than that—it’s a crisis in the ways we use information to make business decisions.  We’ve obviously come to another “Where do we go from here?” moment.

So, where DO we go from here?

I’ve identified four guiding principles that I believe frame a way to move ahead in the ways we use information to manage our economy and society going forward.  These are Vigilance, Integrity, Transparency, and Accountability.  (Each is first defined below using Merriam-Webster’s Collegiate Dictionary.)

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Once again, our radar has failed.

The current financial meltdown is much more than a serious financial crisis. It’s even more than a crisis of confidence. It’s no less than a fundamental abuse of information and its pivotal role in our economy.

When our economy started in pre-historic times, we bartered for goods and services. Then money was invented—first stones, then metal coins, then paper—and finally, ledger entries. No less an expert than Walter Wriston (then president of Citibank) said over twenty years ago that the fundamental financial resource is now information.

Modern information technology long ago dwarfed earlier record-keeping methods. A typical teenager now carries with her several times the amount of data contained in the Encyclopedia Britannica. And these technologies gave us assurance that, to paraphrase the Who, “We could see for miles and miles.” With modern technology and record keeping methods, the story went, we could undertake transactions of far greater scale, scope, and complexity than ever before. And the “systems” would warn us if anything was wrong.

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I recently conducted a KVC Workshop for intelligence producers at SCIP08’s international convention in San Diego.  During the workshop I surveyed them about their biggest obstacles and problems in corporate intelligence.  We’ve been collecting and analyzing this kind of data now for several years—I call it the Intelligence Points of Pain (IPoP) database.

NEWS FLASH:  Intelligence problems and challenges are remarkably similar across different organizations, in different industries, in different countries.  Even as I compare Workshop results from different years, I find the results amazingly consistent.

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It was a weekday afternoon in the fall of 2007.  Though sitting at my desk, I was speaking “virtually” with about a hundred other people around the world who share my interest in corporate intelligence.  Specifically, I was midway through giving a live webinar (hosted by Aurora) on the Knowledge Value Chain®.

A chat message came through on the screen sidebar from the head of intelligence at a large US company.  She said her company was planning an all-day intelligence event, and they wanted to order one hundred copies of my KVC Workbook as a discussion guide for attendees.  This was the largest single order for the book to that point, on that basis I counted the webinar as a huge success.  We left it that she’d call back the following week to firm up the order details.

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Here’s an excerpt from my chapter in the new book Starting a CI Function (SCIP 2008.)

In each organization, the specific mission for intelligence, and the intelligence plan that supports that mission, will vary.  However, a set of “information deficiencies” that is strikingly similar across many organizations, across all industries, remains.  These include: 

• There is too much information “out there”, and often it’s hard to find. According to the search engine Technorati, the number of blogs is now over 93 million-with 175,000 being added each day. Not all of these have business value—but a surprising number do, and should be on your intelligence “radar screen”. And it’s only going to get worse. A recent study (”How Much Information?  2003“, School of Information, University of California, Berkeley) found that worldwide information production increased by 30 percent each year between 1999 and 2002.

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