Competing in the Knowledge Economy : The Knowledge Value Chain (KVC)

Still more ideas from the SCIP annual conference in Chicago…

When I work with internal corporate practitioners of intelligence or research, one of my first recommendations is to run their operation as if it were a stand-alone business.  That is, with clients (managerial decision-makers), suppliers (databases, contractors, etc.), and possibly even rivals of their own-both internal and external.  This helps them determine where the value for their clients is, and how to maximize that value.

Few of the internal practitioners I’ve met charge back for their services—so they are essentially “free” to their users on a transactional basis.  In those rare cases where there is a charge-back system, there is a market value assigned to the function.  People either pay for the service at the quoted price, or they do not.  The user is the judge of what value is received, and whether it was “worth it”.

However, absent this market mechanism—which has its own drawbacks—there is no direct measure of value for intelligence.  There must be some proxy for it—typically informal conversations or a survey at budget time to the effect—Is this function worth its salt, or not?

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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.

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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. Read the rest of this entry »

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. Read the rest of this entry »

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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