Competitive Intelligence, Change, and Strategic Planning
In their book, The Social Life of Information, Brown and Duguid refer to Downes and Mui’s “Law of Disruption” (http://en.wikipedia.org/wiki/Law_of_disruption) which notes that “social, political, and economic systems change incrementally but technology changes exponentially.”
As Information Renaissance Leaders for the 21st century I believe that we need to understand and appreciate not only this concept but also other non-linear changes that can lead to disruption. Just remember that if you recognize a coming disruption in your industry, or even better if you are the one causing it, you have a competitive advantage to exploit.
The incremental change is easy to understand since it can be represented by a simple linear graph as shown below. Here it is easy to see that something slowly, consistently, and predictably changing over time. For the most part this is the kind of change as a leader you do not need to worry about since you can plan for it.
Now the exponential change is also not hard to understand and it can also be shown by a simple graph as illustrated below. The key difference in this graph is that the rate of change increases with time. As a leader this is a kind of change you need to pay attention to and gage or benchmark what you are doing against others so you know where you and your competitors are on the graph. However, notice that even though the change is becoming greater with time (and potentially more disruptive) it is still for the most part predictable so you can still plan for it. The key thing though is you have to recognize that the rate of change shortens your planning horizon, i.e., if you take too long to plan or make a decision, the rate of change may cause you to be behind the game. So as Tom Peters notes, you have to learn to love change.
In looking at both of the above graphs one thing that stands out is that they are continuous curves. Being continuous is a nice property since it makes things predictable. But what about curves that are discontinuous like the one shown below? What do they mean and why should we, as leaders, be concerned about them?
The important feature of this graph is that at some point in time the line stops and suddenly experiences a large jump all at once. Why is this important to us as leaders? I would suggest that a change like this is very disruptive because it can represent a drastic change in an industry. For example, this would have been representative of the effect of the change in transportation technology that took place back in the 1840’s and 1850’s when canals were essentially put out of business by the invention of the steam locomotive. This would also be illustrative of what futurist Joel Barker (http://www.joelbarker.com/) refers to as a paradigm shift. As an Information Renaissance leader this is the type of change we have to be on the look out for because it can occur very quickly and almost without notice but can have the effect of a tsunami if you cannot adapt to the change it represents.
So where does competitive intelligence enter into this? Well, for the continuous cases CI can provide information on what the changes are and how fast they are happening so as a leader you can develop a strategic plan to adapt to the change. So for these instances, CI essentially functions to keep you informed. For the discontinuous case CI becomes very important but also more difficult. The reason CI is very important in the discontinuous case is because it can act as the “tsunami” or “tornado” warning system so you can at least have some time to react if you are not the one causing the “wave”. The reason that CI is difficult in this instance is because you never know from what direction the wave will be coming so how do you detect it before it overwhelms you? This means that you have think about creating a paradigm shift of your own relative to doing CI. As information leaders this means that we have to look at not only information in new ways and how we make new knowledge connections with it but we also have to think of new and novel ways and places to look for it. For example, to have an idea of what new disruptive direction computers will take in the future we will need not only to look at conventional semiconductor technology but also areas of molecular biology or organic chemistry and to make things even more complicated we will need to do this all over the world.
So what does this mean for strategic planning? As an information leader it means is that CI becomes an important input to your strategic plan and that you are continually updating the strategic plan based upon your interpretation of the CI information. Also, as an information leader it also means that if you see a paradigm shift (a discontinuity) occur you have the courage and foresight to abandon your existing strategic plan and develop a new one that addresses the effect of the “tsunami-like” change that is happening.