Can competitive intelligence comply with six-sigma?
On first glance, CI could not possibly conform to six sigma principles, as by definition, CI analysis involves interpreting information that is variable and uncertain. On this basis, there is no way that CI could ever achieve the 3.4 defects per million six-sigma standard.
Issur Harel, the first head of the Israeli Mossad, is reported to have said “We do not deal with certainties. The world of intelligence is the world of probabilities. Getting the information is not usually the most difficult task. What is difficult is putting upon it the right interpretation. Analysis is everything.” This came to mind for this question – how can you guarantee the right interpretation? All you can do is give a probability estimate, with caveats that take into account the unknowns and the inherent variations that are inevitable when trying to understand organisational and human behaviour.
However some aspects of the CI process can also follow six sigma principles.Six sigma aims at exceeding customer expectations, by reducing errors wherever possible at each stage of the value chain. This should also be the aim for all CI functions?
Define the problem
So, how would this work in practice?
First, accept that the end-deliverable is always going to be uncertain. However the steps to the end don’t have to be. Certain processes should exist that will reduce the levels of uncertainty in the end product. These start right from the beginning of the CI cycle, with the key intelligence topic / key intelligence question identification process.
A six sigma CI function would ensure that all CI collection efforts are linked to relevant key intelligence topics, and furthermore, that the organisation recognises the importance of defining their KITs. CI analysts would work with decision makers, in an ongoing process to ensure that these were identified and prioritised. This would mean that less time was wasted looking for information that would never be used in decision making, and thus considerably improve productivity – a key six sigma goal. Also, by focusing on the organisation’s intelligence needs, the business would be providing decision makers with the timely information that its decision makers required.
Following on from the KITs, there needs to be a definition stage, where the topic is broken down into its components, or key intelligence questions, and a plan devised to answer these. Again, insisting on this – will help reduce variability, as the process will force analysts to think more carefully about what is needed, how it can be obtained and how it can be analysed.
At the same time, not all aspects of the process can be systematised. Flexibility and creativity need to be encouraged for an effective CI process – that may involve multiple sources and collection / analysis procedures, that vary according to the particular business requirements.
Finally, following data analysis, results need to be presented to the end-user in formats that empower decision-making. Thus these should also be pre-specified for each project. These steps will ultimately help reduce the costs of competitive intelligence – and lead the CI analyst towards their six-sigma certification.
Measurement and Analysis
Alongside the above steps, some effort should be placed on looking at the CI processes actually used.
- How much time is spent searching the Internet for data, when more targeted approaches could be used, or where primary research is needed, but avoided (perhaps due to the added cost, or lack of elicitation skills in the team)?
- What sources are currently used?
- What sources are available for use? (In some organisations these are very limited: failing to use all relevant sources is likely to lead to poorer, less effective and more error-prone CI).
- What is the general state of knowledge within the CI team and the organisation as a whole?
Each of these should be studied, and the aim should be to ensure that money is not wasted on ineffectual research, the use of inappropriate tools, with inadequately trained staff. As part of a six-sigma CI function, it is essential that staff keep up-to-date with their CI knowledge – through attendance at courses, conferences, and the general reading of relevant literature. This may increase the CI department’s training budget, but the dividends should be seen in the results – with reduced variability in the time taken to complete projects, the understanding of what is happening, and the results presented to the end-user.
Improving the CI function the six- sigma way
One of the problems with the six-sigma concept is that it involves a degree of cultural change. The same will apply to a six-sigma CI function. It would no longer be possible to wait for the end user to come and ask questions, but instead a degree of anticipation, and pro-activity, would be required. Furthermore, the CI staff would need regular training so that they keep up to date in all aspects of the CI process.
Alongside these steps, the CI department should also ensure that end-users know what to expect and when, and be warned of any potential complications well in advance. This way, end-users will start to learn what can be delivered, and what can’t – and how long it will take. The objective should be to reach a stage where end-users feel that they cannot make any decisions regarding the competitive environment without having these validated by the CI function first – a state where the CI end-users really value CI as a critical input for decision making quality.
Controlling the process
Having gone through the above steps, there is a final stage that is required: to ensure that the process stays in place.
If anything, this will be the most difficult stage. The reason is that as the users increasingly realise the importance of CI, the higher their expectations will be. So, part of the process must also be to ensure that end-users are taught about CI, and what is involved. There needs to be organisation-wide support for the CI function, with a budget for research and training so that the knowledge and skills gained are maintained. For the CI team, there needs to be frequent interaction and communication with end-users to ensure that KITs are kept updated, and that deliverables continue to match expectations.
Achieving Six Sigma
More and more corporations are adopting six sigma methodologies for their processes. The cost of poor quality is now recognised as being a significant overhead – and the same applies to CI. Failing to adopt best practices means that businesses risk making bad decisions based on poor intelligence. The impact on corporate bottom lines of such decisions will be considerable, so CI and a six-sigma approach is crucial, with the following caveats:
- The actual concept of 6σ as a physical measure of CI quality probably won’t be applicable. You can’t get to a state where errors are this low in the intelligence produced or collected – but you can certainly work on improving the processes so that the only real variations in what CI delivers are those that are directly attributable to the ultimate purpose of CI i.e. understanding and anticipating changes in the external environment.
- There is a risk that information obtained outside the process may be discarded – just because it fails to fit in to a current KIT or intelligence need. This is extremely dangerous as sometimes such information – rumours, hearsay and many other types of information – may prove to be extremely important as an indicator of change. Such information can be a key early warning signal that something new or different is happening and accordingly it should not be ignored without adequate analysis.