October 2004

No. 034

"Selecting What Needs To Be Known"

One difference between failure and success in market intelligence is not how much you know, but rather how much you know about what is important. And figuring out what is important to know about - which is to say what is important that will directly help you reach a particular objective - is one of the trickiest, least understood, most underrated jobs in the world. It is not enough to think we know what is important as knowing. What is required to do this job is not so much an expertise in one or another specific subject or issue, but rather the ability to recognize what factors will influence that specific subject or issue. Anyone who knows how to determine what needs to be known to reach one objective can also determine what needs to be known to reach any other objective. Anyone who knows how to determine what needs to be known to support one issue can also determine what needs to be known to support any other issue.

Market intelligence and intelligence professionals have this special expertise. Indeed, other intelligence professionals without this expertise are not professionals. Such professionals always begin with the objectives outlined by the CEO or policymakers they serve. Okay, they say to themselves, so we know where they want this organization to go; so, what, then, does he need from us?

Inevitably, some of the things that the CEO or policymakers will need to know will be obvious. For example, let us say the CEO of a US based widget manufacturer wants to increase sales of its company's widgets. His market intelligence system would need to assess the prospects for growth of the widget industry while maintaining security of proprietary knowledge or internal fraud. So how does a CEO protect themself from internal fraud, let us say which resulted from an aggressive pursuit of goals set forth by managing executives and inadequate monitoring of distribution and return policies? The answer is market intelligence. Less obvious is that market intelligence system's need to assess the prospects that third-world widget producers will move into the widget business; as such, a move would spell trouble for the US widget manufacturer, since production costs are generated much lower in the third world.

Or, to use a government example, let us say the President of the United States makes clear that his objective is to strengthen the free world's ability to defend against terrorism attacks on free-world countries. Obviously, his intelligence service would need to assess those countries military capability versus free-world ability to defeat such an attack. Less obviously, the President's intelligence service would need to assess China's military capability and also reach a judgment on how the Chinese would react in the event of a terrorist attack on the United States or Western Europe.

This kind of thinking leads rather quickly to a second set of considerations. And it is within this second set that intelligence makes an especially useful contribution. Let us go back to our two original examples. As for our US based widget company's hopes of selling more widgets to the widget industry; this CEO's market intelligence system had better be assessing developments in the fast-moving composite materials industry. The company's future competitors may not be third-world widget producers at all, but manufacturers of composite materials that will entirely replace widgets and in one instance wipe out the widget industries in both the United States and the third-world.

On the other hand, an assessment of terrorist strength would be necessary to achieve the President's objective of enhancing the free world's ability to defend itself against terrorist military attack. But what factors will influence the terrorist strength? One key factor is the public support among those opposed to freedom and free world countries and the military expenditures required by terrorist alliances; as well as, the US and the free-world to sustain the enormous military expenditures for the necessary strength of effectively defending the free-world countries. And this support is, to a large extent, dependent upon the free-world unemployment rate rises and public expenditures for public benefits increases, which means less money is available for military and homeland defense.

The ability to think about subjects and issues in a multidimensional way enables market intelligence and intelligence professionals to answer the key question: What does the CEO or policymakers need to know to achieve their stated objective? Again, it does not require expertise in one or another subject or issue so much as it requires expertise in identifying those factors that will affect a given subject or issue. This is a complex, difficult, continuous, energy-consuming, time-consuming, cost-outlay sort of process. It cannot be done effectively by a CEO or policymakers. It is not that the CEO or policymakers are not smart enough or capable. It is simply that they do not have the time or trained expertise. So what remains is the most critical subject or issue of selecting what needs to be known.

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