Early warning : using competitive intelligence to anticipate market shifts, control risk, and create powerful strategies

List of Tables and Figures xi Preface xiii Acknowledgments xv Part One: Companies at Risk 1 Chapter 1: Surprise! 3 Surprise Attacks 4 The Supremacy of Internal Convictions 6 Blind Executives? 7 Can Companies Do Better? 9 Manager’s Checklist 11 Chapter 2: What Do You Know About Strategic Risks? 13 The Various Types of Risk 13 The Most Neglected Risk 17 Top Teams and Top Problems 20 The Case of Yahoo! 21 Manager’s Checklist 22 vii viii Contents Chapter 3: The Internal Dynamics of Early Warning Failures 24 Technology “Golden Boys” 24 Polaroid 29 Lucent 37 The “Old Economy” and the “Light Brigade” 42 The Old Economy—Procter & Gamble 42 The Light Brigade—Levi Strauss 46 On Early Warning Failure and the Big Consultants 50 Manager’s Checklist 52 Chapter 4: The Analytical, the Tactical, the Couch Potato, and the Blind 55 Manager’s Checklist 62 Part Two: The Competitive Early Warning System 65 Chapter 5: Step 1: Identifying Risk (and Opportunities) 67 Thinking Systematically About Risk 71 Industry Change Drivers 72 Scenarios 75 Industry Changes and the Elusive “Strategy” 77 Prioritizing Risk 79 Summary: Identifying the Highest Risks 85 Chapter 6: Step 1, Continued: War Gaming 88 Consultants Out, Discipline In 90 Choosing the Right Type of War Game 92 The Curse of the SWOT 95 The Blindspots Identification Methodology (BIM) 97 What Does It Take to Uncover Competitors’ Blinders? 100 War Gaming and Risk Prioritizing 103 A Sample War Game Agenda 103 Chapter 7: Step 2: Intelligence Monitoring 108 From Risk Identification to Risk Monitoring 115 The Monitoring Network: Who Watches What? 122 Contents ix So Who Is a Good Monitor? 126 An Internal or an External Network? 127 The Disaster of Executives’ Networks 131 The High Reliability Organization (HRO) 132 Chapter 8: Step 3: Management Action 134 Management Action Failures 135 A Test Case 137 Handling SPMS and MLMS 141 Maximizing the Effect of CEW’s Deliverables 142 Management Alerts 142 Needs to Know, Wants to Know, What’s the Difference? 144 Executive Briefings 146 Should the BOD Be Briefed Too? 148 Alerts I Would Have Written If I Were . . . 149 Alerts That Should Have Been Written . . . 152 Options and Recommendations 157 Never, but Never, Give Them Data 158 What MBAs Don’t Know but a Biblical Tribe Knew 160 Evaluation Committees 162 Tripwires 164 Brief Conclusion Regarding the CEW 165 Manager’s Checklist—Chapters 5–8 166 Part Three: Early Warning at Work 169 Chapter 9: Case Studies of CEW in Action 171 Model 1. Very Large Global Company, Complex Operations: Citibank—Clean Windows 172 Activities on the Three Steps of the CEW Model 174 Weaknesses (and a Note on Silly Benchmarking) 179 Strengths 181 Model 2. Large Company, Several Related Businesses, Long Product Cycle: DASA—Early Warning German Style 182 Activities on the Three Steps of the CEW Model 183 Weaknesses 190 Strengths 191 x Contents Model 3. Small Size, Domestic Company, Single Product: Pergo North America—The Little Engine That Could 191 Activities on the Three Steps of the CEW Model 193 Weaknesses 198 Strengths 199 Model 4. Very Large Division, Multicultural Company: AstraZeneca—A Cerberus SEWS 200 Activities on the Three Steps of the CEW Model 202 Model 5. Global Company in High-Risk Environments: Strategic Early Warning—The Shell Example 208 What Are We Looking For? 209 Who Does What? 210 How Are We Organized? 210 How Do We Communicate? 216 How Do We Identify and Manage Risk? 219 Cultural Predeterminants of EW 228 Manager’s Checklist—Case Studies 229 Chapter 10: If You Start from Scratch . . . 231 Culture and the CEW 234 CEOs and CEW 236 Other Organizational Considerations 242 Who Makes the Best Strategic Risk Analyst? 246 The Best Practice for Raising First-Rate Strategic Risk Analysts 250 Manager’s Checklist 251 Epilogue 253