How CI Priorities Shift in a World of Zero Sum Competition

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How CI Priorities Shift
In a World of Zero Sum
Competition
A Complimentary Webinar from Aurora WDC
12:00 Noon Eastern /// Wednesday 30 November 2016
~ featuring ~
Nat Brooks Derek Johnson

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Nat Brooks
Nat Brooks is the Principal of Strategy Shapers LLC and Managing Partner of SynFiny Advisors. Prior to his current positions,
Nat spent 25 years in Fortune 500 management roles in finance, operations, strategic planning, and competitive intelligence.
From 2005 to 2012, Nat built Procter & Gamble’s Competitive Intelligence organization, which today is an 850 member global
community of practice responsible for competitive analysis, early warning, technical intelligence and strategic analysis.
Through Strategy Shapers LLC, Nat works with clients in a wide range of industries, from consumer products and healthcare to
manufacturing and basic materials. He focuses on organization development, intelligence best practices, and war gaming. As
Strategy Practice Leader for SynFiny Advisors, Nat leads strategy development and market viability engagements with a wide
range of clients. He also helps Midwest area start-ups with business research, business planning and funding pitches.
Nat’s affiliations include: Aurora WDC G2; ASP (Association for Strategic Planning); and SCIP (Strategy & Competitive
Intelligence Professionals) Nat is a frequent writer and speaker on the topics of business strategy and competitive
intelligence. His articles have appeared in Competitive Intelligence magazine, reconverge.net, and evoke.pro. He blogs at
strategyshapers.com.
Email: natbrooks@strategyshapers.com
The Intelligence Collaborative is the online learning and networking community powered by Aurora WDC, our clients, partners and
other friends and dedicated to exploring how to apply intelligence methods to solve real-world business problems.
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Questions, Commentary & Content

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Agenda
►Welcome to the Age of Zero Sum Competition
►Will it continue?
►Adapting Intelligence to help Companies Succeed

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Disclaimers
“It’s difficult to make predictions,
especially about the future…”
A Danish Proverb often attributed to Neils Bohr or Yogi Berra

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How did we get here?

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Three Driving Factors?
Eco-
demographics
The
Control
Dream
The ROI
Fetish

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Premises
►Eco-Demographics: People are the fundamental raw
material behind prosperity and the most prosperous
human populations have peaked.
►ROI Fetish: Our fascination with “return-on-investment”
largely drives business decision making.
►Control Dream: Despite a life of change and evolution in
our midst, we crave predictability and control and this
ambition is often the paramount objective for the
organizations and processes we build.

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ECO - DEMOGRAPHICS

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Source: UN and CIA World Factbook

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Source: UN and OurWorldinData.org

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Source: OECD Population Data, St. Louis Federal Reserve Statistics as analyzed by Chris Hamilton at ECONIMICA.BLOGSPOT.COM

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Looking at
population as
Consumers is
a proxy for
estimating
their “wealth
contribution”
… fewer
producers =
less wealth.

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Net additional
wealth
production of
0-45 year olds
drops to $0.0
by around
2030.

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ECO - DEMOGRAPHICSTHE ROI FETISH

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Ben Franklin meets Bill Gates
“Money makes money,
and the money that
money makes, makes
more money.”

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Classic Financial Decision Making
$100 Million Investment Option $200 Million Investment Option
5 Year Return Expectations 5 Year Return Expectations
PV Cash Flows = $190 Million PV Cash Flows = $300 Million
Going Revenue = $50 - 70 Million Going Revenue = $80 - 120 Million
ROR = 15% ROR = 12%
Which is the better investment?

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The ROI Dilemma
Discipline
Accountability
Data
Context
Deceptive
Goal Seeking
Flawed Assumptions
2 DimensionalTransparent
Rational Irrational
Linear

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ECO - DEMOGRAPHICS
THE CONTROL DREAM

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The Utopian Dream of
Business Organization

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Management Science?

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Stuck in 2 Dimensional Space…
The Consultant’s View The Engineer’s View

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No Small Problems
Fragile Supply
Chains
Lack of Human
Fulfillment
Change
Management
Complexity
Diminished
Responsiveness
Announcing the Consulting Software Patch … “The Agile Enterprise”
CODE RED

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Diminishing
Economic Raw
Material
Linear
Financial
Objectives
Fully Optimized
Organizations
Why the Battle is Harder…

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Why the Meek Disrupt…
Established
Companies
Entrepreneurs /
Startups
o Reliant on the “macro”
o Corporate culture “de-
institutionalizing”
o Market share growth critical
Eco-Demographics
o Doesn’t care about “macro”
o Attracts creatives and risk takers
o Absorbs underemployed assets and
people
o Earnings cycle tyranny
o Increasingly risk averse
o Rational choice is “more of the
same” and / or optimization
The ROI Fetish
o Capital is plentiful and cheap
o Has NO ROI
o Only direction is UP
o Big or Bigger is rational choice
o Change management cost grows
o Risk management as way of life
o Optimization promises best ROI
o Morally less attractive
The Control Dream
o Doesn’t care … yet
o Pivot as a way of life
o Action compels priorities
o Morally more attractive

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An Intelligent Intelligence Response
►FINANCE FIRST
►FINANCIAL PERFORMANCE RISK ASSESSMENT
►SUPPLY CHAIN RISK ASSESSMENT
►OTHERS

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Finance First!
• You need to understand
the accounting in your
industry and among your
competitors…
• You need to understand to
key performance metrics
leaders are expected to
deliver…
• You need to understand
how buyers and sellers
value your industry and
your rivals….
EBITDA?
Velocity?
Revenue
Accounting? Free cash flow?
Gross Margin?
Value Chain
Assessment?

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Financial Performance Risk Assessment
• What is the math behind
your rival’s commitment
to investors?
• What has to be true?
• What happens if the rival
fails to deliver?
• Where are the key risks /
opportunities for us?
• How can we exploit
those risks?

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Financial Performance Risk Assessment
In the case of merger or acquisition, you need to understand the critical
“improvement levers” that new leadership will push to deliver ROI…
…and then figure out how to exploit the situation!

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Supply Chain Risk Assessment
• Where are rival’s supply
chains most likely to
break down?
- Quality /
Performance?
- Logistics?
- Finance?
- Physical location?
• How can we prepare for
and take advantage?

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And much more…
Strategic versus Tactical?
You have to win battles if you want
to choose future battlefields!

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Thank you!
Now how about a little Q&A?
Email: natbrooks@strategyshapers.com
Web: www.strategyshapers.com
Twitter: @strategyshapers
The Intelligence Collaborative is the online learning and networking community powered by Aurora WDC, our clients, partners and
other friends and dedicated to exploring how to apply intelligence methods to solve real-world business problems.
Apply for a free 30-day trial membership at http://IntelCollab.com or learn more about Aurora WDC
at http://AuroraWDC.com. See you next time!

How CI Priorities Shift in a World of Zero Sum Competition

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How CI Priorities Shift in a World of Zero Sum Competition