This document summarizes a presentation on organizational reconnaissance and intelligence given by Arik Johnson and JP Ratajczak. Some key points discussed include: - The need for intelligence to evolve in response to new threats rather than strategy driving intelligence. - The concept of "stochasm" as the difference between what is known and unknown in intelligence. - Three trends driving business evolution: human capital/collaboration, governance/risk oversight, and business model disruption. - Porter's five forces model and different competitive strategies like guerrilla, flanking, offensive, and defensive. - The importance of understanding non-customers and looking beyond the current business for disruptive innovation opportunities.

1. Intelligence & Organizational Reconnaissance
IAFIE 2014
Mercyhurst University – Erie Pennsylvania
Tuesday 15 July 2014
Arik Johnson
Managing Director, Center for Organizational Reconnaissance
Founder & Chairman, Aurora WDC
JP Ratajczak
Senior Manager – Intelligence Systems, Aurora WDC

2. U.S. Intelligence Community
Failed to Evolve
Unexpected new threats
from non-traditional enemies
like al Qaeda emerged on the
geopolitical stage in the
vacuum of America's return
to international economic,
political and cultural
hegemony after the end of
the Cold War.

4. Strategy should be a
Response to Intelligence
Not the other way around…

5. 5
STOCHASM
The difference between
what you think you know and
what you actually know.
Intelligence lives in this chasm, creating new knowledge
AND
disputing false assumptions.

6. Three Key Business Trends Driving Business Evolution
Human Capital & Enterprise Collaboration
Everyone in the Firm becomes a Virtual Member of the
Intelligence Apparatus, Better Engagement by Rank &
File, Shared Visibility of Issues & Actions
Corporate Governance & Risk Oversight
Board-level Priority Ensuring Reliability of Management’s
Earnings Forecast & Assessing Risks to Status Quo
Business Model Disruption & Value Innovation
Predicting the Outcome of Competitive Battles by
Anticipating Changes in Product/Strategy Dynamics

7. Porter’s Five Forces

8. Guerrilla
Small Players
• Finding market small
enough to defend
• Prepared to bug out at
moment’s notice
Flanking
New Players
• Moving into
uncontested area
• Element of surprise
Offensive
No 2 or No 3
• Avoiding leader’s
strengths
• Attacking leader’s
weaknesses
Defensive
Market Leaders
• Attacking themselves
with new ideas
• Blocking competitive
moves
Marketing WarfareMarketing Warfare

9. Managers caught in this kind of competition almost
universally say they dislike it and wish they could find
a better alternative. They often know instinctively
that innovation is the only way they can break free
from the pack. But they simply don’t know where to
begin.
Chan Kim and Renee Mauborgne
Competing head-to-head can be cutthroat
especially when markets are flat or growing
slowly.

12. Knowing Why They Buy
“Companies may know a
good deal about their
customers. They know
nothing, as a rule, about their
non-customers -- the people
who should be their
customers but buy from
someone else. Why do they
do that? And yet it is the non-
customer where important
changes always start first.”
Look Beyond the Current Business

13. Disruptive Technology

14. Disruptive Innovation Strategy
Sustaining Innovations
Better Products Brought to
Established Markets
Low-End Disruptions
Target Overshot Customers with a
Lower Cost Business Model
New-Market Disruption
Compete Against Nonconsumption
Difference
Performance
Measure
Time
Nonconsumers or Nonconsuming Contexts
Performance

15. Customer Demand & Signals of Change
1. Non-Market Contexts: External Forces (Government, Economics,
etc.) Increasing or Decreasing Barriers to Innovation
2. Undershot Consumers: Opportunities for Up-Market Sustaining
Innovations
3. Overshot Consumers: Opportunities for Low-End Disruption, Shifting
Profits by Specialist Displacements (Modularity) and the Emergence
of Rules
4. Non-Consumers: Opportunities for New Market Disruptive Growth
Established Companies almost always
Lose to Disruptive Innovators

16. Era of Asymmetric Interpretation [Reconnaissance]
Asymmetric Interpretation Depends on Both Decisive & Incisive Sensing
Incisive
Scanning for Trends, there may be
no Decision made
Historical Patterns & Anomalies
Implications for the Reader
Bottom-Up Exposition
Driven by Trends
Product is Observation/Commentary
Emergent & Skeptical
Open Source
Decisive
Frame of Reference is the
Decision
Compares Options & Outcomes
Recommendations & Trust
Top-Down Imposition
Driven by Issues
Product is Decision/Action
Factual & Hypothetical
Confidential & Proprietary

17. 17
Dr. Craig S. Fleisher

18. Asymmetric Interpretation Engages the Entire Workforce in
Collaborative Sensing to Anticipate and Act on Industry Change
Signals
of
Change
Strategic Choices
Influencing
Success
Likely Outcome of
Competitive
Battles
Why Reconnaissance?

19. Collaborative Insights Team

20. 20
Technology is key
Self-service dashboards enable customized
intelligence delivery to the masses

21. Advances in automated processing enable better
retrieval
Deeper Search Granularity Options

22. 22
Clients need the flexibility
to subscribe to KITs based
on their personal
intelligence requirements.
Push Compliments Pull Delivery

23. Making the Complex Simple
23
Visualizing select
perspectives from the
vast corpus of data
available yields
asymmetric insight.

24. Feel free to ask for help:
 Email:
Arik.Johnson@AuroraWDC.com
JP.Ratajczak@AuroraWDC.com
 Phone:
+1 (608) 630-4242
+1 (913) 424-9494
 Twitter:
@ArikJohnson
@JPofMercy
 Web: http://AuroraWDC.com
What’s Next?
Leadership to Act is
Based on Confidence
Intelligence Combats the Paralysis that
Accompanies Uncertainty
Reconnaissance Transforms Your Workforce
into a Force to be Reckoned With