The Role of Intelligence in Formulating Strategy by Jan Herring (Open Source Intelligence: READER Proceedings, 1997 Volume II 6th International Conference & Exhibit Global Security & Global Comp)

S uccessful business strategies are inherently dependent on the skills of the corporate strategist and the company management team's ability to implement the strategies. However, like the chef who is creating the epicurean meal, the strategist is also dependent on the ingredients that he has to work with-in essence, his strategy can be no better than the information from which it is derived. The more comprehensive and.prescient that information, the more likely the strategy is to be successful. Two basic categories of information are required for strategy formulation: (1) information and data about your own company's resources and capabilities and (2) relevant information about the company's total external environment, including customers, competitors. the industry structure, and various competitive forces that shape the markets in which your company competes. The completeness and accuracy of the two sets of information vary considerably. Most companies possess the information about their own capabilities and resources with a reasonable degree of completeness. And many companies have relatively good information about their customers, depending on how much they choose to spend on market research. But only a few firms allocate sufficient resources to collect and analyze the information on the competition and those external forces and factors that affect their industry's competitiveness. It is this latter set of information that is generally defined as competitive or business intelligence. No matter how much you spend in gathering and developing this information, you will never be able to produce business intelligence with the same degree of precision, nor need you, as that about yourself. Nevertheless, the effectiveness of your strategies will be directly related to the comprehensiveness and timeliness of this business intelligence. During the Desert Storm campaign, General Norman Schwarzkopf depended heavily on intelligence about the Iraqi militarv forces, the number and capabilities of their weapons, and their deployment to formulate his strategy and battle plan. Once he launched the campaign. he relied on real-time intelligence about the enemy's response to adjust the implementation of his plan. In addition, he had purposely created a different perception about his battle plan in the minds of the Iraqi military leaders by revealing to them (their intelligence units) what he wanted them to know. Thus, intelligence played a venr important role in formulating the strategy, executing it, and enhancing its chances of successful implementation. Few corporate strategists make such comprehensive use of competitor or business intelligence. Their intelligence inputs are often assumed or static, having been derived from outdated and incomplete public and secondary information sources. This situation ma! stem from the poor state of intelligence in US companies; however, I also believe that it is because most American bus-