Strategic Intelligence: The Melting Pot of Competitive Intelligence, Business Intelligence, and Knowledge Management
Dr. Jay Liebowitz

“Okay, let’s see if I have this straight. Competitive intelligence (CI) looks at external information and knowledge, knowledge management (KM) leverages internal knowledge, and business intelligence (BI) looks mainly at internal information and knowledge. You seem to be focusing on the differences between external versus internal, and information versus knowledge. CI has an external orientation, as you typically scan the competition to look at “what-ifs” and “so-whats”. KM and BI are internally-focused in terms of capitalizing on an organization’s people (human capital) and related intellectual assets. With CI and BI, information and knowledge are components of these processes. KM typically takes experiential learnings, in the form of lessons learned, best practices, insights, and war stories, which are derived from one’s experience and knowledge.”

“I think you are close to being correct, but some people view BI more broadly to have both an internal and external focus. Thus, the use of data mining or business rule engines could fall within BI techniques, but the underlying hidden patterns, relationships, and rules that are induced from applying these techniques could have implications on the customer, such as marketing considerations.”

“Boy, this is quite confusing. I also see that many people are bridging the CI, BI, and KM communities by having a foot in each camp. Many conferences that I attend have tracks in each of these areas, with people going interchangeably from session to session. Why don’t we just pool the collective value of these three communities in order to synergize them for organizational use?”

“That’s an interesting idea—but what would we call this new type of intelligence?”

“Well, since the focus of CI, KM, and BI is to ultimately improve the organization’s strategic decision making ability, why don’t we call this “Strategic Intelligence” or SI for short?”
“That could work, but strategic intelligence has military or defense implications.”

“No problem. Much of what we know today in the business world can be mapped from military or defense applications. For example, the Internet is an outgrowth from ARPANET, funded by the Defense Advanced Research Projects Agency (DARPA). Many of Sun Tzu’s Art of War military principles are captured and applied in business settings in terms of modern strategy and leadership. So, I think Strategic Intelligence, or SI, can be safely applied in a business context.”

“Great—all we need is another type of intelligence—from Artificial Intelligence coined in 1956 to Business Intelligence and now to Strategic Intelligence!   Don’t you think this will confuse people?”

“Well, we are actually collapsing three fields (CI, KM, and BI) into one, calling it SI, to make it less confusing.” 

“Are organizations actually developing SI units?”

“They are starting to move more towards this direction. Even AARP, with probably the largest U.S. constituency base, formed a new group, called “Strategic Analysis and Intelligence”, within the past year. Wilkinson Media also has a Strategic Intelligence unit. Others will surely follow.”

“Why?  How can you be so sure?”

“Look at the underlying components of making good business decisions, especially strategic ones. You need data, information, knowledge, and insight in order to base one’s decision. Business Intelligence can massage the data to produce some useful information. Knowledge Management and Competitive Intelligence can produce knowledge and insights based on the organization’s human capital, structural capital, relationship capital, and competitive capital. Experience has a great role to play to help form insights. Throwing in some intuition and gut feeling, as well as a little luck, strategic decisions in business can be reached. All these elements just described comprise the essence of strategic intelligence.”

“You know, I’m starting to get this. I think you may be on to something.”

“I’m not making this up out of thin air. Look at the continuum of how business decisions and technologies have evolved. For example, many of the underlying concepts behind knowledge management evolved from the intelligent systems and information sciences fields, such as knowledge acquisition methodologies, knowledge taxonomies and ontologies, and knowledge representation techniques. In today’s society, integration is key and the CI, KM, and BI communities are starting to practice what they preach in terms of sharing knowledge and integrating across stovepipes. However, we still have a ways to go. Certainly, with Web-based and intranet technologies, we are able to form the bridges across the isolated islands of knowledge. I think SI can be the lynchpin to making better strategic decisions and taking the complementary sets of approaches from the CI, KM, and BI fields to maximize strategic use and value to the organization.”

“That’s quite a mouthful. Can you give me some examples of how SI could be used?”

“Sure. Michael Maccoby in his May/June 2001 article on “Successful Leaders Employ Strategic Intelligence” (Research Technology Management Journal) discusses five interrelated competencies for successful SI—foresight, systems thinking, visioning, motivating, and partnering. Don McDowell wrote a book titled Strategic Intelligence: A Handbook for Practitioners, Managers, and Users. More recently, Robert Service in his March 2006 article titled “The Development of Strategic Intelligence: A Managerial Perspective” (International Journal of Management) stresses the need for all managers to possess strategic intelligence. And Jay Liebowitz recently published a book titled Strategic Intelligence: Business Intelligence, Competitive Intelligence, and Knowledge Management (Auerbach Publishing, 2006).

“That’s great, but what about any industry examples?”

“There are have been many examples. David Montgomery and Charles Weinberg, going back to even 1998, discuss an example in their article, “Towards Strategic Intelligence Systems” (Marketing Management Journal, Winter 1998). They discuss the use of defensive, passive, and offensive intelligence as part of a Strategic Intelligence system. One company recognized that its competitor had a serious service problem and it would take about two years to work out this inventory investment problem. With this knowledge, the company took advantage of this situation and substantially increased its market share.”

“How about anything more recent?”

“The pharmaceutical industry is a classic example where Strategic Intelligence must be applied. Creating new drugs and getting them to market is a very difficult, costly, and time-intensive process. CI, BI, and KM play fundamental roles in the innovation and competitive environment areas. People like Victor Newman, former Chief Learning Officer at Pfizer, talks about strategic knowledge management in R&D. In fact, he is giving a workshop in July 2006 at Oxford University on this topic.”

“Wow—it seems the way of the future is for all organizations to embrace and apply Strategic Intelligence in order to improve their strategic decision-making process. Whether your industry is pharmaceuticals, aerospace, defense, finance, manufacturing, energy, and the like, SI needs to be actively used.”

“Well, it sounds like you are now a believer in SI. Those organizations that apply SI effectively will be the survivors of today’s and tomorrow’s competitive environment. Now, pass this article to your managers and see what they think!”
                                                        

Dr. Liebowitz is a Full Professor in the Graduate Division of Business and Management at Johns Hopkins University. He is the Program Director for the Graduate Certificate in Competitive Intelligence in the Graduate Division of Business and Management at Johns Hopkins University, and the MS-ITS Capstone Coordinator (http://business.jhu.edu). Prior to joining Hopkins, he was the first Knowledge Management Officer at NASA Goddard Space Flight Center. Before NASA, Dr. Liebowitz was the Robert W. Deutsch Distinguished Professor of Information Systems at the University of Maryland-Baltimore County, Professor of Management Science at George Washington University, and Chair of Artificial Intelligence at the U.S. Army War College. He is the Founder and Editor-in-Chief of  Expert Systems With Applications: An International Journal (published by Elsevier), and the Founder/Chair of The World Congress on Expert Systems. He has published over 30 books and over 200 articles dealing with expert/intelligent systems, knowledge management, and information technology management. His newest books are Communicating as IT Professionals (Prentice Hall, 2006), Strategic Intelligence: Business Intelligence, Competitive Intelligence, and Knowledge Management (Auerbach Publishing/Taylor & Francis, April 2006), What They Didn’t Tell You About Knowledge Management (Scarecrow Press/Rowman & Littlefield, June 2006), and Addressing the Human Capital Crisis in the Federal Government: A Knowledge Management Perspective, published by Butterworth-Heinemann/Elsevier (2004). He also completed a study on “Bridging the Knowledge and Skills Gaps: Tapping Federal Retirees” for the IBM Center for the Business of Government. He is a Fulbright Scholar, IEEE-USA Federal Communications Commission Executive Fellow, and Computer Educator of the Year (International Association for Computer Information Systems). He has consulted and lectured worldwide for numerous organizations. He can be reached at 301-315-2893 or jliebow1@jhu.edu.