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Published in U.S. 1 Newspaper on May 3, 2000. All rights reserved.
Intelligence; Not Espionage — Larry Kahaner
Japanese managers, says Larry Kahaner, spend an
enormous amount of time perusing their competitors’ publications,
annual reports — anything and everything that they can get their
hands on to better understand their competition. By contrast, American
CEOs get most of their so-called intelligence by hobnobbing.
Kahaner, a former Business Week reporter and author of the 1996 book
"Competitive Intelligence," says that if companies want to
survive in a global economy, they have to adopt more effective competitive
intelligence practices. "The new model is to run companies very
lean, and this requires you to know what works, and you learn through
competitive activities," says Kahaner, who speaks on Thursday,
May 11, at 8 a.m. at the Society of Competitive Intelligence Professionals
at the Newark Marriott Hotel. Call 201-998-0173 (www.scip.org).
A licensed private investigator who lives in Virginia, Kahaner grew
up in Brooklyn, attended City College for a BS in physics, Class of
1972, and then earned a master’s in science journalism from Boston
University. He wrote for Business Week during the early 1980s, and
has written eight books. His website, www.kahaner.com, includes valuable
points on competitive intelligence, as well as ancient wisdom on business
"Competitive intelligence has to be done on a systematic basis
— it can’t be done haphazardly," says Kahaner, who will present
these core concepts on competitive intelligence at the SCIP meeting:
says Kahaner, competitive intelligence and industrial espionage are
not the same thing; nearly 85 to 90 percent of the information a company
needs can be found ethically, through newspapers, speeches, public
documents, aerial photos, and other means. "I maintain that industrial
espionage is a failure of competitive intelligence, because if you
have to steal something that means you were unskilled or too lazy
to find it out using open sources," he says.
Often times, collecting information on a company is as simple going
to their headquarters or outpost. "I had one client who wanted
to learn why his competitor was doing so well at loading and unloading
trucks," says Kahaner, "and I said why don’t you go there
with a sandwich and sit outside and watch him. That’s perfectly legal
and you wonder why people don’t do it more often."
- Analysis. Taking raw information or data and turning it
into intelligence or knowledge. This is where most managers trip themselves
up, says Kahaner, who makes a point of distinguishing between information
and knowledge with the following parable:
Two stockbrokers each receive a stockquote on their pager at the same
time. They both buy and sell accordingly. One guy makes a million,
the other loses millions. The difference lies in analysis, says Kahaner:
"Two different interpretations," he says. "People don’t
like to think. You can take three or four disparate pieces of information
and see a pattern."
- Dissemination. Unless the information is in the right
hands, it doesn’t mean anything, says Kahaner.
- Discovering. Explore the questions that intelligence brings
up. Here, too, a company’s system tends to break down — they may
put one employee on a CI job part-time and there’s no follow-up or
- One of the excuses American managers love to use for not implementing
a competitive intelligence program is that CI is not taught in business
schools, says Kahaner. To that, Kahaner says: unfortunately true,
but it is taught almost everywhere else in the world, including Japan.
"How many years did it take for American carmakers to believe
that the Japanese were making betters cars than Detroit?"
— Melinda Sherwood
More important than upgrading your software is upgrading
your employee’s knowledge and skills, says George Pruitt, president
of Thomas Edison State College, which specializes in educational opportunities
for adult students and programs that work in conjunction with corporate
needs (www.tesc.edu). "Knowledge is doubling every seven years," says Pruitt.
"That means that the challenge for businesses and employees is
to update constantly. There used to be a notion that higher education
was something that you did after high school. Now we know it takes
place all throughout your life and it never stops."
Pruitt will speak on "The Chamber, Education, and Your Business"
on Tuesday, May 9, at 11:45 a.m. at the Mercer Chamber’s Hamilton
division meeting, held at Giovi’s restaurant. Call 609-393-4143. Cost:
"There are several avenues in which business and education intersect,
and the obvious one is workforce development," says Pruitt, who
is also chair of the Mercer Chamber. "Companies have to compete
with more than just product services and prices — they have to
compete with their workforce. We were one of the first colleges in
the country that offered high-quality degree programs exclusively
over the Internet, and we were the first to allow adults to gain credit
for some of the corporate training in the workplace."
Founded in 1972, Thomas Edison provides 14 degree programs at the
associate, baccalaureate and master degree level to approximately
9,000 students, and has pioneered the use of telecourses, Internet-based
courses, and independent study methods. Students can also earn college
credit by demonstrating that they have attained college level learning
through tests or performance evaluations.
The college doesn’t just serve students — it serves businesses,
too. In partnership with AT&T, Thomas Edison offers a masters in science
and development, and will unveil a masters of arts and professional
studies, a liberal arts program, this fall. A masters program for
Human Resources professionals, at the request of HR professionals
in the area, is also in the works.
Prior to joining Thomas Edison, Pruitt was executive vice president
for the Council of Adult and Experiential Learning, an association
of 500 colleges and universities interested in particular learning
styles and needs of mature adult. He grew up in Chicago, and has a
BS in biology from Illinois State, as well as a masters in counseling
and PhD in higher education.
How adults and young students view education first became apparent
to Pruitt when he was teaching adult students at Towson State University
in Baltimore. One day, he recalls, a snow storm forced classes to
be canceled. Most of the day students celebrated, but to his dismay
all of his adult students showed up at class anyway. "An adult
is not just an 18 year old who’s been around longer," he says.
"An adult learns differently than an 18 year old, they bring more
experience, they’re self-motivated, and they tend to be more demanding
because they know why they are there."
There’s another good reason why businesses and universities should
partner in the venture to enhance adult education: simple economics.
"More dollars are being spent on education and training in corporate
America," says Pruitt, "than in all the colleges in the U.S."
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