Defining Strategic Intelligence

Tuesday, 10. February 2015
Just like the concept of strategy itself, the term "strategic intelligence" can be traced back to ancient military. Some 2,500 years ago, the Chinese general, strategist, and philosopher Sun Tzu described the importance of "(pre)knowledge" in his classic work "The Art of War" with the famous words:

 “The reason the enlightened prince and the wise general conquer the enemy whenever they move and their achievements surpass those of ordinary men is foreknowledge.”


In business context, strategic intelligence has been used since the 1980s in more or less formalized manner. In recent years, scholars and researchers have taken a renewed interest in the subject (Johannesson & Palona, 2010; Xu & Kaye, 2010; Xu & Kaye, 2007; Liebowitz, 2006; Lonnqvist & Pirttimaki, 2006; April & Bessa, 2006). However, there is still no shared understanding of what strategic intelligence actually means. The fact that strategic intelligence is often used interchangeably with other terms like business intelligence, competitive intelligence, or market intelligence, and used differently in Europe and North America only adds to the Babylonian confusion.

A catchy definition is provided by Xu (2007): “Strategic intelligence is about having the right information in the hands of the right people at the right time so that those people are able to make informed business decisions about the future of the business.” Looking at the concept more closely, strategic intelligence has the following characteristics:

    • The primary objective of the strategic intelligence is to support and improve corporate strategic decision-making by providing relevant strategic information.

    • Strategic intelligence is future-oriented allowing a company to make informed decisions regarding future conditions in its particular market or industry.

    • Strategic intelligence provides information about the entire internal and external business environment. Thus, it helps companies to gain a realistic assessment of potential changes, opportunities, and threats in the business environment as well as their own strengths and weaknesses, and to adopt their strategy to the changing conditions as best as possible.

    • Strategic intelligence performs an early warning function by helping companies to identify emerging trends and patterns early on and respond accordingly. Future changes in the business environment often announce themselves with "weak signals," which are present only in qualitative form and need to be linked in order to be interpreted correctly. Therefore, the collection and analysis of soft, qualitative data is of particular importance in strategic intelligence.

    • The 360-degree view of strategic intelligence helps to challenge long-held assumptions and perspectives of management and to identify and eliminate blind spots. According to Porter (1980), competitive blind spots are the areas where a competitor will either not see the significance of events at all, will perceive them incorrectly, or will perceive them very slowly. This can have a negative impact on the quality of strategic decisions and the agility of the company.

    • Strategic intelligence is a systematic and continuous process. The intelligence cycle can be generally divided into the following stages:

      1) Identifying information needs, defining requirements, and planning actions to be taken,
      2) Collecting, processing, and storing of the raw data and information,
      3) Filtering and analyzing the collected raw data and information with regards to trends and patterns and supplementing it with own assessments and interpretations; in this step the transformation of information into knowledge takes place,
      4) Presenting and disseminating the acquired knowledge to the respective addressees and,
      5) Evaluating, reviewing, and, when needed, adapting the process based user feedback.

      • Strategic intelligence delivers actionable insights on the business environment and actionable recommendations in form of management reports.

      • Strategic intelligence primarily addresses the information needs of those involved in strategic decision making processes.

      • Strategic intelligence is a legal and ethical business practice and not to be mistaken with corporate espionage. Only legally accessible data is collected and used.

      • Strategic intelligence is supported by specialized software which facilitates effective and efficient use and distribution of strategically relevant information to selected people.

      • Finally, strategic intelligence can lead to competitive advantage as it allows companies to respond to emerging trends and changes in the business environment faster than their competitors.

In short, strategic intelligence is a systematic, continuous, and IT-supported process to collect, analyze, and disseminate legally accessible, strategically relevant information on the internal and external business environment, thereby helping managers to make more informed decisions about the future strategic direction of the company, to question their own long-held assumptions, and to better identify and use emerging growth opportunities.


 

Literature

April, K., & Bessa, J. (2006). A critique of the strategic competitive intelligence process within a global energy multinational. Problems and Perspectives in Management, 4(2), 86-99.

Johannesson, J., & Palona, I. (2010). Environmental turbulence and the success of a firm’s intelligence strategy: Development of research instruments. International Journal of Management, 27(3), Part 1.

Liebowitz, J. (2006). Strategic intelligence: Business intelligence, competitive intelligence, and knowledge management. Boca Raton: Auerbach Publications.

Lönnqvist, A. & Pirttimäki, V. (2006, Winter). The measurement of business intelligence. Information Systems Management Journal, 32-40.

Porter, M.E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.

Xu, M., & Kaye, G.R. (2010). An integrative framework for strategic intelligence. International Journal of Strategic Information Technology and Applications, 1(4), 1-18.

Xu, M. (2007). Managing strategic intelligence: Techniques and technologies. Hershey, PA: Information Science Reference.