Decision Intelligence: An Interview

Mr. Sauerbrey: Why do executives need a Decision Intelligence Navigator?
Dr. Moser: We understand “Decision Intelligence” as the capability of an individual or organization to create a FIT between its intelligence requirements in form of data, information and knowledge and its intelligence processing capacities in the form of intelligence gathering, analysis and communication activities.
Our Decision Intelligence Navigator is simply put a mental model that allows you…

• …to analyze the intelligence requirements you have based on the changes in your business context
• …to reflect on the insights that you need to make decisions
• …to improve the way you access different forms of data, information and knowledge and finally…
• …to avoid most biases when turning insights into actual decisions

Based on our research, we can – and our corporate partners also agree – empirically prove that in today’s ever changing world those companies are primarily able to create competitive advantages which are able to create an optimal FIT between the levels of intelligence requirements in the multiple business contexts they are operating in AND their intelligence processing capacities.
 
Mr. Sauerbrey: How does the Decision Intelligence Navigator support executives?
Dr. Moser: In today’s world companies face ever-increasing levels of uncertainty, ambiguity, industry dynamics and industry convergence – a popular term for this is “VUCA”. It simply means that the business context of companies in almost any industry is changing dramatically.
Now, if the business context is changing fast and substantially, a company needs be able to adapt the way its gathers and processes intelligence in order to understand how the political, macro-economic, social and technological environment is evolving, which industry dynamics are still relevant or changing and what kind of resources are key for a company to create a value proposition for its customers in the future.
However, many companies have not invested into conceptually sophisticated and technically advanced intelligence gathering and processing structures and activities often leading to an information overflow and, in the worst case, to strategic decision based on irrelevant information – which still works for companies if they are operating in protected industries or nothing is changing. But where is this still the case today?
So what the Decision Intelligence Navigator does is to guide executives along the entire process to make sure that they and their companies focus on the insights they really need and to improve that these insights are turned into – let’s call it – wise decisions.

Mr. Sauerbrey: Let us then talk about the different elements of the Decision Intelligence Navigator. Where do we need to start?
Dr. Moser: Well, the first step of the Decision Intelligence Navigator is to understand the intelligence requirements that you or your company have. For this purpose we have developed different tools and concepts to create - what we call - the right “Contextual Mindset”.
In a second step you need to improve your Framework Proficiency and your Intelligence Access to create the insights you need to make specific decisions and finally you work on your Decision Proficiency to ensure that your valuable insights are turned into bias-free decisions.
Ok, you have talk a lot about changes in the business context so far – why is the understanding of changes in business context so important for executives?
Some executives still tend to deny that the context is changing much. But many executive strongly agree that

• there is an increasing uncertainty due to numerous political, social and technological changes,
• that there is increasing ambiguity – this means that even if we know what we need to know we face the challenge to draw the right implications
• that the dynamics in almost any industry are dramatically increasing –  and finally
• that we see many industries converging and - as a result – the way they operate, collaborate and make money.  

As result, the rules of the game – somethings even the game – in most industries are changing fast and substantially but companies and executives have only limited resources to gather and process data, information and knowledge. Therefore, executives need to first develop an understanding where they and their companies stand we respect to uncertainty and ambiguity in their business context as well as the level of industry dynamics and industry convergence. That’s what we call the “contextual mindset” of an executive.
 
Mr. Sauerbrey: Ok, given that I have developed the contextual mindset I need - how do I proceed then?
Dr. Moser: Companies and executives then have to find a way how to address all the information requirements they have identified in order to make decisions – for example about their future business model in China or how to integrate Artificial Intelligence applications into their value chain.
As briefly mentioned earlier, this requires two things: Framework Proficiency and Intelligence Access.

• Framework Proficiency means that executives are able to select suitable business context analysis frameworks based on the Contextual Mindset they have developed in step 1. For example, when I ask executives in our courses to conduct an industry analysis about 90% of them turn directly to Porter’s 5 Forces analysis.
  Why?

Because they have often never been exposed to any other industry analysis tool, it’s working just fine in many cases and – to be honest – many executives are not really aware what Porter’s 5 Forces tool is actually measuring…it’s power only.

• The problem now comes with industries that are converging or where other profit mechanisms rather than power towards suppliers, customers, or competitors matter most.
• I then often ask them whether they are aware of a concept called “Key Stone Player” based on the business ecosystem analysis approach. I guess that more than 75% of them are not aware of this concept. However, if you want to understand how companies like Apple, UBER, Google and many others are building their business and market power, Porter’s 5 Forces is still useful but does not identify the industry mechanisms that really matter in the sectors these companies operate in. 
  
• The second element is then “Intelligence Access”. It simply means that there is little impact of your advanced “Framework Proficiency” if you are not able to actually get the data, information and knowledge you need for each element of your business context analysis.
• In short, we differentiate between big data and small data in the form of access to experts.
  Here at the University of St.Gallen we are currently developing a platform where we work with companies in order to understand how they can leverage different forms of intelligence access and integrate it into the business context analysis – efficiently and conveniently.

The combination of Framework Proficiency (this means filtering and selecting the most important dimensions of the business context) and Intelligence Access (which means that I can also generate the necessary data, information or knowledge for each dimension of my business context analysis) – this combination then leads to insights. Insights to make decisions.
 
Mr. Sauerbrey: So, when I have created the insights I want, I still have to make decisions right?
Dr. Moser: Right, we call this element of the Decision Intelligence Navigator “Decision Proficiency”. Decision Proficiency is simply a set of tools and concepts which helps executives to turn insights about the future business context into specific resource allocation decision down to the functional level but also to support executives to avoid any bias that is likely to occur during the actual analysis and decision making process.
 
Mr. Sauerbrey: Let me try to wrap it up shortly: The Decision Intelligence Navigator supports executives to reflect about the business context changes that they currently face, to identify those dimensions of competition that matter in the future and to access relevant data, information and knowledge to really understand them and finally to turn these insights about the future into functional consequences today trying to avoid any bias during the decision making process.