PROACTIVE WORLDWIDE BUSINESS INTELLIGENCE

PODCAST

With David Kalinowski

Introducing David Kalinowski

Proactive Worldwide is celebrating 23 years as one of the largest Business Intelligence firms in the world. In the years since it’s president and co-founder David Kalinowski started Proactive with Gary Maag, things have changed a lot but David believes success lies deep in the fundamentals.

HOW IT ALL BEGAN

David and his co-founder Gary worked together at a smaller boutique consulting firm for about five years when they discussed the idea of striking out on their own. David was hesitant – he’d just had his first child, while Gary was committed but by the time Gary had returned home after talking with David he had a voice-message saying “Let’s do it!”.

That was October of ’95 and they worked out of their respective homes for the first three years and in ’98 hired their first employee. Fast-forward 23 years to a staff of 40 full time team members in their organization and they’re one of the largest companies in the world at business intelligence.

HOW TO APPROACH BUSINESS INTELLIGENCE

There’s a wide variety of individuals and companies starting to dabble in the intelligence arena, There’s the traditional market intelligence organizations or advertising agencies performing market research on behaviors, attitudes, and beliefs of customers. And now they’re starting to dabble in CI, or at times, the management consulting firms might try to position what they do as intelligence gathering.

There’s also individuals that may be displaced from their organization, and wake up and say “Hey, I have a phone, I have a computer. I could jump into this intelligence work” but don’t necessarily have the experience or the resources to deliver on some engagements which can be quite complex and global at times.

So how does someone figure out who the best company is to hire?

Like everything, you get what you pay for? You can hire individuals that have a little bit of experience, but if you really want to hire in an expert organization that lives and breathes around being able to capture and analyze actionable market competitive and customer intelligence and to support decisions, then Proactive is one that specializes in that area.

Companies can also look at subject-matter expertise. Does an intelligence firm have individuals on staff that are part of a team that understands your industry and can combine that with the knowledge of collecting and analyzing intelligence and then the strategic connection with that content?

In addition to evaluating leadership, stability, and experience, you should look to an overall approach. Proven, solutions-oriented methodologies is important for organizations to keep an eye on.

Another element to consider is agility in project management. You want a firm that keeps projects on time, on target, and on budget. Select the firm that can flex with the needs as necessary, but can also handle the management of what can be a very complex engagement. Some intelligence work can be quick or short ad hoc projects, but many involve different companies or different scopes in different regions of the world. More than a staff of talented individuals, networks and external relationships are often needed to pull together the multitude of fragments an engagement can require.

BEFORE PROACTIVE WORLDWIDE

In 1990 when David got into the intelligence field, it was just emerging. The idea itself has been around since the caveman days. One caveman is looking at another to see how they make their fire and says, “Hey, I’m going to copy that, and I’m going to make my fire better.” Observation and benchmarking.

David was studying political science and had every intention to pursue law school but fell in love with the idea of trying to understand competitive strategy and how companies succeed and how others don’t in particular markets. He started out as a researcher doing secondary research, although, there wasn’t a lot of secondary or published information at the time,

It was the days of requesting a company’s annual report if they were a publicly-held company and waiting for two weeks for it to arrive in the mail to find and then call the executives. There wasn’t LinkedIn or Google to find people or background information on companies. It was the library and microfilm. A lot of primary research: getting on the phone, going to conferences, talking to people and building a network using different types of conversational techniques to coax individuals into opening up.

David and his co-founder Gary both started about a month apart from each other and grew up, both doing research and analysis, then project management, and then ultimately consultative sales before deciding to start Proactive.

Today, nearly every Fortune 500 company has some type of an intelligence capability. Some may call it business insights, but it’s hard to survive these days without understanding your market, your customers, your competition.

It’s much like public relations 30 years ago, where that function didn’t exist in every single organization, like it does now. Find one Fortune 500 company now that really doesn’t have some kind of a public relations department. That’s where the intelligence field study is.

A BUSINESS INTELLIGENCE STORY

A company hears a rumor in the pharmaceutical world. It’s not uncommon to want to better understand when a product is about to go off patent, what generic launch is going to happen. What generic brand is going to come out and compete against that, and when are they going to actually launch it in the marketplace?

A few years back Proactive had a client that had heard a rumor from a distributor that as soon as their product was to go off patent, the next day they’d be ready to launch their generic. They were hesitant about making a $40-50,000 investment to uncover and discover whether or not there was any merit to this rumor and when might they truly launch. The perspective client felt they had a reliable source in this distributor, and decided not to make the investment and learn more. The made the decision to launch their own generic preemptively, right before their own branded product was going off patent.

As the client waited to hear and see the generic of the competitor launch, it never quite emerged, and in fact was eight months before that competitor launched their generic product. At the time, the client was making around $7 million a month on the product, and had cannibalized approximately $56 million having chosen not to invest $40-50,000 to understand the truth..

That’s the power of being able to inform of a new strategy or a new distribution or business model or some new, emerging non-traditional competitor coming into a space. Gaining insights around on how it impacts or even derails a plan, or how to change the mix of on offensive and defensive strategy. Receiving input in advance of things actually happening can provide scenarios and help present which scenario is more plausible based on certain indicators. That’s the real value of how intelligence can impact strategic thinking. Gary has often said in the past, what we do is bridge the gap between guessing and knowing.

FIND IT OUT VS. FIGURE IT OUT.

One of the most dominant methodologies a skilled intelligence organization can apply comes from Professor Paul Kinsinger, who used to teach at Thunderbird’s graduate school in the field of intelligence. Find it out versus figure it out.

There’s a lot of information on the market and customers, on suppliers, on regulatory bodies, on the economy, certainly on competitors, that you can find out. There’s other information, either not as published or a little more sensitive that may form from building blocks and you have to figure it out.

In that light, a lot of intelligence is about putting together pieces of a puzzle. Being able to tell the story and figure out the answer. If you wanted to figure out the P & L on a privately-held company, you’re probably not going to get an income statement. But, can you get a sense of what their sales are or a sense of what their operating income is. A sense of how they might compare to the typical average net income in that industry and piece together some key components through some assumptions and some modeling to figure out the answer.

You can’t always learn and find everything out at 100% accuracy. That would be better known as fact, and we’re not talking about fact. We’re talking about intelligence. We look at perspective versus precision, a concept learned many years ago from Kirk Tyson. Perspective always exists, not precision. When considering the challenges, think in context of finding a company’s revenues for a particular line of business. Does it really matter if I come back and tell you that, “We believe it’s between $100-110 million,” or if I tell you it’s $102.7 million? Does it change your decision? You could get a perspective without it being precise, and still make a highly-informed decision.

BUSINESS INTELLIGENCE STRATEGY CONSULTING

Proactive Worldwide consults in three core categories:

  • Strategic Planning: Better understanding transformational business models
  • Scenario Planning: Exploring best case / worst case futures and better preparing for which might come true and what to do about it.
  • War Gaming: Pressure-testing existing strategy or creating a new strategies to be able to better prepare by role-playing the competition.
  • Training: Proactive is partnered with SCIP, the Strategic and Competitive Intelligence Professionals, and they are the provider of SCIP’s CI-100 certification class in North America.

Proactive also provides private training for corporate clients who want to have a more customized approach.

Proactive also has software partnerships to help provide an aggregator tool that allows for a central repository of intelligence.

Proactive’s focus on customer intelligence is everything from customer experience or user experience, voice of customer, and digital strategy.

BUSINESS INTELLIGENCE COMES DOWN TO…

David and his co-founder Gary are Chicago crosstown baseball fans and when they attended the White Sox World Series together in 2005, a grand slam by Sox’s Paul Konerko crystalized in him a tenet around business intelligence.

On the far left field is a big steel sign that says fundamentals.

David was moved by the vision of that statement while enjoying a once-in-a-lifetime moment with his friend and co-founder because he realized it as the source of their success: doing the fundamentals well matters.

High-quality outcomes, exceptional client service, and being responsive.

It is the fundamentals of respect and professionalism and some common sense things that not everybody does anymore that to David is the key driver which as he says “If you do all that well, you usually both come away as winners.”

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