Avoid a Crimson Tide disaster

A major leadership and mission execution crisis ensued on the USS Alabama when its communication systems failed on its planned pre-emptive strike on Russia in "Crimson Tide". A conflict of leadership ensued because of the breakdown in communications with command, and many lessons in the academic field of leadership and management have been derived from the superb plot (and superb acting of Gene Hackman and Denzel Washington) in this movie.

Imagine how much worse their predicament would have been if not only their communications systems failed, but also their health monitoring, surveillance and navigation systems? Inevitably, the Akula-class enemy submarine attack would have had tragic consequences?

In business, a business intelligence (BI) system should be the communication, surveillance and navigation system of the vessel with which the strategy is executed. If the BI system is not specifically geared to support strategy execution, the business is just like a commander that sends out submarine rookies into enemy waters armed with a nuclear missile, but with a broken communication and radar system.

In the early 1980s, research reported that less than 10% of effectively formulated strategies were successfully executed. Twenty years later, research showed very little improvement, and concluded: "The ability to execute strategy was more important than the quality of the strategy itself."

One key reason for this failure to execute seems to be the inability to adapt to unforeseen changes in the environment. Of this, most companies who were caught by surprise by the recent recession bear witness.

A BI system hosted and embedded within the intranet portal can become a powerful strategic communication tool.

Yolanda Smit is senior business analyst at PBT.

Executive management invests months of internal and external research (the political, economic, socio, technological and ecological (PESTE) factors, the micro-economic, and academics' favourite - SWOT analysis) in order to formulate the perfect five-year strategy. Once the strategy is formulated and distributed to all, it seems that the whole organisation falls back into the traditional industrial-age rhythm of operations. They switch on their BI system that methodically pushes out the standard daily, weekly, and monthly reports, only now it's on a nice Web interface with pretty colours and pictures so that the decision-makers don't get bored with the reams of printed spreadsheets.

Below the radar, though, the key PESTE factors on which the strategy is based might slowly be changing, but the organisation runs full-steam ahead, not noticing the winds of change that force them off-course. Five years later they look back, dumbfounded on how their final destination can be so far away from the vision of their strategy.

So what should BI systems offer to overcome this lack of flexibility? Just like the USS Alabama, a company's BI system should at be equipped with a variety of equipment, including communication, surveillance, navigation, and internal health monitoring equipment.

A BI system hosted and embedded within the intranet portal can become a powerful strategic communication tool generating awareness of targets, but also empowering target achievement monitoring.

Traditional BI systems are excellent health monitoring tools, effectively tracking internal performance metrics. However, if the company's six-sigma productivity metrics are all fully optimised, but the demand in the customer market unexpectedly starts dropping, all efforts to optimise will bring no improvement to the bottom line. Therefore, the internal BI health monitor should be extended by adding external surveillance capability, mainly by extending the scope of the data content to include external macro- and micro-economic measures. Adding advanced analytics and data mining functionality, the BI system also becomes an intelligence generating engine, detecting and forecasting changes that would normally not be anticipated by the business.

A company's BI system should not only empower people to identify unforeseen problems, but also assist them to resolve unforeseen problems. As a result, it is important to empower employees to navigate the terrain effectively around all unforeseen obstacles, while still staying on course to the originally intended destination. One option for this is to integrate a knowledge management system into the BI solution stack. Give the company's taskforce access to a library of tactics to choose from when faced with unknown situations.

Gone are the days when the BI system consisted of a data warehouse, an Online Analytical Processing (OLAP) engine, and beautiful graphs. The taskforce is no longer driving four-wheel Fords or Toyotas. The taskforce is rather steering submarines and naval vessels. Therefore, the BI system can no longer merely be a dashboard monitoring the fuel-levels and the health of its engine. Improve the company's strategy execution effectiveness by empowering the taskforce with flexibility through comprehensive BI.