8
Organizational Intelligence
“More than technical contagion, it is the access to organizational knowledge that becomes a factor of progress.” [ETT 14]
In 1994, Henri Martre, honorary president of Aérospatiale, now the Airbus Group, put organizational intelligence at the heart of the competitive intelligence approach when he wrote:
“What makes the exercise of the conduct of the company and thus the decision more and more difficult is that its scope has changed dimensions: globalization of the markets, multiplication and diversity of the number of actors, multiplication of the constraints, whose speed of events and the required reactivity are unprecedented. The scale is such that their evolution can no longer be mastered in traditional organizations.” [MAR 94a]
He concluded by decreeing the innovative “urgency” and need for a profound revision of our modes of reflection, our methods of approaching situations, our methods of understanding situations, our behaviors and our organizations.
In the contemporary era of multiple disruptive breaks, our organizations are called upon to design the methods and tools of an organizational intelligence whose purpose is to respond to the unprecedented challenges created by the metamorphosis of the growth model through the digital revolution. More than ever, it is necessary to acquire the collective intelligence capacity of the new dynamics or else to “fade into the background” [TEN 09].
At the heart of complex organizations and markets, the “ability to invent on a daily basis” and the “ability to invent for the future” as new ways cannot be considered alone. Co-production and “co-management” of intelligence capabilities are needed. How do we organize them? And according to which organizations? What is meant by organizational intelligence? What challenges does this approach face? Through these questions, we will sketch some possible responses [CHU 98].
8.1. Definition
Organizational intelligence can be defined as a process of production by an organization of situational intelligence: intelligence of strategies, threats, possible futures. It is also the product resulting from the process. It is basically the capacity of a community to mobilize the intelligence capacities of the organization (information and knowledge) in order to solve unprecedented and complex productive, economic, organizational, and technological problems. The promoter of the concept and its first implementation doctrine, Harold Wilensky, defined it in 1967 [WIL 67] as the process of competitive intelligence of collection, of processing, interpretation and dissemination of information relevant to the decision-making process and mobilizing the appropriate organization to do this. The author analyzed the purpose behind the centrality of organizational intelligence: the struggle of the organization against information-related pathologies. He placed the source in the attitudes of managers and their roles vis-à-vis knowledge and the influence of information specialists on the strategic process [TEN 09].
Later, almost at the same time that the Henri Martre commission [MAR 94b] conceived the French competitive intelligence conception and a doctrine of application referring to Harold Wilensky [WIL 67], Japanese researchers [CHU 98] introduced the concept in their literature, geared toward managerial practices. They define it as the interaction, accumulation and integration of human intelligence and machine intelligence inherent in any organization. Professor Juro Nakagawa [NAK 13] notes, however, that this does not reveal the essential feature of organizational intelligence: it comes from the organizational dynamics, from the organization as a whole, more than from individuals or groups, even though their role needs to be taken into account in the process. Thus, strategic alliances are a source of organizational intelligence, as are knowledge-sharing networks, including international ones, making the boundaries between organizations increasingly blurred.
8.2. Organizational intelligence and cognitive pathologies
If the lack of organizational and managerial innovation is a serious evil that hampers the development paths of organizations and panics their strategic compass, the lack of intelligence of decision makers, such as that noted by the sociologist James March [MAR 91a, MAR 94a], will play a major role in this game:
“Decision makers often act in a supervision mode rather than a problem-solving mode. In contrast to a theory of information that states that information is collected in order to make a choice among other alternatives, decision-makers monitor their environments looking for surprises and solutions. They watch what happens. In a very obvious way, they do not solve problems; they apply rules and copy solutions in others.” [MAR 94a]
8.2.1. The brakes of the organization
The brakes that we analyze here, related to the organization and the lack of “organizational innovation”, will have to be lifted to release the strategic intelligence capacity of the organization and to prevent it from any blindness.
Before describing the brakes, we should remind ourselves of the central link between organizational intelligence and the culture of the organization.
8.2.2. Corporate culture: both a brake and lever of organizational intelligence
In an enlightening book, with an evocative title, Disconcerted Organizations, Philippe Baumard [BAU 96] analyzes the organization as a “cognitive system”, which will be the focal point of our chapter. On this occasion, he characterizes the sources of perceptual defaults as generating “blind intelligence” [MOR 94]. As a perceptual filter, the organization is confronted with what the author calls “the tyranny of the local environment”.
The organization is multiple, or polymorphic. In this, he writes, it produces locally within it “passive zones” and “active zones”, which are more offensive, acting by intrusion, manipulation and influence of their environment. The actors who compose it then conduct their interpretations of the environment according to a principle of “limited rationality”, of “reduction” of realities from limits they impose and local visions.
Beliefs and traditions, if present in organizations, will then play an important role in the ability to interpret the environment. Thus, the environmental intelligence device, whether passive or more offensive, is constituted by a multidimensional interpretation filter composed of several factors.
In the first place, the filter depends on the culture of the organization, its history, its victories, its failures, its crises, its beliefs, its customs, its novations, but also its conservatisms.
The men and women of the organization shape its culture. They come from socio-professional backgrounds, cultures, peoples and regions that have built their beliefs, their ways of acting and organizing. They import into the organization traditions and rites that they live, build and perpetuate on the outside, the very ones they will use in their participation in the collective intelligence of the organization.
The culture of the organization is also forged and expressed for this assembly. It is then a collective culture with its rules, roles and standards:
“The culture of a human group is the set of implicit rules that condition its conduct. It consists of rites, traditions, myths, values and shared symbols. The representations of the members of the group and the meanings they attribute to information and events feed on this cultural background.” [GEN 98]
Comparative studies (France, United States, Netherlands) showed in the late 1980s [IRI 89] that organizational modes of organization are more the expression of culture (traditions, customs and societal practices) than the result of “scientific” methods of management. Let us indicate here that it is necessary to abandon any cultural determinism to explain the management and the strategies.
An American study [GIL 04] shows that during the last 70 years, the surprise attacks that have been successful have not been successful because of the introduction of powerful lures and therefore the absence of detectable weak signals but because of misjudgments, strategic tensions, misrepresentations or obsolete beliefs and beliefs that have led the organization to ignore the risks.
François Dupuy, a French sociologist [DUP 15], in a book describing his consulting experience, draws up an indisputable indictment of managers. They believe that they manage but, in reality, have no grip on employees; they make simplistic decisions. The sociologist notes their “general ignorance”; they do not know the phenomenon of power. According to them, to get out of this situation, the adage “understand to act” should be generalized. It is translated into a need for thoughtful action based on a serious investigation of reality and therefore of the deep causes to be corrected:
“We have to get down to reality in its complexity […] in other words, to understand in order to be able to act.”
Secondly, the filter is subject to constraints of lack of time, urgency and over-information (reports, weak and strong signals from the environment, clubs and social networks, etc.). It is in these circumstances that the “pathology” of simplification appears.
Faced with complexity, we tend to look for the path of simplification, “pruning” to understand, “pruning” to clarify. “Simplifying,” writes Edgar Morin “is mutilating”. He denounces the “paradigm of simplification” which, by disjunction and reduction, creates a true “pathology of knowledge” and produces a “blind intelligence”.
The consequence of a shared simplification, taught from rules that make it possible to represent the economic and social activity of the company, rubs out whole areas of reality, for example the inscription of the company in its ecosystem (social, environmental footprint).
The endangerment of the company occurs when the market strategy is exclusively subject, for example, to representations and modeling of the marketing department.
Finally, the internal interpretation filter must deal with competitors, partners and stakeholders who have the same information about the environment of their organization.
Thus, not being systematic in the implementation of their device of vigilance, approaching their environment often in an informal way, acting by mimicry vis-à-vis the organizations of the same mission, of the same sector, the majority of the organizations perceive their environment in fine according to “the reflection of their own beliefs”, their “biased” representations. The culture of the organization can then lead it to act in this field as “systems of misinterpretation” of the environment. Indeed, seeking to reduce uncertainty and complexity in an emergency, it tends to refer to its traditions, beliefs, and local references against the global vision.
Reproduction and mimicry in progress among experts, themselves subjected to “the imperialism of calculating and quantitative knowledge” maintain the logic of the imitation of the form (organization) and the substance (strategy) of development policies and crisis situations. Hear us well, the experts are indispensable. But their universe is not without certain defects that can affect the intelligence of situations.
8.3. An example: the US–Japan FSX Fighter program or “thinking out of the silos”
“He who wishes to avoid being deceived prevents his companion’s cunning with good reflections.” [GRA 90]
A report published by the Rand Corporation in 1995 [LOR 95] analyzes the failure of the FSX combat aircraft development program (derived from the F-16 aircraft). It highlights the mistakes, the blindness, the many dysfunctions on the American side that have frustrated this Japanese-American cooperation. At the heart of the reasons, a lack of organizational intelligence clearly shows.
Americans have always discouraged their allies from building their own weapons system. In this case, their reluctance was based on the fact that the Pacific was a strategic area for the United States, which needed to be controlled.
As a result, US policymakers and strategists are showing their hostility to Japan’s decision to build an all-Japanese fighter plane – the Rising Sun Fighter.
They propose a cooperation to jointly develop a version of the F-16 Fighting Falcon of General Dynamics, the FSX. The objective is clear: to control the process of emergence of a potential competitor, beyond a power in the Pacific zone. This is a common problem in technology transfer processes.
Crucially, we live today in France and therefore in Europe which is a partner and undoubtedly a competitor of China to name only EDF in the nuclear industry and Airbus in aeronautics. The author of the report describes the consequences of the many American psychological and strategic errors.
The program ultimately favored the acquisition by the Japanese of the know-how contained in the complex production programs of the American F-16. More seriously, while they wanted, through this partnership, to prevent Japan from developing a fighter plane alone, the Americans contributed by a “boomerang effect” to create a competitor. The reporter reveals a gaping gap in organizational intelligence. The entry into negotiations in “administrative silos” undermines any coordination of the American strategy between the government and the industrialists: the complexity of the bureaucratic apparatus, the absence of a common State/industrial front, the lack of a shared strategic economic and military vision. The Pentagon and the State Department are in favor of co-production, while Congress and the Department of Commerce are opposed to it because of the risks associated with technology transfers.
These divergent positions generate incessant disputes. They distract the Americans from the strategic intentions and tactics of the Japanese. The lack of coordination led to a lack of organizational intelligence, which did not allow anticipation, monitoring and analysis mechanisms to be put in place. The consequences are unacceptable: there was a lack of American control over the technological evolution and the final configuration of the FS-X aircraft.
The Americans lost control of the changes to the base model to such an extent that the Japanese partner managed to modify 95% of the technical drawings provided by the Americans. The Japanese partner with a weak R&D base was able to benefit from all the upstream work of the Americans. The Administration and the American industrialists underestimated Japanese capabilities in military aeronautics.
The certainty, to the point of blindness, that the Japanese military R&D base was weak and poorly funded deprived Americans of the knowledge of the partner’s military know-how. Supreme humiliation: the Americans discover that they have become, in this program, at the end of the R&D phase, a subcontracting base of the Japanese. Americans are ignorant of Japanese technologies and know-how in the field of aeronautics.
Blinded by their supremacy, the Americans did not find it useful and did not know how to negotiate the transfer to their industry of the technologies developed by their partner during the SF-X program. They forced the partner to adopt their program proposal. The latter has adopted a counter-strategy based in particular on an organizational intelligence approach leading it to use the partnership to “influence” the program, develop modifications and transform it into a system of technological intelligence at the service of the growth of power of Japan. The Americans have allowed the emergence of an autonomous and competing Japanese defense industry, as well as military power in the Asia-Pacific region.
8.4. Organizational intelligence and strategies
Forms of organization are being revisited, new forms are emerging. They generate the creativity needed for organizational intelligence. We propose to examine two such forms here, agile networks and organizations, accompanied by illustrations.
8.4.1. Networks
It is a question of rethinking the organizations that we build from our territories toward a new, relevant efficiency, that is to say one that corresponds to the new economic and social dynamics born of the great upheavals of the world. The network is part of the organizational arsenal of development actors. As an essential component of the social and economic world, they can be defined as “sustainable structures resulting from interactions”
[IDB 12] (relations) between their components (individuals, organizations, networks, territories, knowledge, skills, etc.). Whatever their size (global, national, local), the dynamic they create according to their purpose is based on the mobilization of their “social capital” composed of several assets: network assets (resources, information, etc.), active relational assets, participative assets and trusted assets.
Thus, networks correspond to complex structures and dynamics that globalization and the digital revolution have upset in space and time. From now on, their mastery depends on their membership in the world’s major networks of knowledge, innovation and expertise, which is essential for finding new growth paths. This registration is based on the “organizational innovation” [ETT 01] capacity of companies, research and knowledge networks of universities, as well as the ability to interconnect and “unite” new partnerships.
It will then be necessary to set up an identification/diagnosis procedure for the “cognitive” quality of a network and its experts or watchmen. The valorization/evaluation of true social capital will have to go beyond economic indicators and integrate into the overall performance of the organizational intelligence system [CER 02].
We suggest here four entries to qualify and appreciate the performance of networks in terms of competitive and organizational intelligence. We distinguish:
- – “network assets” [LAN 00]: what kind of actions and information are produced by each network. What types of networks are used, with strong links or weak links, strong signals or weak signals, according to the proximity or distance from the core of the sector of activity concerned (industry, services, cultural industries)? What strategic mobility gives one one’s involvement in the network? It is at this level that we willingly situate the systems of strategic intelligence allowing us to anticipate the transformations/deformations of the sectors of the cultural industries, the crises and the critical movements (mergers, repurchases, disappearances of companies, emergence of a leader, etc.), but also information risks or the risks of strategic dependencies (loss of strategic skills, loss of mastery of key technologies, massive imports of cultural products);
- – “relational assets”: evaluation of relations between institutions, between organizations, by which actions and between the different networks. What is the level of synergy between individuals and organizations? What are the obstacles to cooperation? It goes without saying that the map of networks of allies or partners in international relations is here called into question;
- – “participation assets”: they concern the assessment of density/proximity, the regularity of the commitment of public and private actors in networks of influence (for example the coalition for cultural diversity);
- – “trusted assets”: this is the desire of network players to sustain their action.
8.4.2. Agile organizations
The definition that is given of the practice of agile organizations enriches the approach of the networks for our exchanges and our reflections. It will be appropriate to integrate them with the themes of our round tables.
What is this definition? Crises, metamorphoses and shocks that make the environment of our organizations unpredictable (illegible?) summon “our organizational innovation capabilities” to imagine and build new ones with more “decentralized” architectures, at horizontal coordinations, implementing the sharing of information obtained through experience and great flexibility. Thus, the “agile” organization is distinguished by its compatibility with its environment and its ability, in case of modification of the latter, to modify its strategy according to the new environment or to reposition itself in a more favorable environment to better to act on (influence) the environment.
The “agile” organization [ADB 98] is made up of “multi-functional” internal and external (cooperative) teams involved in organizational adaptation. It also includes back-office structures that provide teams with resources, tools and methods including systems for sharing and capitalizing information for a more flexible and faster adaptation to the environment. The “agile” organization is distinguished by an effective mobilization of its “social capital”, an in-depth knowledge of the environment, a mastery of know-how with added value and a high degree of initiative.
Very clearly, we will have to note the significant gap that exists, for example, in territorial development policies between “prescriptive rationality” – resource allocation strategy, grants, advice aids and strategic formalization – and policy driven development strategy on the project base – innovation, territorial intelligence, export and information risk.
Hence the use of men and women capable of broader, more qualitative perspectives, as well as an in-depth focus in the analysis of problems.
8.4.3. A network of experts
Networks of experts link knowledge and skills to combat the risk of simplification. They also make it possible to take a necessary distance for the analysis. The mobilization and learning of intelligence capabilities requires a critical gap in relation to certain approaches and to certain obstacles.
How can unprecedented problems be solved by calling on a network of experts?
How can the organization of this network be outlined?
Choosing the experts is an essential step in mobilizing network expertise to qualify the sources of information and validate the analyses.
This is called “breadth of expertise”. This allows for broad visions of business sectors. The choice then focuses on the diversity of expertise, the mix of profiles (age, training, etc.).
The art of detecting weak signals or “early warning signs” and emerging disruptions calls for “in-depth expertise”, that is economists specializing in such areas, technological experts or financial analysts and engineers.
Hence the imperative to mobilize representatives of civil society, youth and their representative organizations to increase the wealth of decisions through intergenerational dynamics, but also to make decisions and choices more effective through their ability to analyse associated with their different look.
Regarding the mobilization of digital data, it is necessary to think and organize their sovereignty, especially when their treatment makes it possible to solve problems related to the future of humanity and the planet. The provision of data to the greatest number as a common good requires the preservation of this sovereignty against predation and the risks of dependence. Typically, data, the ingredients of wealth, are the prey of large Internet groups, often more powerful than states. Private use for data business development purposes requires that a doctrine on data sovereignty be thought out.
8.4.4. The culture of organizations: management of cognitive biases and vehicle for the creation of a knowledge base of the environment
Here, the culture of the organization as we have defined it becomes an essential lever of the interaction of the organization with its environment, its blockages and its advantages. The culture of the organization is added to the brakes that meet the intelligence capabilities of any organization and that an approach to competitive intelligence must prevent permanently.
The organization is seen as a system that processes information to solve its problems and drive its “intrusions” into the market, into its environment. To do this, the organization has information, often too much information, that prevents it from forming real knowledge. In other situations, the organization may be able to build knowledge, but may also be unaware of the knowledge it holds.
Competitive intelligence will make it possible to target risks, develop countermeasures and enhance the cultural assets of the organization, or even help to transform it in the light of the constraints imposed by the ecosystem.
8.4.5. Managing the culture of organizations
The culture of the organization is produced by the organization. It is an internal variable that expresses itself through the myths, traditions and rituals of the organization. Knowledge of the identity of the organization through its culture helps guide the changes.
The management of the organization as a “cognitive system” is based on the identification of the knowledge and beliefs that individuals belonging to the organization share to communicate and innovate, for example. “Subcultures” appear in the same organization that managers can mobilize to resolve certain conflicts (for example, different national cultures represented in communities of researchers or workers within the same organization are more important than the structure itself, even the attitude toward the organization, the links with colleagues).
So the culture of the organization develops on the basis of common values and rituals called “cohesion” which are fed permanently by “the context” in which the organization is bathed. The organization is influenced by what some people call the “societal culture”. It can indeed be “the fruit of locally typed cultural elements, such as value systems, ideals and meanings shared by the members of a country” or a territory. The territory of Choletais [SIT 09] carries a culture of the particular community which will influence the functioning of the actors of the productive system:
“The weak influence of the family group on its members, from which a tendency to individualism emerges, clashes with conservative and religious values to leave the field open to an original organization of the community. Less folded on family structures, it is more permeable to the ‘coordinating forces’ of the Church and the local Catholic bourgeoisie. […] What emerges is the branch and the firm, more than the family or the trade community, which gives meaning to the economic coordination.”
These elements allow members of the organization to read and interpret the “context” to find the paths and pathways to understand its complexity and day-to-day complexity. Thus, participation in the activities of civil society (social, cultural, civic, etc. practices) contributes to enriching the “collective intelligence” of the organization: company, association or public organization.
In the same sense of this construction of a culture shared by the members of the organization, prospective thinking is indispensable in that it allows us to build the desired culture, the one that organizes and mobilizes “intelligences”.
8.4.6. Learning organization
An intelligent organization is defined by its ability to manage complexity, that is to say, to collect, extract the meaning of the movements and signals of its environment and to share it. To this must respond an ability to innovate in the organization and a new form of management which tends to be imposed gradually: “agility.”
Intelligence is defined both as the process of creation of knowledge and as the “possession of knowledge”. The intelligent organization draws on its knowledge to solve a particular problem of production, innovation or strategy.
It thus produces new knowledge through innovation or the exploitation of new situations. Three types of knowledge are then mobilized:
- – the tacit knowledge contained in specific know-how and intuitions is difficult to formalize;
- – the knowledge formalized in rules corresponds to routines and standard procedures allowing the coordination of controllable actions;
- – cultural knowledge is more contextual and expresses itself in the discourse. It is an integral part of the organization’s culture and contains stories, beliefs, myths and traditions. It is mobilizable to shape collective visions and give meaning to information and knowledge.
8.5. Collective intelligence and organization of sensor networks
Collective intelligence within business networks, for example, is intended primarily to mobilize stakeholders on development issues that they cannot access individually [TAR 10]. Its mobilization by the actors of these networks, at the service of their organizations rests on a permanent process of organizational intelligence and requires that it be apprehended in the surpassing of simple sharing and interpretation of the knowledge to become a real system of decoding, of intelligence and creativity in the service of collective challenges of the sector or network. This approach is well suited to social innovation networks. Regarding the present approach, the competitive intelligence devices that feed the collective intelligence appear at the center of the new strategies of differentiation, even of diversification, those of the individual companies, those of the sector or the pole.
In clusters or sectors, any collective intelligence approach brings together the skills of companies, research actors and organizations supporting economic development such as technical centers, chambers of commerce and industry (CCI), and technology diffusion networks. It is a collaborative set of links or relationships between people or organizations that work together as a system that shares information, knowledge and analysis to develop projects of collective interest. One could then think that this would develop a community competitive intelligence [REN 11].
Daniel Tartonne [TAR 10] explains that the challenge of support through a collective intelligence approach is to converge the companies of a sector, for example according to federative themes and creators of value and performance, inaccessible individually. These themes are classified under the heading of challenges or productive or commercial problems requiring solutions imagined in common and then applied individually: control of innovative processes or cost reduction, new organizations, etc. The themes mentioned by the members of the sector can also be defined as opportunities, issues of growth by business gains whose mastery is beyond individual capabilities.
Figure 8.1 was collated in terms of feedback from industry and industry networks led by chambers of commerce and industry in search of the most innovative collective organizations that could lead to differentiation strategies and diversification of traditional sectors. It shows the wheel of components/ingredients of an approach of collective and organizational intelligence that can be mobilized, for example, in the repositioning of a cluster of companies or a sector. Accompanied by the CCI in their approach, companies in a sector are implementing strategic creativity based on a shared approach of collective intelligence. Competitive intelligence here applies to the controlled construction of an “integrating” value chain. A matrix and organizational tool, this chain assembles the assets – know-how, products, services, skills of companies in several sectors – to create the conditions for access to sophisticated markets that CCI France defined in 2009 as markets created through the combination of activities without direct links, resulting in a more comprehensive offer than traditional markets that have not yet been invested in or imagined.
Figure 8.1. Wheel of parts/ingredients of the steps toward collective and organizational intelligence
8.6. Conclusion
The additional cost of running an administration, the loss of performance leadership or a geostrategic position, often comes from a lack of organizational innovation [ETT 14]. Thus, the application of innovative practices in the field of organization has an important influence on the results of the development of a territory. Unsuitable organizational practices will not only result in the demobilization of actors, but also in a loss of efficiency and particularly information. It is therefore important, at the level of territorial development, to carefully analyze organizational practices in order to determine blockages, obstructing practices and inappropriate steps. It is from this analysis that the practices will have to be modified.
8.7. References
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