SCIP / Frost & Sullivan?

[Kieran Michael Brown]

So, what do we think about this? I've got no dog at all in this race, just sincerely curious about what others think.

[Bryan Doran]

It seems that in this thread, people (myself included) are discussing whether to keep SCIP as an umbrella organization or whether we as a community will splinter into a myriad of competing organizations. I wonder if that decision has not already been made - it seems that with the declining SCIP membership and the declining attendance at the annual meeting, people are already seeking alternatives. So the question becomes: does this merger provide SCIP the chance to re-emerge as an organization at the forefront of CI or not?

[Mark Johnson]

It took me a while to think about this one before posting again.

After the SCIP conference call with chapter chairs yesterday I felt much better about the merger terms. I still have concerns, and feel that SCIP is unlikely to change many of the things I feel need changed. If that is the case the merger will not achieve the benefits that were promised. But then, a rough rule of thumb is that 2/3 of mergers fail to achieve the promised benefits. My personal rule of thumb is to consider shorting any company that engages in a merger. Non-profit mergers are pretty rare...so not much track record.

SCIP hasn't really responded to the idea of providing written copies of any of the documents I was interested in. So it's a matter of trusting their assurances. Many folks won't accept that. It leaves me with a high degree of skepticism as well.

1. Financials - SCIP indicates they had a negative net worth at the end of 2008. This could be verified with financials filed with the IRS, but the documents were not provided. They claim they had a net worth of ($264k). Combined with general attendance downturn and much worse than expected return from the SCIP Conference in Chicago, SCIP determined they had no choice but the merger. Attempts to obtain financing and/or mergers with partners with more natural "match" were unsuccessful. No indication that I heard of the amount of cash infusion. It sounded as if the amount was somewhat in flux, depending on results through the coming months.

2. I'm not aware of any "document" addressing vendor neutrality. However, SCIP staff & Kelsey Hare (Chapter Liaison from the Board) indicated this was one of the key concerns addressed in all discussions. An extensive interview with David Frigstad is contained in the Board minutes, and strong assurances were given that vendor neutrality was understood and accepted.

3. Anticipated budgetary measures (and any money saving initiatives by SCIP) were not addressed. SCIP is aware that there is a likelihood of some staff reductions, but they also indicate an awareness that they cannot cut benefits and hope to stimulate membership.

4. Concern for SCIP's intellectual property, including articles and courses owned by SCIP was expressed. Since F&SI is a 501(c)3 nonprofit, and SCIP is a 501(c)6 nonprofit, there is an IRS rule indicating assets and proceeds of a non-profit may not inure to any profit-making entity, individual, or corporation. If at some future point SCIP or F&SI were to cease to exist, all assets would have to be transferred (donated) to another non-profit.

5. What does Frost get out of this? Still not adequately answered. Frost (corporate) benefits from the existence of a strong CI community. Frost & Sullivan Institute will get two seats on the board, bringing the board to 13, and they will get to review and/or veto significant financial transactions. This last is obviously designed not to strangle SCIP, but to assure that the subordinate organization will exercise responsible financial controls, and to assure that Frost has a voice in key decision making. That is most reasonable. Beyond that into the vague area of "synergies"...darned if I can see anything like that. SCIP has said a shared services approach will help them save money. This strikes me as utter cattle crap, since F&SI currently doesn't have any operations whose services COULD be shared. There are promotional opportunities from an association with Frost. But anything SCIP could do to benefit Frost would be a violation of vendor neutrality. Benefits to the Institute would be very limited. F&SI's charitable status is up for renewal at the end of 2009. It's possible that...since F&SI hasn't really done anything to date, their charitable status was in jeopardy unless they actually do something. I am not a lawyer, but it strikes me that this is something that might help F&SI maintain their non-profit status. That is pure speculation on my part.

All these discussions left me with a much better feeling. I believe that the worst outcomes from this are unlikely or not possible. It did not leave me a raving fan of the merger. I still think "how we got here" is because of authoritarian rigid adherence to procedures and a refusal to consider change. I believe the growth model of SCIP is flawed and the chapter model is broken.

The society may easily yet fail sometime in 2010 or beyond. For a short-run measure, this merger may serve. The key (my own view) will be willingness to try things that have always been "we can't do that" previously. SCIP will need to accomplish this while some in the society and/or non-member practitioners will be moving to competitor societies or starting up competitive alternatives. SCIP ain't the only game in town.

I believe the merger vote will be in favor. While it's widely considered unethical to cite the direction before the vote is in, SCIP has been reporting 90%/10% acceptance. This may have the result of generating bandwagon effect, but it seems like an unethical manipulation of the result to me.

SCIP has done an extraordinarily crappy job of communicating the substance of this agreement. Rather than put together a full information package so the vote could be informed, they put together a statement with loads of holes in it, did no anticipation of likely questions, and half-answered questions. They indicate financials can be obtained from the IRS with FOIA request, but didn't make those documents available as a link off the website or a summary mailing to key volunteers. Rather than inform key volunteers who they KNEW would be deluged with questions, they didn't meet or discuss with us until the vote was half-over.

I believe SCIP hoped to get approval with the minimum amount of disclosure they could get away with...and that was interpreted by many viewers as an indicator that something nefarious was afoot. It is SUPPOSED to be a key attribute of CI analysts to be naturally suspicious. Everyone could easily see the proposal was put together in a slipshod hasty fashion.

In this case, I believe the clumsiness was not deception...but merely clumsiness. Try not to look for conspiracy when mere stupidity is an adequate explanation. A week more preparation to announce and inform, followed by a better defined voting period would have likely defused many concerns. Oh well. Blew that one. If SCIP wasn't in the habit of making mistakes, they probably wouldn't be in this fix anyhow.

SCIP has promised (not on our call, but in the call Monday with SCIP FELLOWS) an "Obama-like" transparency. I don't know if Obama-like is acceptable...but every bit of transparency will help...if they really mean it. It's time consuming to summarize and inform...but it makes a huge difference in buy in and client/member cooperation. It would be a HUGE departure for SCIP to actually adopt transparency.

Like everything else in this proposal...we'll just have to wait and see, won't we?

And now....I must get some work done. This controversy has consumed WAY too much time for me the last week, and I'm behind on a project.

Mark Johnson

[Arik Johnson]

Thanks a lot Mark - for those of us still seeking clarity that was very helpful to get your input.

[Claudia Clayton]

Mark, I second a lot of this but especially that the growth model is broken and the lack of communications. I hope this will begin an era of can do instead of "can't do what other groups do cause we have no money". And I am making this short and sweet as I too have to get back to work!

Claudia

[Arthur Weiss]

If the reason things were handled as they have been is because of clumsiness then it calls into question the calibre of the board and their ability to make the necessary decisions post-merger. Maybe, following the merger, the board should stand down - and there should be new elections to bring new faces for the new era.

[Sally Church, Ph.D]

Well, I'm a little late to the party here, due to being swamped with work lately.

The first I heard of the merger was a sparse email asking me to vote.

Another email was received this week explaining a bit more details but but really, the whole thing came out of left field for me.

I've not been a big fan of Frost and Sullivan stuff in the past, whether it was their reports (weak in Pharma) or the CI conference (ditto). None of my pharma CI clients were keen on them either.

What is a little surprising is the lack of internal CI awareness or ability to communicate, judging by the number of people who were surprised by this development.

[Melanie Wing]

This link found its way to my inbox...via SCIP.online. Thought it might be a useful reference for others.

http://www.scip.org/content.cfm?itemnumber=7481

[Carolyn M. Vella]

This is not meant to be unfriendly - just to explain my vote. I have been an officer on several Boards (religious, cat registries) and we were very ethical. So this is not my first rodeo. Boards write things so that their members will vote in favor and the membership does so because they voted for and generally like and trust the Board. We have seen this writing in our practice of CI (seduction, misleading, mis-stating, misdirection, indirection) and, of course, there is nothing wrong with this. But I live and raise those who walk on four feet. I walk on two. I voted "no". I'm not a sheep and won't be treated as one. As much as I like and respect the Board, voted for them and appreciate their hard work. Carolyn

[Tim Powell]

SCIP and I go way back, almost (but not quite) to its beginnings. I founded the New York City chapter as one of the first ever city chapters – a new idea at that time (early ‘90s – before the Internet). I have met many clients and friends, people I have known through most of my working career, and whose “colleagueship” and diverse backgrounds and viewpoints I’ve always found stimulating, challenging, and valuable. I admit to having a lot invested in “the way we were”, and I’m concerned that we may not be passing that great legacy on intact to the newer members of our discipline.

On the other hand, as a professional business analyst, I make my living by pointing out that organizations are born because there is a need for them, they grow – and as the needs for them evolve, they evolve to meet these needs. And if they do not make that evolution happen, they go into decline, and eventually die out. This is a cycle, it happens to businesses, non-profits, political ideas, TV shows -- and professional associations.

This ability to adapt to changes in the environment is one of the Merriam-Webster definitions of “intelligence”. The fact that an association of intelligence professionals can’t be more open to changing itself to meet changed market needs says less about the management of that organization – which I think on the whole has done the best that could be expected of them in very difficult circumstances – and more about the innate inability of most organizations to adapt quickly and effectively to environmental change. (Read The Innovator’s Dilemma by Christensen for more on this theme.)

The strategic challenges for our discipline are much greater than the problems of SCIP, and I believe that SCIP’s problems merely model in miniature these larger secular trends. There are far greater problems in the intelligence discipline itself, as practiced both in business and in the military and political world. You needn’t look beyond the recent controversy over interrogation techniques to see that the whole discipline is in crisis – and has been for some time now.

A “sister” business discipline, strategic planning – to which we owe many of our models and constructs -- previously suffered much the same fate as intelligence. Its association has undergone several changes in ownership as it struggles to find an audience and a voice.

SCIP’s immediate cash flow problems need to be addressed, which this merger will apparently do. But more importantly its ongoing cash flow – and value proposition -- problems urgently need to be addressed going forward. It’s not clear how this is expected to happen. The implication is that the Frost people will somehow be able to achieve this, where we haven’t. While I hope this is the case, “hope” is not a strategy.

To continue the medical metaphor, this deal stops the bleeding – but the cancer in our discipline is still there. We’re being asked to approve a short-term solution to what is actually a longer-term problem.

I don’t mean to hijack this thread, which certainly has helped crystallize an interesting and valuable debate. But I believe what we should be using our considerable collective brainpower to ask ourselves is– how, in this era of unprecedented peril for business, and what seems to be almost continual tumultuous change, can we be adding greater value and relevance to what we do to ensure the viability and success of our clients?

Once we figure that out on a micro level (i.e., in each of our clients), the macro problems of the intelligence discipline will be solved – and the problems of any related professional network will pretty much take care of themselves.

Put another way, SCIP’s insolvency is a symptom of a deeper, larger systemic problem -- not the root problem itself. We must be careful to make this distinction, and keep our attention focused where it’s truly needed.

This membership vote is neither a referendum on SCIP nor on CI, but rather is needed for technical reasons (as specified in SCIP’s by-laws) to accomplish the merger. My vote FOR the resolution carries with it the following implied conditions: (1) a vote of confidence for the SCIP leadership that they have exercised adequate due diligence and stewardship, and made a tough decision; (2) my trust that they continue to monitor the status as and after the transaction takes place, and that they safeguard the interests of the entire SCIP community; and (3) my trust that they will address in earnest the longer-range issues of value to members and sponsors that I’ve mentioned above.

[Alan S. Michaels]

Tim, you're comments are so clear, logical, intelligent, and comprehensive.

[Claudia Clayton]

In response to the comments re SLA and why it thrives while SCIP does not, I'll throw a couple of other thoughts into the pile.

First, I am going to my first SLA conference in June as a speaker with Toni Wilson on the topic of how SLA members can educated themselves on CI. So I am not an expert on SLA.

However, I do know that somehow they managed to develop a series of web-based courses and a certification that while it is far less thought out than SCIP would like a certification to be, it still at least exists in real time. Also, they already have distance learning which certainly helps in a recession. And I am led to understand by SLA members that vendors are out in force at the conference, subsidizing all kinds of things because information centers still have budgets and the association has created sufficient growth and member mass to attract them over time.

Also, SLA has different areas of interest including their "CI Division". SCIP does not have their "practitioner division" and "independent consultant" division. No focus on us, no focus on SCIP.

Associations are important for information and idea exchange, but what almost ALWAYS supports them is the judicious use of marketing opportunities for the vendors. I say judicious because this needs to be a balance. Enough opportunities for vendors to reach customers but not taking over the educational aspects of the organization. It has been my experience - and I have served on the board of many associations - that no voice for vendors is as bad as too much.

It takes money to do the things an association needs to do to attract members and to provide them with value. Until this is part of the SCIP plan, there won't be enough to fund the things that will make the organization great.

SLA seems to be an association that is pointed to as successful and that serves its members and that manages to grow. It is not done by the miracle of loaves and fishes but by the sound approach of mutual need and advantage. And of supporting the many constituencies they have identified as being important to the organization. And some of these approaches could be adopted by SCIP without losing the intellectual focus of a professional association of competitive intelligence practitioners.

SCIP needs a real plan, not a mission statement. That plan needs to include marketing. SCIp does not have a marketing plan. I will just about bet SLA does.

[Carolyn M. Vella]

OPPORTUNITY (sent at the same time to the SCIP BOD)

I have been told that I have led an interesting and exciting life. What I have done is make use of the opportunities that have been offered to me. Opportunities are always exciting. So now SCIP, along with membership approval, can make use of an opportunity it now has. This is very exciting for SCIP. Where does it take it? What does it do?
SCIP, although a professional association, has more than just a mission statement. It has a life of its own. It must live CI. In the life of a professional association, this means promotion of the discipline around the world, instituting pride in the practitioners of the discipline, teaching established methods of practice in the discipline for those just beginning and newer methods that enable the discipline to progress to another level. In addition, there is the social side. Members of any discipline need to interact. They need to get together with others who share their own interests and “speak CI”.
SCIP has performed all the above for many years admirably and, with their new opportunity, will continue to do so in the future. I hope to see many of you at SCIP events in the future where we can all help SCIP make the most of their exciting opportunity.
Carolyn M. Vella, Meritorious Award Winner, Helicon Group