Zach Selch warns that organizations gather intelligence well but fail when leaders force it to confirm what they already believe. He contrasts a Cold War story where Andropov demanded proof of a fake nuclear strike with a 1990s company that clung to an outdated sales loophole instead of collecting fresh data, leading to collapse.
Chapters
Hi, I'm in front of the old KGB building in Moscow. And it always strikes me how interesting it is that you have organizations that are phenomenal at gathering intelligence, but then the management, the leadership, doesn't quite know what to do with it and screws it up sometimes. In the '80s, the leader of Russia, Andropov, was sure that the West, the Brits and the Americans, were planning a preemptive nuclear strike on Russia. And he was pushing people to find him confirmation of these plans. And none existed because that wasn't in the plan. But all the intelligence organizations, the KGB and the various other intelligence organizations, were being pushed to find confirmation of something that didn't exist, which created havoc in the ranks. And it really contributed— I'm sure it wasn't the main force, but it was a contribution, contributor. It was a contributor to the fall of the Soviet Empire. And you see this in business a lot. People will say, will come up with an idea, and they'll ask for business intelligence to confirm their plan instead of coming out with actual data, which can then be used to create and make a plan. And I'll give you an example. Back in the '90s, I worked for a company where the chairman had worked in the '80s for a company that had sold consumables for a very, very high price, utilizing a loophole in the nursing budget. So the nurses were actually able to buy very highly overpriced consumables from their operating budget, and the company could give away devices and then sell these expensive consumables. And he was sure that that was the whole business plan of our company 10 or 12 years later. But by that time, the loophole had been closed, the rules had changed, the budget system had changed. And I was told to go and gather information, and I went and I interviewed dozens of people, and I looked at the laws, and I looked at the rules. And I came back and I said, you know, the rules have changed. And he said to me essentially, look, Zach, if you can't get behind the company strategy, you should find yourself another job. And at the point, I was pretty young. I was a little bit more— a little bit less secure at that point. And I said, OK, I guess you're right. But it was a huge blow to the company because effectively a few months later, we realized we couldn't sell this product at all. What we had done was we had taken something that we could have made for a dime and sold for a dollar, and we made it for a dollar and sold it for $7 with the idea that we could make a lot more profit on it, but the market simply wouldn't handle those prices. And we could have done much better if we had started off with the idea of making it for a dime and selling it for a dollar. Remember, when you're ready to grow your international sales, reach out to us. We can help.
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