Make Better Decisions with an Integrated Intelligence Model

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The following is an excerpt from the article: The A2E Integrated Intelligence Model: Integrating Five Types of Intelligence to Improve Organizational Performance. Authored by Chaojie Wang, Fred Hoffman, Alvi Lim, and Jin Kwon.

Decision Support Systems have existed for decades, and today, firms are turning to advancements such as big data, machine learning, and artificial intelligence to help guide strategy development and improve organizational performance.

While technology is a powerful enabler, it is not a panacea; the reality is that technology alone is insufficient for informed, wise decision-making and problem-solving and must be supplemented by human intelligence

With this understanding, a new model which blends technology and humanity to support strategic decision-making is needed. We call this the “A2E Integrated Intelligence Model.”

What Is The A2E Intelligence Model? This model builds upon the Data-Information-Knowledge-Wisdom (DIKW) hierarchy as its foundation to integrate five different types of intelligence into a unified and coherent framework:

Artificial Intelligence (AI) Business Intelligence (BI) Competitive Intelligence (CI) Decision Intelligence (DI) Emotional Intelligence (EI) -- Article Continues Below --

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While these five concepts represent five different approaches and perspectives and are studied and practiced within five different disciplines, they are inherently related and complementary. Integrating them into a single framework provides a simple, yet powerful, mental model to help organizational strategists and business executives conceptualize an effective approach to problem-solving.

The DIKW hierarchy, also known as wisdom pyramid, is commonly used to explain the different types of human experiences.

Data are the most primitive type, the result of observing events, environments, and ourselves by our senses and modern sensors. (i.e. the number "3") Next, information represents patterns from data. Information helps us understand what things are. (i.e. the three colors or a traffic light) Knowledge represents the sense-making of information in the personal and social context, and helps us understand how things are. (i.e. "There is construction at the traffic light") Last is wisdom , the pinnacle of the hierarchy, it represents human beliefs, purposes, values, and judgment which helps us understand why things are. (i.e. "If I follow my GPS directions to the traffic light, I'll be late for my meeting: I'm going a different way.") This model represents the increasing level of human understanding through the incremental process of discovering, creating, and applying human knowledge, and helps to better understand human decision-making.

The new A2E Integrative Intelligence model as depicted in Figure 2 integrates the five types of intelligence along the DIKW hierarchy.

AI is placed at the data level as a tool to enable the collection and processing of large volumes of data. BI and CI deal with the collection and processing of data from inside and outside an organization using AI as the tool. BI is about using reporting tools and internal data to learn about the company's internal strengths and weaknesses and improve internal business operations. CI is about collecting information from external sources to help understand the competitive environment to ward off threats and leverage opportunities. DI is the disciplined, data-driven, evidence-based decision-making process that leverages AI, and relies on the information collected and knowledge gained from BI and CI. Finally, EI represents the ultimate human factors that drive decision making including intangible intuitions, insights, beliefs, and judgment.

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The A2E Intelligence Model and Best Buy The U.S.-based consumer electronics retail giant Best Buy illustrates the relevance and efficacy of the A2E Intelligence Model in a real-world business scenario. The survival and prosperity of Best Buy in a challenging retail environment demonstrates the benefits of applying all five types of intelligence to overcome weaknesses and threats, leverage strengths and opportunities, and ultimately achieve optimal organizational performance.

Rapid advances in information and communication technologies (ICT) have presented established business to consumer (B2C) retail firms with both opportunities and threats. Over the past decade or so, one major trend has been the rise of online retailing. Changes in consumer shopping and purchasing habits challenge the traditional, brick-and-mortar model used by leading retailers.

As successful online retailers like Amazon began to eat away at the market share of traditional, brick-and-mortar retail chain stores, many traditional retailers found they were unable to come up with a strategic response to the price, variety, selection, and convenience advantages of online shopping.

Many retail businesses have suffered sizable losses in market share, and some have either declared bankruptcy or have been projected to do so in the near future. For example, in October 2018, after more than a century of existence, once-dominant U.S. retailer Sears declared bankruptcy, and some industry experts were predicting that another industry giant, JC Penney, was not far behind.

Just a few short years ago, computer-electronics retailer Best Buy was in a comparable state of decline. Best Buy store managers increasingly found themselves standing by helplessly as visiting customers would engage in a practice known as “showrooming”, or physically examining new products in a store but then leaving the store to purchase the item from an online vendor like Amazon.

Like so many of its industry peers, Best Buy found itself in serious trouble, and corporate executives knew they needed to come up with a strategic response - and fast - if the company hoped to avoid the financial death-spiral being experienced by some of its competitors in the industry.

For businesses faced with a significantly changing operating environment, the difference between bankruptcy and continued profitability is adaptability, and adaptability requires sound strategy stemming from wise and informed decision-making.

While “blue chip” firms like Sears and JCPenney failed to adapt, Best Buy not only staved off disaster, but has reversed its decline and even prospered.

Best Buy’s strategic response is an example of how organizational leaders can draw upon a mix of technological and human resources to address even the most dire of problems and come up with creative, workable solutions.

The company used an integrated approach that encompassed artificial intelligence, business intelligence, competitive intelligence, decision intelligence, and emotional intelligence. Each of these intelligence types is needed by executives faced with a challenge like the one Best Buy confronted.

Leveraging all five types of intelligence supports the development of an informed, sound, and successful strategy. While each of them can be use independently to address a specific dimension of a problem, the most effective approach is to use them collectively to solve a problem as a whole.

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What the A2E Intelligence Model Means For CI Practitioners In the business world, the only constant is change and the only certainty is uncertainty. Recent advances in technology have not only brought about rapid change, but also second and third level consequences that were often unforeseen and threatened established businesses with serious, and sometimes fatal challenges.

Avoiding these threats is possible through an integrated, strategic approach - one that incorporates tribal leadership, innovative thinking, and informed, wise decision-making.

An integrated framework, like the A2E model, places technology in the context of informed decision making. In other words, technology is merely a means to an end and not the end in and of itself. AI is a powerful tool addressing the “how” to enable BI and CI, which address the “What/Where/When?”, while the DI and EI answer the ultimate question of “Why?”

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