For the good of society – [inlinetweet prefix=”@mgriffin_uk” tweeter=”@mgriffin_uk” suffix=”null”]18 leadership lessons from organised crime[/inlinetweet]
Preface
In Part 1, “Ambition” we set the scene.
According to Interpol, the UN and WTO the organised crime industry is one of the worlds largest with quantifiable revenues of at least $3 Trillion per year and despite trillions of dollars worth of investment to counter act their growth the industry is growing faster than ever leaving a trail of devastation in its wake.
In a world first we reveal how Syndicates, some of whose annual revenues top $200 Billion use influence, resources, technology and vision to build global empires and translate it into a business language that philanthropists can use to build prosperous companies that can help repair some of the societal damage by creating new jobs, simplifying international expansion, building engaged workforces and creating new, selfless collaborative cultures.
During our investigation we uncovered 18 categories, to read them just click on the link below:
- Ambition
- Customer Service
- Bribery and Corruption
- Devolved decision making
- External Problem Resolution
- Internal Problem Resolution
- Local Touch
- The Lean Team
- Consistency
- Loyalty
- Perks
- Disruptive Innovation
- The Flight to Favourable Jurisdictions
- React to Real Time Events
- Process as the Enemy
- Spying on the Competition
- Emigres Clusters
- Trust, Faith and Openness
(14) React to Real Time Events
What this means to the Shadow Industry
In todays connected world the Shadow industry continues to show us that not only is it able to monitor global developments in real time but that it is also able to use them to its advantage, sometimes with devastating effects.
In 2008, in an attack that the western security agencies called a terrorist template for the future and became a prelude to the Westland bombings in Africa, members of the Lashkar-e-Taiba, one of the largest and most active terrorist groups in southern Asia committed an atrocity in Mumbai killing 168 people and seriously injuring another 308. The coordinated attacks started on Wednesday 26th November and lasted until Saturday 29th. The planning was complex. SIM cards were sourced from America and Pakistan, weapons were sourced from China, intelligence was gathered using ground based intel as well as Google and Google Earth and the attackers destroyed the Cobala police Command and Control Center before simultaneously launching the attacks from land and sea and taking a mix of Cocaine, LSD and steroids to stay awake for the 50 hour rampage. Despite this though the most deadly part of their armory was a Pakistan based Command and Control Center equipped with a satellite phone, hand held mobiles, laptops, broadband and a TV where the Lashkar chiefs used live video feeds from the terrorists headsets, from-the-scene news broadcasts and live public from-the-scene social media commentaries to direct the slaughter by phone and help their teams evade capture.
While this is, of course, an extreme example of a terrorist group using live feeds to gain an advantage it’s unnervingly common for organized crime groups to use omni channel marketing campaigns to exploit newsworthy events. Disasters are on the rise and whether they’re man made or natural it makes no difference to the criminal underworld. Every year the world’s civilized society gift trillions of dollars a year to erstwhile charities who have the unenviable job of supporting the victims of terrorist attacks, floods, famines and earthquakes in their time of greatest need but criminals, as we’ve witnessed so often before are able to plunge to even greater depths of depravity and swiftly use news to their advantage. One week after Hurricane Katrina struck New Orleans the FBI issued a press release stating that the ‘great majority’ of over 4,600 websites soliciting money on behalf of the victims were fraudulent and there are many other nefarious examples such as the Yakuza in Japan who used live information after the Fukishima earthquake to run labor broking and construction scams, both notorious for their deceptions and swindles.
The World Health Organisations Center for Research on the Epidemiology of Disasters, CRED, defines a disaster as “a situation or event, which overwhelms local capacity, necessitating a request to national or international level for external assistance; an unforeseen and often sudden event that causes great damage, destruction and human suffering” and according to the World Disaster Report, compiled by the International Red Cross and Red Crescent disaster relief agencies there have been over 600 multi-billion dollar Disasters since 2002 which have killed over 1.1 Million people, affected a further 2.1 Billion and caused over $1.43 Trillion in damage. Over the years 40% of the rebuilding, humanitarian aid and support costs of righting the damage from these catastrophes have all been funded by the generosity of the public and the World Giving Index, a worldwide survey into the year by year charitable giving habits of the world’s population have found that during the aftermath of a disaster the number of people donating money each month rises by an average of 2.4%, or 312 million.
As the culture of giving becomes increasingly omni channel authorities continue to report a 9% CAGR rise in technology led scams with estimates from agencies including the FBI, UK Government and UN suggesting that between 3% and 14% of all donations are siphoned off so putting this into perspective in 2012 alone between $5 Billion and $22 Billion could have been siphoned off. Shockingly however these estimates fail to include downstream, long tail scams such that include corruption and fraudulent construction contracts which commonly run into many hundreds of billions of dollars per year.
Ultimately, as unfortunate as it may be, we cannot say that these tactics haven’t been successful for them however, with persistence and vigilance hopefully we can stem the tide.
What this means to legitimate industries
There is no denying that over the past decade we have all become more interconnected and as new technologies emerge such as the Internet of Things, the Semantic Web and Embedded Technology this trend is accelerating.
We live in a time where access to real time information, both at a micro and a macro level is becoming increasingly ubiquitous – from being able to read tweets from a Malaysian farmer who’s watching storm clouds track across the horizon all the way through to watching every aspect of the search and rescue operation for a lost aircraft but having access to this information doesn’t necessarily mean you know how to capture it or use it to your advantage.
Being able to see information in real time is one thing but if you are going to use it for competitive advantage then your organisation is going to have to be able to react quickly enough to maximise it.
Over the past number of years there have been a multitude of events that organisations could have used to their advantage had they seen the opportunity and been able to react quickly enough such as the ruinous monsoon floods in October 2011 that crippled the factories responsible for producing over a quarter of the world’s hard disks. To the average outsider this information was just news but to Dell, EMC, IBM, Lenovo, Netapp and HP who relied on these components for their Enterprise and consumer technology products this news had disastrous downstream consequences. They felt the first ripple effect when they couldn’t fulfil customer orders, revenues declined, leadership teams missed their earnings calls and over $20 Billion was wiped off of their share prices then soon afterwards, when they had all sold through their reserve stocks, the second ripple hit – drives were in constraint, demand exceeded supply and component prices increased by over 30%. Again, to an outsider this might sound unfortunate but it meant that customers tried to manage with what they had and delayed purchase orders so for the second time in nine months organisations found them facing revenue shortfalls and their stocks lost an extra $12 Billion.
If any of these organisations had been quick enough off the mark and understood the implications of the floods they could have increased their forward orders and cornered the remaining supplies at the expense of all the other manufacturers. Not only would this have given them an epic price and supply advantage but it would have allowed them to aggressively target their competitor’s customers, take orders, exceed revenue targets and take market share.
In other industries organisations have managed to leverage the real time power of social media to dramatically reduce their advertising bills. One of the most famous examples recently was Procter and Gamble’s Tide business unit who saved over $4 million by deciding not to buy a prime advertising slot during the recent Super Bowl, instead their marketing team used Twitter to Tweet about other people’s Super Bowl ads creating Tweets such as “Puppies and horses @Budweiser? Adorable, or just a giant mess for @Tide to clean up. #GetsItOut” and “@JaguarUSA May we recommend one of these as well? @Tide #GetsItOut”. When all was said and done it was hailed as a grand success and their tweets and viral videos were retweeted tens of millions of times.
Takeaway
Every day there are millions of opportunities for organisations to use real time data to generate new insights, reduce costs and create business advantage.
The key takeaways are:
- Create an agile organisation that allows everyone to react and respond with speed
- Deploy enterprise wide Big Data and Analytics solutions to spot events and trends
- Look for new ways to interact with live feeds and create new experiences
