In September Collective Intelligence again teamed with Futures Strategy Group and Board Advisory Services for part two of a scenario-planning event hosted by the Institute for Internal Auditors in New York.

Building on the introductory session conducted for the IIA last January, the three firms took IIA members through a multi-scenario analysis to help them think practically about nontraditional risks in a range of business environments.

Participants in the September event spent the bulk of the day in structured breakout groups brainstorming around richly imagined "worlds"—scenarios, that is, for 2025. The product of their work was a reimagined audit function appropriate to each scenario. A plenary session at the end of the day compared ideas from multiple scenarios, and left only the strongest, most versatile ideas standing. Participants went home with real-world recommendations for their organizations.

Participant feedback was overwhelmingly positive. Said one IIA member, there was profit in "looking into the future first, then back to the present to come up with strategies. It was a lot of fun, as well as an education. The speakers were excellent."

Participants were engaged by "the whole concept of contemplating different and even hard-to-imagine scenarios." In particular, "ideas related to managing the workforce of a future world that works remotely—and how to influence management—were enlightening." That sentiment was echoed by another participant who remarked that "everything discussed was so relevant to the real world... It forced the participants to really think in a short period of time." Said another, the day was "an opportunity to think intellectually and creatively about our collective future. Very thought provoking."

Kevin McDermott, the founder of Collective Intelligence, served double duty as the day's luncheon speaker. He addressed the day's main theme that traditional controls are insufficient for managing non-traditional risk.

"Our big idea," McDermott told the group, "is that for managing non-traditional risks traditional control functions may well create a false sense of rigor. Historically they've been designed to measure the present and make choices about the future by making reference to the past. That might not work in the face of a Category 5 hurricane that blows up unexpectedly from over the horizon—which happens all the time."

It's great to have new ideas, McDermott argued, but an organization needs the strategic confidence to privilege some ideas above others.

"Strategic confidence," said McDermott, "is not perfect knowledge. It's confidence that an organization can respond to dramatic change in its operating environment that it could not have predicted by extrapolating from the past."

Collective Intelligence founder Kevin McDermott addressed the 8th International Conference on Knowledge, Culture and Change in Organisations on August 6^th. His subject: what's gone wrong with knowledge management and how to fix it.

The Conference, an annual summit on social and economic change, was held at Cambridge University. Collective Intelligence is not a knowledge-management consultancy but KM is among the firm's core capabilities.

"For a while now," says McDermott, "I've noticed that in client conversations I am careful to avoid speaking the words 'knowledge management'. I can never be sure if the people I'm talking to didn't invest lots of money building 'knowledge capability' and now wish they hadn't."

McDermott had three large points to make. One, talk about "knowledge management" is nearly always talk about technology; the knowledge-creation ROI is assumed. Two, knowledge mangers overestimate the market's desire for social-networking tools. Three, the user experience doesn't appear to matter much.

What these have in common, McDermott argued, is a failure to make explicit the link between an organization's strategy and what it spends on knowledge management.

McDermott told the conference that in the past decade organizations, especially big organizations, set out to build knowledge-management "systems" at a moment in time when managers were spellbound by information technologies. IT, he contended, "promised—well, promised everything. The consequence has been that big-company KM systems often became elaborated data-mining processes."

Making the business case has been tough for KM advocates. McDermott thinks that's because the discipline has so often had only generally defined links to strategy. Knowledge managers, he believes, can take lessons from established corporate-control functions like audit and compliance.

"A control function," says McDermott, "is, at bottom, an intelligence-gathering job, one in which practitioners are—or should be—constantly asking themselves, 'Am I looking at the right things? Am I asking rich questions?'"

Making explicit the why behind collecting a byte of data—to act with strategic intent—is what McDermott calls the "the intelligence agenda", a to-do list naming where an organization needs to be smart if it is to attain its objectives.

"The intelligence agenda," McDermott told the Cambridge conference, "is the business case for knowledge management."

Five years ago the Sarbanes-Oxley Act set in motion a string of unintended consequences for public companies. Among them: internal auditors are acquiring extraordinary opportunity to participate in the strategic direction of their organizations. And it is now evident to auditors that conventional risk and compliance models will be insufficient for managing the nontraditional risks guaranteed to characterize the next 15 years.

On January 11th, 2008 Collective Intelligence combined with The Futures Strategy Group and Board Advisory Services in an unprecedented one-day session hosted by the Institute of Internal Auditors at Madison Square Garden in New York. Attendees learned to cultivate a clear line of sight on the cross impacts of multiple categories of risk from anywhere in their organizations—a horizontal view of decision making intended to tear down the walls between siloed functions.

The intense one-day event was framed by an adaptation of the alternative-futures planning model created by the Futures Strategy Group. Collective Intelligence, a frequent partner of FSG, helped lead participants through the scenario-planning work and provided the practical tools of capturing organizational knowledge and putting it to work. Throughout the day Board Advisory Services, which built its reputation on a horizontal view of risk management, kept the expert audience on track toward an integrated view of governance, risk and compliance in a post-SOX world.

"Our deliverable today," CI's Kevin McDermott told the crowd in his introductory remarks, "is not interesting conversation. If that's all you get we've failed. Our deliverable is to send you out of here with an altered idea of your jobs, your organizations and the strategic choices before you."

The attendees were enthusiastic in their response. Here's just some of what they had to say afterward:

"Forward thinking is a necessary competency. Not only thinking of current risk, but risk that may arise in the future... The breakout groups offered a different perception of risk... The concept of thinking of all disciplines that impact risk fro consideration in the thought process... The set up of this workshop requires full engagement, interaction... It made me think globally... Learning how to apply current issues and demographics, etc to strategic planning... The scenario breakout was far more interesting than what I expected. I enjoyed the interaction of my peers and the guidance provided by Kevin McDermott."

For more on the application of futures-strategy to non-traditional risk click here.