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The term "organizational intelligence" refers to the ability or capability of an organization to analyze data and translate it into usable information. It includes the organization's ability to gather data and also to research events and behaviors in order to apply them to its business model in a way that moves the organization forward. It may also refer to an organization's capability for sharing information amongst stakeholders.
There are usually two main components of organizational intelligence. The first one is knowledge management, which includes a number of strategies intended to gather and share information gained through research, data collection, and experience. Examples of knowledge management techniques include the creation of best practice documents. Such documents are created by interviewing the most successful workers in a functional area, analyzing their processes and habits, and documenting those behaviors for use by all other workers in the same functional area.
The other main component of organizational intelligence is organizational learning. This refers to the ways in which an organization learns and also to the way in which organizations adapt based on what they learn. It is based on the belief that organizations that can objectively analyze data and find ways to incorporate changes in environment, government, resource availability, and consumer opinions and buying behaviors into their business plans are more successful than those who merely assemble data. Intelligent responses might include changing pricing strategies, expanding product offerings, or marketing in ways that reach consumers more effectively.
One of the most important aspects of the concept of organizational intelligence is that intelligent organizations do not merely gather information, they share it throughout the organization. For example, different departments may well use different vendors for the same function. In an intelligent organization, the departments will share that information and attempt to negotiate a collective deal in which reduced pricing is obtained from a single vendor in exchange for the business of several departments.
Another critical feature of an intelligent organization is that it does not merely sit on the information it gathers — it uses it to improve itself. The tenets of organizational intelligence dictate that once information is gathered, it must be evaluated to determine all the ways in which it is relevant to the business or organization. For example, if a business finds that it is losing market share amongst a particular group of consumers, it should try to determine why, what it can do to regain the share, and what other consumer groups might be a viable replacement for the lost business.