How do you know what your CI needs may be?
CI is a process intended to assist in maintaining or developing a competitive advantage. It allows a company’s management team to assess change in its industry, as well as the capabilities of current and potential competitors. CI exists to ensure that the organization has accurate, current information about its competitors, and a plan for using that information to its advantage.
Effective implementation of its CI requires not only information about the competitors, but also information on other trends in an industry: legal and regulatory, international, technological, political, and economic. The relative strength of the competitor can be judged accurately by assessing it against the factors listed above. As the speed of change increases external factors assume greater importance in effecting organizational change. Thus, the determination of CI information needs is based upon the company’s competitive advantage over the competitor assessed, and further assessed against both internal and external factors.
The information obtained can be used in programs that supplement planning, mergers and acquisitions, restructuring, marketing, pricing, advertising, and R&D activities.
One of the most important roles in CI is that of educating the organization on change. Once needs have been defined, the CI group is responsible for collection, evaluation, and analysis of raw data, and the preparation, presentation, and dissemination of the intelligence gathered. The CI-group may handle all the activities itself, or it may assign some tasks to an outside contractor. Often, decisions have to be made on assignments of data collection, and data analysis and evaluation.
The CI-group has to decide upon the choice of sources of raw data. Should it use government sources or on-line databases, interviews or surveys, drive- bys, or on-site observations? It also has to decide if and when to deploy ‘shadowing’ and defensive-CI. Other decisions may involve choice of specialized interest groups (such as academics, trade associations, consumer groups), private sector sources (such as competitors, suppliers, distributors, customers) or media (such as journals, wire services, newspapers, financial reports) as the sources of information. Very frequently, such issues involve balancing various constraints, such as those of time, finances, staffing, etc., and therefore are based upon individual judgment.
The purpose of CI is to gather accurate and reliable information. The groundwork for the CI is done by beginning with a review of the organization’s operations to determine what is actually known about the competitors and their operations.
When an organization has some knowledge about its competitors and its own CI needs, it proceeds to the stage of gathering data. Based upon the needs, relevant data can be gathered from the organization’s own sales force, customers, industry periodicals, competitor’s promotional materials, its own marketing research staff, analysis of competitor’s products, competitor’s annual reports, trade shows, and distributors. Specific techniques include querying government resources and on-line databases, selective surveys of consumers and distributors about competitor’s products, on-site observations of competitor’s plant or headquarters, “shadowing” the markets, conducting defensive CI (determining what your competitors are trying to find out about you), competitive bench marking, and reverse engineering of competitor’s products and services.
Raw data is evaluated and analyzed for accuracy and reliability. Every attempt is made to eliminate false confirmations and disinformation, and to check for omissions and anomalies. Omission, which is the seeming lack of cause for a business decision, raises a question to be answered by a plausible response. Anomalies beg for a check of the working assumptions. While the conclusions one draws from the data must be based on that data, one should never be reluctant to test, modify, and even reject one’s basic working hypotheses. The failure to test and reject what others regard as an established truth is a major source of incorrect interpretation. Challenge what you have learned. If the information doesn’t fit the model or fact you have, then what model or hypothesis does it fit?
Evaluation and analysis of raw data are critical steps. Data that lacks accuracy and reliability may be marginally correct, a mixture of very good data and bad data, or even disinformation. All data is produced or released for some specific purpose. In CI, reliability of data implies the reliability of the ultimate source of the data, based upon its past performance. Accuracy of data implies ‘correctness’ of data. Evaluation of data is done as the facts are collected and unreliable or irrelevant data is eliminated. Analysis of remaining facts includes ‘sifting’ out disinformation, studying patterns of competitor’s strategies, and checking for competitor’s moves that may mask (this is disinformation) its ‘real’ intentions. The analysis should be conducted not only by the CI group, but by as broad a range of professionals in the firm as the CI-group can muster. The resulting CI information and its analysis can then be integrated into the company’s internal planning and operations for developing alternative competitive scenarios, structuring attack plans, and evaluating potential competitive moves.
Some suggest you should not build the mother of all databases, because A), no one is there to feed it, so maintenance becomes a nightmare, and B) it is so poorly focused, there are a jillion things in there, most of which are worthless, and no one can figure out what is good and what is worthless.
For some, the term “competitive intelligence” evokes images of computer hacking, dumpster diving, and other cloak-and-dagger activities. But there is enough information available from good sources to make questionable practices unnecessary.
Most of the information you need (not want) is publicly available. CI professionals frequently call a client’s competitors seeking information. The darndest thing is that most of the people called answer the questions. Some will ask on whose behalf they are calling. Even when the CI professional names the company, and even if unable to name the specific client, most will still answer.
Keep in mind that no one involved in modern decision making needs 100% of the information to make good decisions. Not even historians get 100% of the information.