In the last month, I have had the privilege of hearing two prominent economists speak. At the recent SCIP national conference, we heard from the chief economist from Intel Corporation. Earlier in March, I met and listened to the chief economist from IBM. They talked about many of the same things. For instance, both covered the state of the economy. Both talked about global competitiveness issues. Surprisingly to me, both of them included humor in their talks that was very effective (who knew that economists could be so funny?). Still, the most fascinating statement from both men was simply this.
Do not trust my predictions.
This was from nationally known people that had made it their life’s work to forecast what was going to happen in the global economies. Their companies made crucial decisions based on currency fluctuations, growth rates in various countries, the movement of interest rates and many other issues that were their province to study, interpret and report. Why, will all of their knowledge and decades of experience did both feel compelled to say humbly that their predictive abilities were suspect?
The obvious answer, I think, is that anyone that consistently ventures to predict the future in detail will often be wrong.
Hearing them state their predictive limitations made me think about the success of competitive intelligence predictions. Do we in competitive intelligence consistently and successfully predict significant future competitive events? My answer is “yes” and “no” to that question.
Competitive intelligence futurists will say (with some justification, I think) that some things are predictable. Look at many clear trends today and project their impact tomorrow. It is old news now but five years ago it was “new” news to spot the rapid spread of social media and its impact on people and businesses. The ubiquitous availability of wireless, low power and highly connected devices continues to drive many market responses. Renewable energy and all that implies seems to be in its infancy. Demographic or geopolitical trends point to a small set of probable outcomes in some areas. In these areas and others like them, it seems possible to make broad predictions successfully.
However, most customers of competitive intelligence are usually looking for other answers.
The answers that they want are nearer term and much more precise in timing and direction. How will my product fare in the competitive market? Which businesses should I enter/exit? What competitive gaps do I need to close to improve my company’s performance? What disruptive business models will likely affect my business model? Where should I deploy my resources in 2011 to gain the greatest competitive advantage? If precise predictions were available to answer any of these questions, they would be quite valuable.
It is not for lack of trying that we do not have these answers.
Indeed, we often try to predict. We make guesses (I emphasize, “guesses”) for our customers and clients. We point to outcomes that we consider are most likely. We strain to shift the competitive signals from the background noise to deliver keen insights to management. Then, after formulating an opinion, we confidently attempt to persuade others that our view is right (or, at least, highly probable). After all, what good is competitive intelligence if it does not have the spunk to stand for something? What good is it to waffle, hedge and obfuscate?
The truth is that we do have to stand for something; it is just not our predictions.
Management does not believe our predictions anyway. They already know two things before you or I show up to deliver our competitive intelligence product. First, predictions are hard even for the smartest people. Like our brilliant economist brethren, we can know many things but that is hardly a guarantee of omniscience. In fact, sometimes the very depth of knowledge may add to the difficulty of identifying the broad trends that actually might be useful for predictive purposes. The second thing that management knows is that they do not want predictions from competitive intelligence people. It is management’s job to make future bets and competitive intelligence people are seldom equipped to offer superior business insight.
What does management want from competitive intelligence if it is not predictions?
Simple. They want competitive intelligence people and their products to stimulate better thinking about the pressing business challenges. They want information, models and insights that improve management decision-making. They want their organization to be sensitized, mobilized and energized to compete better and win more. They want tangible, near term advantages that reflect well on their ability to lead. Finally, they want rewards for their personal performance. If competitive intelligence helps on these matters, then it will be highly valued among managers.
Our competitive intelligence challenge is to understand a myriad of issues, to help our customers and clients efficiently sort through those issues and to act humbly as we acknowledge the limits of our capabilities.
I humbly submit that I do not know what you will think about these points.