Wow. Who would have thought that we would see the death of strategy in our lifetimes?

After all, strategy has been employed in so many ventures over hundreds (thousands?) of years and now, apparently due to the recent economic issues, it is “dead.” This shocks me as much as seeing the Berlin Wall fall in 1989 or as seeing Sadat address the Israeli Knesset in 1977. Are we experiencing a radical transition to a post-strategy business era where reflexive actions completely replace strategic reflection?

I doubt it. It would be better for readers of such pronouncements to translate the death knell statements to what they really mean.

For instance, in my personal life, a surgeon once told me that a particular procedure that I needed was “impossible.” He implied that attempting the surgery would cause more harm (i.e. my death) than good. Luckily for me, we “translated” his statement from “it is impossible” to “I can’t do it” and reacted accordingly. We found a more experienced surgeon that could do what was needed. Had we accepted the first doctor’s words verbatim, you would not be reading this column.

Similarly, when someone says that strategy or strategic thinking is dead, there are possible translations that are important. You have to decide which one fits bests. Here are five options.

1. “Strategy is dead” might mean “we cannot sell our strategy services the same way.” This applies specifically to consulting companies that have large businesses around formal strategy processes. Typically these are high-dollar engagements with a specific sales process. In recent economic periods, that sales process requires adaptation.
2. “Strategy is dead” might mean “near-term survival requires emergency actions.” Many companies have experienced this since 2008. Meeting payrolls, managing cash flow and preserving customers became critical. Those concerns crowd out (temporarily) discussions and energy devoted to what might happen in 2011 or later.
3. “Strategy is dead” might mean “our old strategy does not work anymore.” This applies to both the specific strategy and to the strategy process. Some companies established a strategy that is now outdated. This happens all the time and often leads to a healthy reexamination of the strategy. The danger is when the need to revisit strategic thinking (a common fact of business life) unfairly implicates the strategy process. That is, the thinking might imply that since the strategy is no longer working, perhaps the strategy process is no longer needed.
4. “Strategy is dead” might mean “our strategy process is broken.” This often occurs when the old strategy process is too rigid, infrequently evaluated or poorly implemented. Some companies are good at grand strategies announced every three years. In between announcements, life goes on and many unofficial changes to the strategy occur. For those companies, this indicates that the blend of top-down, prescriptive strategy and the bottoms-up emergent strategies is not in balance. Usually a company needs some of both.
5. “Strategy is dead” might mean “we are not getting good results.” Some companies would be better off saying that “our strategy is ‘sick’.” They would be better off with a “healthy” strategy versus jettisoning strategic thinking. Several high technology companies are reporting excellent results this week. Apple, for example, just had their best quarter ever. Do they have a strategy? Does Google have a strategy? Even the most casual observer can discern that both companies do. Strategy is not dead for them.

Beware of those that do not speak clearly. Their messages of doom mask other realities. Translate what they are saying to something nearer the truth. Strategy and strategic thinking are most assuredly not dead.

Competition is a constant.

My son competes in basketball. His team has many challenges. Perhaps the biggest challenge is that they are a new team (formed this year) competing against established teams that have played together for multiple seasons. Moreover, the other teams have “serious” coaches that teach sophisticated offenses and defenses. Those teams execute plays with coordination, skill and timing that give them decided advantages against less prepared teams.

Here is an interesting point. My son’s team has talented athletes. In fact, they have enough talent to win any game (even against the best teams in the league). Talent alone, however, is not enough. They need to have better offensive and defensive plays. They need to make better adjustments during the game to react to what the other team is doing. They need to learn more from their opponents to make their team better.

Is business any different?

Companies are constantly competing in markets everywhere. Some of the companies are established players with all of the advantages derived from that position. Others are “new to the game.” They have fewer obvious advantages and have to capitalize on disruptive strategies to change the game. No matter their current positions, both camps have to react to change to stay (or get) ahead.

Just as in sports, sometimes the difference in outcomes is not solely due to talent.

There are smart people everywhere. Most of my career has been in the corporate world surrounded by intelligent and resourceful people that created new high technology businesses. Lately, I have seen more of the drive and ingenuity of the small business owner. Are there many things more difficult (or more fun) than starting something from scratch? Being talented is important but it is not enough when it is not applied intelligently.

Competitive intelligence is a way to compete better

During halftime at my son’s basketball games, he will stop by the stands to talk with me. We talk about how the first half went and what he needs to concentrate on during the second half. Usually, I have an idea for him to try. For instance, in one game, the defense was not covering the jump shots from the free throw line. Maybe he could fake a pass to his right, step forward to the free throw line and have an open shot. Indeed, that is what he did and he was open for a clear shot (missed it, though – more practice between games needed).

Businesses need “open shots” too.

It is not easy to find such conditions because the competitors are playing active defense to prevent openings. Here are three things to remember.

1. Systems are competing. When considering competition and what to do it, recognize that two (or more) systems are competing. Focusing on a constituent part may be easier but may also lead to less viable solutions. Analyze multiple “moving parts” of the systems. For example, consider not only the competing products but also the engines (i.e., intellectual property, R&D investment, alliances) behind the product development.
2. Every competitor has a weakness. We hold up certain companies as the epitome of success. Ten years ago, the list might have been Sun, Microsoft and Yahoo. Today’s roster of high technology companies would include Google, Apple and Amazon. It will not always be that way. As the environment changes, many successful companies cannot sustain their advantages. New companies recognize weaknesses and capitalize better than the established companies do. The only question is “when?”
3. Every change is opportunity. And, of course, every change is a threat. Forward-looking companies are constantly seeking to understand change so that they can shape or adapt their strategies accordingly. Change is particularly threatening to “static” companies. These companies decide a strategy and completely focus on execution. No attention is given to competitors, market changes or anything else that might challenge their initial assumptions. Conversely, alert companies are constantly adjusting. Their great advantage is seeing and reacting first.

My son’s team is getting better. All of the parents can see the players’ efforts. We know that they are close to breaking through against the established teams. They are actively learning while improving their individual skills. Their teamwork is getting better at overcoming their well-prepared opponents. Perhaps this weekend will see our first win. After that, the sky is the limit!

How about you? Do you have competitive intelligence challenges in 2010? Are there things that you should do to get better against your competition?

I have created a short survey about competitive intelligence challenges to get a sense of what others are facing. Click here to take the survey. It will require less than five minutes of your time. Thanks!

The respondents answered five basic questions about strategy facing their organization or work group in the year ahead. The fourteen organizations mostly represented high technology companies ranging in annual revenues from $30M to greater than $10B. However, there were also startups and nonprofits included.

Here were the questions that I asked.

1. What is your relationship to strategy decision makers in your company or work group?
2. What types of strategy do you influence or decide in your company or work group?
3. How would you assess your company’s or work group’s strategy effectiveness?
4. What critical strategy challenges does your company or work group face in 2010?
5. What types of strategy help would help you most?

From the (admittedly) small sample, several interesting responses jump out.

Most of the people were involved in strategies at the business or product level. The survey included fewer that had responsibilities for financial, mergers & acquisitions or alliance strategies.

Each person ranked their strategy efforts across a few categories on a scale from one to five (5 = best performance). The categories included developing strategy, communicating strategy, executing strategy, reacting to competitors and so on. I averaged the ratings across all categories for each company to produce a composite rating. The distribution is shown below. The fascinating (though not entirely surprising) finding is that more than 50% of the organizations were rated no better than average (3 = average performance). Average is not likely to be good enough in 2010 (if it ever was).

Looking more at the detailed ratings, it becomes clear that most organizations rated themselves higher on the front end activities of strategy (i.e., developing, communicating, executing) and lower on those on the back end (i.e., ongoing management, evaluating, reacting to competition). To the extent this is true, it reflects a great vulnerability that a strategy may start strong but finish weak in the organization or market place.

Given where companies rate themselves, where do they see the challenges in 2010? The number one response was that they needed ways to gain new competitive advantages. Would not that require above average strategy performance? Or, maybe it would require better competitive positioning. Then, throughout the year, would not strategies need to be evaluated better to support adjustments to the strategies? The net is that the recognition of the challenge is dead on but that current performance of many organizations inhibits them from successfully closing their strategy gaps.

Assuming that they could have anything, what kind of help would people like with their strategies in 2010? I speculated before the survey that most might want help formulating the strategy. For example, what are the new products to introduce and how should they be marketed? Perhaps many would want help analyzing the competitive environment. Neither of these two possibilities garnered the most responses. Instead, most people simply wanted someone with experience to talk with about their strategy and to reflect on their plans.

There are many smart people working diligently on business and competitive strategy in 2010. It is not news to them that the environment is tough or that their companies’ have high expectations about the strategies. Neither is it news that their strategy efforts need to improve. For those people, the best thing to do may be to talk to someone that they trust to reflect with them about what to do better.

These are challenges. They affect how we think, act and feel about ourselves.

Business challenges abound, too. Many of us face the new year with the same old problems. We need to introduce or market products better. We need to deploy a beautifully crafted strategy throughout the organization. We need to turn our slumping business around to attract new customers.

We know that we have to do something different in 2010 (how did 2009 go for you?). That is not the debate. The challenge is deciding what to do and moving forward with something that will solve the problems rather than perpetuate them.

That is where strategic thinking comes in.

Long needed solutions often come when the epiphany of a new strategy occurs. Then, instead of trying the old approach, we do something from a new perspective. The beauty of a new perspective is that often that view is freeing. That is, the barriers to movement are removed, the organizational energy returns and a sense of hope becomes evident again.

I am conducting a survey about 2010 Strategy Challenges. The survey has five simple questions. When I am finished, I will analyze and report the survey results on my website and in my Strategically Thinking newsletter.

Would you give me your opinions?

Click here to take the survey. It will require less than five minutes of your time. Thanks!

The anticipation came because raises and bonuses were doled out in January and February. The dread was that I had to meet with my manager or supervisor to get my annual performance review. (It was never clear if these meetings were more painful to them or to me.)

Having been on both sides of the review, I know that many of the meetings were neither helpful nor satisfying.

Why? There is the usual fallacy that feedback given once a year (versus frequently) is effective. (Have you ever noticed that the once-a-year variety is often focused on what happened in the last month?) Another common failing occurs when the review meeting is a one-way communication. That is, the manager “announces” to a passive employee the corporate numerical judgment of the employee’s performance. What about those numbers? You know, the manager gives you a score in each performance area. They tell you that your organization skills are a four. Meanwhile, your innovation rating is 3.75. What do you do with such scores? We could go on and on about the weaknesses of these systems. My blood pressure is being to rise just recalling those days. Repeat, must be calm …

Still, the ideas behind the annual feedback cycle are laudable.

One principle is that the employee deserves honest feedback about their performance. It is even better to have an ongoing feedback dialog throughout the year. Secondly, it is equally important that the organization declare what is important. Many times, the definition of performance categories and scales for the performance signal what is important. Ideally, the categories are highly tailored to specific jobs. That way, the feedback is far more targeted and (potentially) useful. When done well, the review transmits useful information in both directions.

What would a good review for a competitive intelligence person look like?

This is the review that I would give if I was the strategy manager (customer of competitive intelligence) and the one I would like to get if I was the competitive intelligence manager. It contains a difficult set of questions. They are difficult because they are intended to focus on value and impact versus activities and tools. There are 10 fundamental performance areas abd 50 questions to discuss.

Do you have other ways to evaluate competitive intelligence? What categories or questions would you change?

Download a PDF version of this post here.

The archetypical strategy story goes something like this …

“A small gathering of senior leaders is convened at a secluded site. The atmosphere is serious. An important decision is needed. Everyone there knows the competitors. They are attacking. Some of their attacks have been beaten back. As for the others, well, that is why the meeting is so urgent. The leader stands to speak. We must counterattack. Our stockholders and employees depend on our decisions. The organization must be aligned around a common strategy. What is that strategy to be? So many actions, priorities and resources must be congruent with it. It is time to act. Here is what we are going to do.”

When this scenario (or one like it) occurs, some days or weeks later various parts of the organization get their new assignments. Sales must target new customers. Perhaps their incentive programs are adjusted to reflect the new priorities. Marketing must adapt the product line messages to feature new attributes of the augmented product. Engineering must invest in different technologies to support new product features. Meanwhile, competitive intelligence gets new marching orders to track and report on new competitors and markets.

This is top-down strategy development. Sometimes this works spectacularly well.

Consider the case of Intel. As recounted in the book “Strategy is Destiny” by Robert Burgelman, Intel followed a top-down strategy process that, starting from the early 1980’s to about 1998, relentlessly focused the company on microprocessors. More specifically, Intel created, promoted and sold ever-increasing performance for the Intel Architecture instruction set. Because of their focus, scale and ecosystem (think of the WinTel “alliance”) of software developers, Intel reaped incredible profits. Within the organization, everything was subordinated to this mandate. Andy Grove and other executives explicitly understood and reinforced this top-down strategy. Because the strategy was dictated from the top, all supportive processes (including competitive intelligence) became similarly top-down in nature. As long as there was growth, profits and market share, this worked well.

Interestingly, despite the executive mandates, other businesses emerged from within Intel. Some will recall the RISC (the x86 is CISC) architecture and products (i860, i960 processors) that were produced for a few years. Andy Grove spoke about the strategic dilemma that this caused.

“We now had two very powerful chips that we were introducing at just about the same time: the 486, largely based on CISC technology and compatible with all the PC software, and the i860, based on RISC technology, which was very fast but compatible with nothing. We didn’t know what to do. So we introduced both, figuring we’d let the marketplace decide. … our equivocation caused our customers to wonder what Intel really stood for, the 486 or i860?”

Eventually the dilemma was resolved in favor of the CISC based x86 architecture product line.

However, another example from Intel points out the positive possibilities of emergent strategies. It involved the design and production of motherboards that contained the Intel microprocessors. At one time, partners primarily performed this task. Intel provided information to them and sold components. PC manufacturers bought the motherboards from Intel’s partners. As the processors became more complex and performance more critical, many of the partners could not design and build the motherboards that would highlight (and differentiate) the Intel microprocessors effectively. This was a threat to Intel because it meant that AMD and others could credibly market similar products. Within Intel, an unscripted response to this threat emerged. Simply, Intel began designing and manufacturing the motherboards. Though it started small and without a top-down strategy mandate, it became a significant business for Intel in the 1990’s.

What does all of this have to do with competitive intelligence?

Because competitive intelligence is a supportive strategy function, the structure and processes used by the competitive intelligence people often reflect the business strategies. That is, when strategies are well known, competitors are confidently identified and threats are well characterized, the competitive intelligence function is organized to reflect those realities. Its role is to reliably produce accurate information to help answer the fundamental question, “How do we continue to execute our successful strategy to maximize our results?” Commonly, the competitive intelligence team leans toward repeatable processes supported by comprehensive infrastructures to answer this question for strategy decision-makers. When a strategy is as successful as Intel’s, this is a valuable service to a company. However, few technologies companies have such sustained runs. Thus, a competitive intelligence function must consider more than what is well known or established within the company.

For instance, take the more common case where the strategy does not have a 15-year lifetime of enormous growth and profit. In those situations where strategy changes occur more often or competitive threats are less predictable, a top-down structure for competitive intelligence has some risks. The risks are evident when the top-down strategy prevents or discourages a balanced view of the competitive environment. You can observe this happening when assumptions about the environment prematurely harden or business model risks go unmonitored.  Sometimes the thought of disruptions (both opportunities and threats) may be devalued since this “distracts” from near term strategy execution.

What is the antidote? It is simply to balance the highly structured, top-down competitive intelligence efforts with an intentional focus on “emergent” competitive intelligence.

“Emergent” (bottoms-up) competitive intelligence is disruption focused, less structured and (somewhat) untied to the established business strategy for the company. It cannot be fully described ahead of time in the form of key questions. Instead, it refers more commonly to thematic threats in the competitive environment. It requires different thought processes. For example, rather than receiving questions from strategy leaders to direct activities, emergent competitive intelligence must identify new key questions and supply them to the strategy decision-makers. A key role of emergent competitive intelligence is to stimulate strategy refinement by supplying valuable and unanticipated competitive intelligence information.

Here are thoughts about doing emergent competitive intelligence effectively.

1. Reserve time, energy and resources. It is critical to get senior management agreement to spend time on emergent threats. One way to argue for this latitude is to assemble a set of case studies about how surprising developments have upset successful strategies. Both business (and military) history is replete with such examples.
2. Develop appropriate processes. Highly repetitive, structured processes solve important problems. However, looking for the unexpected requires processes that deal with more competitive noise because the sources are more diverse and the “signal” is, by definition, less well characterized. The right information filters are required.
3. Emphasize networks. Primary sources are important for all types of competitive intelligence. They are even more important for emergent competitive intelligence. Cultivating an effective network is often the only way to get early insight into the unexpected. The network must be constructed intentionally to be forward looking and early adopter oriented.
4. Activate the organization. The first network is within the organization. In my opinion, a successful competitive intelligence function involves more than a small team. Activating the organization means creating an early warning system that systematically attempts to identify, discuss and characterize competitive threats. Emergent competitive intelligence facilitates early warning systems and gives key contributors product ways to participate.
5. Tolerate higher risk. We are certain only about the past. However, some business results seem predictable based on momentum. Emergent competitive intelligence looks beyond the current momentum and that is why risk tolerance must increase. When the competitive intelligence team or management cannot accept this uncertainty, then they will forego potentially great advantages.

Emergent competitive intelligence complements “top-down strategy driven” competitive intelligence. A highly successful team balances the two perspectives. It uses different processes and tools to be effective for each perspective. When done well, an organization gains great benefits from both.

Do you find the description of “emergent competitive intelligence” applicable to your company or business?

There are also lists about negative things. For example, there are the top 10 political gaffes, the top 10 worst business deals and the top 10 awkward moments. It is fun to read such things because  mistakes often standout as much or more than accomplishments. The mistakes are sometimes funny, occasionally painful and almost always useful for learning (even when we did not make them ourselves).

It has taken me a long time to value mistakes in my professional life appropriately. Although they can still make me feel bad and they are never my goal, I finally have accepted that they are the inevitable but needed fuel for improvement. Why not embrace them, learn from them and move on? Thus, my new motto has become:

Try many things, fail fast, learn quickly and succeed sooner.

In that spirit, here are my top 10 competitive intelligence mistakes. (Perhaps I will write my top 10 successes later.)

1. Ceded the presentation. I once led a competitive intelligence team that produced numerous studies for senior management. For a variety of reasons, I did not present our results during senior management meetings. Instead, another person took that role after we did the work. Who do you suppose got the credit and exposure?
2. Missed the education. One organization that I served loved SWOTs and so I faithfully produced them. It turns out that they loved SWOTs because they did not know about any other model for presenting results. Moreover, they were using SWOTs incorrectly! I missed the early recognition that senior management may need education about various models and their suitability for an analysis problem. It came back to haunt me when I later tried to introduce new models.
3. Skipped the review. In one case, my job was to coordinate others that produced competitive intelligence analysis. The problem came when the final presentation was readied for senior management whenever the author resisted reviewing the report with me. As a result, they usually made many easily corrected mistakes when presenting to senior management. Who do you think got the blame?
4. Avoided the relationship. As an introvert, my idea of a good time is not found in new relationships (especially high stress ones). Since there was always a lot to do while sitting in my office, I once systematically neglected the formation and nurturing of relationships among senior management. Do you suppose that senior management shared information, concerns and needs freely with those that they did not know? Of course not and a competitive intelligence function (that was me) suffered as a result.
5. Muted the alarm. It is easy to be busy establishing infrastructure, monitoring news and responding to discrete requests. That took a lot of my time in one assignment. What I missed doing was proactively analyzing the competitive risks to the organization. The net effect of my choice was to fail to deliver the most valuable, integrated intelligence to senior management. Instead of being strategic, I was satisfied being tactical and therefore did not raise the proper flags. Did anyone care about my beautiful website then?
6. Avoided the courage. Once I got started in competitive intelligence, it did not take long to realize that I sometimes had sensitive information for senior management. It was sensitive because it was not what they wanted to hear (so I thought). Many times, I talked myself out of walking to their office to give them such news. Frankly, it scared me to imagine their displeasure with me if I did that. In retrospect, I had it entirely backwards. Had I delivered the news well (and I was capable of doing so), their respect for my team and me would have vastly increased.
7. Did not claim the victory. We had an assignment to analyze a geographical competitor. The analysis showed how they were winning. For good reasons, my company decided not to compete with them and withdrew from the market. This was a success! I should have found ways to appropriately publicize the success among my customers. I did not. This left open the possibility in some people’s minds that we were not contributing value.
8. Acted too passively. There is a healthy pattern whereby competitive intelligence should respond to senior management requests. However, over time, much more assertive actions are needed. In one case in a large organization, I waited too much, preferred “perfect” analysis over effective early alerts and assumed that senior management was happy. They were not. That unhappiness was reflected in their overall lack of support for competitive intelligence.
9. Assumed too much. Senior managers are typically smart people. I thought that most of them knew a great deal about competition, competitive analysis and early warning. I found out quickly that the knowledge is often quite product focused. I made two mistakes with this. First, I began trying to deemphasize product analysis by balancing it with other views. It sounds reasonable (even now) but management was not ready for that. Second, I assumed that senior managers were active learners about business and competitive models. Guess what? Many of them are not. Ouch.
10. Stopped too soon. I began my work in competitive intelligence focused on analysis. Quickly I realized that presentation was also important. Too late, I got it that decision-making and, ultimately, changes were the right goals. I cannot tell you how many times I left a meeting after having presented beautiful analysis with the sense that senior management was poorly served. I know why now. They needed help understanding what to do and I had not provided any such assistance.

Thankfully, I do not make these mistakes much anymore. Instead, I am on to my new set of mistakes. Perhaps next year I will only have enough material for a Top 5 list? Somehow, I doubt it.

A General Manager must decide the complete range of activities to implement to enter a new market segment. Does she need competitive intelligence?

The Marketing vice president struggles to clarify the winning proposition for the key brand of the company. Does his organization need competitive intelligence?

It is easy to answer “yes” to these scenarios. Each decision-maker faces choices that affect their organizations and, ultimately, influence their chances for success. However, the choices are rarely simple. For example, favoring one approach means that another must be deemphasized leading to disruptions in the organizational roles and responsibilities. Changes often imply new investments, processes and skills. These things cost precious money, time and energy that must be deducted from a finite “bank” within the company. Moreover, other stakeholders assert their importance along vectors independent of competition. For instance, owners, regulatory agencies, communities and others regularly inject their priorities into the mix considered by senior managers.

Since competitive intelligence is only one of the voices in the mix, how can it be effective (and not be unwisely drowned out)?

Here are three ideas to consider.

1. Identify with the decision maker. This means that all of the competitive analysis activity should be focused on the values, terminology, models and methods used by the person making the ultimate strategy decision. Commonly that implies that the analysis be multi-variant (i.e., considers the many dimensions important for making the decision versus simple analysis), the presentation be “big number” focused (i.e., large impact versus details) and the overall process be tailored to what the decision maker is prepared to support (i.e., centered on effectiveness versus elegant but unused analysis).
2. Master strategy models. While it is true that many decisions are made independent of formal models, knowing those models sensitizes the competitive intelligence professional to critical strategy issues. For instance, understanding Clayton Christiansen’s resources, process and values characterization of an organization’s capabilities gives both a framework and a readymade set of examples to explain the range of possible responses from a competitor. Kaplan and Norton’s Balanced Scorecard is an excellent way to visualize and represent the critical dimensions of successful strategy implementation. The list goes on.
3. Embrace the politics. Many people will disagree with this point. For them, the primary role of competitive intelligence is probably analysis and presentation. That is, figure out what is happening and clearly express that to someone. My view is that these steps alone are insufficient to enable meaningful change or decisions. However, that is exactly what is needed in most strategy discussions. The politics are important because the decision-maker does not exist in a vacuum. His or her decisions are complex precisely because they must balance so many factors including internal winners and losers. Of course, the competitive intelligence person does not make those decisions yet considering that the issues are present in the decision-maker’s mind can increase the effectiveness and richness of the information supplied to him or her.

The CEO, General Manager and Marketing Vice President need help to make good decisions on difficult strategy topics. Competitive intelligence can be quite helpful to them when framed appropriately. A first step is for the Competitive Intelligence person to make some fundamental decisions about how to approach and support the decision-makers.

Do you agree? What other key ideas are important in your experience?

Of course, these foods are not completely bad. Maybe if I ate a few chips or only one slice of cheese pizza, I would do better. Perhaps I could eat other healthier foods more often and combine them with better exercise habits. I need the whole package to reach and maintain the correct weight. Whatever else I do, I especially need to be aware of the common pitfalls to avoid (goodbye to deep dish pizza).

In competitive intelligence, it is my experience and observation that we have pitfalls that inhibit us from reaching the desired goal. That goal, in my opinion, is to help strategy leaders make better decisions. Nevertheless, the pitfalls distract the competitive intelligence professional from usefully satisfying the needs of strategy decision-makers.

Here are my five (least) favorite pitfalls that should be avoided. I wonder if you agree with me.

1. Gimmick analysis. There will be some argument with this point. However, I do not think that most senior management people are enamored with clever search skills or the latest Twitter details. Many competitive intelligence professionals, on the other hand, seem to spend a lot of time on such cleverness. It is seductive, for sure, because it is immensely interesting to find information that hitherto fore was unreachable. But, when we feature this type of “analysis,” senior management often dismisses our potential valuable contributions.
2. Pretending that the competitive intelligence function is important. Frankly, it is not important. At least, as a separate function, the value of its existence is shown regularly to be minimal. That does not stop us from asserting that all progressive companies should engage in competitive intelligence. No, they should not because they have businesses to run, decisions to make and goals to reach. Competitive intelligence is only important only to the extent that it helps senior management in those three ways. We are needlessly fooling ourselves to think otherwise. Senior management values value not functions.
3. Working timidly. Most people should not be in competitive intelligence. In particular, many analytical (introverted) types are ill equipped to fight the right fights within the company. The dirty secret that new people to competitive intelligence should be told is this. Unless you are prepared to stake out positions, argue them with powerful people in an organization and withstand all types of personal and professional criticisms, you are going to fail in competitive intelligence.  It is better that these folks move to some other role.
4. Expecting too much. In my experience, I am amazed at how little senior managers understand about the competitive environment. Many cannot adequately characterize the major competitors, explain how the company strategy uniquely positions it for success or how competitive information should or can influence strategy formulation. Thus, the value that they can reasonably get from the best competitive intelligence is limited by their own understandings. This means that the competitive intelligence person has to be alert to the education requirements of senior management. Missing that realization may cause one to deliver valuable but ultimately unusable information to an organization.
5. Giving too much of the wrong thing. This is my personal pitfall. I cannot help giving great amounts of information in pretty ways to busy executives. By the way, I have learned that they do not want, cannot absorb and do not respect this vast quantity of information. They would rather have three things. First, they want understanding of their problems. Second, they want meaningful interpretations of information. Third, they want to understand their options and risks. Everything else should be in backup.

Are there other pitfalls that you work to avoid?

What about the “ultimate player” in Competitive Intelligence?

I submit that there are three fundamental categories of skills for competitive intelligence.

A “three tool” competitive intelligence professional will be competent all of these areas. When that is true, their value to their organization or clients is great. Admittedly, each category covers a multitude of skills. Moreover, mastering even one set of skills will make you valuable to someone. However, being proficient at all three makes you and your services standout.

Here are my three skill areas, or categories.

I. Table stakes. These are the basic skills needed by anyone conducting competitive intelligence. Grouped in this category are analytical techniques, modeling approaches, data collection and interpretation, presentation delivery, project management and more. A useful list of skills and knowledge is contained at John Prescott’s Competitive Intelligence Book of Knowledge. Here is a diagram from his PDF file.

I have a similar taxonomy that I have described in 10 steps for competitive intelligence. The diagnostic questions for each step are listed in this file. Neither framework is sacrosanct. Their importance is that they attempt to describe completely fundamental tasks and skills.

Acknowledging that skills are critical, this category, in my opinion, gets a disproportionate amount of attention from Competitive Intelligence professionals. Although it makes sense to start with these skills, the inordinate preoccupation with them causes us to starve our other needed learning. Would it be better to become simply proficient and then move on?

II. Change management. Many times competitive intelligence professionals consider an analysis, well presented to be their services end point. That is, once the information is interpreted and given to senior management, the competitive intelligence task is over. No doubt that some organizations prefer and enforce this boundary. However, for competitive intelligence professionals, separating meaningful change from the analysis responsibility is a recipe for irrelevance. Why does an organization need great competitive information if it is disconnected from debate and devoid of influence in strategy discussions? The short answer is, “they don’t.”

The more powerful and compelling view of competitive intelligence is one that is recognizably useful in strategy discussions. The usefulness metric is a function of potential improvements to strategy. By definition, improvements imply change and change affects constituencies in the company. This involves people that are often found in prominent positions and have well developed opinions and biases. Therefore, the common challenge is to change the minds of powerful, well-placed people. The (usual) lack of positional authority for competitive intelligence people compounds the challenge. So, what skills are needed to persuade others to change? Here is a short list.

1. Political awareness – There are decision-making rules (formal and informal) that are followed in any organization. Deciphering the informal ones is especially important because they affect how people behave. Mapping influential relationships often illuminate what otherwise seems opaque. This (and more) all matters greatly for accomplishing changes.
2. Marketing – Every competitive intelligence professional needs to be good at telling stories. This is different from “presenting data” because stories are meant to convey more than information. Good stories are memorable, make an emotion connection for the listener and convey truth. Yes, they also transmit information but information transfer alone is a modest, unsatisfactory goal.
3. Alliance management – Pity the competitive intelligence person that works by him or herself. Yet, many slave away doing web searches, monitoring Twitter and constructing PowerPoint slides in their office hoping to produce something of value. It may be possible to do so but it is unlikely. It is far more powerful to work with and through networks of people (inside and outside the company). The amplifying effect adds credibility. Building, nurturing and harvesting information from networks is critical.
4. Change artistry – It is fine to spot the need for strategic change. Someone skilled at competitive intelligence may identify multiple strategy modifications. Which ones should be advocated? What is the most propitious timing for change? Who is emotionally, intellectually and spiritually ready to risk supporting the change? A change artist learns to plan actions in context of answers to those questions.

III. The Customer’s Mindset – My definition of competitive intelligence involves helping strategy leaders make better decisions. The strategy leaders are my customers. (See my series on Competitive Intelligence Notes.) Certainly, there can be many different strategy roles in an organization at different levels. No matter which role is served, their issues, problem solving tools, priorities and ways of thinking are critically important. Without that understanding, the distinct strategy dialect that practitioners and senior leaders use may be confusing to outsiders. “Non-strategy speakers” will find communication difficult and positive results consistently illusive. It is quite possible to learn how to speak the dialect if one invests to learn what the strategy leaders already know.
Many competitive intelligence people stumble with these skills especially when they intentionally of inadvertently position themselves separately from their customers. Of course, a competitive intelligence person cannot unilaterally promote himself or herself to senior management. What they can control, however, is their own education.

That is why the third tool for a complete competitive intelligence professional is proficiency in their customer’s mindset. Often this means that the missing education concerns strategy models, formulation, trends, techniques and more. If the customer is in a different role, then the list of training should mirror whatever they do most.

The value of getting an education in the customer’s area is that a competitive intelligence professional can better translate from their knowledge domain to the customer’s. That is when communication becomes effectively and positive change becomes possible. Without the sensitivity for the customer’s viewpoint, the delivery of interpretations is a hit-and-miss proposition.

The three tools go together. The table stakes are expected competencies. The change management skills have more meaning with effective analysis. Finally, the customer’s mindset shapes the application of table stakes skills and change management possibilities.

Would it not be better to be a “three tool” competitive intelligence professional?