1. We already do competitive intelligence (but it is not helping us).
2. We can’t afford it (but we can accept the costs of not doing it).
3. We don’t believe it can help (because we think we are already are doing everything we need to do).
4. We tried it before (and it didn’t deliver valuable information).
5. We need certainty (and there is some risk in the answers).

I recently met with a marketing manager from a high technology company. We talked about the many challenges that his company is facing. It was clear to me as we talked that he is a very smart and accomplished manager grappling with tough questions (who isn’t?).

How to differentiate their products? How to branch into value added services? How to anticipate the technology and architecture roadmaps for their major customers? How to compete against emerging low margin competitors? How to direct and leverage their R&D effectively? All of this was against the backdrop of multiple years of losses and declining revenues for the firm.

Aside from the general macro economic pressures affecting most everyone, it was clear that the company had some very specific pressures all their own. I heard about the history of competitive intelligence at the company. It turns out that people throughout the organization had some responsibilities for monitoring competitor’s products (this is the common form of competitive intelligence).

Eventually we got around to discussing the kind of competitive intelligence that would answer (or help answer) the questions that we posed. “Wouldn’t it be nice,” I suggested, “if you could get answers with some reasonable confidence to all of those questions?”

“Yes,” he said, “but it would be impossible to get the answers.”

It was then that I was struck by the realization that many people that might benefit from a well organized or improved competitive intelligence function never get started. There are many reasons that they cite but five stand out.

1. We already do it. Usually this means that the responsibility is distributed among many people whose opinions and interpretations are not correlated or summarized. Hence, the coverage of important topics is very uneven. When these conditions exist, it is my experience that there is a recurring dissatisfaction with the effort. The antidote is to prioritize the questions from the strategy leaders and ask if the current approach is answering those questions.
2. We can’t afford it. This attitude is not a failure among business management alone. It is shared with CI professionals that cannot quantify their value to the company. The missing element is almost always the missing appreciation for the value of effective competitive intelligence. Maybe it is because CI people work on things that are “easy” but not “valuable”? (My definition of “value” for competitive intelligence is credible answers to important questions that when answered well may lead to changes in business strategy.)
3. We don’t believe it. See reason 1 above. Sometimes people think that the poor result of what they are already doing means that is all that they can expect from any competitive intelligence effort. After all, our smart people already track the competition and make strategy. How could someone else do better? If they could do it better, how would that reflect on us? Competitive intelligence (when it works well) may be viewed as “internal competition” rather than as a help to strategy leaders in a company. If it is seen as a threat rather than as support for improving competitiveness, it will not be valued by those that need it most.
4. We already tried it. Every leader and manager worth his or her salt keeps track of the competitive environment. Typically, these people have risen to the top of their organizations and are very, very smart. They have at least passing familiarity with common models used for competitive intelligence. They know about SWOT diagrams, maybe they have heard or Porter’s Five Forces and they can already read a competitor’s annual report. However, they may not be familiar with the disciple and problem solving approaches of professional competitive intelligence. Or, maybe they have been given subpar performances by those who have other specialties. Either way, the past colors their ideas of what is possible in the future.
5. We need certainty. Confidence is a precious thing. A confident company can move decisively when a less confident company either doesn’t move or moves slowly. Competitive intelligence is all about confidence. Difficult questions (i.e., “the most valuable ones to answer”) have important answers with varying degrees of certainty that ranges from 100% (we absolutely know!) to 0% (we have no idea). It is in the middle where the challenge exists since that is where most every answer falls. Would an answer that has a 70% likelihood of being true be useful? Some companies would say “no” and that is a problem. If the confidence bar is set at 99%, it almost surely guarantees that competitive intelligence efforts will fail.

In most every case, it takes an enlightened leader to ask the right questions to and demand useful answers from the competitive intelligence function. From the CI professional, it takes great attention to delivering the value (not “easy”, factual summaries) needed by strategy leaders of the business.

These are the conditions when competitive intelligence capabilities will be developed or improved and make a useful, recognized impact on the business strategy of a company.

My experience in competitive intelligence (CI) is that organizations have favorite techniques to interpret the competitive environment. For example, many companies love SWOT (strength, weakness, opportunity, threat) diagrams. These may be useful however they are clearly not the right approach to model or interpret all issues of the competitive environment.

When a small number of approaches are used repeatedly, it may signal what I call “analysis poverty” in the organization. Analysis poverty is the condition whereby a large variety of problems are addressed by a narrow set of analytical techniques. The impact of analysis poverty is that the organization will not likely understand the environment appropriately and they will dampen the impact (through misapplication) of the techniques that they know best.

Analysis poverty presents the competitive intelligence professional with some challenges.

1.  Education - This starts with the CI professional. It is important that he or she be regularly learning new approaches to understand the competitive landscape, model possible responses and mobilizing the organization for change. There are multiple avenues for expanding ones repertoire including the Society of Competitive Intelligence Professionals and training offered through organizations like the Academy of Competitive Intelligence.

2.  Training - By this I mean training in the organization. This is a far more subtle task that the self learning. Most senior managers have little time to test “untried” techniques for critical issues. The “accepted” techniques (even if misapplied) may be preferred to change. The CI professional must learn to introduce alternatives appropriately to this audience. Usually I have found low risk settings an excellent place to try one new approach at a time.

3. Leverage - It is a fact of life that some organizations value some types of work done by those outside of the organization (e.g. industry analysts) over that produced internally. If this is true, then the challenge for the CI professional is to find those sources that are considered highly credible. Then, using the validation of the external source, the task is to customize an organization specific example.

4. Testing - Even when new techniques have not been accepted for general use in presentations by the CI professional, it is often completely acceptable for the CI analyst to test what is new for themselves. This seems obvious but may be overlooked if the presentation of the results is thought to be the critical success factor. Actually, the derived insights will be more valued over time and if the new techniques enable such insights, then their value will be easily illustrated after the suitable testing.

There are a couple of books that I have used to stimulate my thinking about analysis techniques.

• Business and Competitive Analysis: Effective Application of New and Classic Methods (Fleisher/Bensoussan)
• Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition (Fleisher/Bensoussan)