Selling strategy and strategic thinking to a trial-and-error management team can make perfect sense. In fact, it not only makes perfect sense but it is a complementary antidote to inevitable blind spots of the most intuitive of people. Properly executed, a thorough strategy process balances perspectives to reduce the possibility of missing something important. Indeed, systematically eliminating unknowns (or, better, converting assumptions to facts) is an important cornerstone to discovery driven growth.

Eskimos, as the saying implies, are not the best customers for snow makers. Obviously, given where they live, snow and ice exist in abundance. Producing something that is already free seems unlikely to induce someone to make an incremental investment. Yet, an Eskimo depends on the ice and snow for traditional igloos and, perhaps more importantly, for maintaining an environment that supports their lifestyle. It is a hedge, maybe, to pay for something that often appears unneeded. However, the moment the temperatures rise, that hedge is all that stands between disaster and survival.

Strategy is similar. Most management teams get by on undirected intuition. They already “own” this and everyone has an opinion to assert. Sometimes, it works spectacularly well. After all, business owners and senior managers tend to be smart, experienced people. Other times, increased competition or environmental changes expose a lack of strategic problem solving. When that happens, business results suffer.

Recently, with Don Springer of the The Colton Group, I completed a survey of 22 business leaders of small-to-medium size businesses. Most of these businesses involve technology products and services. The demographics from the survey are shown in the following graphics.

Overwhelmingly, the respondents were CEO and/or owners. All of the other respondents held senior positions within their companies. How do these senior leaders get better at strategy? Looking at the results below, most simply employ trial-and-error approaches. The upside to this approach is that it represents an on-going learning mentality. This is good. The possible downside is that it reflects unstructured strategic thinking that impairs or inhibits growth. Also, note the importance of trusted relationships. Professional groups, mentors and friends were all sources for improvement.

They expected that their top five strategy activities in 2011 would be the following (I have added commentary for each activity).

1. Deciding the right strategy for the business. There are so many choices of where and how to apply resources. For small companies, a wrong choice may put the company out of business. Thus, it is unsurprising that this decision is most important. Interestingly, large companies have a different problem. They often “know” the right strategy and implement cultural and process barriers to dismiss objections or people that challenge untested assumptions.

2. Aligning the management team to support the strategy. Even the best strategies are impotent before implementation. A visionary, superbly intuitive genius needs other people. Hence, aligning the larger management team and then the rest of the employees around the decided strategy is absolutely critical. This is more critical during changes because changed strategies may affect culture, processes and people. These three dimensions are powerful when pointing in the same direction and destructive when they are not.

3. Balancing strategy and tactics effectively. Overwhelming, leaders and employees have a tactical mindset that drives them to near term accomplishments and results. The caution against “being penny wise but pound foolish” emanates from this predilection. Owners and senior management cannot afford this imbalance. They are responsible for both long and short-term thinking. Since most of the organization specializes in the tactics, it appropriately falls to the leaders to think strategically.

4. Deploying strategy within the company. As mentioned before, deploying a strategy internally is consequential. It may shift responsibilities and budgets, alter the organization structure, introduce new market or customer targets and set different incentives and goals. Poor deployment leads to chaos. Conversely, effective deployment leads to new energy that can stimulate growth.

5. Improving operational efficiency. Ah, the key internal success factor is costs. That is, the costs to run the business to produce the products or services. Aside from revenue and profit numbers, most senior managers measure costs for two good reasons. One, it is measureable (and other factors such as employee buy-in are not). Second, there is a stronger sense of direct control over costs versus externally driven metrics.

You can see the complete set of survey results and download the survey from the JTHawes Consulting website.

I would be pretty happy if I could say that all of my problems were due to those that garble the definition of competitive intelligence.  If customers would just understand what I do better, then my business would boom, my clients would prosper and the long awaited vacation home in the Colorado mountains would be a reality!

Fairness compels me to admit, however, that poor definitions are only the beginning of the issues faced by me and, perhaps, by others that practice competitive intelligence.

Another significant problem has to do with marketing competitive intelligence. (I have previously written about “The Failure of Competitive Intelligence Marketing.”) Undoubtedly, there are exceptions but my sense is that it is common for CI professionals to face difficulties in marketing their services. Why? One reason might be that previous successes are problematic to share. If I deliver outstanding insight to a client, it is reasonable for them to want exclusive access to that insight. Thus, I cannot ethically share this story to help me get my next client. Another reason might be that it is often hard to capture discrete, numerical benefits directly attributed to competitive intelligence. Testimonials help, of course, but the holy grail of benefiting a company’s bottom line is often elusive.

Finally, there is the issue of increasing personal value over time. How does a competitive intelligence professional get better at his or her job? Admittedly, there is no substitute for numerous client engagements to support on-the-job learning. Still, the absence of a well-established competency framework (though some are in work) to guide or certify professional development in the industry is a clear community weakness. In absence of a framework that has a commercial meaning (i.e., customers value the framework and use it to make buying decisions), how does a CI professional manage their own skill development? There is no lack of opportunities but how do you decide what to do. And, after taking advantage of some of those opportunities, how do you translate the improved skills into increased value for customers?

These questions are a puzzle for me and are the subject of a short survey that I am doing in March. The survey has five questions. It will take about two minutes to complete.

Would you give me your responses? Click here to take the survey. I will post results on my website and blog by March 31^st. Thank you.

Here are the survey questions.

1. How well do you think that your CI customers or clients understand the definition and value of competitive intelligence?
2. Which statement best describes your success in describing competitive intelligence to prospective customers or clients?
3. How well does your organization assemble and market competitive intelligence success stories?
4. Which of the following development steps do you regularly take to improve your competitive intelligence skills?
5. Which skills, if substantially improved, would have the greatest impact on your competitive intelligence success? I would like to be better at …

You can see all of the results on my website at http://www.jthawes.com/surveyci.html.

Okay, caveats aside, the interesting result to me is that the self-rating (all companies combined) of CI effectiveness is above average in every category. The categories included the following.

1. Identifying Needs
2. Gaining Sponsors
3. Conducting Analysis
4. Interpreting Information
5. Presenting Conclusions
6. Effecting Change

The distribution (based on averaging the ratings per company across the six categories) suggests that most of these companies are being well served by their competitive intelligence professionals. Of course, it would be better also to survey the CI customers to determine their perceptions. Indeed, I did some of this in my 2010 Strategy Survey last month. The results from fourteen organizations is described at http://www.jthawes.com/surveystrategy.html. In that survey, one measure of competitive intelligence (“Reacting to Competitors”) received the lowest rating from strategy leaders.

Consider that for each of these six effectiveness areas, there were five possible responses (1=poor, 2=below average,3=average, 4=above average,5=excellent). Multiplying the six areas times the number of respondents means that there were 138 ratings. Observe that that the histogram shows a pronounced skew to the right (i.e., higher effectiveness).

The survey results prompt more questions than they answer. For instance, how would most of our customers evaluate our competitive intelligence services? If collectively we are so effective, why are there (seemingly) widespread questions about the need for and delivery of competitive intelligence? How are in-house CI teams doing compared to CI consultants? What is the actual impact that CI professionals want to make in an organization? And, how do competitive intelligence professionals think about improving their skills?

Maybe you would draw different conclusions than I did. What do you think that the survey results reflect?