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Jul
13

Competitive Intelligence Practices for SMBs

Tom Hawes Competitive Intelligence, Strategy Effectiveness 1 comment

A small-to-medium size business (SMB) is different from a large corporation in many ways (I don’t think that I am breaking any news by this statement). An SMB views the world differently.

Aside from the obvious facts that an SMB has smaller revenues, fewer people and (probably) a narrow product or service scope, there are other less obvious differences in strategy issues. Here are a five common strategy differences.

  1. Strategy Responsibility: The responsibility for strategy is often shared among a small number of senior managers rather than vested in a named function (e.g., vice president of strategy). It is a part-time, diffuse task.
  2. Strategy Definition: The company completes few formal strategy exercises. Emergent strategy is assigned much greater value. That is, strategy is “recognized” rather than prescribed.
  3. Decision-Making: Decision-making speed is valued over reflection. Rapid adaptation and reaction are the currency of the day.
  4. Tactical Activities: Day-to-day pursuit of customers, creating products, closing deals and operations consumes management’s time. In short, tactics dominate strategy.
  5. Internal Focus: Attention to the external environment is narrowed to match the SMBs near-term customers and prospects. There is less attention paid to broad trends, unexpected competitive threats and tangent opportunities.

All right, what about the SMBs that do think that strategy and competitive intelligence are (or might be) important? What is a feasible set of practices for them to initiate and sustain over time?  For whatever stage of strategy and competitive intelligence maturity they find themselves, how do they move to the next stage?

Before talking about the stages, there are four meta-principles for SMB competitive intelligence practices.

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business strategy, Competitive Intelligence, SMB, Strategy Effectiveness
Jul
06

Competitive Intelligence Priorities for SMBs

Tom Hawes Competitive Intelligence, Strategy Effectiveness Add your comment

I often talk with SMB owners and managers. When they ask about what I do, I explain that I help companies with competitive intelligence. “Isn’t that spying?” they ask as they usually take a defensive step back from me. “No,” I hasten to explain, “it is about understanding the competitive environment better so that you can make better decisions.” If they trust me even a little, they exhale and begin to relax. I then get a chance to answer the implied question, “What does competitive intelligence have to do with me?”

The key is to recognize that SMB’s already are doing competitive intelligence whether this is recognized or not by management.

Their competitive intelligence efforts may be ad hoc, incomplete or ineffective. Nevertheless, competitive assumptions are made and used.

Could it be done better?

From this point, things move faster. It is easy to talk about the important questions that every SMB must answer. (My post “Competitive Intelligence Value for SMB’s” identifies these questions.) “Wouldn’t you like timely, credible information that helps you improve your results and decrease your risks?” I ask. That is easy for them to answer. “Of course,” they reply though there is some mystery about how such information can be obtained within their budget and capabilities.

“Not to worry,” I tell them. “Once you know your competitive intelligence priorities, you can allocate your time and resources according. Then, for the priorities that you act on, there are specific approaches that you can tailor to your budget.” (more about this in a later post)

I have their attention now. Before I suggest priorities, I set the context with some questions.

“Is your industry competitive? Does knowing about competitors and the environment help you decide your strategies? Assuming you had valuable information, would you use it?”

Again, it is easy to answer “yes” to these questions. Now the issue becomes how to apply limited resources more effectively. Hence, I have developed my Top 10 list of priorities for SMB’s. Competitive intelligence supports each one.

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Competitive Intelligence, competitive priorities, SMB, strategy, Strategy Effectiveness
Jul
06

Competitive Intelligence Value for SMBs

Tom Hawes Competitive Intelligence, Strategy Effectiveness Add your comment

Most of my career has been spent in a large, multinational technology conglomerate. There are challenges a plenty in that kind of business. Because of the variety of businesses, there are many strong and diverse competitors. Cultural issues are also prevalent as conducting business and selling in many countries is difficult. Then there are the expectations of investors. Well-prepared analysts review the company’s operations and ask pointed questions about future prospects. Within the company, there are entrenched constituencies with their own histories and subcultures. There often is a tendency to reduce profitable practices to predictable processes. Documentation, standards and overhead are prominent. All of this breeds a certain set of competitive habits and sensibilities.

There is another world that is quite different.

Lately, I have spent more time with small-to-medium size businesses. These companies have emerged from the start-up phase and may have revenues between $10M-$100M. Their issues are different from the conglomerates. Typically, the product line scope is narrower. The markets served are fewer. Access to capital is sometimes difficult. While some business processes are beginning to emerge, they remain less important than the leadership’s intuition. There is an ever-present sense of vulnerability to competitors. Employees are stretched to perform multiple roles. Documentation, standards and overhead are minimized whenever possible.

Though they are different from large companies, SMB’s face challenges that require an understanding of the competitive environment. Competitive intelligence is important for SMB leaders.

Commonly, there are five critical strategic imperatives for SMB’s. Competitive intelligence, properly tailored, provides value for each imperative.

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business strategy, Competitive Intelligence, SMB, strategic imperatives
Jun
29

Competitive Intelligence: The Balance of Humility and Expertise

Tom Hawes Competitive Intelligence, Strategy Effectiveness Add your comment

Every professional experiences the moment when what they know is questioned. By implication, this moment also questions their value. That is, if they know something and are convincing to others, the professional is perceived to be valuable. On the other hand, if they do not know an important point or are unconvincing about what they do know, the professional is valued less (or not at all).

It is the way of the world, at least in knowledge positions within today’s economy.

There is another side, of course. Some people are completely convincing without the knowledge or experience to support what they advocate. Their self-confidence radiates within a room and casts a spell. People agree with this kind of person implicitly and are willing to follow him or her. Later, it may be clear that their confidence was misplaced. Then, a sense of betrayal replaces the false confidence. Convincing, yes, but (in the long term) they are not credible.

Competitive intelligence professionals routinely deal with knowledge. There are facts about the competitive environment, advanced data collection tools, powerful analytical models and insightful interviewing approaches. Awash with information, a competitive intelligence project usually ends with some type of report or presentation. Then, the facts, interpretations and recommendations are displayed for a sometimes-skeptical senior management audience. Attitudes of “convince me” and “prove it” often challenge the competitive intelligence professional’s performance and credibility. The obvious temptation is to emphasize expertise and exclude doubts, right? After all, is not humility a sign of weakness?

Unsurprisingly, there should be a balance between honest humility and expressed expertise. This balance is not contrived. Rather, it reflects what is true for most people. That is, the more that we know, the more we realize that we do not know. Put another way, whatever we know today, it will not be enough for tomorrow. Hence, we need a way to live with ourselves while delivering valuable services to others. We need to be able to explain what we do not know with as much credibility as we covey our certainties. (See my article on “The Right Answer to the Trap Question” for one approach.)

How do we do that? Here are seven guidelines that I use to balance my expertise and my humility.

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Competitive Intelligence, effective presentations, professional competence, Strategy Effectiveness
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