Consultants and managers like to talk about grand strategies to win in business. They spend time and money to meet together to craft the best possible expressions of the purpose of the business, the vision for the future and the major steps along the way toward that future. They gather in retreats to make advancements.

Meanwhile, in the rest of organization, people come and go to work each day. They often know little of what has been decided. Or, if they have received the pronouncements from on high, they selectively integrate what they consider important into their work plans.

So, how can you tell that the business strategy is working?

There are usual external measures of revenue, profit, market share and so on that are typically used to measure the effectiveness of strategy. These are critical measures, of course, but they are lagging indicators when a new strategy is introduced. Often the first measures of strategy effectiveness come from the internal organization.

What should a manager look for to understand if the strategy is working within the organization? Here are my five success indicators to monitor.

1. Managers are modeling the changes. At all levels, a new strategy implies change (otherwise it isn’t new). If management expects change to occur only because of announcements, then the strategy is unlikely to be effective. People are sensitive to strategy fads which come and go. However, they are similarly alert to real change in people.

2. Success measures are being understood. It is not enough to have a bright idea. At some point in time, the performance of the strategy must be measured and the measurement must be understood (and accepted) in the organization. People that understand the external measures begin to adapt the internal reward system accordingly.

3. Competing strategies are retired. The temptation for management and organizations is to retain the familiar. If a significant new strategy is introduced, a significant old strategy must be retired. Not only does this make sense to the larger organization (sensible behavior is important), it establishes the credibility of leaders to focus the organization.

4. Increasing focus on the future. A temperature reading of the organization will reveal that people are talking more about the future than the past. It should be no surprise that a backward focus is a drain on the organization’s energy. Befuddled leadership, ineffective strategies and risk aversion prevent an organization from solving tomorrow’s problems. A strategy starts to work when an organization is energized about what is possible to achieve.

5. It is becoming personal. The best leaders create bridges between their organization and the vision. People then make conscious decisions to move toward or away from the vision. A strategy’s effectiveness can be measured by the extent to which employees own it. Increasing ownership means increasing alignment with the vision, greater problem solving and broader participation. Simply put, people commit themselves by crossing the bridges.

One of my favorite Dilbert’s is the one about the quills. The strip starts with the question (paraphrasing) “Why is it that the best analysis technique is always the one that the analyst knows best?” Then, the next few frames show how different specialists recommend their specialty to solve the problem (e.g., the hard driving manager says “we just need to kick some hiney”). The last frame shows a porcupine who says that we “just have to stick them with quills!”

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)

There are many things to do to be successful in a competitive intelligence (CI) function. There are some things that will likely doom an effort. When working in CI it is important to understand  both perspectives. That is, there are things to ensure and things to avoid.

Here is my list of things to do to “doom” a competitive intelligence effort. It behooves a person involved to work to avoid these circumstances if they want to be successful.

• Bury it in the organization – This is a failure indication because it means that the CI likely has little access to management and what they are thinking. Sometimes this happens when the CI is seen primarily as a sales and marketing tool rather than as a strategy enabler.

• Concentrate on tactical questions – A CI function gets few chances to establish its value. Given limited resources and time, tactical issues can consume all of the available capacity. This will limit the strategic impact of the CI and be of less value to those that need to sponsor the effort.

• Highly filter information in both directions – It is difficult to provide perfect information or anticipate all that is needed. Excessive filtering means that there is little ongoing calibration between CI people and management. Without calibration, it is likely that the CI effort will diverge from what is most important to management.

• Focus on undifferentiated information – It is easy to accumulate information. It is harder to provide insight that is useful. As the quantity of information increases and the insight decreases, the value of CI is lessened.

• Staff with people that have little credibility in the organization – People trust people. At least, they trust certain people. The CI function must be trusted and valued for their insights. Without that credibility, information, reports and analyses will be ignored.

• Avoid measuring its value – At the end of the day, competitive intelligence is an overhead function. Its value will always be debated and the function will be subject to elimination without measurement of its impact. A profession CI person will regularly be seeking quantitative and qualitative feedback from management about the impact of their effort.

See my presentation on Competitive Intelligence Lessons at http://tinyurl.com/dbuyb7.

There are many important things to consider for establishing and executing a successful competitive intelligence function. Some of these steps may be executed “outside” of a designated competitive intelligence staff. Nonetheless, my argument is that all of the steps are critical.

Here are the 10 steps that I think are important.

1. We Have A Problem: It is critical that business management (i.e., those responsible for strategy, financial results, etc.) recognize that there is a problem to solve or a question to answer. It is also important that the problem or question be clearly stated.

2. I Need the Winning Move: Answers alone are unimportant if there is not the possibility that they will lead to action. Of course, the answer may suggest that nothing can or should be done. However, the importance of competitive intelligence is that it leads to more successful competitive positions.

3. The Future is Unclear: There has to be a sense that there are multiple possibilities for future actions. Much of what is done in competitive intelligence is to narrow the options for those actions. The clarity is possible by employing models, interpreting information and suggesting options in context of the market environment and the organization’s strategy.

4. Mobilize the Organization: For complex businesses, it is unlikely that a competitive intelligence person knows everything that he or she needs to know. On the other hand, it is much more likely that the information exists somewhere in the organization. Or, it may be that someone in the organization knows where to get the information. Hence it is important to leverage co-workers to answer the critical questions posed by management.

5. Get the Information: There are many sources of information outside of the company. An effective competitive intelligence person must think like a librarian. Librarians are masters of understanding the sources and organization of information. Also, the competitive information person must behave like a journalist. Journalists are adept at asking questions of people (primary sources) and following the trail to find the complete story.

6. Let’s Talk About It: The best answers delivered after the most exhaustive analysis can be useless if they are not properly discussed within an organization. The discussion is critical to examine both the source information and the options or possible answers. The goal of the competitive intelligence professional is to facilitate the internal conversations that lead to effective actions. This leads to ownership in the option that is eventually selected.

7. What Are the Implications: Options without the implications clearly listed are not very valuable. It is an important service of the competitive intelligence person to anticipate the possible impacts of each option and to clearly state them for the sponsoring manager.

8. Give Me The Best Options: There are two important ideas with this step. First, the sponsoring manager will likely have preferred method of communication. The competitive intelligence person should understand and match the preferred method. Second, since it is the manager’s responsibility to decide, what should be presented are options rather than decisions.

9. I Have Decided: Although it may appear that this is a management step, it is critical for the competitive intelligence person to track the impact of their work and the resultant decisions. It is important to characterize the value of the function so that budgets, resource decisions and involvement for future projects can be properly evaluated.

10. We Win – For Now: Although a specific manager’s interest may wane after a successful competitive intelligence project, a holistic view recognizes that there is a recurring need for competitive intelligence. In between projects, it is vital to improve the skills of the competitive intelligence professionals, to deliver value to the broader organization and to improve the infrastructure of the function.

See my presentation on Competitive Intelligence Lessons.