This article was originally published in the Intelligence Insights May 2010 newsletter of the Special Libraries Association – Competitive Intelligence Division.

I remember standing next to my fellow student as we both stared at the teacher in the front of the classroom. Fourth grade rarely got as intense as when we were competing to give the right answer to the teacher’s flash card question. The teacher would wait until we ready and then quickly display the card with a math problem. What was the answer to “8 times 7?” We rushed to raise our hands. It was not a small matter to master multiplication and we were proud when we did (especially when we won the competition).

In math (as in most subjects), we learn the basics first. Complex problems remain a mystery until a solid foundation of principles and techniques is established. We first learn to add, subtract, multiple and divide. Later, we learn about fractions, percentages, geometric shapes and trigonometry. Each topic builds on established foundations and represents significant learning.

About the time that we were satisfied with what we knew, our math teachers introduced a new challenge – word problems.

“I don’t need the exact figure. Just give me the ballpark number.”

This is how I sometimes do business when I am trying to buy a new car. When I am early on in deciding which car to buy, knowing that one of the candidates is about $25,000 and the other one is about $40,000 is enough information for me. The ballpark number is a useful approximation for my initial purpose. (Later I will bargain about the exact car and sales price.)

In competitive intelligence, we are often asked to assign a number to something a competitor is doing.

For instance, our management might want to know how much research and development money has been spent on the latest product from our competitor. This isn’t a number that most companies will report publicly. So what do we do? Give up? No, rather we fall back on the article of competitive intelligence faith that there is always an ethical way to give a good answer.

When looking at another company, that company’s future plans are important to know. The company may be contemplating entering or leaving a market. They may be creating products which increase their competitiveness. Product lines may be expanded or contracted.

There is no one measure (short of public announcements) that signals the future. However there are many activities and actions which may help produce a reasonable guess about future plans. Job postings are one type of signal that may indicate a company’s future plans.

Most companies are good about publishing their job openings. Some companies even provide information about the level of opening (e.g., director, senior engineer, VP) and the division or product involved. This information can be captured at three month intervals to help identify trends. The captured listing should be sorted by location (certain activities occur at specific locations, product/division and levels). You want to know the following.

• Are job listings increasing or decreasing? (might signal changing R&D investment levels)
• What specialties are listed most? Least? (might signal turnover or expansion)
• Where are the centers of activity and how does this map to known products? (might signal what is being developed)
• What new skills (i.e., those not needed for the company’s known products) are being listed? (might signal new product type)
• How are recent acquisitions/mergers affecting job listings? (might signal plans for integrating the new company)

There are cautions to observe with this type of information. First, a job posting is not a job. That is, the company is making no promise to actually fill a position just because there is a job posting. Second, without turnover numbers, it is difficult to directly understand that a job posting (if filled) represents a staff expansion or not. Third, for companies with large campuses, it is more difficult to match postings with specific products (unless they tell you in the posting).

Mining job listings effectively over time helps the analyst map out the competitor’s future product plans, identify their development centers and understand how they expect to expand (or contract) their competencies.

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)