In the last month, I have had the privilege of hearing two prominent economists speak. At the recent SCIP national conference, we heard from the chief economist from Intel Corporation. Earlier in March, I met and listened to the chief economist from IBM. They talked about many of the same things. For instance, both covered the state of the economy. Both talked about global competitiveness issues. Surprisingly to me, both of them included humor in their talks that was very effective (who knew that economists could be so funny?). Still, the most fascinating statement from both men was simply this.

Do not trust my predictions.

This was from nationally known people that had made it their life’s work to forecast what was going to happen in the global economies. Their companies made crucial decisions based on currency fluctuations, growth rates in various countries, the movement of interest rates and many other issues that were their province to study, interpret and report. Why, will all of their knowledge and decades of experience did both feel compelled to say humbly that their predictive abilities were suspect?

(Note to self – using “all”, “always” and “never” guarantees that you will sometimes be wrong.)

Beware of consultants (like me) that tell you that they know what to deliver and how to deliver it to your organization. Be especially cautious when the consultant knows a lot about competitive intelligence but only a little about your situation. Maybe, after you have talked with them awhile, it is more reasonable to accept the opinions of an outsider but only after they have demonstrated knowledge about your competitive challenges.

And what are your competitive challenges? Who cares most about these challenges?

Common challenges are growing the business, reacting to a competitors’ initiatives, clarifying a product or market strategy, deciding a business strategy question and cutting costs effectively. In many organizations, strategists of one type or another are the decision-makers. They are responsible for overcoming these important challenges and, thus, are the customers of the related competitive intelligence.

Competitive intelligence has a significant role in addressing all of these challenges.

Should a company spend money on competitive intelligence?

Well, if they knew that their returns would be twice their investment, then they might quickly answer “yes.” Conversely, if the return was half the needed investment, then it is equally clear that the answer would be an emphatic “no.”

Those answers are easy when credible numbers are assigned to both the investment and return sides of the equation. However, as most experienced CI professional know, this is not a trivial matter. Although incontrovertible, quantitative evidence of impact is highly desirable, CI professionals usually have to use qualitative ROI “measurements.”

Sometimes the investment side is easy. For instance, it is often clear what a consulting engagement costs or the sum of the tools and salaries for an internal staff. However, this precision is often missing on the return side.  After all, competitive intelligence is a support function for decision-makers. Their decision-making process can be quite complicated and involve many factors beyond the direct CI input. In the end, did CI tip the scales one way or the other? Was the CI input valuable or not? How valuable? Who would know the answer to these questions?

Gather a group of competitive intelligence people together and commonly you will hear the same sorts of issues. One issue is that many competitive intelligence customers do not understand the value of CI. Another common topic is how to ensure that competitive intelligence people are properly involved in decision-making. Occasionally, the discussion turns to picking the best tool or technique for an organization. Sometimes we talk about the economic conditions (i.e., how many jobs have been affected) for competitive intelligence staffs. These are all good issues but the most impactful problem is something else.

The most common issue is how to connect with senior management effectively.

This topic came up at the recent SCIP Conference in Washington, DC. In one session, everyone around a table shared their challenges about making the case for competitive intelligence to a prospective sponsor. One person explained that they were due to present such a case in about a month to a senior manager. Understandably, this important meeting caused much stress. What information should be presented? What splendid arguments should be assembled to convince the reluctant or uninformed manager? What presentation style was most appropriate? In short, what was the best approach to gain ongoing support for competitive intelligence from this senior manager so that the competitive intelligence person’s assignment and job was safe (at least, temporarily)?

There were many good suggestions bandied about.

Admittedly, it is hard for outsiders to know the right answer for another organization without more background than we could get in a short conversation. Still, one guiding principle emerged from the discussion.