It should not be.

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.

At the end of an invigorating but overwhelming day of discussing competitive intelligence, I often hear people ask for simplicity.

As I wrote about in “The Three Basic Competitive Intelligence Questions”, the simple formulation of “What? So What? Now What?” regularly resonates. People tell me that they finally understand competitive intelligence after internalizing those three questions. While that is encouraging, the questions are a framework with only the hints of specific actions.

“Just tell us what to do,” they say. “You’ve convinced us that competitive intelligence is important and that there is a lot to know about doing it right. Give us a three step approach that we can wrap our arms around and remember. We want something tangible to do!” they demand.

“Okay, okay, I’ll give you some steps,” I say. (Unsurprisingly, these steps correlate to the three questions in the framework.)

Here are three tangible steps that most anyone can take to get moving. If these issues are well covered, then there is a good start at competitive intelligence. Furthermore, after one pass through these steps, a company will understand competitive intelligence far better than most any simple formulation.

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.

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.