business technology trends Blog on competitive intelligence, strategy, marketing, and business

After 15 years within the competitive research industry, referred to as “Competitive Intelligence” or “CI”, I have seen many trends come and go. However, the single most significant trend that persists is the growth in the amount of competitive research and subsequent information. With the advent of the Internet, with the growing use of new technology to capture competitive information, companies have more information at their finger tips about their competitors than any other time in the world. However, this growth in the amount competitive information is actually resulting in less being done to make decisions regarding how to sell or market against competitors. The growth in the amount of competitive intelligence is actually creating paralysis, and in many cases, results in nothing being done with the collected intelligence.

Why is this happening? There isn’t a single answer to the question but I have noticed a few reasons for an increase in paralysis, or at least a stasis in reacting to competitive intelligence.

First, I have noticed that many internal company competitive intelligence managers have adopted an attitude of “all questions get answered”. That is, in an attempt to be “customer centric” and increase internal client satisfaction, managers responsible for collecting, analyzing, and presenting CI are actually accepting a majority of requests for CI without any question of how the resulting information will impact the organization. The result is an overwhelming workload for the CI staff, resulting in analysts becoming more of a project manager rather than an internal strategy consultant. In this regard, much of the information delivered has limited actionable result. In addition, the originating request for information might actually have limited impact to the organization, such as helping the Company to increase market size, win competitive deals, or get ahead of the competition in product or service development. Managers aren’t questioning information requests and specific questions and how it will impact the bottom line.

 Secondly, I have noticed that many CI requests are emerging as a “CYA” tool from the requestor. That is, there are a growing number of requests that not only have no or limited impact to the Company, but are being originated to rationalize a budget request, a new departmental policy or procedure, or to justify an individual’s action. Case in point. A fortune 50 company recently approached me to take on a “competitive benchmarking study” to understand the budgets of their competitors’ customer service departments. The reason? The client said that their own customer service budget was going to get cut, including a reduction in headcount, and he wanted to try and show leadership that the competition had larger, growing service budgets and that their own budget reduction would result in negative customer service ratings compared to their rivals. The problem is that there is no direct link to budget and customer satisfaction. Many customer service departments have very positive customer ratings because of how they train and incentivize their service agents and has very little to do with overhead budgets.

Finally, the increase in ability to collect and analyze competitive information is resulting in information overload and actually causing an “information blackout”. Internal competitive information stakeholders are receiving too much information with little actionable impact and they simply don’t know what to do with it. In this regard, the amount of competitive information is actually hurting the organization from moving forward and making a decision in a timely manner.

Sometimes a “Low information diet” is the most successful recipe for making good decisions and creating action within an organization. The number of competitive benchmark exercises that have been undertaken in the past 2 years is amazing. However, a majority of the information collected is not very useful to a company because competitors’ processes, procedures, and strategies can be vastly different. Many times it is literally like comparing “apples to oranges”.

Here is a question? “Why benchmark when you can lead?” Rather than spending the time and money on competitor benchmarking, companies should consider taking those resources and investing into research on what customers want, need, and are missing. That is, focus on your own customer segment and target audience, learning what they want and need rather than what your competitors “think” customers need or want.

Finally, CI and market research managers need more rigorous processes for vetting requests for competitive intelligence. Managers need to ensure that internal customers consider the necessity of the requested information and how it will be used and made actionable. Through more rigorous scoping of the information request, managers help their internal customers better use the information, making an organizational impact while at the same time weeding out non-essential requests for information. This will allow CI and research managers to have more time to be “consultants”, helping internal customers to use the information, rather than spending their time managing research projects and being glorified project managers.

Microblogging is presently enjoying an explosive growth phase, with Twitter being “all the rage” these days. But other microblogging sites are coming online in droves. It is creating a fragmented marketplace with users not sure what platform to use. Although the competition between rival microblogging services promotes innovation, the fragmented market threatens to produce the same kind of balkanization occurred within the instant messaging (IM) space. Instant message users address this problem by using increasingly ubiquitous multiprotocol chat clients like Pidgin and Trillian. Even OEMs, like Google and Yahoo!, are allowing other services to interact with their own IM platforms.

 Although it is likely that similar multiprotocol microblogging clients will also emerge as users spread out across the various services, there is still hope that Google’s involvement at this crucial stage could serve as a catalyst for protocol standardization. Regardless of the long-term outcome of Google’s Jaiku acquisition, expect to see microblogging evolve considerably in the near future. But in order to remain effective, microblogging sites must remain true to their purpose: aggregate and syndicate content. And you cannot do that effectively if there are 100 different proprietary sites that do not allow effective microblogging client integration and aggregation.

 While Twitter enjoys “first-mover” status, microblogging rivals will face an uphill battle if they do not launch with a strategy to allow for cross-platform integration and aggregation.

Much like standard corporate assets, like desks, buildings, and machinery, it is time that companies begin considering employee knowledge as a corporate asset. The seemingly disparate information that is rolling around in the heads of your employees about your company’s market, customers, and competitors, when collectively analyzed, has the opportunity to give you detailed, proactive insights not otherwise obtainable. One excellent way of harnessing this information is to develop an on-going employee knowledge transfer process specifically focused on your field sales and marketing teams.

 Having the ability to gather information on an on-going basis from the brains and experiences of all your employees would be extremely useful. Starting with employees that interface with the outside world on a regular basis is often the biggest “bang for your buck”.  Using your sales and marketing teams as your “field intelligence partners” allows you and your company to gain proactive information rapidly, many times that is not otherwise available. The old adage “you don’t know what you don’t know” applies here.

 I have found that having a formal process to collect market, customer, and competitive information from your sales and marketing teams involves very specific training and a very specific process.  For large companies or with companies with greater than 100 field employees, it becomes difficult to turn information into actionable intelligence if there is a significant amount of it coming in. Training your field intelligence partners on what to provide, and just as important, what not to provide is crucial for success. This includes training on legal and ethical considerations, such as the passing of documents marked confidential (example: sales person obtains a competitor’s pricing sheet from a client. Sheet is marked “confidential”).  In addition to training, having a very simple and easy to use process to regular submit information is just as important. Allowing information to be submitted using regular email as well as telephonically (even using a voicemail system) can be effective.

 One way to streamline this process is to create field “intelligence liaisons”. These are especially trained sales & marketing staff that provide on-going market & competitive information as well as can become the “go-to” person for specific information needs.  Another tactic that works is to have regional “intelligence roundtables” where you invite managers and directors (or your field liaisons) that contribute on a conference call every month on specific topics you have proactively provided to the team before the call.

 In my experience, it is important that there is an incentive beyond an “it’s your job” attitude in order for this process to work. Educating participants that the strategy will allow them to receive aggregated intelligence back to them as a reward is often plenty. I have also seen companies successfully use an annually president’s award for participation work effectively as well.

 I have seen and managed several systems like what I have described above with varying success. It comes down to the culture of the company, willingness of the employee to participate, and a very structured data collection system.

I am fairly certain that fall is my favorite time of year. Yes, the trees are beautiful when the leaves change color and the crisp, cool air is refreshing with a few minor snow drops signaling winters imminent arrive. But, winter signals something else: football play-offs!

 When I say I am a football fanatic, it may be an understatement. When we moved into our new home in Boise, I was able to build my “dream room.” My theater room features a 120-inch screen with high definition T.V. and cinema-quality speakers. But don’t even think about playing a movie on it; it is strictly for those glorious days of watching college and NFL games. (Please don’t tell my wife, but the third Direct TV satellite is on its way so I can now have ninety channels of football. I think I am dead meat!)

 While watching the Patriots take on (err…clobber) the Seattle Seahawks this last week, I began thinking about how the players on the field communicate with each other. Frequently, you’ll see the quarterback point out to his lineman a potential threat from the defense. Other players must also communicate successfully, including the coach, who sends in plays from the sideline.

As a leader, the coach’s job is multi-faceted: play developer and director, team organizer and trainer, motivator and counselor, strategist and tactician. It reminded me a lot of the corporate world and today’s business leaders. Recently, I have seen many corporate leaders struggle to communicate successfully with their “players” about the direction, vision, strategy, and execution of a series of specific “game plays.” The increasing struggle to communicate a company’s strategies to employees is impeding the growth of organizations.

As long as a company is big enough to have a bureaucracy or a political structure, then information becomes a valuable commodity in trading for favors or getting a head start on internal competitors. Internal competition comes in many form factors: competition for keeping job or receiving a promotion, jockeying for a pay raise, or increasing one’s status within the organizational political hierarchy. Part of a manager’s task should be to help employees overcome the natural tendency hold information to themselves. The manager must ensure that competitive, customer, and market information flows upward to management, downward to operational subordinates, and laterally to keep people connected and informed. Even seemingly unimportant “pieces” of information can be the one “puzzle piece” to understanding a competitors’ new marketing strategy, shifts in market trends, or customer opportunities. In my opinion, the extent that managers motivate and manage their employees to share information is a significant measure of manager.

But how often do you hear about leaders promoting, much less talking about, corporate information sharing? All too often information is compartmentalized or never shared in the first place….at least until the most advantageous moment for the individual information holder to exploit his or her specific knowledge, most likely for personal advancement.

Not too long ago, I was a part of a company strategy meeting where a specific employee seemed to suddenly have the answer to the CEO’s question about a competitor’s next movement. Earlier in the day, during a series of meetings on this very same topic, the same employee held back the specific information that he later shared with the CEO.

Information is indeed a valuable commodity and is frequently equated with power. This generates two different approaches that are similar to our approaches to money: hoard it, save it (like some kind of security blanket or a weapon in a turf war), or invest it. The more confident (or maybe competent?) know that information shared (invested) returns increased power to the originator. This perspective seems to tie in with the view of either (a) the organization as a pyramid in that to win you must climb through narrowing layers to reach the ultimate job [power] or (b) organizations as webs or networks with unlimited possibilities and opportunities.

Information sharing is critical and is the first step to truly being a leader and having an effective, winning organization. But, information connectivity and sharing alone are not enough. Sharing and connecting enable the import and export of information. If an organization connects everyone and everything that it knows, then only very limited competitive advantage is achieved.

The real value is in knowledge creation, which requires positive information sharing. New knowledge is the key to a competitive advantage.  New knowledge drives markets, trends, and advances in a company’s position in the market. Recently, a client discovered from a group of sales and accounting executives that a competitor was getting ready to launch a competing product in a specific market. The sales employees knew this from talking with their customers who had seen the product in beta and in pilot programs.  My client was able to determine the planned launch date, the features and functionalities of the product, and any perceived strengths and weaknesses all from the small handful of sales staff. Quickly, the company prepared a counter-selling campaign to ensure that their customer base was loyal and blunt the launch of the competitor’s product. And, it worked: The rival’s product launch was received poorly, but, my client’s company would not have known this information if it were not for a fluke discussion with a group sales staff at a regional sales meeting.

Knowledge creation is at the very heart of business value and competitive advantage, and as such should have a significant degree of focus and priority by the enterprise.

When the Seahawks go back to the locker room at halftime, the head coach leads the team in a mid-game debriefing session where they collectively review the game to that point. Each starting player gives his opinion of the game and shares his experiences on which player on the rival team is the hardest to cover, which one seems to be the slowest or to have a specific weakness, or what plays seem to be working or not working from their own experience. A linebacker is going to have different information and a different perspective than the quarterback or a safety.  They create new knowledge by aggregating all the shared information and individual analysis from the meeting to make mid-game corrections, develop and execute new strategies, and even potentially change the player lineup.

Anyway, if you’re as big of football fan as I am, you know that the next few weeks are going to be great.

In March of 2007, I began writing a book titled Why Your Company Sucks, which is a snarky look at U.S. companies and how they have become poster children for ineffectiveness, inefficiency, and waste. I completed the book early this year before the economic crisis began to climax and companies began looking for government “rescue” (aka “bailouts). Out of time, I have yet to seek a publisher. However, the principles in this book, Why Your Company Sucks, are becoming more critical than ever to explore, which is why I am moving forward with publishing it this winter.

I am not saying I have all the answers. With 10 years as a corporate consultant to some of the largest companies in American, I have personally witnessed how companies have been blinded by corporate greed, institutional mediocrity, and inbred ineffectiveness. From my first-hand view,   we are now seeing that companies cannot weather the storm of this economic crisis due to consequences by their own doing and not the other way around.  As more companies go before congress and whine about how the economy has failed them, and how their company deserves government funding, no one is asking the hard questions about the roles these companies played in contributing to the failing economy.  

Depending upon the company type, bad loans, borrowing upon borrowing, uninsightful acquisitions, overlooked inefficient business practices, and poorly and hastily selected & executed strategies are all parts of the puzzle of how many U.S. companies contributed to the current economic failure and not the other way around. When you point a finger at the economy as the reason for your company’s demise, remember there are three fingers pointed right back at your company and what you did to get where you are today: over-inflated spending, growth for the sake of growth, unmeasured and uncalculated strategies, and being indifferent about ineffective processes and practices.

For example, last month I returned from a meeting where a company asked me to come and speak about how they could become more efficient and effective at project coordination and company information sharing. A company  vice-president wanted a short presentation on some grass-roots “best in class” practices their company could adopt to increase the effectiveness of their project coordination as well as how to best obtain and share competitive and market information that is obtained during employees’ normal course of their workday. The overwhelming resistance I received from the near 100 employees in attendance was incredible.  From responses shouted like “too time consuming” to unwillingness to take on an extra hour per month of work, the attendees were throwing virtual tomatoes at my.

After analyzing the resistance and moaning about how minor adjustments in corporate process will add more work to their day, I was reminded about a conclusion that I write about in my book. Not only do some employees want chaos, they help create chaos to enable institutional disarray for their own job protection. An effeciently and effective run organization doesn’t need more inefficient and ineffective people to help run it. The fear of lay-offs and firings often prevents employees from seeing the bigger picture: some organizational effectiveness could not only help them out individually in their own job duties, but it could ultimately save their company and their own jobs through cost-cutting, increased revenue, and overall enabling less jobs to be lost.  Such a short-sided view to think that costly, ineffective and inefficient business practices will not eventually catch-up with a company is  exactly what has happened with companies like AIG, GM, and others that require government funding to continue to survive.

But it is not just the employees’ fault. Managers have ignored, and many times enabled, “institutional mediocrity”. This is what I call business processes, procedures, and organizational strategies that do not contribute effectively to the top and bottom lines of a company’s financial sheet.

I don’t mean to be a curmudgeon, but I tire of hearing about how bad the economy is and how companies are facing problematic times because of it. Truth be told, these same companies helped to cause the economic crisis that they are in right now and not the other way around. When we as Americans begin to understand that, we will demand better out of these companies – better performance, greater effectiveness, well-thought-out strategies, and a commitment to cost efficiencies because it is our individual tax dollars that are going to save these companies.