As laudable as it may be to make some decisions instead of no decisions there is now a major change in the dynamics of the decision-making environment. While information is more abundant than ever before, managers are intelligent information starved!
Yesterday’s information and methods are increasingly ineffective for making today’s decisions – and even less effective for identifying tomorrow’s opportunities, problems, and unknown competitors.
Competitive Intelligence, or CI as it is commonly referred to, has grown as a specialist management discipline around the world as companies face tougher and faster competition. In fact, CI in large successful multinational organisations is becoming a “must have” rather than a “nice to have”. Recent studies from the USA indicate that budgets for CI now range up to and over US$4 million per annum and that rates of return can be as high as 4000%.
In the past, Australian businesses have been slow to practise effective Competitive Intelligence. One reason I believe is that many Australian companies think they are already practising Competitive Intelligence. Although all managers intuitively carry out some form of CI, the information explosion, fake news, changing technology, and increasing global competitive pressures mean that there is an increasing need to develop more systematic ways of using CI.
Today, some are beginning to realise it is a strict discipline that selects and delivers the right insights to support key decision-makers, a discipline focused on the external environment, maximising the company’s competitiveness, optimising time and profit, while minimising risk.
CI relates to the techniques used to interpret and analyse external information and communicate it to the right people for timely and effective use. It is ethical and legal and right now it is estimated that over 90% of what one will ever need to answer an executive’s questions, is already in the public domain. Maybe not in the form that will directly answer questions, but the pieces of the intelligence jigsaw are always there.
Information Collection, Analysis and Interpretation
It is important to note that intelligence or insight is never found – it is created specifically as a result of information collection, analysis and interpretation. It is the insight from the analysis that enables executives to make sharper and smarter decisions.
The most significant issue that sets this process apart from conventional information systems is that rarely is one piece of data or information in itself sufficient to provide management with all the answers and that it requires the introduction of the process of “analysis” and “thinking”.
After all, the keys to the future are not found through extrapolations, predictions or media gurus, but through patient, careful strategic work.
Make More Informed Decisions… Not Decisions in a Vacuum.
The purpose of CI is not to predict the future, but to identify what is likely to happen and to assist leaders to make better decisions about the organisation’s future.
Competitive Intelligence is an integral part of making business decisions today. The data and information gathering and evaluating process can identify and project strategies that current or emerging customers and competitors might pursue, and provides an assessment of the implication of these strategies on your company’s future.
This process is very specific in its intent and always outward looking, using both internal and external resources as mentioned above.
We need to realize that we are threatening the very existence of our organization if we continue to make decisions in a vacuum. We need to realize that our more wide-awake competitors will climb on the ‘intelligence bandwagon’ even if we don’t. We need to realize that we have exciting new ways to protect margins, to fight the competition, to achieve breakthroughs. We need to realize the positives will far outweigh the negatives – but only if we change.
Forced change is always second prize. The secret lies in putting together a strategy for the future based on sound insights.
Here is an example of one CI project –
Scanning strategic environments and market segment prospects
Aardvark had a problem, perhaps many problems. The market for widgets seemed to be changing, revenue and premiums were under pressure in their key market segments. New market entrants and Aardvark’s main competitor were eroding market shares. New business models fueled by information and telco technology and movements in the exchange rate also seemed to be complicating the picture. What was going on, what was driving this turbulence? How would Aardvark respond? How could they improve their competitive advantage?
MindShifts® worked with Aardvark to define the key intelligence topics and refine the key questions which would drive a situational analysis. Internal sources of information, expertise and networks across the organisation were mined. At the same time MindShifts® carried out a targeted search for publicly available information which would add external information to the analysis. We also talked to industry commentators and associations, suppliers, competitors and employees in search of information and knowledge.
The strategic drivers were now becoming clear, the market and competitive terrain had fundamentally shifted and Aardvark now appeared to be positioned in the wrong place to take optimal advantage from this powerful set of trends. On the basis of this analysis, MindShifts® proposed strategies that would move Aardvark to take advantage of the emerging opportunities.
Working with MindShifts®, Aardvark was able to move quickly to modify its capability and move into emerging market segments through a new distribution channel with the right sort of product and service offer. Within 12 months Aardvark had reversed the erosion in market share and was also experiencing strong growth in the new market segments they had entered. Aardvark’s market entry was also before its major traditional competitor which was proving to be a significant advantage as they now tried to play catch up.
For more information about how we can assist you to develop CI capability in your organisation contact Babette Bensoussan at MindShifts®.