Strategy and Intelligence

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I noticed this month that there are interestingly a number of intelligence events and conferences around the world  –  from the AIPIO conference in Melbourne to events at Mercyhurst University, USA, live streaming on intelligence studies. Cybersecurity while the flavour of the month if not the year is a part of the intelligence field!  So this month, I thought I would address the issue of strategy and competitive intelligence.

A decade ago, a colleague of mine introduced me to the “Topple Rate”. This is a measure developed by a McKinsey consultant that measures the rate at which companies lose their leadership position or switch ranks. The topple rate varies across industries however no industry is safe from this growing churn rate.

Today, competing effectively is not just about understanding existing competitors and the current business environment.  It is strategically about having a picture of what the future business environment will look like.  It is about addressing questions such as:

1. How will new technology affect you and your customers? 

2. What are you doing to protect your business performance when new and sometimes unusual competitors are now only a click away? 

Competitive Intelligence, or CI as it is commonly referred to, is concerned with the methods used to minimise risks in decision-making and takes into account industry risk, competition, and an organisation’s own competitive position and advantage. It relates to the techniques used to interpret and analyse external information and communicate it to the right people for timely and effective use.

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 an organisation’s future.

A key value of CI is that it underpins foresight and provides early awareness and early warning. This reality check enables board members and all executives to recognize and monitor the future as it unfolds, thereby reducing risk and minimizing mistakes. Costly mistakes by executives, let alone board members, is no longer an option.

The systems for identifying these warning signals are totally different from yesterday’s methodology. Google just won’t do it …….neither will a tip from a colleague over lunch! And don’t get me started on disinformation regularly published in the media.

Business respects and relies on statistics, facts, and concrete data. Sadly this information is retrospective and most useful for quantifying what has occurred. But it is increasingly unreliable and inaccurate for revealing the future in a rapidly changing environment.

The competitive Intelligence process is very specific in its intent and always outward looking, using both internal and external resources as mentioned above. Using CI can give an organisation advantage and protect it from a higher topple rate.

Forced change is always second prize. The secret lies in putting together a strategy for the future based on sound intelligence.

Are you doing CI?  If so, how well is it performing for you?

CASE STUDY

Aardvark had a problem, perhaps many problems. The market for widgets seemed to be changing, and 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?

Working with Aardvark, internal sources of information, expertise and networks across the organisation were mined. At the same time, a targeted search for publicly available information was carried out. We also spoke 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 of this powerful set of trends. On the basis of this analysis, MindShifts® suggested options and strategies that would move Aardvark to take advantage of the emerging opportunities.

Selecting their preferred approach, 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.

Avoiding Bad Decisions

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As you know, I have been working for over 25 years to help people make better decisions, whether through strategic and competitive intelligence or life, leadership, and business coaching. I even call myself The Decision-Making Maverick™.

Over the years, I have found four key areas that impact decision-making the most:

  • Heavy internal focus
  • Decision Fatigue
  • Shallow Brains
  • Learning how to do new things

So when a colleague – Shane Parrish from Farnam Street – recently posted about one aspect of decision-making that’s rarely talked about – how to avoid making bad decisions – I had to share it with you.

Here are his suggestions (including some additional comments based on my experience) for five of the biggest reasons we make bad decisions:

1. We’re unintentionally stupid

We like to think that we can rationally process information like a computer, but we can’t. Cognitive biases explain why we make bad decisions but rarely help us avoid them in the first place. It’s better to focus on these warning signs that signal something is about to go wrong.

Warning signs you’re about to do something stupid unintentionally:

  • You’re tired, emotional, in a rush, or distracted.
  • You’re operating in a group or working with an authority figure who thinks they know it all.

The rule: Never make important decisions when you’re tired, emotional, distracted, or in a rush.

2. We solve the wrong problem

How many times have we come across this? The first person to state the problem rarely has the best insight into the problem. Once a problem is thrown out on the table, however, our type-A problem-solving nature kicks in, and we forget first to ask if we’re solving the right problem.

Warning signs you’re solving the wrong problem:

  • You let someone else define the problem for you.
  • You’re far away from the problem.
  • You’re thinking about the problem at only one level or through a narrow lens.
  • You don’t have a clear enough question about the problem.

The rule: Never let anyone define the problem for you. And never proceed if you are not clear on which problem you are trying to solve. Go back to the decision you are trying to reach around the problem.

3. We use incorrect or insufficient information

We like to believe that what we read is correct and that people tell us the truth. We like to believe the people we talk to understand what they are talking about. We like to believe that we have all the information.

Warning signs you have incorrect or insufficient information:

  • You are not speaking to the right people.
  • You’re reading about it only in the news.
  • You are not looking at multiple sources to collect and verify the information you need.

The rule: Seek out information from numerous sources – don’t be lazy – a lot is riding on making a better decision.

4. We fail to learn

You know the person that sits beside you at work that has twenty years of experience but keeps making the same mistakes over and over? They don’t have twenty years of experience—they have one year of experience repeated twenty times. If you can’t learn, you can’t get better.

To truly learn from our experiences, we must reflect. Reflection has to be part of your process, not something you might do if you have time. Don’t use the excuse of being too busy or get too invested in protecting your ego. Only reflection allows us to distil experience into something we can learn from to make better decisions in the future.

Warning signs you’re not learning:

  • You’re too busy to reflect.
  • You don’t keep track of your decisions.
  • You can’t calibrate your decision-making.

The rule: Be less busy. Keep a learning journal. Reflect every day.

5. We focus on optics over outcomes

Our evolutionary programming conditions us to do what’s easy over what’s right. After all, it’s often easier to signal being virtuous than to actually be virtuous.

Warning signs you’re focused on optics:

  • You’re thinking about how you’ll defend your decision – and you don’t share what you already know.
  • You’re knowingly choosing what’s defendable over what’s right.
  • You’d make a different decision if you owned the company.
  • You catch yourself saying this is what your boss would want.

The rule: Act as you would want an employee to act if you owned the company.

As some of you would know from my many presentations, I have talked about these very issues. Avoiding bad decisions is just as important as making good ones.

Look at the warning signs, reflect, set some rules for your decision-making processes, and you will never need to rely on luck to get good outcomes.

Here is the link to Shane’s original article and many others – https://fs.blog/2021/03/avoid-bad-decisions/

I would love to hear how you have learnt to avoid making bad decisions.

At MindShifts® we offer a range of coaching programs, and competitive intelligence services to support individuals and businesses. If you’d like to get in touch, or would like to arrange a 45 minute complimentary ‘discovery session’ please contact us via our contact page.

 

Competitor Information

How to learn more about your competitors

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These days it is critical that executives understand the constantly changing competitive environment. The pandemic has changed supply chains, production processes, customer interactions, technology use, staff interactions, and so much more. So with all these changes going on around us, how can we each still make sound decisions?

90% of everything we need to know about our competitors is available online

Right now more than 90% of what we will ever need, in data or information to help with those decisions, is already in the public domain – that means it’s all available online. Maybe not in the form that will directly answer our specific questions about, for example, our competitors but the pieces of any jigsaw are always there.

Let’s take one example. What if a large Asian/European/US firm decided to enter the Australian market. We would estimate that they were planning on entering the market well before any actual launch, undertaking research to review existing players, identify market growth opportunities, government legislation, consumer requirements and so on.

Yet, as a player, how could we have detected their intentions before they actually entered the marketplace? And, what can we find out about their intentions?

Firstly, market expansions rarely occur without changes in personnel, particularly senior personnel. In the above example, this could also mean increased management, skilled and unskilled labour, equipment and floor space. Wouldn’t all of these considerations be part of our own business and marketing strategies if we were to consider the growth of this kind?

So why would a competitor be any different?

The pieces of the jigsaw are all there – each carrying a little message.

Now, as we know well, not all information is of equal value, worth or credibility. Information may arrive distorted, almost always incomplete and usually with bias either from its source or from the user….even if it has been published. Remember just because it is on your computer screen and in Google, does not mean it is true! Information needs to be verified.

There are four main sources of information, each able to validate the other in some way. These are:

  1. Human Sources: Oral information by way of business networks, seminars, friends and experts. At MindShifts®, our company’s greatest asset is our staff. After all, they attend industry webinars, research online, look at social media, just to name a few sources. To tap into this wealth of information we need to find out who knows what and develop a method for gathering and processing the information. We may also need to attend specific additional industry webinars or listen to expert podcasts, online product and service demonstrations, or connect with the local council and industry associations and join social networks.
  2. Economic & Financial Sources: This includes annual reports, trade publications, general media. What has been written about a company locally or in other countries? What publicity have they received in their industry press? What about the individual partners, board members, connections?
  3. Corporate Sources: This includes customers, suppliers, innovation hubs, Facebook pages, web sites, advertising etc. In this area, staff should be listening and gathering information about the competitive environment as part of their everyday activities. Simpler still put yourself on to some e-newsletter lists or join some Facebook and/or LinkedIn groups. Now, with a new perspective, we will have competitive information delivered to our desk.
  4. Technical Sources: This includes technical reports and journals, product manuals, IP/patents, even cases.

Don’t hesitate to use all four sources to build your competitive puzzle.

A question I often get asked is ‘How do I identify disruptors?‘ One great way is to get on the newsletter listings from organisations such as Kickstarter, Springwise, Indiegogo, TrendHunters, and the Aussie Idea Spies- just to name a few. These all identify start-ups and the products and services seeking funding or being launched. These days nothing is really that far from you.

The important thing to remember is that understanding competitors – whether disrupters, medium or large players – can give a business advantage and provide us with the right information at the right time to perceive and avoid threats, and utilise opportunities for a profitable business in today’s constantly changing environment.

Learning about, and understanding, the business environment in which you compete is really your only competitive advantage.

Want to know more? Get in touch.

Business Anchors

Budget Anchors – Exalted Numbers

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In business, some numbers take on special status.  The cost of capital.  The rate of inflation. The market average.  Last year’s results.  The industry benchmark.  Six sigma. These and other numbers are so exalted, we rarely question, let alone notice, their unintended consequences as mental anchors.

One number stands out in every organisation. 

 It is a number we fear and venerate.  It is a number that is fluid and then becomes a stone.  It is a number that defines the limits of what’s possible.  The number is, of course, the budget.  

Our colleagues at Advanced Competitive Strategies in the USA conducted a business war game for a major company.  They divided the company’s managers into teams to role-play their own business and their competitors. They were told that they had to allocate their marketing budget among various messages that they could deliver through multiple media. Their market share and gross margin numbers would result from how much they spent and how well they spent it, compared to how much their competitors spent and how well they spent it.

Advised what their budgets were, they were free to spend more or less than those budgets. There were no limits to how far their spending could diverge from their budgets.

Every team, in every year of the business war game, spent within a few percentage points of their budgets.

In most companies, the budget is rather like Goldilocks’ porridge scenarios.  Spend less than your budget, and your bowl shrinks next year.  Spend more than your budget, and you get burned.  Spend very close to your budget, and you are just right.

Unfortunately, the meet-your-budget imperative collides with the competitive challenge. If you are constrained by your budget when an unexpected threat or opportunity pops up, then you are restricted in your options to respond to the threat or exploit the opportunity.  

If your competitors work the same way (and they probably do), you might not suffer too much.  However, when new competitors (or newly aggressive existing competitors) charge in, your (real or unconscious) constraints can produce a debilitating competitive disadvantage.  

This competitive disadvantage can trigger a downward spiral that’s hard to wrest from a heavy budget anchor.  A competitor takes a share, so sales go down; as sales go down, budgets go down; as budgets go down, the ability to respond to the competitor goes down; as responses weaken, the competitor takes more share; and so on.  A strategist in a large company described this conundrum: We have enough money to buy bullets, but not enough to buy a scope for a rifle that will let us aim accurately.

The downward spiral isn’t the only way budget anchors can taint strategic thinking.  

In another business war game, a budget anchor led managers to assume their strategy would work.  They knew they could cut their costs, which would give them pricing flexibility; they figured that because their competitors couldn’t cut their costs, their budgets would force them to either cut spending or maintain a higher price.  They were wrong.  When their own managers put themselves into their competitors’ shoes – one of the main benefits of business war gaming – they figured that their competitors couldn’t afford not to match a price cut.  Of course, they couldn’t guarantee that their competitors would behave that way.  Nonetheless, the insight led them to a major change in their thinking, which led to a major shift in strategy and a major improvement in performance.

Why do upstarts beat incumbents?  

Remember articles in our previous issues of MindShifts® Matters?  Upstarts supposedly “think outside the box” or “break the rules.” What are the boxes, what are the rules, that bind the incumbents?  The budget anchor is one.  An upstart thinks investment; an incumbent thinks budgets.  The different word reflects the different boxes and rules.

What to do:

One of my wise colleagues refuses to talk about “budgets.” He talks about “spending plans.” It helps us think more expansively and more creatively.

Watch the thinking that goes on in your company’s strategy sessions.  Are there unstated assumptions about the inviolability of the budget?  Is there an important opportunity, or threat, that people are trying to fit inside the budget, rather than thinking about spending what’s necessary to deal with the challenge?

What you can do if you believe that the budget does not reflect the needs of an opportunity or threat is to show how a different level of spending would be of benefit.

Finally, note that anchors and other assumptions partly influence budgets themselves.  We should spend X% of sales, this year’s budget is last year’s plus an adjustment of Y%, we’ve got to keep spending to $Z to boost the stock price.  Other strategy-related issues have anchors of their own: a new-product launch costs $A, it takes B years to become profitable, the pricing sweet spot is $C.

A ship moves only after it raises its anchor.

For more information about how you can improve your competitive intelligence capabilities get in touch!

Source:  This article is adapted from Mark Chussil’s blog post, ‘Exalted Numbers: How Good Numbers Produce Bad Decisions’ 

The underlying principles of strategy are enduring, regardless of technology or the pace of change._ Michael Porter (2)

The Power of Choice

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We all have choices in our lives – day-to-day choices, life choices, choices about our friends (we can’t choose our families – although we can choose how to behave/react with them!), choices about how we show up at work, our attitudes, our thoughts even our beliefs.  And the more coaching I do, the more I see how much we limit our choices to staying in the ‘safe’ zone.  We often become blind to a myriad of options available to us and that can be followed through.

Is this the time that you will choose to take steps to create the life you want?

If you’re looking for a new direction or making those goals that seem so elusive, become reality do this quick checklist. Yes, it’s simple, but take your time – maybe over your next cup of coffee. 

A quick checklist to start afresh – list five key items for each question:

  • What am I proud of accomplishing over the past year?
  • What didn’t I do that is still outstanding?
  • What am I most pleased with?
  • What am I most disappointed with? (don’t dwell on this – just note it down, it’s essential to face our ‘failures’ and deal with them)
  • What would I truly like to achieve going forward in my:
    • work-life
    • personal-life
    • health & physical goals

These aspects of your life are intertwined and will each impact on the other. To help you look at all of these aspects of your life, download our Wheel of Life.

  • How will I make these become a reality and am I ready to do this?

If you don’t start now, then when will you create the life you want?

Moving forward, make sure you are clear on your goals or the outcomes you want to achieve.  Break them down into smaller goals or steps if you feel they are too big or if you want a champion on your side as you work through them, talk them through with a coach.

Taking the first step is the hardest, but it is your choice whether you take that first step and the next one.

If you identify with the above, then I invite you to chat with me over a coffee, by phone, or Skype/ Zoom, and let’s see if you are ready to make your goals become a reality!  

As a dear friend once told me when I started my business over 25 years ago – It is your attitude, not your aptitude that will determine your altitude.  

Let me know how I can support you – you can contact me here.  

Technology is no substitute for strategy

Technology is not a substitute for strategy

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Do I keep a 30,000 feet overview of what’s happening in my competitive space?

You bet.

Do I follow those competitors carefully, analyse traffic on their websites, compare their products, prices, keywords, AdWords, page load time, linking roots domain, changing text, quality of photos, mobile optimization, or zillion other minutiae to mine, and obsess over social network chats about them and us?

Not for one minute.

The pundits’ advice is often wrong.

Go on LinkedIn, and a horde of consultants advise entrepreneurs to keep a close eye on competitors by watching social media like a hawk, tracking competitors’ online moves, analysing site traffic patterns, and many other magical tricks.

This is simply bad advice.

If you want to stay in business, you can’t obsess about competitors.

Not knowing what to look for, what is crucial, and what to ignore is a waste of time and resources. Web intelligence and web analytics are not competitive intelligence. Not by a mile. It’s a toy that makes it easy to “spy” on competitors, right from your desk, compiling tons of useless data.

If you are serious about your company’s long-term success, you don’t want to bring a toy gun to a real gunfight.

The real competitive questions worth asking:

Real competitive intelligence answers the following tough questions:

  • What do I offer that’s unique and who can truly benefit?
  • What are the activities that are crucial to this uniqueness? Which are the most reliable links in delivering the offering? Who or what poses the real competitive threat to your business?
  • How do I stop competitors from imitating quickly?
  • What are the strategic risks and opportunities opening up for us as the market changes?

The problem with relying heavily on web analytics and other online intelligence tools is that they replace strategic thinking with hyped-up statistics or meaningless noise. A focus on web or online analytics only is a sure way to lose sight of the competition.

Internet trolling and social media obsession haven’t delivered one iota of better performance to anyone but the vendors supplying the tools.

For professionals like us who’ve been analysing the competition for decades, the hype surrounding web intelligence tools borders on the hilarious; its serious consequences, however, can lead to your company’s early demise.

Best advice #1: Never follow competitors

Competitive intelligence is about competing, not chasing the tail of your competition, whether direct or indirect. Sometimes, the best way to compete is actually to ignore competitors. That’s why Harvard Business School never succumbed to the wave of MOOCs free courses and cheap online education.

Best advice # 2: A channel is just a channel. 

Never forget that your company website is just a channel. What will make you win will depend on what your offer is – and who needs it. If you don’t fill a real need you will disappear, together with your fast-loading, button-happy, feature-rich mobile site with all the right SEO-grabbing keywords in place, state of the art technology just like everyone else.

Digital marketing is not a strategic insight. Continuous alertness to possible market evolution is where strategic minds win.

Technology is not a substitute for strategy.

There are dozens of companies today offering free or low-cost subscription web intelligence services (e.g., Alexa, Compete, HitWise, Google Trends, SimilarWeb, and Tregia are just a small sample). Are any of them a clear winner over the others? The same companies that allow you to “spy” on your competitors’ traffic and analyse their data to death can’t even win their own competitive race.

Best advice #3: Technology is no substitute for thinking.

This is the third lesson I teach my high tech start-up audience. If you are ready for hard work, it is worth it.

The realm of competitive intelligence is the realm of “standing out.” Don’t obsess over competitors’ minutia. Instead, obsess over your strategy and its underlying competitive perspective. It is a magnitude harder than collecting web noise, but it will pay off if you get into the habit of answering strategic questions with real competitive intelligence.

Leave web analytics for the kids who get excited with toy guns. Don’t be young, foolish and self-employed.

This article has been edited and condensed and sourced from my favourite CI guru, Ben Gilad, back in 2016.  Sadly not much has changed, so I thought it was worth revisiting. What do you think?  Do you do think differently four years on?

Benjamin Gilad is the co-founder and president of the FGH-Academy of Competitive Intelligence, the leading institution that pioneered the training and certification of competitive intelligence professionals (CIP™) world-wide. He is a former strategy professor at Rutgers University’s School of Management and author of three books on competitive intelligence’s role in companies’ success.

 

If you need help developing real competitive intelligence that will inform your business strategy – get in touch.

decsisons

Decision Making Skills – Your Most Important Tool

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My dear friend and colleague Jack Speer of Delta Inc. in the USA wrote an excellent blog that made me reflect on my decision-making processes.

As a child, decisions were easier. They were based on a few fundamentals:

How much does it cost?  Can we afford it?  What will the neighbours think?  Will it get me in trouble?

As adults, here are a few more principles that may be helpful:

  1. Decisions Are About Ways to Move Ahead.

    The decisions that matter should be stepping stones that take us to the next part of the life we’re building. Sometimes life takes a 180degree turn, and we take a different direction to where we thought we were headed. Generally speaking, however, the decisions we make today build on the decisions we made yesterday and hopefully move us forward.

  2. Logic Is Useful, But Checking In With People Is Clever.

    Good decisions are informed by facts but are impacted by our thoughts and the people around us. Being aware of other people’s opinions and ideas can expand our decision logic and limit our biases and blind spots.  Our decision-making process may then uncover information we had not addressed nor thought of.

  3. Group Thinking Kills Good Decisions.

    As a species, human history has its foundation in groups and tribes who wanted stability and were naturally not attracted to change.  So be aware that you may have to fight for your ideas. The quality and the effectiveness and passion with which you present your decisions will determine your success.

Decision-making is complex and difficult and involves many factors, some contradictory to each other.
Making good decisions requires good research and fortunately, facts about any subject today are just a click away. You just have to know where to look.

Every good decision should also involve a personal ‘poll’ of the best minds that surround us.  Family, tradition and religious beliefs all shape our decisions.  The influences of those around us help us to optimize opportunity and minimize risk.

Decisions almost always carry an element of risk, which many people are uncomfortable with. They would rather have someone else make the decision, even when they don’t agree with it.  However the more willing you are to make decisions, the more control you have over your life and circumstances.

I believe that the more I empower myself to make decisions (even though I make mistakes), I’ll always come out better by stepping up and deciding.  Ultimately, I know that I will protect my interests better than anyone else.

So give it your best shot. Decide and do it!

Understand Competitors

Do you understand your competitors?

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Every organisation has competitors, whether they’re internal competitors – fighting for limited resources and budgets, or market place competitors fighting for their share of the market.

Why should you understand your competitors?

In order to make the best possible decisions for your business, you must understand the market you are in – where it’s headed, and what your competitors are up to.  In my experience, however, most businesses tend to track what their main competitors are currently doing – or have done in the past.

We all know that the way we operate today is not the same as how we operated a year ago – so why should any competitor be any different?

We need to uncover where existing competitors plan to go in the future and where potential competitors might disrupt an industry.  Ask yourself – will you be taking sales from them, or will they be taking sales from you next quarter, next year or even two years from now?

To get a good grasp on a competitor’s real intentions, you need to delve a little more deeply.

Here are seven tips to help you better monitor your competitors:

  1. Buy your competitors product or service

Always buy your competitor’s product, if possible, to determine their sales process and get on their mailing list to see future promotions. The relatively small price you pay for their product will pay for itself many times over. Knowledge is power – and you’ll gain by finding out what they are doing and how they are doing it. By purchasing their product you’ll also experience what being a customer of theirs is like – and you can judge their product, service, and operations against your own. Just reflect on how the Chinese have been able to enter so many markets.

  1. Audit their website

You probably know the websites of your main competitors, but there’s an even better way to identify sites in the same niche that you may not even know about. This will help you understand the market share in your internal audit report. You can use a site called Similar Sites to find sites like yours.

Another part of competitive auditing is identifying competitors who are ranking higher in search engines for your primary keywords. There are many sites you can use to help with this – however, one that I use is called Moz SEO toolbar (MozBar). It will give you immediate access to a range of many on-page SEO factors such as Domain Authority and Page Authority.

The other search that you may find useful is to simply put your primary keyword phrase into Google search, and find out what comes up.

Often you will uncover other companies you’d never heard of, doing the same thing or in the same business. Changes to a website can also say a lot about a company. TimelyWeb, by EldoS (www.eldos.org), has several ways of notifying you when page changes occur, including via e-mail. The free program can monitor 10 Web pages. If your competitors have large sites, you may want to buy the commercial version.

  1. Get the gossip from Colleagues, Vendors, Friends and Discussion Groups.

There are so many ways to find out what people are talking about online. Online discussion groups are the pubs and clubs of the internet – where individuals meet with like-minded people. One of the popular ways to hunt through newsgroups is with Facebook Groups or Google Groups. Simply type in the subject you are interested in to sort through the web’s 20,000 Usenet discussion groups.  LinkedIn is also pretty good.  And remember to speak to your customers, distributors, suppliers, industry consultants, industry associations, journalists – to name just a few.  All these people are a fountain of competitor information and may provide new insights into market intentions.

  1. Check out the Classifieds

Is your competitor expanding? Is he or she going in a new direction? You might get a clue through help-wanted advertising. The listings can tell you more than what your competitor is planning. You can also check salaries being offered. Through the use of search engines, you can also tell whether a company is experiencing tough times. Rumours of a layoff? Ask an information broker/librarian to help you delve deeply into a competitor’s online profile. They have the training.

  1. Read up on Plans and Finances

Drop by your industry association’s website. It won’t cost you a cent. If you’re lucky, you may find additional information about a member who is your competitor. Perhaps they were interviewed for the association’s website or publication. You can also learn a lot by reading what people say are their future plans. If your competitor is a large publicly listed organisation, it is required under Australian law to file quarterly and annual financial reports and announce any activities that are likely to be of investor interest (that has an influence on the share price).

  1. Set up a Google Alert

These days you don’t need to pay for expensive online monitoring services to keep track of activity by your competitors. Google Alerts allows you to track information on the internet such as simple keyword monitoring – which might include blogs, forums, news sites – and information on the wider web. It will also track You Tube. Google Alerts will send you an email every time one of the chosen keywords is mentioned. You can also choose the frequency at which you’ll receive the information. One option is to get the information, as it happens – or alternatively, you could choose to receive the information once per day, once per week, etc.

What you won’t receive are social media results. If you want to know what’s said on social, you’ll need a social listening tool such as Keyhole.

For more comprehensive print, online, TV, radio and social monitoring and insights, platforms such as Streem can help you track, measure and respond to competitor news as it happens.

  1. Hire a ‘Big Gun’

With so much information available, strategic specialists can help a company define what information will genuinely assist you in making better decisions. They can provide strategies to help a company collect, monitor and, most importantly, analyse information to deliver the necessary insights for better decision making. Look for a company that has a strong ethics policy. This represents a clear signal that the consultancy is credible, has considerable experience and is aware of the boundaries concerning responsible corporate behaviour.

Understanding what your competitors intend to do in your market is not hard.  It may cost you time, effort and budget in the first instance, however when you compare that cost to potential market share loss, sales lost and customer shrinkage – it’s worth the investment.

To help you get underway, here is a free download to help you build a better intelligence system for your business.

For more information about how you can improve your competitive intelligence capabilities get in touch!

Business Blindspots

Blindspots vs Black Swans – Don’t let blindspots ruin your business

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I was catching up on some reading in preparation for this newsletter and re-read an article in the Company Director Magazine called “Planning for the Unknown.” Among a number of issues, the article highlighted the need for directors to be more on the alert for the so called “black swans” – that is events which are hard to “predict”.

The term “black swan” became popular by Nissem Taleb, an American finance professor, whose “black swan theory” refers only to unexpected events of large magnitude and consequence, and have played a dominant role in history.  As such, black swans impact everyone at the same time.

As a decision making maverick and a competitive intelligence expert I would like to state that unless a business operates in a vacuum, executives and directors can identify events that will impact on their competitive ability, seek a number of options, and mitigate the risk.

The Lessons Are Clear

Over 25 years of working with multinationals, local businesses, large and small, the lessons are clear.  While everyone knows that a business does not operate in a vacuum, senior executives and directors continuously exhibit blindspots which increase competitive risk and limit growth opportunities.  Just think of all the companies you know that have lost market value or no longer exist.

Case study after case study, in every business degree in Sydney, Boston or London, identifies executive blindspots as the number one cause of company failures.

Executive Blindspots

The first blindspot to be acknowledged is that you cannot know everything about your industry and customers.  Every industry is moving too fast, morphing daily in some way.  There is no way an executive can stay on top of it all including unexpected disruptors.  And being internally focused only makes things worse.

The second blindspot is the belief you can do nothing about this, as it is so overwhelming.  There is just too much data, too many inputs and it is all too time consuming.  Well, these days we operate in a VUCA World (Volatile, Uncertain, Complex, Ambiguous) and we need to become very, very familiar with this.  We need to have people who can provide insights to help mitigate risks and uncover all the options that are available in this dynamic environment.

Think, Reflect and Analyse

It is not about big data.  It is about the ability to think, reflect, and analyse.  Executives have an armoury of tools and methods to limit the risk from the unexpected.  Tools such as Scenario Analysis, War Games to name a few and methods such as competitive analysis or competitive intelligence have been around for many, many decades.

Remember:

  1. There is no business that operates in a vacuum.
  2. Learn about your competitive marketplace – I can assure you, you do not know it all.
  3. Limit your blindspots – get customers, suppliers, outside consultants, experts to provide insights into your competitive landscape and highlight what they see are some options on your horizon.

Black swans will affect everyone. Blindspots will destroy each company one at a time and these days at a much faster pace!

To find out how you can mitigate against blindspots in your business get in touch via our contact us page.

Analysis

What IS and IS NOT Analysis – and the five benefits of good analysis.

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You can’t be expected to know the entire competitive landscape well enough to correctly call ALL the shots. Within today’s complex, chaotic, and globally competitive environment  – think VUCA world –  the pressing need for sense-making, strategic thinking and improved understanding of the competitive terrain is why you need to develop and enhance your analytical abilities.

Analysis needs to be done well if you want your business to succeed.

And you ask – But isn’t analysis something that my software can do for me? Can’t I just get by and rely on a mixture of collected data, software analysis, intuition, and experience?

My answer is unfortunately a resounding no – and definitely not these days.

Let me briefly explain what I do and do not mean by analysis by referring to the following table.

Table 1 – Identifying Analysis

  What Analysis IS What Analysis is NOT
Methods The practiced application of proven technologies. Constant usage of industry conventions and one-off solutions.
Process A method and set of steps designed to effectively break a situation into its component elements and recompose it in a way that addresses a challenge or question. “We just kind of know what it is, how to do it, and fortunately, have managed to get by so far.”

We hire consultants to do it for us.
Output Actionable insight, intelligence/meaning and implications derived from data and information. Repackaged, re-organized, re-classified data and information. Often a summary of the information at hand. No meaningful conversion.
Data Sources Legal and ethical gathering of relevant data or information driven by the needs defined in the structuring of the analytical question. Seeking and using data or information from illegal sources or by unethical means – often incomplete.
Support Systems Using application-relevant communication, information and management systems to supplement your thinking. A software application or solution you can acquire and apply “off the shelf.”

Magic-bullet solutions.
Timing Provided in advance of any decisions. Rushed to provide support to an answer that has been decided.
Communication Channel Conducted in whatever means the decision maker can best accept and use it. Done via “formal” reports with a specific format.

Always in writing.
Questions Answered What?

So What?

Now What?

 Just something nice to know – providing no insights.
Catalyst Yours or your bosses discussed need to know something.

The need to better position your organization in its competitive marketplace.

 What you think or hope is important to the executive.

The need to demonstrate we are actually doing something.

 

At a minimum, good analysis of your competition, environment, organization and strategy should help you deliver the following:

  1. Early warning of potentially developing opportunities or emerging threats in your competitive environment.
  2. An objective and arms-length assessment of your organization’s relative competitive position.
  3. The ability to help your organization to more quickly and easily adapt to changes in the environment
  4. The means for basing your organization’s strategic, marketing, sales or product plans on relevant and timely intelligence.
  5. Confidence that decisions are based on systematically derived understandings that reduce ambiguity and complexity to low levels.

Does your analysis deliver the above?

The driving purpose of performing analysis is to better understand your industry, the context of your business, and your competitors so that you can make better decisions.  Improving the quality of decision-making should hopefully improve the quality of the strategies that you implement – providing you with a competitive advantage – and superior performance results.

If you would like to find out how you can develop your competitive intelligence capabilities – or those within your organisation – contact Babette Bensoussan for a confidential conversation. 

Are You Looking for Insights?

Are you looking for insights?

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This post focuses on one of the hardest steps in providing intelligence or insights to decision-makers – identifying Users Needs and the direction of an Intelligence Assignment.

The Competitive Intelligence process is defined as “a systematic and on-going process forgathering and analysing information to derive actionable insights about competitors, the competitive environment and trends in order to further the organization’s business goals” (Adapted from Fleisher & Bensoussan, 2003).

Whether you are doing competitive intelligence, market intelligence, strategic intelligence, consulting, or providing support for decision-makers, the first step is to identify the client’s key question or objective and then plan the direction of the assignment.

Experience has shown that identifying Key Intelligence Topics (KIT)/Key Intelligence Questions (KIQ) to be one of the hardest steps. Executives are often like kids in a candy store to start with, believing that any question, focus or topic will do – only to find the answers often provide little, if any, strategic value.

It is absolutely vital that there is an understanding of what the “customer” (the decision-maker) really wants, where they are coming from, and how the insights will be directly related to a management decision or course of action.

A good example of the need to understand intelligence questions occurred several years ago when a client brought us in for a CI assignment and asked us to tell them ‘who is who in the zoo’ in relation to a particular market segment”.  In order to understand their key focus and provide value, we asked the basic of all basic CI questions “What decision will you be supporting with this information?” The answer – “Should we enter this market niche?”

Wow, how different was the assignment now.

We immediately realised that in order to answer their original question, we would have delivered little strategic value.

The key was in understanding that what the client really wanted to know and the reasons behind the question.

Step 1:

Formulate the goal you want to achieve.

For example, the goal may be – “Is it worth my while to spend $500,000 developing Product X?” or “What would be the most effective way of entering this market?” or “Is there a market for my services in Asia and if so, how do I do it?”

The goal, whatever it may be, will in effect drive your information gathering process and keep you focussed.

Too many times research projects fall over because of poor identification and understanding of the topic or question, and its relationship to the business. It is really worthwhile spending time here to understand your decision-makers.

Step 2:

Scope out the project parameters.

  • Who needs the intelligence?
  • What business decision is being supported?
  • What specific information is required?
  • What are some potential sources of information?
  • What are the assumptions implicit in the KIT?KIQ?
  • What method of analysis should be undertaken to answer the KIT/KIQ?
  • What form should the final ‘report’ take?
  • When is it needed?
  • What are the budget constraints?

It is a waste of time and resources to ask too broad a question to start off with. It will always deliver little value.

Step 3:

Break down the decision focus into three areas:

  • Early Warning Issues– these typically stress activities and subjects by which management does not want to be surprised. They are heavily weighted toward threats.
  • Strategic and Tactical Issues– these relate predominantly to the development of strategic plans and strategies. However issues around the implementation of marketing or sales tactics are also identified in this area.
  • Market Player Profiles – these are the least actionable but reflect a need to understand a “player” in a particular market.

The approach outlined above enables a clearer focus on the specific types of questions and the irrelation to company strategic issues, competitor issues or factors that cost the company money whether for today or tomorrow.

The more specific questions are to start off with, the easier it will be to build up decision support, intelligence abilities, and deliver value.

Step 4:

Ask the right questions.

It has often been said that the critical factor is not the information we get but the questions we ask. Often we ask questions that are either too broad or too convoluted to be able to provide us with a specific response. In the end we often end up with information that is of little strategic value.

So start with questions that are quite specific and result in a specific response. The important thing to remember in all of this is that intelligence works for the business.

Businesses have a purpose, an intent, and all intelligence activity must be carried out for, and focus on, the intent of the business – otherwise why bother!! To get information for the sake of getting it is really a waste of time – especially in today’s climate of information overload and fake news.

The key is in understanding what you really need to know, where you are coming from, and how the intelligence will be directly related to a management decision or course of action.

Step 5: 

Analyse your information.

Once the issues around the KIT/KIQ have been clearly defined and agreed to, a plan and direction of how the assignment will be undertaken can then be formulated. The major focus is not just the identification of sources of information but what method of analysis will be used to turn the information into intelligence and insights. Let me say at this point that there are over 170 methods of analysis in business, and picking the appropriate methodology is critical to delivering value. It is through analysis that information is turned into intelligence.

Insights are created – they’re never found!

2019 Business Plan

Are your 2019 business plans based on the right information?

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As it is the beginning of the year we thought we should point out three of the most common (yet most harmful) practices in decision-making in business that you should keep in mind – especially if you are setting plans for 2019 in the weeks ahead. 

1. Casual Benchmarking: People tend to copy the most visible, and obvious business practices of a competitive organisation without understanding the underlying purpose behind it. Very few companies undertake the research and analysis required to have a thorough understanding of the reasoning behind a strategy  – Is it the best strategy to improve your organisation’s performance? What would the possible downsides be? And how could you do it more effectively?

2. Doing what has worked in the past: Be careful to understand exactly why a strategy was previously successful. Is it relevant to the issue at hand, and is this strategy the best one to resolve the current situation? Be aware not to confuse success in spite of an action as opposed to success because of an action.

3. Following deeply held but unproven beliefs: This happens when we believe something will work or that it matches some assumptions that are held about what makes businesses successful. These assumptions or beliefs will resist change and affect judgements and choices, regardless of whether or not they are true. Check whether your decisions are relying on intuition, personal or group beliefs or influencers who may have other agendas in play.

Avoid these pitfalls and you’ll make much better decisions that provide clear direction and competitive advantage for your business.

Get in touch with MindShifts® today to find out how we can help you access the right information for your business.

 

Are you starved of Information

Are You Starved of Intelligence?

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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

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 –
CASE STUDY

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®.

Why do Smart companies make dumb business decisions

Why do smart companies make dumb business decisions?

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Why do smart companies make dumb business decisions?  Like you, I have heard many stories of great companies crashing.  But why is that?

After 25 years of strategy consulting, I would like to suggest some of the following reasons:

  • Companies repeat mistakes
  • Work gets duplicated
  • Customer relations are strained
  • Good ideas don’t get shared
  • Competition is around price
  • Not keeping up with market leaders or innovators
  • Dependence on a few key individuals
  • Slow to innovate
  • Lack of good market knowledge

People don’t choose for good things to go bad – just as executives don’t choose strategies that fail.

Bottom line I think, is that people in business aren’t finding the insights they need to improve their decision-making, aren’t sharing it around if they do know something, aren’t keeping it refreshed and up to date, nor even using it.

All of this has real business consequences.

What do you think you could do differently this month to improve the quality of your decisions?

Get in touch to find out how MindShifts® can help you make better business decisions.

10 Essential Strategic Insights

10 Essential Strategic Insights

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I was recently going through some old files and realised that in some cases the more things change, the more they really stay the same. This is especially true in strategy and when you distil the writings of Michael Porter, a global authority on competition and strategy, there are essentially 10 key strategic insights. Not least among them is that most companies think they have strategy when they don’t.

Porter’s essential strategic insights are:

1. The granddaddy of all mistakes is competing to be the best, going down the same path as everybody else and thinking that somehow you can achieve better results.

2. Confusing marketing with strategy.

3. Overestimating strengths.

4. Getting the definition of the business wrong or getting the geographic scope wrong.

5. The Worst mistake: Not Having a Strategy at all.

6. Not addressing the hidden biases embedded in internal systems, organizational structures and decision-making processes.

7. Companies undermine their own strategies.

8. Strategy killers in the external environment.

9. If you listen to every customer and do what they want you to do, you can’t have a strategy.

10. Single minded pursuit of shareholder value, measured over the short term, has been enormously destructive for strategy and value creation.

Yes, some of these seem self-evident when you think about it, yet they run counter to the way most executives think and behave.

Clearly developing an effective strategy is a long-term process and not a short-term one, and having a strategy is even more important in these turbulent and uncertain times.

Remember we operate today in a VUCA World (Volatile, Uncertain, Complex, Ambiguous). There is nothing wrong in returning to basics – sometimes it’s important to step back and take an outsiders view of your business.

Need to see with a fresh set of eyes? Looking for someone to challenge your thinking? – Give me a call on 0403 346 322 or contact us via our website.

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INTELLIGENT COMPETITION

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The most critical strategic issue for any business is its competitiveness. No one would disagree with this yet few businesses really spend time and effort to deeply understand and manage their future competitiveness.

Most executives monitor their competitiveness through market share and as we all know that indicator is historical and is in no way predictive.  Neither is historical tracking of past revenue trends.

So how do you monitor your competitiveness, identify potential new entrants, understand your existing competitors, and manage as well as identify your potential competitiveness? How do you manage the risks involved in being in a competitive market?

While generally the CEO is the one responsible for the competitive ability of any business, they are often lacking the right insights to make the best decisions.  And while most businesses have plenty of information and plenty of know-how they have very little Competitive Insights or Intelligence (CI).  One reason — there is no tie between business strategy and future competitiveness, and business systems and processes.

CI is concerned with the methods, systems and processes that a business uses to monitor its competition, any potential industry disruption, its own competitive position, and to improve its competitiveness overall.

Although most managers intuitively carry out some form of CI – generally in an ad-hoc way – the overwhelming data that is available, rapidly changing technology, and increasing global competitive pressures mean that there is an increasing need to develop more systematic ways of doing CI.

There are a number of key steps that will ensure the success of a good CI process. These are:

  1. Ask the right question

Far too often, businesses make decisions too quickly and without a strategic context — it is a case of ‘ready, fire, aim’.  The internet and social media has not helped this mindset, as the speed to market has become a more critical factor. In the end, we are left with a smoking gun, but where did the bullet go?

 Experience has shown that ‘asking the right question’ is one of the hardest steps for senior management.  Here we need to define the decision objective or purpose and to put it simply to understand what really needs to be identified.

  1. Manage information effectively

Once you have identified your objective and possible key questions, the next driver for understanding what you have and don’t have within the business needs to come from studying the forces at work on your business. These forces could include competitors, technology, clients, consumers, new entrants, industry trends and so on.

Getting solid information on the decision at hand requires a number of information sources:

Human sources: for example, people in your organisation, business networks, experts, etc.

Economic and financial sources: for example industry reports, economic analyses specialist media.

Corporate sources:  for example, customers, suppliers.

Technical sources: for example technical reports, academic papers, and product manuals.

Remember all the information needs to be put into context and subjected to interpretation to derive some meaning and value.

  1. Analyse for insight and intelligence

The major focus in the CI process is the method of analysis used to turn the information collected into intelligence or insights for the decision maker. It is only through analysis that intelligence or insight is created.

The value of insight is early awareness, as it enables you to recognise and monitor the future as it unfolds, thereby reducing risk and minimising mistakes. Today, executives are faced with many pressures — they may sometimes seek only short-term gains — but costly mistakes from executives making uninformed decisions are no longer an option.  The risks are too high.

 It is important to note that the purpose of CI is not to predict the future, but to enable management to make better decisions about the future.

In a VUCA world, CI is becoming an integral part of making business decisions. 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 competitiveness.

We need to realise that we have exciting new ways to protect margins, to fight the competition, to achieve breakthroughs. We need to realise 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 intelligence.

How to do SWOT Analysis the right way!

SWOT – The most abused analytical technique in management

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As most business people would know SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.

Traditional SWOT analysis is possibly the most widely known and among the most utilized means of situation analysis.  A SWOT analysis is used to assess the fit between a company’s internal resources and capabilities (its strengths and weaknesses) and external possibilities (its opportunities and threats).

The technique can be applied to many areas of a company, including products, divisions, and services. The simplicity and ease of using this model have made it a popular technique, particularly for determining a company’s ability to deal with its environment.

However, it is also arguably the most misused, misapplied, abused and poorly understood analysis method in management today.

Have a look at the diagram below.

Most people undertake the first SWOT that, to be honest, provides executives with little insight and no options as to their competitive abilities. It is so easy to fill in four boxes and persuade yourself you have done analysis!

The real SWOT (as originally developed by Harvard Professor Ken Andrews) will always deliver insights and options for good decision making. It is a little harder to do however every client I have worked with using this “proper” SWOT has uncovered invaluable insights and options as to its competitive ability.

SWOT Analysis

So how can you improve your use of SWOT Analysis?

Step 1: The first step in utilizing a SWOT analysis to understand each of the elements.

a. Strengths: Strengths are those factors that make an organization more competitive than its marketplace peers. In other words, those factors that differentiate you from your competitors. It is where the company has a distinctive advantage at doing or what resources it has which are superior to the competition. Listing what you believe are your strengths is simply an exercise in patting yourself on the back! Strengths are what differentiates you from your competitors. Your customers, suppliers and third parties know your strengths well compared to your competitors.

b. Weaknesses: A weakness is a limitation, fault or defect within the company that can prevent it from achieving its objectives. They occur when the company performs poorly or has inferior capabilities or resources compared to the competition. Again, your customers, suppliers, and other third parties would be aware of your real weaknesses.

c. Opportunities: Opportunities include any favorable current or prospective situation in a company’s environment such as a trend, change or overlooked need, which supports the demand for a product or service and permits a company to enhance its competitive position. Opportunities are equally valid for all players in your industry – not just you!

d. Threats: A threat includes any unfavorable situation, trend or impending change in a company’s environment that is currently or potentially damaging or threatening to its ability to compete. It may be a barrier, constraint, or anything that might inflict problems, damages, harm or injury to the organization. Again, these threats are equally valid for all the players in your industry.

Once you have completed your list in each of the four boxes, the hard work now begins.

Step 2: You now need to match each of the boxes with possible strategies you could undertake –

a. Matching your Strengths and market/industry Opportunities – what are some activities/strategies you could develop?

b. Matching your Weaknesses and market/industry Opportunities – what are some activities/strategies you could develop?

c. Matching your Strengths and market/industry Threats – what are some activities/strategies you could develop?

d. Matching your Weaknesses and market/industry Threats – what are some activities/strategies you could develop?

This is not easy to do and requires thinking.

Below is an example of a completed SWOT.

Once you have completed your SWOT, you will notice some common themes in the activities/strategies you have available. These common themes become what I call your strategic imperatives. You should address these in the coming 12 months as they will provide you with a competitive ability based on your current market fit.

Each year, business executives need to repeat this process as your fit will no longer be the same – and neither will your marketplace!

______________________________________________________________

EXAMPLE:   SWOT Analysis for Cannondale Bicycle Corporation

Obsessing About Your Competitors is a Rookie Move

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Competition-Fine-Line-Between-Healthy-Interest-And-Obsession-720x340Startups and small businesses are at greater risk for competitive failure than large businesses. They have no “fat” to cushion a competitive threat or to recover from a serious blunder. Entrepreneurs (especially early-stage ones) need to take the competition seriously.

For starters, I am not YFS (Young, Fabulous & Self-Employed). I am OCS (Old, Cranky & Self-employed).

My entrepreneurial venture has been successful for 26 years now. In the world of small business, this is close to an eternity. And being at this juncture, I hate to see entrepreneurs fail simply because they didn’t pay the right type of attention to competition. If I save one business owner from going under because he or she didn’t ask the right questions, it was worth writing this article.

Many entrepreneurs are bad at competitive intelligence
My business is dedicated to teaching managers and executives about competitive intelligence which is the method by which companies unmask opportunities and threats in the market. Through the years I have trained thousands of business people in the world’s most successful companies. I’ve also seen entrepreneurs cherish being first to market with their brilliant idea or product, but forgetting that first move advantage is not enough. It happened to me too. After almost a decade of glorious loneliness at the top, competition entered my space as well. I actually trained my own competitors!

C’est la vie
.

Do I keep a 30,000 feet overview of what’s happening in my competitive space? You bet. Do I follow those competitors closely, analyze traffic on their websites, compare their products, prices, keywords, AdWords, page load time, linking roots domain, changing text, quality of photos, mobile optimization, or zillion other minutia to mine, and obsess over social network chats about them and us?

Not for one minute
.

The pundits’ advice is often bad advice
Go on LinkedIn, and a horde of consultants advise entrepreneurs to keep a close eye on competitors by watching social media like a hawk, tracking competitors’ online moves, analyzing site traffic patterns, and many other magical tricks.

This is simply bad advice.

If you want to stay in business, you can’t obsess about competitors.

Knowing what to look for, what is crucial, and what to ignore as a waste of time and resources. Web intelligence and web analytics are not competitive intelligence. Not by a mile. It’s a toy that makes it easy to “spy” on competitors, right from your desk, compiling tons of useless data.

If you are serious about your company’s long-term success, you don’t want to bring a toy gun to a real gun fight.

The real competitive questions worth asking
Real competitive intelligence answers the following very hard questions:

  • What do I offer that’s unique and who can truly benefit?
  • What are the activities that are crucial to this uniqueness? Which are the strongest links in delivering the offering? Who or what pose the real competitive threat to you?
  • How do I stop competitors from imitating quickly?
  • What are the strategic risks and opportunities opening up for us as the market changes?

The problem with relying heavily on web analytics and other online intelligence tools is that they replace strategic thinking with hyped up statistics or meaningless noise. This is a sure way to lose sight of the competition.

Internet trolling and social media obsession haven’t delivered one iota of better performance to anyone but the vendors supplying the tools.

For professionals like us who’ve been analyzing competition for decades for the Fortune 500, the hype surrounding web intelligence tools borders on the hilarious; its serious consequences, however, can lead to your company’s early demise.

Best advice ever: never follow competitors
Best advice #1: Never follow competitors.

Competitive intelligence is about competing, not chasing the tail of your competition, direct or indirect. Sometime, the best way to compete is actually to ignore competitors. That’s why Harvard Business School never succumbed to the wave of MOOCs free courses and cheap online education. The bankruptcy of now-defunct for-profit education chain Corinthian College is testament to the value of competitive perspective over foolishly following others.

Best advice # 2: A channel is just a channel.

Never forget that your company website is just a channel. What will make you win is what you offer on it and who needs it. If you don’t fill a real need you’d disappear, together with your fast-loading, button-happy, feature-rich mobile site with all the right SEO-grabbing keywords in place, state of the art technology just like everyone else.

Digital marketing is not strategic insight. Continuous alertness to possible market evolution requires the discipline to say “No!”
 That’s where strategic minds win.

Technology, anyone?

There are dozens of companies today offering free or low-cost subscription web intelligence services (e.g., Alexa, Compete, HitWise, Google Trends, SimilarWeb and Tregia are just a small sample). Any of them a clear winner over the others? The same companies that allow you to “spy” on your competitors’ traffic and analyze their data to death can’t even win their own competitive race.

Technology is not a substitute for strategy
Best advice #3: Tech is no substitute for thinking.

This is the the third lesson I teach my high tech startup audience. If you are ready for hard work, it is worth it.

The realm of competitive intelligence is the realm of “standing out.”
 
 Do not obsess over competitors’ minutia. Obsesses over your strategy and its underlying competitive perspective. It is a magnitude harder than collecting web noise, but it will pay off if you get into the habit of answering strategic questions with real competitive intelligence.

Leave web analytics for the kids who get excited with toy guns. Don’t be young, foolish and self-employed.

This article has been edited and condensed.

Benjamin Gilad is the co-founder and president of the FGH-Academy of Competitive Intelligence, the leading institution that pioneered the training and certification of competitive intelligence professionals (CIP™) world-wide. He is a former
 strategy professor at Rutgers University’s School of Management, and author of three books on competitive intelligence’s role in companies’ success.