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?
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.