Megatrends: Should competitive intelligence pay attention?

[Eric Garland]

There was a debate on this site a couple years back when the financial markets imploded - should more industry-driven competitive intelligence analysts take the time to look at megatrends that will impact their business, even if it isn't technically about specific competitors, customers and market trends?

We may get a chance to retry this question - Greece's two-year bonds are yielding 26%. Portugal's sovereign debt was just downgraded by ratings agencies. Spain is following fast. And Japan is finally on the verge of fiscal collapse after years of monetization. And while the United States as a nation is somewhat more stable, several of its cities and states are close to "Chapter 9" bankruptcy.

Sure, you may not be in the financial industry monitoring the yields of bonds on a daily basis - but should you be keeping an eye on this anyhow?

If not competitive intelligence, then who?

[Jordan Frank]

I agree with Melanie - its incumbent on CI to watch for megatrends. If not CI, then who? I do think that it causes a need for a larger charter that goes beyond competitors, per se, into "intelligence" as a whole and requires an intelligence perspective that has some level of 5-forces radar on competitors, customers, partners, governments, and other factors. The main issue (since 5 forces ostensibly covers things) is whether you pay attention to events that can be expected or whether you also increase from 5,000 to 500,000 feet and consider major industry shifts that could be caused by oil slicks, volcanoes, war, major technology disruption, housing bubbles and so on.

Taken another way: Given that major disruptions open the most significant opportunities and threats, I could argue that megatrends are the only thing intelligence should look at. You could say that Amazon became a a significant and threatening in a mega-trend, Google became a search contender, Enron re-shaped energy, and Apple went from being an insignificant corner case in hardware and software to running past a Google size valuations in just a few years.

[Avner Barnea]

Remember the distressing fate of the Dutch bank ABN Ambro- they did not understand what they were doing regarding the CDO's, which led to the collapse and bankruptcy. If they more sceptical and looking into this matter differently – they could be saved. Not to mention more than 100 US banks that have disappeared. Actually, we are referring to strategic failures.

[Miguel Duarte Ferreira]

Sure CI can do ‘this’ and ‘that’ and even ‘something else’ but, are we doing it?

The fact Eric raises the question is on itself an half-answer (or a full one? :-) )

In ‘Our ideal world’ everyone should relate these concerns to CI but most people do not. Anyone knows why? Is there one simple single answer? I don’t know why…but I guess there is more than one answer.

As long as we keep being perceived or positioned by our customers (as Arik’s Pharma example so well putted) as ‘those guy that know something about the competition’ we will hardly get to be asked about ‘Megatrends’ or any other subject other than the competition.

Can we or should we accept that our customers may very well be correct?

Can you guess the name of Nokia’s group for the below slide?

Strategic Foresighting group - Nokia Corporate Strategy

Can CI do this? Yes
Can CI be mandated to this? Hardly not
Why? Not perceive to have the ability, capacity, competences, etc.
Is this perception correct? No
But does it matter what I/we think? No. Customers/Demand rules in today’s oversupplied economy

[Arik Johnson]

Agree entirely Miguel - the key question here is the scope of the intelligence brand identity - do customers on the demand side of the equation perceive a scope beyond competitor intelligence when competitive intelligence is uttered?

If not, then why over-reach under that identity and swim upstream against their more natural definition? Is there a broader identity (simply "intelligence") that leaves the "competitive" part of the memetic payload behind entirely in order to capture the true ambiguity of our collective mission and thereby enable sub-specialties to bloom?

I'm as big a believer as anyone that we need to reposition the argument in order to set aside the silliness of disagreeing over semantics. I would merely suggest CI as defined by clients (who are the ones who ultimately matter, right) is letting its reach exceed its grasp.

Indeed, there is a need for all these other things... the megatrends, that is. But under CI? Only if we can make a believable case that it's nobody else's job.

[Miguel Duarte Ferreira]

Spot on Arik! That is why we need to have as many professionals from other related fields into our discussions and conference calls. Diversity, complementary perspectives and different/opposite arguments are likely to help us move forward in a potential common effort – improve organizations performance in the long run via decision maker’s capacity to better manage change and therefore threats and opportunities.

[Vivek Raghuvanshi]

When we use a simple tool:

PEST

PEST at County Level
PEST at State Level
PEST at Country Level
PEST at Markets where you operate
PEST at Global level

Then maybe, identify random isolated incidents that may have an implication to your organisation's future.

Macro Picture = Big Picture = Environment

[Jordan Frank]

This oil spill in the gulf is another major event which could heavily influence industry.

Spills like this highlight the hidden cost of oil as an energy source. Couple this with the coal mine accidents this spring and you see thatcleaner energy starts to look a lot more appealing and cost effective. If, yesterday, we considered coal or oil or nuclear to cost $1 / Unit, today they may look more like $5 / unit whereas sources like solar and wind which cost a lot to build at first (manufacturing solar panels uses a lot of water and creates a lot of CO2 output) but do not create potential for disaster or waste in the way that oil and nuclear do.

While we've seen oil spills before, the timing of this one at a time when energy is a hotter topic coupled with its potential impact on more than one republican state come together to create a political swarm that could easily change US policy and funding directions.

Putting money where my mouth is: I shifted some of my stock portfolio to solar industry companies today.

If I were an energy company or a heavy corporate energy user, I'd be taking a serious look at what happens next and would hope my intel department could provide guidance.

[Vivek Raghuvanshi]

Yes Jordan,

When one formulates Corporate Strategy, one needs to monitor the following and assess implications to one's organisation :

Again it depends on the organisations operating environment.

One needs to define the nadir and zenith of the organisations operating environment or lets say the purpose of Intelligence.

How many organisations really see anything beyond Functional Strategy level, in that case the Macro Risks / Mega Trends may sound like Greek & Latin.

Macro Risks of Globalization [ Domino Effect ]

1. Retrenchment from globalisation
2. Oil & Gas spike
3. Infectious diseases in the Developing world
3. Trans-national crime and corruption
4. Chronic diseases of the Developed world
5. Middle East instability
6. Heatwaves and droughts
7. Natural catastrophe : cyclone, earthquake, extreme inland flooding
8. Interstate and civil wars
9. Fiscal crisis in advanced economies
10. Food insecurity
11. Failed and failing states
12. International Terrorism
13. Loss of fresh water
14. Collapse of NPT
15. Emergence of Nanotechnology risks
16. Extreme climate change
17 Liability regimes
18. etc.,.................


http://corporaterisks.info/blog/?p=48


Like Arik said, CI is defined by clients ie one needs to provide tailor made solutions to clients.

Will any operator assess Mega Trends / Macro Risks on a regular basis, would really depend upon whether the Intelligence is required at :

1. Corporate Strategy level
2. Business Strategy level
3. Functional Strategy level

If one caters to CS + BS + FS then Intelligence dimensions change.

[Miguel Duarte Ferreira]

Great point Vivek.
Based on your experience and knowledge where would you 'fit' a CI effort? In all 1. 2. and 3. or more likely in one of them?
My experience tends to show that CI efforts tend to serve 2. and 3. so Mega Trends are a far away reality and still so necessary and relevant,
Thanks.

[Edward Allison]

I know eventually I'll get flamed for my direct nature.. :)

I think this is blurring the lines between the necessary, valid, and required market intelligence, or general intelligence needs of a firm, and the strickest, most valuable application of CI. CI has a specific offer and a specific brand and when applied specifically, can be invaluable to a firm. I offer its not general and its not vague. The discipline is not 'everything to everyone that needs to know something about something" :) (I hear the flame throwers getting loaded)

Those forces are market level forces that would have to be included when researching a Key Intelligence Topic related to a decision at any level to which a deeper understanding of competitors will make a difference to the firm.

I move that we all, as a profession, differentiate between the types of intelligence, and focus on the profession of Competitive Intelligence.

Can I get a second?

:)

I'll be behind the flame retardant blanket...

Ed.

[Mark Johnson]

I don't think you need to fear flames. I think the point is well taken. There are really only a few times when the really large trends are going to emerge as critical. Constantly looking at them will be distracting. But missing something is potentially very costly. So a set of key indicators to "flag" when there is trouble would be a prudent move.

We're doing very well if we can get management to listen at all. And if they feel we're rambling or off-message, they quickly shut us off. Focus is very important.

Early warning is best addressed by setting criteria and "alarms". That way you don't have to constantly evaluate a troublesome scenario. You get a warning alarm. Someone who sits on their porch with a shotgun waiting for burglars is crazy-paranoid. But it's also crazy not to invest in a burglar alarm. You just have to be specific what you are looking for.

[Eric Garland]

I leave town for a few days, and this massive thread bursts through - awesome, and what I intended.

I've written voluminously on this topic, and it's all summed up with the following: It's amazing how fast an unrelated megatrend becomes a matter of practical survival.

Ask the car companies if the housing crash and credit meltdown have affected whether their direct competitors thrives, survives or disappears. You don't need to be an economist to sell cars, but when Americans' disposable income evaporates and the savings rate shoots from 0.01% to 7% in a quarter, you begin to care about these ephemeral philosophical discussions. Customers who are totally broke tend not to buy cars. When foot traffic drops 50% at dealerships, do you care now? And the question rapidly becomes - which of the competitors in the market have prepared for contingencies?

Maybe 15 years ago you could relegate such discussions to some far off think-tank. My sense is that the velocity of change is considerably faster these days, and as such, of prime concern to those tasked with providing insight on competition.