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?

[Tadeusz Lemańczyk]

CIA ["Producing timely analysis that provides insight, warning and opportunity to the President and decisionmakers charged with protecting and advancing America's interests [...] 2.2 Lead the integrated center dedicated to the highest quality collection, analysis and dissemination of open source materials" ( https://www.cia.gov/about-cia/strategic-intent-2007-2011.html )]?

[Vivek Raghuvanshi]

Tad Sir,

Why NOT NK - Unit 586 ?

NK – Unit 586 location!

The coordinates are: 39° 6′28.45″N, 125°43′53.86″E.


http://corporaterisks.info/blog/?p=350

[Tadeusz Lemańczyk]

"Why NOT NK - Unit 586 ?" Elementary, my dear Vivek. ;-) North Korea with its Korean People's Army Unit ( http://wikimapia.org/16213550/KPA-Reconnaissance-Bureau-Unit-586 ) is neither an ally of the USA, nor an ally of Poland.

[Tadeusz Lemańczyk]

Vivek, I've quoted you again ( http://fedcba.ning.com/xn/detail/2516803:Comment:11155 ) in the discussion with my Polish Security & Safety Engineering students. :-)

Best,
Tad

[Arik Johnson]

I'm a big believer that somebody needs to monitor these forces and continuously interpret their potential impact while suggesting countervailing measures to defray the risk to growth and sustainability.

However, I'm skeptical that CI will be handed this responsibility. There are today so many adjacent disciplines among the ambiguous sciences that have a more believable and deliberate claim to governing these issues (from those cited above, the treasurer [CFO?] is probably the most obvious to me) that I don't know if it's realistic for CI to turn its schizophrenic gaze toward these matters.

I had a perspective-altering conversation with one of the more successful and long-lived of our corporate practitioner colleagues a few years back (from pharma, perhaps predictably) who replied, when I asked the secret to CI success: "it's because we focused on competitors and helped our colleagues understand their own subjects more effectively from the point of view of the competition."

In other words, defaulting to competitor monitoring and understanding as a primary identity and mission for CI simply means accepting the label most of our colleagues have already given CI anyhow. That's admittedly rather less sexy that the broad (and rather dogmatic) view of CI that has emerged over the past couple of decades; but design thinking has to kick in somewhere if CI is to avoid becoming jack-of-all-trades-but-master-of-none and being defined away as SEO or something worse.

[Edward Allison]

I would have to throw my lot in with Arik.

This is a problem for someone... perhaps the Sr. Intelligence Officer of the firm, but probably not the specific discipline for Competitive Intelligence. It may be in so much that you would be sensing how any external factor would impact a competitor - and what their actions would be, etc. thus starting the Intelligence process.

So, agreed that this is an intelligence problem that firms on which should build strategies, but it would be more purely the responsibility of another intelligence division.

My thoughts,

Ed.

[Mark Johnson]

There was a time (showing my grey hair AND my parent discipline) when most large firms had their own corporate economist.

However, it is now rare to find a job listing for an economist in a commercial role. The few commercial roles include hedge funds, industry associations, and holding companies. Macro-economics is often the only role associated with these kinds of positions.

Competitive intelligence, however, deals with micro-economic issues. The Porter 5-Forces model is fundamentally an economic model of industry organization.

I've always found my economics background suits competitive intelligence well in understanding the factors which help one firm beat another in the marketplace. I believe we SHOULD be the ones who raise the warning, though not all CI professionals would have the background to do this. This is one of the drawbacks of the discipline not having an easily defined skill set or boundaries.

[Dr. Avner Barnea]

It depends who you are. If I'm an intelligence unit of a larger financial firm – I definitely need to monitor macro economic trends and try to identify threats, such as buying risky bonds. However, CI has to be able to define exactly what is its role. CI has a role serving financial corporations avoiding strategic surprises - and this is one of the examples. This is also a lesson to learn from the recent financial crisis in the US.

[Mark Johnson]

Back in early 2001, I was asked by my firm (telecom software) to evaluate and prioritize Latin American markets for entry. I was to prepare a prioritization incorporating market size, level of deregulation, domestic ownership rules, economic well-being, etc. Although Argentina was at that time the third largest economy in Latin America for telecom services, I recommended they hold off on Argentina. Although the currency was pegged to the US$, the financial markets were already "discounting" the currency by increasing interest rates. About a year later the Argentine economy imploded. By that time, I had been downsized, so part of me hoped that they would be caught napping and lose a bundle, as my little bit of "I told you so".

I don't know who other than competitive intelligence you would trust with this task. But for this reason, the CI skillset should be fire-retardant clothing and strong diplomatic skills. Warning that a juicy business opportunity is a pipe-bomb in disguise is not a popular message. Especially when the executive has already made up his mind, and is merely looking for confirmation and cheerleading. Companies which recently signed a juicy contract in Greece are not admitting this, but I'm guessing there are a few.

[Arik Johnson]

Great example Mark!

[Robert de Bruyn]

Employing a 5-forces framework within an organisation (whether this is the CI unit or distributed responsibility amoung other departments (finance, strategy, marketing), would address this issue.

Perhaps the question is not so much; should CI have responsibility but how does the organisation organise itself for responding to the competitive environment?

[Melanie Wing]

Quite frankly, how can we not monitor these trends? They impact our own ability to compete as well as our competitor's ability and strategies. We are tasked with helping to improve our competitiveness, which means that we look at competitors, but we also look at all the forces that impact the business -- including access to capital, economic and consumer trends. How can we anticipate if we aren't looking at these major trends? Enterprise Risk Management looks at them for the internal impact, we look at them for the external impact.