Tactical, Operational & Strategic Analysis of Markets, Competitors & Industries
The April 2011 issue of Inc. Magazine included a series of articles on competitive intelligence by Bill Helm. Helm is a senior writer at the magazine and the former marketing editor of BusinessWeek. For many entrepeneurs this is the first and most detailed view of the deliberate practice of competitive intelligence they will see. Overall the articles are a positive for both for the competitive intelligence practice and entrepreneurs. That said, the series did leave some things to be desired. What I will try to do here is to summarize the series and reflect the good, the bad and the ugly.
Here are the links to the individual articles in the series:
For many if not most entrepreneurs this will be their introduction to the notion that there is a structured practice of understanding competitive market dynamics. Even for those who are familiar with the practice this is likely to be the most detailed look at the practice. If any press being good press, this series constitutes a win right there. My hope is that entrepreneurs will read this article and realize that they need to make systematic competitive intelligence part of their standard business practice. I hope those same entrepreneurs will follow up with some of the excellent CI resources that are out there.
Helm avoided jargon to make CI accessible to entrepreneurs. CI professionals can fall into the trap of diving too quickly into the details of specific collection or analysis practices. The community that has grown up around the practice can also sometimes be infatuated with the cutting edge of analysis or collection, desirous of expensive tools and is often invested in the narcissism of our minor differences. I know I’ve been guilty of this, and I’ve always tried to correct for this tendency by insisting that every presentation I deliver has to give my audience something new they can take away and try right away at no cost.
The series quotes a number of leading thinkers and figures in the field and mentions SCIP as a professional association for CI professionals. It’s clear that Helm interviewed some of the key people in the field, and this lends legitimacy to the material. Helm also interviews entrepreneurs that have used or conducted CI themselves for great value.
Helm clarifies that it’s best to narrow intelligence requirements at the beginning of the process. AMEN! If entrepreneurs or managers takes only one thing away from this series I hope it is the admonish to not say “I need to know absolutely everything about Company X” but to be laser-focused with their intelligence requirements. If CI customers will remember just this one bit of mindfulness they will save themselves a lot of time, a lot of money and avoid needless frustration. This one piece of advice is the key to getting value from competitive intelligence.
Despite the fact that I was pleased to see this series of articles, there were some specific aspects that I didn’t like about the series.
While the series did a good job describing some of the basics of CI as a practice, the collection opportunities described came across as being based on serendipity rather than a systematic and often tedious practice.
Grateful as I am for the admonition to focus on specific needs, the description of the CI practice is over-focused on finding specific pieces of information. The modern CI practice is more about interpretation and analysis of information and data flows rather than uncovering that one hidden gems.
It seems that this series, as with all articles about CI, maintains a sheen of cloak and dagger about the practice. There are numerous mentions of former government, military and law enforcement intelligence types involved in CI. The skill sets are applicable across domains, and many of the best intelligence education opportunities are geared towards these communities. The mark of a good CI professional, though, is their ability to analyze and interpret findings to the world of a profit-making business. A government intelligence background does not guarantee a person will possess these skills.
The Ugly (or "What I Would Have Liked to See")
Many entrepreneurs who read this series will probably want to learn more about CI. I would have liked to see a brief section on where they could go to find more information and a few of the books they could read to learn more. My top web site candidate is the SCIP web site, a great source in itself and useful jumping off point. While a number of books come to mind as best candidates for your first CI read, Seena Sharp’s Competitive Intelligence Advantage is excellent for an entrepreneur to better understand CI.
I thought the series over-emphasized primary research. Some brief descriptions of basic secondary research would have been a strong addition. Some basics on how to examine a competitor's web site would have been useful. Maybe the feeling was that this sounds too obvious. As obvious as it is, I’m often surprised how much low-hanging secondary fruit is overlooked. Social media in particular offers some very useful opportunities to easily and inexpensively deliver valuable insight.
It would have also been very valuable to illustrate some of the basic analytical frameworks such as SWOT and Porter’s Five Forces. SWOT is very easy to understand and compile, and when done well quickly summarizes the state of the competitors in a market. I know some in the CI profession look down on SWOT. I still find the framework so readily accessible to be a useful with stakeholders.
Finally I would have also like to have seen greater coverage of the issues of legality and ethics. While the articles hints at some of the questions of legality related to activities like dumpster diving, a whole article is devoted to the subject of eavesdropping at trade shows. Richard Horowitz, one of the CI thought leaders and a practicing attorney referenced in the article has asked the question whether or not CI professionals are obsessed with ethics in past presentations at SCIP conferences and local chapters. I agree with Richard that some organizations apply an overly-strict interpretation of ethics that go far beyond the SCIP Code of Ethics for CI Professionals. However, I do believe that CI practices must be far beyond the standards of behavior laid out in the Economic Espionage Act and guided by SCIP’s code (a policy analysis of the act by Horowitz is here in PDF format).
Ethics and Efficacy of Suggested Practices
Some of the specific practices described in this series create concerns for me that some entrepreneurs may engage in activity that at best runs afoul of ethical standards and at worst may violate the Economic Espionage Act or other laws. These practices include posing as customers, eavesdropping and dumpster diving. To my mind none of these practices constitute ethical or acceptable practices for competitive intelligence professionals.
Posing As Potential Customer
Houston-based Private Investigator J.J. Gradoni is quoted as saying. "I will pose as a potential customer and ask questions about a company's pricing structure, how fast they ship, turnaround time, number of employees, and so forth. Then I ask for references. I call those people as well." My interpretation is that this is a wholly unethical practice and very possibly violates some of the specific prohibitions against misrepresentation in the Espionage Act. If any practicing CI professional were exposed engaging in any such behavior I can only hope they would rightly be raked over the coals. Likewise for any executives or managers on whose behalf such a practice were employed.
The series does touch on some examples of the damage to a reputation that can come from having been caught dumpster diving, Toledo-based importer Gary Marck is alleged to have been caught pilfering secrets from his competitor’s trash. The competitor used these stories to besmirch Marck’s reputation. Despite this cautionary tale the article hints that under certain conditions dumpster diving can actually be legal. Perhaps that is true, but my interpretation of SCIP’s ethical standards lead me to question this practice. The thought of rummaging through someone’s trash is absolutely disgusting, but now you know why I have a cross-cutting shredder.
I actually enjoyed some of the basic overview of interview and elicitation. The article illustrates some of the basics of appealing to a target’s self interest and summarizes five types of elicitation targets. Quality elicitation requires a lot of up-front research and is very structured. I was really impressed when we had Catherine Foley of CM2 Limited speak about elicitation at the Washington SCIP chapter in 2009.
Encouraging Staff to Participate in Collection
I agree that the task of collection is shared by everyone in the company, and I believe this works best when each role receives guidance that is specific to their standard activities. This training should also address some of the specific ethical and legal concerns for their collection activities.
Trade Show Eavesdropping
The recommendations to engage in eavesdropping at trade shows is one of the more problematic recommendations of this article series. At least as troubling as the ethics are my concerns I have for the efficacy of eavesdropping as opposed to systematic trade show intelligence. Two very useful sources on trade show intelligence are Conference and Trade Show Intelligence edited by Jonathan Calof and Bonnie Hohhof and The WarRoom Guide to Competitive Intelligence by Steve Shaker and Mark Gembicki.