In my upcoming book, Getting Innovation Right, I detail seven activities that give an edge to leaders who want to succeed in the market (who doesn’t?!). One of them is gathering business intelligence, a service I have provided to executive clients since 2000.
A good friend of mine, Ken Garrison, is the former CEO of Strategic and Competitive Intelligence Professionals (SCIP.org), a global nonprofit organization serving professionals in the field of competitive intelligence. His first-hand experience with dozens of industry professionals gives him insight into the need to use an external provider to gather effective, unbiased business intelligence.
I interviewed him recently for my upcoming book. Here is some of what he said:
A broad definition of competitive intelligence is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions.
Competitive analysis looks at the market, its variables, adjacent markets, products, customers, and competitors, all so you can create a competitive edge. This is done over time so you can predict where trends may go as best you possibly can, and evaluate your ability to respond effectively.
In a changing world, leaders must realize that they are always a single event away from survival they need to know what is on the horizon to stay relevant, competitive, and to win. Competitive intelligence provides information so you can answer questions like, How do I make adjustments so I get my share of revenue growth, attractive markets, or expand my base?
Many leaders do not know there are professionals who understand this, do it, and provide this kind of an edge. It is legal, ethical, and a professional discipline.
If you are going to create a world-class competitive intelligence program you have to have three things:
- A strong personal understanding of what competitive intelligence is and how you can use it for business advantage. This understanding must reside in your chair. You are the CEO. If you do not get it, it will fail. When you understand it and own it, it becomes an extremely powerful tool.
- A line item in the budget that you commit to. Do not bury it in marketing, research, development, or communications. Competitive intelligence makes a unique contribution. If you put it in one of those buckets, two things will happen: it will be twisted by the office that runs it that should instead be you, at the top and it will be one of the first things cut when the office you put it in is forced to make tough decisions. Cutting competitive intelligence when times are rough is like saying we dont need to look out the front windshield of a car anymore when you are driving through a storm. That is when you most need to understand the trends and market.
- You need a consistent presentation of results so you can see the work. You must have a way of disseminating your information. Your audience legitimately has the expectation that they are going to get something back.
As someone who surveys the entire field I see a significant shift when leaders begin taking competitive intelligence seriously. They realize an ad hoc effort will only get them so far. When a CEO chooses to do this in a modulated way over a period of time so they have a consistent set of facts and information flowing in, they achieve a new level of performance simply because they have better quality information, that is data across time.
I find it surprising that so many leaders have little or no intelligence efforts in-house, let alone the ability to exploit this resource. Its a stark absence. They cannot act on their information, because they have none or what they have is haphazard, built upon conversation and hunches only. It is a sad state considering that much of this valuable input is readily available for a negligible cost.
Typical intelligence efforts explore three inter-related areas:
2. Market Conditions
3. Organizational Capabilities
By combining information from all three, you assemble an explanation of how an organization is doing along with potential challenges and opportunities, and get a good idea of what needs to be done so it can handle the challenges well and take advantage of the opportunities.
Consider dedicating resources to competitive intelligence. Leaders who do put themselves ahead of the competition. The vast majority of executives do not practice this with any discipline or intensity. Yet it is the awareness that springs from solid intelligence that make the difference between those who are haphazardly shooting in the dark with good ideas and those who consistently and systematically uncover potential, capitalize on opportunity, and generate traction in the marketplace.
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Seth Kahan is a Change Leadership specialist. He has consulted with CEOs and executives in over 50 world-class organizations that include Shell, World Bank, Marriott, Prudential, Project Management Institute, and NASA. His book, Getting Change Right: How Leaders Transform Organizations from the Inside Out, is a Washington Post bestseller. Visit GettingChangeRight.com for a free excerpt.