Far too often, we come across organisations where decisions are made too quickly and without a strategic context. The old rule of “ready, fire, aim” is still prevalent in corporate Australia. The internet has not helped this thinking as the speed to market becomes a critical factor. In the end we are left with a smoking gun but where did the bullet go?
While information is more abundant than ever before, managers are intelligent information starved!
Competitive Intelligence (CI) has grown as a management discipline around the world as companies face tougher and faster competition. Competitive Intelligence in large successful multinational organisations is becoming a “must have” rather than a “nice to have”. In fact recent studies from the USA indicate that budgets for CI now range up to and over US$4 million per annum and that rates of return can be as high as 4000%.
In the past, Australian businesses have been slow to practise effective Competitive Intelligence. One reason we believe, is because they think it is something else, another buzzword, another soft option, another ‘be seen to do’ activity which consumes time and profit. Today, some are beginning to realise it is the opposite, a strict discipline that selects and delivers the right intelligence to support key decision-makers, a discipline focused on optimising time and profit. An example is one client who measures the value of business intelligence simply in dollars – an identified new market worth to them at around A$100 million.
Another reason why companies have been slow to pick it up, is that many Australian companies think they are already practising Competitive Intelligence. CI is not paper shuffling, having the most expensive database or the most efficient data distribution. CI is also not market research or strategic planning. It is an approach which focuses these and all marketing, analytical and planning functions on one outcome, maximising the company’s competitiveness.
So what is this CI discipline that helps you be “aim” first? Competitive Intelligence is concerned with the methods organisations use to monitor their competition, their own competitive position, and to improve their competitiveness. It is about the techniques used to select and filter information, to interpret and analyse it, to communicate it to the right people, and to use it effectively. Although all managers intuitively carry out some form of CI, the information explosion, changing technology, and increasing global competitive pressures mean that there is an increasing need to develop more systematic ways of using CI.
The major focus in the process is not just the identification of sources of information but what method of analysis will be used to turn the information into intelligence. There are over 170 methods of analysis in business and picking the appropriate methodology is critical to delivering value at the end. It is through analysis that intelligence is created.
The intelligence process works best however within a strategic framework where individuals and organisations can look ahead with all the means at their disposal, interpret what they find and integrate these understandings into a continuous cycle or process of competitive ability. The keys to the future are not found through extrapolations, predictions or media gurus, but through patient, careful strategic work. You need to be ready and take careful aim at the specific target before you fire.
A strategic plan that doesn’t include insight about the near future is next to useless. Yesterday’s information and methods are increasingly ineffective for making today’s decisions – and even less effective for identifying tomorrow’s opportunities, problems, and unknown competitors. The purpose is not to predict the future, but to make better decisions about the future.
The value of foresight is early awareness. This reality check enables you to recognize and monitor the future as it unfolds, thereby reducing risk and minimizing mistakes. Costly mistakes by managers firing from the hip, is no longer an option. The issue is often that managers today faced with so many pressures are unsure of the specific target sometimes seeking only short-term gains.
The systems for identifying these warning signs is totally different than yesterday’s methodology. For example, business respects and relies on traditional information. Statistics, facts, concrete data. This hard or secondary 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.
Another problem is that of asking the right questions. Experience has shown this to be one of the hardest steps for senior management. The key is to ensure there is understanding of what the “intelligence customer” really wants, where they are coming from, and how the intelligence will be directly related to a management decision or course of action.
Too many times, intelligence projects fall over because of the poor identification and understanding of the key issue and its relationship to the business. If managers can’t identify the target, how can they be prepared to take aim and be successful?
Success comes from hard work and careful planning, and it does not come overnight. The realities of making this work means we need to understand the competitive landscape before we fire, and incorporate this understanding and insight for competitive management. How your organisation prepares its competitive gun, in essence, will provide you with either a strategic advantage — or kindle the demise of your organisation.
Today, Competitive Intelligence is not negotiable. Can you afford to fire first?