It Is What It Is

July 18, 2017

Since 1990’s, we have heard about disruptive innovation leading to disruptive competitors. Of course, most of those talking about it don’t know what it is. Even the creator of the concept, Clayton Christensen, sadly notes

“Despite broad dissemination, the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied…. There’s another troubling concern: In our experience, too many people who speak of ‘disruption’ have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use ‘disruptive innovation’ to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.[1]

But back to disruptive competition. This is not the first effort, but a major recent effort, to dissect the concept of competition and to explain how the marketplace really works. Consider these: predatory competitor, imperfect competition, and even Joseph Schumpeter’s creative destruction. They are all efforts to detail situations which veer from “perfect” competition to explain economic behavior.

Now, recall that perfect competition presumes the presence of perfect information, including information on competitors (bet you were wondering when I would get to that). When you drill down, you will find that what they all have in common is that there is less than perfect information. It may be about markets, competitors, technology, consumers, trends, etc. In other words, until you get to a monopoly situation, where there is NO competition, competitors suffer when they lack perfect, or even good, actionable intelligence on these key topics.

The lesson: those companies lacking ongoing intelligence efforts, whether centralized, DIY or both, are likely to be the victims rather than the beneficiaries of disruptive/imperfect/predatory/destructive competition!

[1] Clayton M. Christensen, Michael E. Raynor, and Rory McDonald, “What Is Disruptive Innovation?”, Harvard Business Review, December 2015, https://hbr.org/2015/12/what-is-disruptive-innovation.


Ten Things Outside CI Consultants Do Not Want to Deal With

July 5, 2017

On the relationship

 

  1. “I’m not the final client for this work.” That makes doing the work harder, since the consultant is going through a filter – you. And that means no opportunity for effective pushback or digging into the end user’s real needs, as opposed to its (different) stated needs.

 

  1. “We’ll promise you more business if you’ll cut your fee.” Unless you have that authority, and there is more business in the pipeline, do not hold out this faux carrot. And don’t you think this will impact the current work? Remember the saying, “There are three things possible, but you only get two: fast, cheap, or good.”

 

  1. “Your relationship is limited to the person who signed your contract.” (This involves a sad story in which a client was fired in mid-project, and his successors initially didn’t want to pay a pending invoice.)

 

On the submitted bid/proposal

 

  1. “We’ll share your proposal and/or approach with other vendors.” In other words, one consultant is now working for its competitors? Increasingly, proposals are submitted to potential clients with language forbidding sharing the contents. Respect it.

 

  1. “We’re really just looking for good ideas for our own people.” Why not pay a consultant to work with your team to learn how to develop better skills and approaches?

 

  1. “You’re column fodder.” That means you need to get three bids, but want only vendor #1. The other two bidders are there to fill out the columns on the evaluation matrix. Don’t do it.

 

  1. “Your bid is a bargaining tool.” Sometimes bids are solicited on an existing piece of work to keep an incumbent “in its place” cost-wise and otherwise. See number 6 above.

 

  1. “You’re not bidding on the same scope of work as others.” It is amazing how few companies issue formal RFPs or other engagement specs for CI these days, so they are often getting competing “apples and oranges” proposals.

 

On fees and payments

 

  1. “We always bargain harder with small vendors.” High quality small vendors without big time “brand names” are often seen as more likely to cut fees to win work. See number 2 above.

 

  1. “We only pay on 45 (or 60 or 75) days.” When that comes from a (large) firm which requires its own customers to pay in 10-15 days net, it translates to “We ride our accounts payable to enhance our cash flow.”

The 4th of July 2017

This coming July 4th holiday celebrates the independence of the United States of America. My significantly better half, Carolyn Vella, reminded me that this began the process that established some of the critical liberties that enable us to post blogs like this and, yes, to conduct competitive intelligence research. Here are just two of them:

At the Virginia Ratifying Convention, on June 9, 1788, while debating the ratification of the US Constitution, Patrick Henry rose to say

“The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them…. [T]o cover with the veil of secrecy the common routine of business, is an abomination in the eyes of every intelligent man, and every friend to his country.”

From the Bill of Rights, the First Amendment to the US Constitution, ratified in 1791, provides, in part that “Congress shall make no law…abridging the freedom of speech, or of the press….”

These fundamental rights were later extended to protect US citizens from state governments as well as the federal governments. In 1925, the US Supreme Court stated that

“[W]e may and do assume that freedom of speech and of the press which are protected by the First Amendment from abridgment by Congress are among the fundamental personal rights and ‘liberties’ protected by the due process clause of the Fourteenth Amendment from impairment by the States.” Gitlow v. New York, 268 U.S. 652 (1925).

Celebrate the 4th of July’s gifts of liberty.


Getting it right

June 21, 2017

 

Just because you are big, and still getting bigger, does not mean that you can skip competitive intelligence activities. And that is true even when your competitors are much, much smaller. Fortunately some firms realize that.

Take the case of the ubiquitous Starbucks. A recent profile[1] noted that many of its “newer and cooler” competitors are small – “not big enough to take market share”. But, still Starbucks “keeps a keen eye on the newbies”. One of the newbies told the author that employees of Starbuck involved in R&D activities have ordered “cases” of one of the newbie’s innovative products.

Good going!

[1] Beth Kowitt, “Howard Schultz Has Something Left to Prove, Fortune, June 8, 2017.


Walk and chew gum at the same time?

June 16, 2017

A recent article[1] observes that “Microsoft is learning from Amazon.com…[basing] more of its decision-making on data-driven experiments and what it thinks customers want rather than what competitors might be doing.” Woof. Does this mean that Microsoft has NOT been basing some decisions on what customers want? Or does it mean that Amazon.com doesn’t use competitive intelligence (CI) in its decision-making? I doubt either is true, but this observation reflects a tribal attitude towards actionable information in many corporations.

Exactly what is the problem with basing corporate decisions on holistic intelligence dealing with the totality of the competitive and marketing environments? The default choice, alas, in some firms is evidently market research (MR), without any CI. Maybe the MR people do a little (what they call) CI, but usually they do not. If there is any CI process, it is likely reporting to the planning function, but not supporting sales and marketing as well. These silos hinder effective operation. That is like driving your car with clear side and rear windows, but with a shattered, opaque front windshield.

For example, say that MR including the “voice of the customers” research, discloses a need/desire of customers that they are also willing to pay for (an oft-ignored issue). Would it not help to know if CI disclosed that (a) one major competitor has previously rejected this opportunity (and why), (b) a second major competitor is ready to roll-out a new product/service to meet this need in the next 30 days, (c) a third competitor has done similar research and saw no such opportunity, and/or (d) another smaller competitor has the technology to enter this niche, but currently lacks the funding to do so? I think so.

Maybe Microsoft is right here. Why buy Safeway just because Amazon.com is buying Whole Foods?

[1] Matt Day, “Microsoft borrows from Amazon’s philosophy as its cloud grows”, The Seattle Times, June 7, 2017, http://www.seattletimes.com/business/microsoft/microsoft-borrows-from-amazons-philosophy-as-its-cloud-grows/


Free do-it-yourself competitive intelligence webinar

June 2, 2017

This week, I will be presenting a free 1 hour webinar on DIY CI. It will start on June 8 at Noon ET. I will be providing on everything from finding and using the best data sources to how to market your skill set throughout your company. You’ll find practical suggestions and “how to” strategies to get your CI trajectory not only on course, but on the rise!

This presentation revisits my very well-received half-day Competitive Intelligence Division’s continuing education course held last summer at the Special Libraries Association’s annual conference.

Register now: https://register.gotowebinar.com/register/4571811512132925443


Just connect the dots?

May 10, 2017

I just finished re-reading a mystery written just before the horrible events of 9/11. It made me reflect on the difficultly of satisfying the oft-repeated (but rarely fully appreciated) mantra to “connect the dots” and how difficult that can be, particularly in the context of any early warning process[1].

Let me give you a taste of a few things that leapt out at me from this story:

  • The tale revolves about  Islamic terrorism impacting the US.
  • The mission involves hijacking a passenger jet.
  • One individual notes these jets pose an explosive danger “within a hundred-yard radius” of the plane.
  • The author, commenting on the then lax security at airports, has a character note that “America wasn’t ready for any of this.”
  • The terrorist mission is religiously justified.
  • In one chilling scene, the terrorist is driven over the Verrazano Bridge, and sees the two World Trade center towers. His associate, not a terrorist, says, referring to the towers, “Maybe next time”, to which he replies, “God willing.”

Amazing, isn’t it? This is an author who was talking about, or at least predicting, the then-forthcoming attack on the World Trade Center towers, right?

No.

These elements connect with 9/11 only in the way I put it. These “dots” are a very few among the hundreds of others in the fine 1,000 page novel by Nelson DeMille, The Lion (2000).

In this case, these specific dots did not predict or foreshadow 9/11. Take them in turn:

  • The Islamic terrorist who comes to the US comes from Libya, not Saudi Arabia, and is associated with the Libyan government. His mission involves killing former US Air Force personnel while he is in the US. There is no team.
  • The passenger jet hijacking gets the single terrorist into the US, where it is landed via autopilot. It is not flown into a target.
  • The person noting the explosive power associated with jets is the hero, in law enforcement, not the terrorist.
  • The comment “America wasn’t ready for any of this” refers to the hijacking, which resulted in the deaths of all passengers and crew due to poison gas.
  • While the terrorist sees his mission as religiously justified, it is also very personal and political.
  • The reference to the two World Trade center towers and “next time” recalls the failed 1993 attempt to blow up the south tower, and not to the terrorist planning to assault the towers again. In fact, the terrorist thinks the 1993 attack was cowardly.

The lesson? it is very easy to connect the dots in retrospect. Way too easy. Conversely, it can be almost impossible to figure out which dots to connect in advance, much less how they do connect. And the selection of which dots to connect is can too often be an exercise in proving what the analyst already believes is likely.

[1] Just a brief commercial message. Early warning systems are dealt with in a forthcoming book which I co-authored with my significantly better half: Carolyn M. Vella and John J. McGonagle, Competitive Intelligence Rescue: Getting It Right, Praeger, August 2017.