May 8, 2018
As I hope most of you know, Carolyn Vella, my significantly better half, and I have a new book out: Competitive Intelligence Rescue: Getting It Right. We were very fortunate to get some pre-release reviews, which said, in part
“In this book you get to listen in on real conversations and solve real issues.”
“Long experienced in competitive intelligence, Vella and McGonagle provide insightful lessons for those who need intelligence to compete, profit, and succeed.”
“This is an essential addition to every librarian’s shelf.”
“Anyone involved in CI, or trying to rescue their CI program, will find Vella’s and McGonagle’s book informative, insightful, practical, and executable.”
For the full texts of these previews, just go to the publisher’s page for Competitive Intelligence Rescue: Getting It Right.
Since its release, the book has been reviewed several times, with all reviews saying very positive things (click on the quote to read the full review):
“Any knowledge producer — researcher, practitioner, or manager — will learn something valuable here. Likewise, the user of intelligence — business owner, executive, or investor — will benefit by becoming an “educated consumer” of intelligence work products and by seeing what is possible, even with limited resources.”
“[C]omprehensively breaks down what companies should aim for as realistic goals and how the market is affected by factors outside the company.” Reading Eagle, December 31, 2017, p D6.
To all these reviewers, thanks for your kind words. For my blog readers, why haven’t you purchased it yet? (VBG). To help you, here is a link to Amazon.com you can use. Thanks.
(End of shameless commercial plug.)
April 3, 3018
What headlines in the health insurance industry! It is an industry which has traditionally looked at itself as relatively protected from outsiders. (Remember the concept of “barriers to entry”?) First, Obama Care turned the individual market upside down and may have threatened its very existence. Then, there is massive change is coming or pending due non-insurance firms including CVS, Walmart, JPMorgan Chase, Amazon, Berkshire Hathaway.
Question – did the competitive intelligence teams at the major health insurance companies foresee this sea change and warn their management? I do not know for certain, but having spent time there, I am guessing not. Why?
I think that the health insurance industry, like too many others, erroneously favors experience in the industry over CI experience/training in its CI providers, both inside and out. And that preference for industry specialist over generalist is widespread.
Let me give an example. Some time ago, a head hunter contacted me looking for a candidate to fill a slot in another “health” industry. The client’s detailed specifications required x years of direct CI experience in that industry – only. The client was willing to drop back on time in CI, but not in time in the industry. It was non-negotiable. I told the recruiter that there were not just very few people that met that standard, but in fact there was only one. And that person I knew was soon retiring. I pressed, and soon learned that the headhunter’s client was the very firm where that person worked.
I told the recruiter that I knew of many excellent candidates with extensive CI experience, but their industry experience was in related industries. The recruiter replied that the client was adamant. So, the client ultimately found no one, by ignoring more general experience in favor of specialized industry experience. Over time, the CI unit basically dissolved.
Sometimes generalists have it over specialists. Listen to the late Joseph Campbell, world-renowned expert on myths (and regarded by some as inspiring the Star Wars sagas):
“Specialization tends to limit the field of problems that the specialist is concerned with. Now, the person who isn’t a specialist…sees something over here that he has learned from one specialist, something over there that he has learned from another specialist – and neither of them has considered the problem of what this occurs here and also there. So the generalist…gets into a range of other problems….” 
 Joseph Campbell with Bill Moyers, The Power of Myth, Doubleday, NY, 1988, p. 9
I am a proponent of the “early warning” use of competitive intelligence. However, any early warning program requires an inclusive, rather than selective, definition of competitors and what constitutes potential competitors.
Let’s look at a recent event from the perspective of the health insurance market.
“Two mega-health insurance mergers terminated” .
Would/could early warning pick that up? Almost certainly. Why? Because these transactions involved the 4 dominant players in the group health insurance market. Any/every health insurer should have been watching all 4 of these firms and should have been on top of the legal and financial drivers which might enable/hinder these transactions, probably without much additional research.
What about these two other recent events impacting the same market?
“CVS Health [owners of the pharmacy company] to Acquire Aetna; Combination to Provide Consumers with a Better Experience, Reduced Costs and Improved Access to Health Care Experts in Homes and Communities Across the Country”.
“Amazon, Berkshire Hathaway, JPMorgan Chase to tackle employee health care costs, delivery”.
I doubt that any early warning mechanisms in this market picked these up, for any one or more of several reasons (disclosure, before coming to CI, I previously worked in the health insurance industry):
It is unlikely that most firms in this market have heavily invested in early warning activities because their regulatory structure establish high barriers to entry. Firms regard this as virtually eliminating the entry of new or expansion of existing competitors, at least without some notice from monitoring filings with state regulators.
People move relatively freely from one competitor firm to another, producing an underlying sense that “we sort of know what is probably going on”. That undermines the effort to advance early warning, at least by limiting its focus to the “usual suspects”.
The focus of the industry has been on monitoring the political and regulatory activities at the state and federal level, inducing and supporting a short-term vision of structure and marketing. Short-term stress does not work well with long-term early warning.
The same focus would preclude any early warning system from considering the likelihood that non-insurance firms could/would take steps that might fundamentally change the health insurance industry.
The CI focus in the industry is most often on new products and their marketing, technology acquisitions, and changes in relationships with brokers and agents. Did you see the concept of structural change or existential threat? I didn’t.
Lesson? Come to an early warning system with as few preconceptions as possible. Recall the analogy of the lookout at sea: the lookout surveys all directions (not just on either side), constantly (not only periodically), and for anything that could become a potential threat (not merely any anticipated and identified threat).
 https://www.usatoday.com/story/money/americasmarkets/2018/01/30/amazon-berkshire-hathaway-jpmorgan-chase-tackle-employee-health-care-costs-delivery/1077866001/. This event reportedly caused an immediate 5% drop in the stock prices of major health insurers.
January 25, 2018
I have been running into an interesting phenomenon – more and companies are taking steps to conceal their major construction/renovation filings made with local governments. It has been going on for a while, but seems to be increasing in the last 2-3 years.
That raises two, no, three questions: Why, How, and What Can I Do About It?
Major construction/renovation filings with local governments, such as building permits, zoning applications as well as applications for state waivers, such as dealing with highway/rail access or environmental issues, are all “tells”. That is, they indicate the coming of an important action which the target, your competitor, does not want the public, and certainly its competitors, to know.
To be fair, such actions usually do not prevent the release of such information – but they substantially delay that release, whether to competitors or to the local press.
Here we are not talking about abusing open records acts by tactics such as improperly claiming ordinary data is confidential or a trade secret. What is done is making the filings under other names, to foil inquiries for or even attention paid to these records. That is done in at least two ways. One is to make them under the name of a subsidiary not identified with the parent. Another is to have another party to the transaction, such as the company managing the construction project, make the filings under its own name.
What Can You Do About It?
Well, not a lot. If you suspect that a competitor is going to engage in such a project on an existing site, you can ask the local government for filings covering the current address, as well as adjacent properties. If the issue is a competitor which may be building a new facility at a new address, then try to determine what areas are likely sites, and then follow real estate sales and leases on a micro level – checking local papers every week for “suspicious” transactions, and then drilling down at the municipal or county level, as appropriate.
Defense against CI is always improving which is why our CI strategies and processes must always try to get better, too.
January 9, 2018
In Time, Harvard Professor Steven Pinker recently wrote about how the media impact human cognition (don’t yawn). Specifically, he points out that people tend to “see their lives through rose-colored glasses”. Yet, when discussing others (people, countries, etc.), they see “everyone is miserable…and the world is going to hell in a handcart.”
He attributes these “biases”, his word not mine, to the “bad habits” of the media as well as our own “morbid interest in what can go wrong”. The cure? Numeracy – literacy about numbers. That skill, he contends, helps to develop and maintain a quantitative mindset, which is not just “smarter” but “more enlightened:”.
Does this mean that quantitative skills should be added to the list that CI analysts, collectors, and even end-users should consider as “must haves” and not just “useful”?
I vote yes.
December 6, 2017
So, you want to grow your personal competitive intelligence expertise, or maybe grow what your CI team can do for your company? Doing that often takes you and your team through several stages of development, each of which requires additional skills and work, but which also provides increasing benefit to the ultimate end users of the CI.
This is where you produce and use of CI to understand what and who is going on – here and now. You would be surprised (then, maybe not surprised) how little some companies know about their competition, or even who their major competitors are. Don’t believe me? Let relate a real experience with a client.
A business development manager at the client, a new hire, wanted us to help identify the firm’s top competitors in each of its 4 key markets. What she wanted to see was what strategic moves they had made in the past few years, and how well those efforts turned out. The goal was to learn from their successes and failures.
She told us that, when she went to senior managers, what she got was confusing and conflicted. (Everyone who is surprised, raise your hand) The executives did not agree among themselves who they were competing with and in which market niche.
So, we did our research and gave her a list of the top ten current competitors, by gross sales, for each niche. The results were interesting.
Of the 10 competitors, the senior managers, as a group, identified 6 or 7 in each niche. So far so good.
In each niche, they had identified 1 or 2 firms as competitors who were not currently competitors and had not been in that niche for a minimum of 2 years. Bad. Obviously, they were not paying close attention to what was happening in niche by niche.
What about the others, the missing 1 or 2 in each niche? They were firms that were current competitors that no senior manager, let me repeat that, no one, identified as in the top 10. Even worse, in 3 of the 4 niches there was one of these “stealth” competitors among the top 5! Talk about blind spots.
Now you begin to understand the history of the key competitors, which can lead to at least a partial understanding of its culture and its view of the world. Businesses and their executives and managers are molded by what they have succeeded (and failed) at. This stage should include a look at key executives, particularly those who have joined the firm in the past 2-3 years. They were hired for a reason. What was it?
Don’t think culture is important (or even real)? Consider the attempt by Kraft Heinz to acquire Unilever. According to a report in Fortune, one of the several reasons that the Unilever board rejected the offer was the radical difference in corporate cultures. 
This stage involves identifying the capabilities or potentialities of your competitors. What can they do that they are not doing how? How skilled is the workforce? How good/efficient is its supply chain? What strategic alliances do they have or might they logically create?
The final stage involves ascertaining your key competitors’ intentions. That is, now that you know where they came from, what they are really doing, and what they can do that they are not yet doing, you start analyzing available evidence to determine where they are going to go tomorrow. Now you are at the top of the CI food chain. Congratulations! From here, lies the world of early warning systems – another important topic.
 “Change World”, Fortune, Sept. 15, 2017, p. 82. “Unilever’s board rallied behind [the vision of ‘making sustainable living commonplace’] to help stymie an unsolicited takeover bid from Kraft Heinz.”
November 29, 2017
As I have noted, in our experience, there are usually 7 major issues involved in creating or adding a new competitive intelligence unit:
- financial and personnel
- internal marketing
- customers and their needs, and
- products and feedback.
Several of the (masked) cases in Competitive Intelligence Rescue – Getting It Right, our newest book, deal with CI products and feedback as do several chapters in Bottom Line Competitive Intelligence. Here are a couple of the key high-level issues you should consider:
- What products are you providing now? Who uses which products? Why don’t others use them?
- Are you providing a newsletter? Is it really providing value to the readers or is it just a convenience for those readers?
- Your product mix should change as your targets – and customers – change. And you should be changing your targets. They are not going to stay static just for your convenience.
- Feedback from your customers is critical. Get it on a project by project basis, if possible, and, in any case, quarterly. And get it from ALL customers. If they are too busy to talk about your work, how much time do they have to absorb and use it?
- Feedback should include reviewing what products to add as well as which ones to stop providing.
Also check out this past blog. among others: Answers and Questions.