Another look at problems with competitive intelligence (part 2)

March 31, 2015

Last week, I noted that a recent business journal article took an academic look at the business use of intelligence contrasted with governmental use[1]. That piece had four criticisms that are relevant to developing CI for your own use or with others on your business team. This week I will deal with the fourth one, and my take on all four:

The fourth is that

“[m]ost companies do not collect the correct information in the most efficient manner”.

and the recommended solution for this is the

“collection of broad range of intelligence including open source (OSINT) and human intelligence (HUMINT) through external organizations. Testing of customer facing employees with target collection campaigns.”

I have to take issue. While external organizations (such as my firm) have much more flexibility in collecting data than do our corporate counterparts, part of the significant difference between government collection of intelligence and corporate collection of CI lies in resources. That is, a team of two or three (private sector) employees (or consultants) cannot be expected to collect, maintain, and continuously analyze the vast amounts of data on a competitor or competitors that an entire team of analysts, supported by a separate team of full-time data collection professionals, in career governmental positions, can generate and maintain.

In addition, the private sector is constrained from many forms of data collection available to the government, so that they rely on a smaller range of options.

For example, signals intelligence, based on the interception of communications, is absolutely barred for the private sector, while it is available, admittedly under certain constraints, to the governmental sector.

Also, corporate policies, as well as CI ethical standards[2], may significantly limit human intelligence activities in the private sector:

  • Many businesses, properly so, limit or even forbid direct contact with competitors about certain issues including, of course, prices and pricing.
  • Some, to protect against accidental violations of this standard, even bar one-to-one communication with employees at any competitor.
  • In addition, CI ethical standards do not permit an employee of one company to collect human intelligence (via elicitation interviews) from competitors by lying about his identity or her employer.

Similar limits do not exist for the government.

Overall, the strong parallels between the governmental collection of and development of intelligence and business’ intelligence activities are increasingly diverging. After years of development, government intelligence culture, tools, analytical and communications protocols differ more from those of CI than they did 30 years ago[3]. That is because the missions, the methodology, the legal constraints, and the total resources devoted to the respective tasking has less and less symmetry (properly so, because there is a difference between losing market share and losing lives). In light of that, I expect that competitive intelligence can and should differ from governmental intelligence both in intelligence collection and analysis, and should be allowed to develop and differ without inappropriate comparisons.

[1] Edward Mozley Roche and Michael James Blaine, “The Intelligence Gap: What the Multi-National Enterprise Can Learn from Government and Military Intelligence Organizations“, Thunderbird International Business Review, Volume 57, Issue 1, pages 3–13, January/February 2015.

[2] See, e.g. The Helicon Group, “Ethical Standards”, Strategic and Competitive Intelligence Professionals, “SCIP Code of Ethics for CI Professionals”, and John J. McGonagle and Carolyn M. Vella, Proactive Intelligence – The Successful Executive’s Guide to Intelligence, Spring, 2012, Chapters 5 and 6.

[3] In the words of Eddie Wilson, “Hey! I didn’t say better, I said different”, Eddie and the Cruisers, Embassy Pictures, 1983.


Who is really doing competitive intelligence?

June 19, 2014

I recently ran a training session on competitive intelligence for non-competitive intelligence professionals, that is, people primarily involved in marketing, product development and the like.

Of interest was the fact that one of the attendees commented that at an earlier meeting, he was told that most business-to-business (B2B) firms didn’t engage in competitive intelligence. After discussing it with my partner, Carolyn Vella, I think I can understand what I think is a clear misconception.

The vast majority of large business to consumer (B2C) firms, our major retailers or consumer-products companies, conduct competitive intelligence through freestanding teams, internal competitive intelligence units. In the B2B world, many of the firms are not large, so immediately, we have to question parallels with the B2C firms. In fact, I would be willing to guess (not bet, as I do not bet) that there is a higher percentage of nonpublic and family-owned firms in the B2B market space than in the B2C market space.

That is a significant issue with respect to CI. In fact, I think that internal CI teams are more common with B2C firms than with B2B firms. That is not the same as saying that B2B firms do less CI.

Why? Smaller, particularly privately held, firms do not have the internal and external “churn” of employees, and even executives, that is common in the large B2C for market space. That “churn” carries with it the infiltration of new ideas and techniques. Thus, we can logically expect that the B2B market space may be less likely to be far along in developing internal competitive intelligence capabilities, than are firms in the B2B space.

There is another factor, one dealing not with existence, but with visibility. By this I mean that it is easy to identify a consumer goods firm with competitive intelligence when there someone in the firm carries the title “competitive intelligence manager”. However, in smaller B2B firms, and family-owned firms, the individuals doing CI do not carry such titles. They do CI as a part of everything else that they do, whether it is product development, marketing, research and development, or whatever.

Thus, they are truly the locus of the do-it-yourself CI revolution, which I think is spreading throughout the business community. While B2B firms may not be advanced in terms of creating freestanding units, they do conduct CI and I believe it will be more deeply embedded, simply because CI will become one of the necessary tools that every manager, in almost every department, will have to have and master. In the long run, I think this bodes particularly well for the B2B sector, and for CI.

So the presence of CI in the B2C space is more evident. But, being better (or more advanced) than CI in the B2B space, in the words of Eddie Wilson of Eddie and the Cruisers, “Hey! I didn’t say better, I said different. You oughta remember that.”