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.

Information security

August 12, 2014


One biggest problems for those of us who are sensitive to the power of competitive intelligence is realizing how much competitively sensitive information from your business is potentially available to your competitors. One of the most interesting things about this is the fact that major problems in this are come most often from two sources:

  • Senior members of your business that know more competitively sensitive information than others do, but are not sensitive to that. In other words, the higher they are, the more they may inadvertently release.
  • You.

You? Yes. Let me give you a couple of quotes which I find relevant (and amusing):

  • From a retired US military officer, just this past weekend, talking to a news reporter about current international developments (I paraphrase) “I’ve talked to many of my friends in the military intelligence establishment, and they are telling me….”
  • From the fictional British barrister Rumpole of the Bailey: “Lawyers and priests deal largely secrets, being privy to matters which are not meant for the public view. I don’t know how it is in the religious life… but barristers are mostly indiscreet. Go into Pommeroy’s Wine bar [a lawyers’ hangout] any evening with when the Chateau Fleet Street [a cheap wine] is flowing and you may quickly discover who’s getting a divorce or being libelled (sic), which judge got which lady pupil in the club, or which Member of Parliament relaxes in female apparel.”[1]

What they should tell us is that as we become privy to sensitive information, we have a tendency to share it. Unfortunately, we may also lose perspective on with whom we share it, talking with friends, relatives and those with whom we do business, in and out of the company. And then they share it….

Let me give you a short example of what I mean (company name deleted to protect the…speaker):

At an annual meeting of SCIP (then the Society of Competitive Intelligence Professionals, now Strategic and Competitive Intelligence Professionals), the CEO of a large consumer products company addressed a special session of about 150 SCIP members. He was accompanied on stage by his CI team leader.

In his remarks, he described how the company was going to reorganize, with particular emphasis on how that reorganization would eventually impact the CI team as well as all of its various major product lines.

Sitting in front of me were 2 employees from a key competitor, looking shocked. When they recovered, after asking me “Does he know where he is?”[2], they began taking notes with a vengeance.

At the same time, the CI team leader tried to vanish into the chair. You see, the team leader was unaware of the details of the CEO’s remarks – not to mention the fascinating, detailed overheads which accompanied it. The commitment of the CEO was that his speech could be video recorded and made available to all SCIP members, featuring of course, the great overheads. It was. The team leader, following the speech, tried desperately to keep that distribution from happening. All the leader was able to do was get a 3 month delay, thus delaying, but not defeating, my friends in the row ahead of me.

So, in terms of CI security, keep in mind what the cartoon sage of the 60s and 70s, Pogo said: “We have met the enemy and he is us.”[3]

[1] John Mortimer, “Rumpole and the Official Secret”, in The Second Rumpole Omnibus, 1987, p. 513.

[2] He most certainly was warned. The head of CI at another competitor, presiding over the session, introduced the speaker, noting slyly that he was certainly “very, very familiar” with the speaker.

[3] Walt Kelly, “Pogo”, 1970,

A Name Worthy of a James Bond film?

October 15, 2013

 In the most recent issue of Bloomberg BusinessWeek, there is a fascinating article about, “The Secrets of Bezos”. It includes in it a particularly strange statement:

     “Amazon has a clandestine group with the name worthy have a James Bond film: Competitive Intelligence.”

The name “Competitive Intelligence” is worthy of James Bond film? Are you kidding me?

James Bond films have much better names than something as mundane as “Competitive Intelligence”. How about an organization such as SMERSH, from the Russian for death to spies? Or SPECTRE (SPecial Executive for Counter-intelligence, Terrorism, Revenge and Extortion)? How can “Competitive Intelligence” compare with Auric Goldfinger, Ernst Stavro Blofeld, Le Chiffre, or Dr. No? Not at all well (unfortunately).

Perhaps the author meant that the concept of “competitive intelligence” is worthy of a James Bond film. No, I doubt that. Tracking how fast and well competitors fill online orders is too plain for a series starring a character with a “license to kill”, working for a character known only as “M”.

How about the fact that one company is checking out its competitors on a regular basis? If the author really means that “competitive intelligence” is such an unusual term for that reason, then we have a major problem – as a character in the movie “Hud” once noted “What we’ve got here is failure to communicate.”

You see, competitive intelligence has been around as a business and academic subject since the 1980s. Since the organization of SCIP, Strategic and Competitive Intelligence Professionals, formerly the Society of Competitive Intelligence Professionals, in the 1980s, many, many books have been written on the subject in several languages,. And, thousands of workshops and seminars on competitive intelligence have been held  around the globe by organizations ranging from those covering pricing to strategic planning, and libraries to industrial security.

If anything, a lack of familiarity with “competitive intelligence” may reflect the failure by those of us involved with competitive intelligence to advance its visibility on institutional basis. There is much hard work that is being done by businesses, and based on the article, very effective work, by those involved full time with competitive intelligence and those using competitive intelligence as an effective tool. We just need to do more.


Where is intelligence going?

June 4, 2013

Two interesting pieces raising this question in my mind again. The first was an essay by Ben Gilad, in a SCIP publication, asking whether or not competitive intelligence had become “Googlized”, that is, evolving into a situation where, because of the access to information through the Internet, the practice of competitive intelligence will be in the hands of line managers and not competitive intelligence specialists within large corporations. One key trend underlying this is that many end-users of the competitive intelligence seem to view it as being basically the collection and organization of raw data, and not the critical analysis of that data.

From another point, the recent issue of Bloomberg BusinessWeek featured the article “How the U.S. Government Hacks the World”. There it was reported

“When President Obama receives his daily intelligence briefing, most of the information comes from government cyberspies, says Mike McConnell, director of national intelligence under President George W. Bush. “It’s at least 75 percent, and going up,” he says.”

Let me dissect why I was taken by the quote. First, it described the president’s intelligence briefing as containing “information”, not intelligence. Second, it indicated that at least 75% of the contents of the daily intelligence briefing came from government cyber spies. In other words, they do not come from open source materials or communications with government employees and diplomats, but rather from hacking into the computers of other nations.

Hacking provides data, sometimes information, and only rarely intelligence. Yet it seems that raw data is now what passes for some intelligence at the governmental level. I doubt that is the universal case, and sincerely hope that is not true. For if it is, then the craft of intelligence, at least at the government’s highest levels is becoming more a matter of repackaging data into information than it is providing truly insightful and actionable analysis.

What do these two pieces have in common? In government we see a possible pattern that is similar to Ben’s observations in business about competitive intelligence managers being replaced by data gatherers, not analysts.

What we need for business to function effectively is not more data, whether from open sources or from government cyber spies, but rather insightful and actionable analysis. That is not provided by overwhelming the end-user with data. In the end, doing that only chokes off decision-making by minimizing or even eliminating analysis. It creates the erroneous impression that one knows what is going on, when all that one has is a mass, or mess, of raw or somewhat digested data.

To draw from another discipline, cooking, there is a huge difference between the meat, vegetables, and other ingredients, the raw data if you will, and the intermediate products as delivered by the prep chef, the trimmed meat, the sliced vegetables, ready for cooking. That is the information. Then the chef converts the intermediate products into Beef Wellington, the meal. Preparing the meal is the equivalent of using analysis to generate intelligence. Right now it seems as if, both in the public and private sector, we are in danger of people confusing raw meat and vegetables, or prepared meat and vegetables, with a gourmet meal. If that is the situation, that is worse than unfortunate.

Can you learn to analyze?

November 13, 2012

One of the most perplexing problems facing those in CI is analyzing raw data.  It is certainly not for lack of tools.  In the bibliography of our book Proactive Intelligence: The Successful Executive’s Guide to Intelligence (brief commercial there), we have listed a couple of very fine works detailing the tools that are most commonly used in analyzing competitive intelligence problems. You should review them when you can.

In addition, there are several excellent books dealing with how to approach analysis itself: Improving Intelligence Analysis – Bridging the gap between scholarship and practice[1], Intelligence Analysis – a Target-centric Approach[2], An Introduction to Intelligence Research and Analysis[3], Intelligence Analysis – Behavioral and Social Scientific Foundations[4], and Analyzing Intelligence – Origins, Obstacles and Innovations[5].  Each of these books is written primarily for the intelligence community, generally governmental. They are very important (as I have said in my reviews), but not for novices. I suggest that sometime in your career you would do well to read one or more of them.

What I’m suggesting is that the experience of many in intelligence, as well as in education, is that analytical ability is not something which can be taught very easily.  There are some who argue you cannot teach analytical ability at all. In fact, in the mid-1990s, a group of competitive intelligence professionals and academics, working on a project at the Society of Competitive Intelligence Professionals (SCIP), as Strategic and Competitive Intelligence Professionals was then known, worked out a very thorough outline of “curriculum modules for educational programs in competitive intelligence for use by academics and professional trainers”.  Of interest us in this discussion is the  fact that, in identifying specific skills necessary to operate within the CI process, they included “analytical ability”, in contrast to what they identified as teachable skills, something developed from professional experience, or something which could be learned through mentoring.

Whether or not that is true, if you have any analytical ability whatsoever, you can improve and enhance it. If you intend to do any significant competitive intelligence, you owe it to yourself to do so. To do that, in addition to knowing what tools are available to you, what you want to develop is a combination of a questioning attitude with the ability to draw insights from other sources beyond those that you are looking at.

I was once asked to suggest a reading list for people who wanted to become involved in CI.  My response is that you should be reading all the time.  And what is most important, you should be reading things outside of your business, your market space, and even CI.  The more widely read you are and the more you challenge your mind, the more you will learn to analyze (or improve existing skills – your choice).

In Proactive Intelligence: The Successful Executive’s Guide to Intelligence, Carolyn Vella and I  have some suggestions about getting rid of your blinders by changing what it is you read and what you listen to.  In terms of developing analytical abilities, I strongly suggest reading – are you ready for this – mysteries.  Not books about spies, but real mysteries.  Now I can argue that you would do better to read Agatha Christie and Arthur Conan Doyle, whom I like, than you would James Patterson and Jonathan Kellerman, whom I also like.  The point is, as you’re reading, you are following the detective in the story. That entails following the efforts of the hero/heroine to make sense of what appears to be senseless.  That does not mean you would even have to agree with how the authors approach the problems or the conclusions that they draw.  That’s not the issue.  Rather, it is to get yourself in an intellectual frame of mind to analyze something as it unfolds.

Now to see how you’re doing on this learning effort, the next time you hear an unusual story, such as the one with former General Petraeus which is at the moment occupying headlines, ask yourself what five questions does this raise?  I’m not asking you to challenge the facts being reported in this case.  I’m rather pointing out that you should consider what additional facts might continue to come out.  And the reason the facts will continue to come out is that someone somewhere looked at the first set of facts and then asked the next question.  That is what you’re training yourself to do. Those questions will eventually lead you to conclusions.

In addition to helping you learn to analyze, reading a good mystery is a great way to relax. And, if you have not learned it yet, mental and physical relaxation can be critical to beginning and then completing a difficult assignment.

[1] Stephen Marrin, Routledge, 2011.

[2] Robert M. Clark, 2nd Edition, CQ Press, 2007.

[3] Jerome Clauser revised and edited by Jan Goldman, The Scarecrow Press, Inc., 2008.

[4] Baruch Fischoff and Cherie Chouvin, eds. (National Research Council of the National Academies), The National Academies Press, 2011.

[5] Roger Z. George and James B. Bruce, eds., Georgetown University Press, 2008.

Where Did Competitive Intelligence Come From? (Part 1)

October 9, 2012

That is an interesting question.  There are at least two answers.

First, and widely accepted, answer is that competitive intelligence originates with Harvard Professor Michael E Porter’s seminal[1] 1980 work, Competitive Strategy – Techniques for Analyzing Industries and Competitors.  More specifically, intellectually, it grew out of chapter 3, “A Framework for Competitor Analysis” and Appendix B, “How to Conduct an Industry Analysis”. 

From there, it was fed by the presence of a large number of former US government intelligence officers who were look to business for second careers, after retiring from the US Government.  Prime among them was Jan Herring, a former CIA professional intelligence officer, who is often credited with setting up the first corporate competitive intelligence unit at Motorola.  Now, whether the former intelligence officers picked up Porter’s concept or their corporate mentors merely adopted it is not clear and probably not relevant.

From there it was but a short step to the creation of an association (don’t we have an association or group for everything?) by people interested in the subject, the Society for Competitive Intelligence Professionals (SCIP), now Strategic and Competitive Intelligence Professionals.  The founders and early members of SCIP came from a wide variety of backgrounds, including marketing, market research, academia, corporate strategy, advertising, the law, government intelligence, medicine and accounting.  Since then they have, individually and collectively, worked to promote competitive intelligence and to develop it into a cohesive subject to the point where it is being taught in a large number of undergraduate and graduate business level curricula.

Now for the second version, a long story, or more correctly a story that goes back further.  One can argue, and I’m not the first to make that argument, that Professor Porter’s description of how to conduct an industry analysis is merely a description of how good secondary research should always be done in a business context.  The key element is Porter’s focus on competitors and advocacy that companies should be regularly checking on what their competitors are doing and are capable of doing, and acting on that.  But that element was not new.

This version holds that the roots of competitive intelligence go back as far in business as we would like them to go.  We can look at the great European banking family, the Rothschilds, whose agents collected information on the progress of European wars so that they could make market trading decisions before the rest of the market.  That was intelligence, but not directly on competitors.  Or we can take a look at the industrial revolution, with its efforts by French companies to steal technology from English companies in the exploding textiles industry.  Not intelligence, but certainly focused on competitors.

Given all that, competitive intelligence should have existed for a very long time, but has not.  My view is that as companies became more and more focused on their own metrics, particularly since once computers have them that option, over time they lost strategic and tactical focus on anything external except their customers and the market space they were in.

Competitive intelligence and its emphasis on collecting and synthesizing raw data to help companies compete better predates the Internet information revolution, which is still going on. It has exploited it, and may even be enhancing it, but that is a subject for a future post.


[1] Seminal comes from the Latin seminalis, meaning influential, and evidently including the concept of being quoted more often than actually read, as in “Karl Marx’s seminal Das Kapital”

Politics versus Analysis

July 9, 2012

A current article in Vanity Fair deals harshly with Republican Candidate Mitt Romney. At the very beginning, it notes:

A person who worked for Mitt Romney at the consulting firm Bain and Co. in 1977 remembers him with mixed feelings. “Mitt was … a really wonderful boss,” the former employee says. “He was nice, he was fair, he was logical, he said what he wanted … he was really encouraging.” But Bain and Co., the person recalls, pushed employees to find out secret revenue and sales data on its clients’ competitors. Romney, the person says, suggested “falsifying” who they were to get such information, by pretending to be a graduate student working on a project at Harvard. (The person, in fact, was a Harvard student, at Bain for the summer, but not working on any such projects.) “Mitt said to me something like ‘We won’t ask you to lie. I am not going to tell you to do this, but [it is] a really good way to get the information.’ … I would not have had anything in my analysis if I had not pretended.”

Pretty damning, no? No. Now, read it again, this time like an analyst – slowly and closely, and in context.

The person who worked for Romney was still in school. Romney graduated Harvard Law & Business Schools in 1975, so Romney was just 2 years out. That means he was not a senior manager.  Note it was Bain (that actually that means someone higher up at Bain, right?), not Romney, that pushed a student to find out “secret” sales and revenue data.

Of course, sales and revenue data from a private company are not always secret. Hum…but no one said that the competitors were even all private companies, did they? A lot of people may know these figures, including subscription services like D&B, as well as trade associations, local chambers of commerce (shameless plug – for more ideas, buy our new book Proactive Intelligence: The Successful Executive’s Guide to Intelligence ). And, if a company employee gives them out over the phone to someone who calls and asks for them, then they are not really trade secrets, are they?

The request to the student was, well actually, well, was there actually a request? Let’s move on.

And what exactly did the student then do: “pretended” to be a student.  And is that illegal? No. As Attorney Richard Horowitz’s insightful recent interview on CI law and ethics notes

If you tell me things that you would have told anyone, the fact that I misrepresented my name or who I am [such as being a student] alone doesn’t make it an illegal act.

Well, this was unethical anyway, right? This happened in 1977, and the only ethical standards barring this, from SCIP (Strategic & Competitive Intelligence Professionals), would not even exist for more than 10 years. So it is a bit of a stretch to call it unethical, too.