Competitive Intelligence: So What and Who Cares?

Ambassador Series, Part 1 — Written by Luis Madureira, PhD Researcher and Invited Professor from NOVA Information Management School and Kari Syrjä, Head of Growth at Comintelli

Practical Ways to Turn “Nice-to-Know Reports” into Actions That Move Companies

Recently, Ben Gilad, Founder of the Academy of Competitive Intelligence, posted a provocative blog on LinkedIn. In it, Gilad discusses the impact competitive intelligence (CI) professionals versus merger and acquisition (M&A) managers have on companies’ strategic direction. The same topic but from a different perspective was discussed by Luis Madureira, PhD Researcher and Invited Professor from NOVA Information Management School, and Kari Syrjä from Comintelli, the company behind Intelligence2day Competitive intelligence platform. The key topic to understand is whether a CI Practitioner’s function or role has any real effect on company performance, and if so, how to improve it.

If you attended a recent webinar or training course hosted by CI software companies, you may have realised the ongoing paradox: Competitive intelligence is more important than ever; however, it is often reduced to a “tick in the box” of Win-Loss Analysis markers in a CRM system. The bottom line is that CI is being minimised to a one-click data point that attempts to encapsulate the reason behind why or to whom a deal was lost. The results emerging from these data points is the so-called “Competitive Analysis”. It usually reveals that the product from company X is losing against the equivalent product from company Y.

So what?

Is this competitive intelligence? Is this what management needs or is looking for? Will this be able to support product management or marketing decision-making?

Most CI professionals will tell you “No”.

Although this quantitative, non-contextualised analysis provides easy answers for management, in practice, management does not even care due to the shallowness of those “findings”. Put simply, this is an insult with gross errors and a potentially big negative impact. The long-term result, most probably, will be a loss of traction and redundancy of this so-called “Competitive Intelligence” practice. Reducing CI into a Product or Sales Intelligence only, based on an oversimplified Win-Loss Analysis, provides management with a very limited view of reality. One can even argue that it is a harmful waste of resources.

A Holistic Perspective

Competitive intelligence is so much more holistic than that; but, if CI has a bigger scope and greater strategic importance, what is stopping CI from advancing? People are confused.

To understand the root cause, we must revisit the basics: What is “competitive” intelligence and how does it differ from “competitor” intelligence? How does it differ from whatever buzzwords the market is inventing to sell the bells and whistles of their software tools?

Brutal fact 1: Most (so-called) CI Professionals don’t really know what they are doing!

What is Real Competitive Intelligence Work?

A CI professional takes into consideration the macro-, meso-, and micro environment ecosystems in which an organisation operates.

It means understanding the macro forces that impact countries and regions, the market’s economic agents, as well as direct organisations and forces a company comes into contact with.

Does your organisation face a talent shortage, or are massive layoffs impacting morale? How did the recent FED and ECB interest rate hikes impact your organisation? Are there venture capital or private equity firms pressuring your company to get deals or scale at any cost? What about Covid-19, strikes, heat waves, fires, and logistical bottlenecks affecting your organisation and economy?

Ticking boxes or 1-pager battlecards is too narrowly focused.

A true CI Professional (CIP) must understand the competitor in greater depth, consider the whole competitive environment, and then position and outmanoeuvre the competition in the space available. This encompasses the analysis of several layers.

Understanding how macroenvironmental forces impact your organisation and your competitors are usually done by using the PESTEL framework. It’s something that is confused with market intelligence (MI), and admittedly, they do overlap, but in practice, they also differ.

The meso-environment consists of organisations, locations, the products or services interchanged, and to whom — the customer and the consumer.

Then, you have the microenvironment where Porter’s 5-Forces model comes into play to help understand the attractiveness of an industry. Finally, a CIP needs to understand the company, not only its product functionalities and prices, but also its recruiting, financial status, and much more. In fact, you need to understand the whole value chain (Porter again).

Once You Dare to Embrace This Bigger Picture, What Results Can You Expect?

It’s a decision to improve the performance of the organisation.

Don’t forget, doing nothing can still have a positive impact but only after understanding the context. You have to ask, why does it make sense?

In other words, if you are a CI professional, a good starting point is to understand what CI is to ensure you know what you are supposed to be doing.

CI is the process and forward-looking practices to develop knowledge of the competitive environment to improve organisational performance. (Madureira et al , 2021)

Keeping the above in mind, what is happening in the CI industry?

New concepts — such as social intelligence, talent intelligence, patent intelligence, data intelligence, decision intelligence, revenue intelligence, sales intelligence, and competitive enablement — have been popping up for quite some time. In parallel, the industry is going through considerable consolidation. For instance, British social listening company Brandwatch was bought by behemoth Cision, while the French social listening and CI platform software Digimind joined Onclusive, a company focused on media intelligence. Strategic intelligence and geopolitics are becoming more important for public relations and creative agencies as well.

While all this conceptual fragmentation (i.e., decision intelligence, data intelligence, competitive enablement) and industry players’ consolidation (resulting in larger, more integrated players) may be positive, we must be careful in reducing CI to a few use cases (e.g., new customers), or reducing its scope to competitors (i.e., competitor intelligence), or even to just a technique (e.g., win-loss). This restriction will not deliver strategic or long-term value to any of the stakeholders (such as the C-suite, marketing, product managers, sales, CI professionals, or even the CI discipline itself).

Competitive intelligence as a quick fix for specific needs in a limited number of organisational areas is not a sustainable development path for this discipline.

Would those “niche insights” help you or your management team to understand the impact of wildfires or energy shortages due to Putin’s war on Ukraine in your organisation? Or, would those “niche insights” explain the impact on the energy-intensive quantum computing or blockchain industries? Of course not.

If CI cannot help to guide organisations by laying out the existing alternatives for management to decide the way forward, then what is the purpose of CI after all?

Management must be made aware of alternative routes or options they have in order to decide how they allocate resources — that is what management is all about. CI cannot be dissociated from the competitive scope of an organisation, nor can it be pigeonholed into specific narrow-use cases.

Brutal fact 2: The value of CI is in the holistic integration of all its subdisciplines. A true CI professional knows that being aware of them is not enough.

In Summary: Do CI Professionals Know What They are Doing? Does it Really Matter?

Look at your company; does the emperor have clothes on?

The C-suite needs someone objective and independent to tell them the truth no matter what, not just line managers with biased, vested interests. If the CI function is under marketing or sales, there is a risk that competitive intelligence will be used to support internal claims for a bigger budget or to drive the agenda-setting efforts of the Head of Marketing or Sales. Is this the best for the organisation? Of course not!

Competitive intelligence must produce the best quality insights possible which enable the organisation to act upon them in order to make the best possible decisions to improve the performance of the company.

For your company to advance and sustain a competitive advantage, competitive intelligence requires C-level attention, not just sales or marketing input.

A last caveat to highlight is that CI sub-disciplines cannot position themselves as the discipline. There is a real danger this process erodes the overall competitive intelligence value proposition which impedes the development of CI and its sub-disciplines in the process.

So What Can You Do? Call to Action! Embrace Complexity.

Our aim is not to leave CI professionals unarmed. The call to action for all of you working in the competitive intelligence domain is to embrace not just one, but all of these sub-domains.

This approach has several benefits such as increasing internal communication and interaction amongst front and back-office silos, line organisations, and corporate functions. CI professionals can act as masterminds, gathering perspectives and verifications from all functions: Sales, research & development/ patent department, people management (talent acquisition & HR for different perspectives), as well as brand guardians, and why not, the office of the CFO, since that is where the monetary power sits. A brave company will also include the perspectives of external parties and partners, and moves can actively be considered as part of the exercise.

Paradoxically, the answer lies in the very fragmentation of the CI sub-domains. Bring them back home. It is not about control, it is about orchestration and coordination. The more you collaborate, the more the CI function is seen as a value creator and the impact starts to show.

Go get them, your time is now!

REFERENCES

Madureira, L., Popovic, A., & Castelli, M. (2021). Competitive intelligence: A unified view and modular definition. Technological Forecasting and Social Change, 173(December 121086), 1–17. https://doi.org/10.1016/j.techfore.2021.121086

Madureira, L., Popovic, A., & Castelli, M. (2021). Competitive intelligence empirical construct validation using expert in-depth interviews study. 2021 IEEE International Conference on Technology Management, Operations and Decisions, 1–6. https://doi.org/10.1109/ICTMOD52902.2021.9739422

Porter, M. E. (1998) The Competitive Advantage: Creating and Sustaining Superior Performance. NY: Free Press, 1985. (Republished with a new introduction, 1998.)

Gilad, Ben. 2022. Linkedin blog post: https://www.linkedin.com/pulse/can-lowly-ci-professional-compete-investment-bankers-crony-ben-gilad/