Why CI Is Essential to Effective Thought Leadership

A recent survey by the Economist Intelligence Unit shows that B2B companies are rapidly installing sophisticated global business intelligence systems.  Indeed, 65% of survey respondents said that greater integration of external and internal business intelligence systems is the top change their companies will make to how they receive and share external information. (10 Megatrends in B2B Marketing, 2008, The Economist Intelligence Unit, March 2008)

Why?  For B2B companies, demonstrating distinctive thought leadership has become the most effective marketing tool at their disposal, and survey respondents admit that richer sources of business intelligence that assess and validate industry trends are crucial for an effective and integrated thought-leadership campaign.  Clearly, these executives believe that impact assessments of external information are valuable in setting their companies' marketing efforts apart from the competition.  What kinds of intelligence are B2B marketers looking for?  Four of the top six types cited include:

• Industry analysis and forecasts
• Analysis of news and key developments
• Competitive intelligence
• Regulations and business conditions

Whether your company provides B2B products and services or not, the implications of the survey results are clear.  A systematic and thoughtful approach to competitive and business intelligence is essential if integrated marketing campaigns are to succeed.

'Soft' Competitive Intelligence in the 21st Century

Blogs, wiki’s, and virtual worlds creates new opportunities for gathering intelligence. What is unique about these venues is that they are not additional published sources but a form of primary intelligence available through the 21st century’s latest electronic media.

What sets these vehicles apart from more traditional sources is that the individuals participating in these media are freely volunteering their opinions. Folks are usually more open when they believe they are interacting with their peers. The information shared in such venues is honest and raw, and not usually uncovered in traditional surveys or phone interviews, which can feel more like an official contract than an open dialogue.

So what exactly can blogs, wiki’s and the rest reveal from a competitive intelligence standpoint? Plenty. If analyzed properly, they hold insights into a wide variety of customer’s views including that of your and your competitors’:

 products, both likes and dislikes
 unique issues and challenges
 unmet needs and more.

Furthermore, the information shared is not outdated. In fact you can watch a real-time conversation unfold before your eyes on the Internet. And what’s more, you can join in on a conversation to dig deeper and learn more about a topic.

The intelligence you uncover is more of a “soft intelligence” than solid facts and figures. It reveals opinions, feelings and possible reasons and explanations behind the actions of consumers.

This type of intelligence can be just as important as hard-core statistics that come from more traditional market research.  Why?  It can not only provide insights into the underlying assumptions of consumers - which can explain their behavior today - but also how they are likely to act in the future.  Combined with qualified market research and secondary data, it can create the ultimate holistic view of the needs of customers. 

The 21st century is fast and furiously here. Don’t fall behind and miss out on some of the softer intelligence gems that can help you outsmart your competition today.

The Evolution of CI Software

Just as organisms and species evolve to meet the ecological requirements and environmental conditions in which they thrive, so too do dominant business models necessarily adapt to the ever changing landscapes of the unique operating environments in which their firms compete. Just look at the evolution of the software industry over the past few years. As the supporting technologies upon which software systems were intended to run evolved over time, the dominant business model (installed, server-based solutions) has begun to give way to a more stream-lined, web-based hosted solution. Commonly referred to as ‘software as a service’ (SAAS), the new model carries major implications for traditional software providers.

Often, when we think of competitive intelligence software, we can’t help but recall the almost dauntingly sophisticated full-scale packages that dominated the CI software space until recently. As a breed, these full-service software suites proclaim to be a panacea for almost all your CI needs, from planning and information collection on to analysis and reporting, these suites offer a host of tools that are able to address nearly every stage in the CI lifecycle. Interestingly, the all-inclusive nature of these packages, responsible for their greatest strengths, is simultaneously the root of their greatest weaknesses as they are often cumbersome to install, costly to maintain, and often require a steep learning curve not to mention the need to jump through corporate IT procurement policies and lengthy roll out procedures.

For a variety of technological reasons, full service CI software packages evolved in an environment that rewarded large, installed, server or mainframe-based technology packages. As Internet bandwidths increased over time and the software as a service (SAAS) model began to gain traction, CI software firms (like many others) were slow to get in on the ground floor. This opened the door for a cavalcade of hosted CI software solutions that were more dexterous, functionally targeted, and easily implemented. In fact, because the operating environment began to favor the hosted solution business model with its low installation and maintenance costs, shorter learning curves, and ability to bypass corporate IT departments, the large, full-scale software solutions, though admittedly more feature-rich, have been put at a disadvantage.

But while proponents of SAAS will have you believe that the shift towards a new business model is paradigmatic rather than fad, the new generation of CI technology tools has much ground to cover if it is to completely displace installed, server-based solutions. Critically, most new solutions do not offer support over the entire CI lifecycle, virtually ceding the market for those in need of an end-to-end solution to companies that offer full-service suites. In addition, newer hosted solutions tend not to be able to address the needs of complex CI functions as a result of their often-limited functionality (though this appears to be changing). Nevertheless, SAAS in the CI sphere may well be the future, but CI practitioners in need of a product that covers the entire range of the CI cycle may well have to wait for such a product to show up.

To be sure, the giants of the CI software space became behemoths for a reason – they were able to offer services and features that no other tool could match in a way that made sense within the operating context in which they evolved. But just as the lumbering dinosaurs came to recede from a rapidly changing ecology, so too has the software environment evolved, causing some to question whether or not the time has come for the lumbering giants of the software world to concede their place to a novel, more nimble generation of CI software solutions.

William J. Dragon
Will is a Senior Consultant at Outward Insights, a Boston-area strategy and competitive intelligence consulting firm. He can be reached at wdragon@outwardinsights.com.
© Copyright 2008 Outward Insights

Surprise: Strategic Planning's Achilles Heel

Think of all the ways your company manages its internal information – sales forecasts, ERP systems, and so on. Now, think about the resources spent tracking external events. If your company is like most, it is spending a fraction of its time and effort on the external as it is on the internal. Yet, isn’t the greatest source of strategic surprise found in the events and conditions that lie beyond the corporate walls?

Strategy guru Peter Drucker once said, “ninety percent of the information used in organizations is internally focused and only ten percent is about the outside environment. This is exactly backwards. “ At the heart of Drucker’s comments is the notion of competitive surprise. By failing to monitor external information, companies raise the likelihood of being surprised by external developments.

Research conducted by the Wharton School of Business found that two characteristics of surprise affect companies’ responses: the source of the surprise and the company’s ability to react. The source of the surprise can be looked at in two ways – is it from unknown sources (for example, terrorism) or is it a familiar surprise, such as the timing of a recession? While known threats such as recessions can be anticipated better than sudden ones, successful companies are the ones that can adapt to both.

Surprise acts as a risk-multiplier. It’s bad enough for companies to be confronted with an external development that complicates their strategy. However, if companies at least have an indication that such developments could occur, they can focus on remediation. When such developments happen by surprise, the company’s ability to act in a thoughtful and effective way is compromised. Surprise takes what could be a manageable – though perhaps unpleasant – situation and makes it almost completely unmanageable.

Why do companies do such a poor job of keeping tabs on information that has the potential to cause severe strategic disruptions? I believe there are two causes:

• First, companies have a hard time knowing what to monitor. Given the wide range of industry participants and conditions that can be at the root of external threats, firms struggle just determining what is significant. As a result, many companies attempt to monitor everything, and build elaborate “environmental scanning” systems that crumble under the weight of the mountains of information they accumulate.

• Second, even if companies are able to isolate those external conditions that pose a threat, there are few effective means by which to monitor those conditions. News alerts and filters usually are not precise enough to capture information that is truly diagnostic for assessing a developing threat. At the same time, knowledge management efforts that attempt to encourage employees to share information and observations related to strategic threats have for the most part been a failure.

The solution, I believe, lies in a system that combines structured analysis of plausible threat scenarios with a simple and effective approach to information monitoring. Both elements form the basis of a business early warning system that can allow strategy analysts to provide credible warning of external threats, thereby minimizing the effect that surprise has on executives’ ability to respond.

The early warning indicators a company will monitor may include areas such as technology disruption, competitive shifts, regulatory changes, environmental factors, consumer or social changes, economic conditions and political influences. Analysts should collect industry information from a mix of published and human sources. The information collected can be further synthesized through an IT application designed for just this purpose.

As analysts determine that certain indicators are behaving in such a way so as to present a developing threat, they can generate early warning alerts that argue for a particular strategic option – ideally one considered during the scenario-planning phase. This way, the element of surprise is almost completely eliminated from the equation, and managers can focus on deploying a response.