Basic Tools and Strategies
Hilary McLellan

Value, not volume, drives intelligence. Competitive intelligence (CI) is information that's been analyzed to the point where you can make a critical decision. Driving that information to a decision point is where the value lies. What separates the savvy business leader from the also-ran is having a good idea and acting on that idea in the right way at the right time. Competitive intelligence may not give you a "good idea" but it can help you with the latter two initiatives. You must also realize that CI is a relatively rare commodity. Managers need to work at it. They have to apply considerable talent and creativity to see through the information haze that confuses most of the market. Ray Croc of McDonalds, Bill Gates of Microsoft, and Richard Branson of Virgin Atlantic are examples of business leaders who retain this savvy, this innate CI drive. Can an organization learn from these leaders? Yes, but it takes work. Corporations that use intelligence well make it a part of their everyday activity. It's not a separate initiative, or "a flavor of the month," as some of my clients would say. For the companies that have succssfully incorporated Competitive Intelligence into their operations, it has become a part of their corporate breathing. They use it in all facets of their business, from sales, R&D, and purchasing to investor relations. All that said, it takes time to learn how to apply competitive intelligence in a corporation. Leonard M. Fuld The hardest work is figuring out what to do in a world of infinite choices. William Jensen Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information? T.S. Elliot

Introduction

Miller (2000) explains that "The intelligence process is based on the assumption that managers seek to become better informed about critical issues on a formal and systematic basis. Intelligence is distilled information." (p. 12) The emergence of the Internet, and especially the World Wide Web, are expanding the tools for obtaining intelligence. At the same time, the rapid expansion of the Internet has exacerbated "information overload," which will only grow orse in the coming years. Let's look at some of the basic tools and strategies for gathering competitive intelligence --- and also avoiding information overload. It is essential to keep in mind the changing face of competitive intelligence tools and strategies as a result of the Internet. And it is also vitally important to keep in mind that these changes will only continue --- at digital speed --- as the universe of electronic media continues to evolve and innovate.

This week we will take an introductory look at competitive intelligence tools and strategies. We will continue to examine and expand upon these topics throughout the rest of the course.

Let's start by identifying the process by which competitive intelligence usually takes place. Miller explains that competitive intelligence involves a four part process, including the following stages:

1. Identification of key decision makers across the organization and their intelligence needs.
2. Collection of information about events in an organization's external business environment from print, electronic, and oral sources.
3. Analysis of information and synthesizing/upgrading it to intelligence.
4. Dissemination of the resulting intelligence to decision makers.

THE COMPETITIVE INTELLIGENCE CYCLE 1) Obtaining CI Requests Understand how to identify and elicit the intelligence needs of decision makers exactly. Develop effective communication, interviewing, and presentation skills. Understand basic psychology types to appreciate the different orientations of decision makers. Know the organizational structure, culture, and environment as well as the key informants. Remain objective. Articulate intelligence needs into the intelligence cycle. Know the internal and external capabilities. Conduct an information resource gap-analysis. 2) Collecting Necessary Information Obtain knowledge of primary and secondary sources. Know the various methods for accessing internal and external, primary and secondary sources. Manage primary and secondary sources appropriately. Know how to execute the triangulation, multimethod, multi-source approach. Develop confidence level by ensuring reliability and validity of sources. Recognize anomalies in the information. Know the difference between hypothesized and open assumptions and why. Develop formal research skills. Recognize corporate information-gathering patterns and collect accordingly. Know the ethics associated with data gathering. Become keenly aware of security, legal, and counterintelligence issues as well as how international and cultural issues affects the intelligence cycle (overlay). 3) Analysis and Synthesis of Information Recognize the interaction between the collection and analysis phases. Analyze creatively. Employ inductive and deductive reasoning. Use network analysis, alternative thinking. Obtain an overview of basic analytical models; introduce exciting and attractive models first to elicit the discovery notion of analysis rather than the dry, research approach. Know when and why to use personality profiling, financial analysis, economic analysis, accounting analysis, trend analysis, risk assessment, quantitative and qualitative analysis, influence diagrams, opportunity analysis, pattern analysis, core vulnerabilities analysis, event analysis, linchpin analysis, etc. Recognize the inevitable existence of gaps and blindspots. Know when to cease analyzing (analysis paralysis). 4) Communicating Intelligence Use persuasive presentation skills. Demonstrate empathy and use counseling skills, when appropriate. Organize findings and convey them with assertiveness and diplomacy. Use the format or media appropriate for each end-user. Recognize the effective volume and level of disseminating intelligence. Realize that listening can also be a form of presenting. Source: Society for Competitive Intelligence Professionals (http://www.scip.org/education/module4.html)

Tools

Burwell (1999) points out that the changing face of business is is changing the online tools that are used for competitive intelligence. According to Burwell, until just a few years ago, online research resources were divided into two categories, including:

1. Internet sources accessed via File Transfer Protocol, Telnet, or the World Wide Web, and
2. Commercial resources that could be accessed via modem using communication software. (p. 15)

Now, with innovations in technology and increased awareness of the Internet, the landscape of online competitive intelligence has expanded dramatically. There is no longer a clear boundary between Internet sources and Commercial resources. And more resources are available. Here is the new landscape, according to Burwell:

• Major commercial online services, such as DIALOG, Dow Jones Interactive, and LEXIS-NEXIS, who have mounted increasingly sophisticated web sites on the Internet to take advantage of improved technology and potential new desktop clients. Using the World Wide Web, they provide features not previously available, such as graphics capability or PDF files. At the same time, they must continue to address the needs of a large client base that resists entirely the Internet until that platform can offer popular functions provided in dial-up mode. As a result, some vendors continue to offer both Internet and dial-up service.
  
• New commercial vendors, such as Northern Light and Infonautics Corporation, who recognize the Internet's potential. These companies took advantage of Internet technology to give the old timers a run for their money --- or for ours. They offer some of the same database files available on the major services in addition to files that the major vendors might not consider cost-effective. Some of these sites offer credit card access for pay-as-you-go customers or deposit accounts where users charge against a previously deposited amount. However, their search engines may be less sophisticated and they may not offer the level of support that the major commercial online services provide.
  
• Database producers have created their own web-based commercial services that compete with major vendors. Some, such as Reuters, remove their files from other vendors's systems as licence agreements expire. Others, like Information Access Company, have commercial services of their own, but also allow their files to remain available through major vendors. This new competition has resulted in benefits like pay-as-you-go pricing at some sites, along with faster availability of new information and graphics.

In other cases, however, some searchers can no longer afford to search favorite databases, because they cannot justify the substantial subscription cost charged by the database producer. Removal of files from the major services means that you lose some of the cross-file searching ability that the big vendors formerly touted. For example, you can no longer search Reuters files and other favorite business or news files simultaneously on DIALOG or LEXIS-NEXIS, eliminate any duplicates, and pay one vendor for the documents retrieved from different producers' databases.

• Internet sites intended to inform, educate, or entertain. Some contain searchable databases and provide copies of documents. These sites have been created by trade associations, industry groups, academic institutions, individual companies, the media, and others. Many of them are crowded with advertisements that offset the cost of providing the searcher with "free" information. Although FTP and telnet still exist, these resources are used less frequently than in the past. (p. 16)

The growth in information online has resulted in an increasing array of free information resources. The value of this information must be carefully assessed in terms of quality.

Strategies

Strategies for gathering and assessing intelligence center around two themes: on the one hand, capturing information that is sufficiently complex and broad in scope, and simplifying the information into meaningful patterns that can support decision-making that enhances competitiveness. As Leonard Fuld points out above, value not volume is at the center of effective competitive intelligence. At the heart of CI is a process comparable to the mythical medieval alchemist's conversion of lead into gold. In the case of competitive intelligence, the transmutation that must take place is to convert complex often messy data into simple, meaningful intelligence.

Competitive intelligence is fundamentally a tool for decision makers. In order to support decison-making, complexity must be transformed into simplicity --- just the right simplicity for each situation.

Jensen (2000) articulates the value of simplicity in today's complex world: "What is your cost of confusion and the value of clarity? Platitudes aside, our biggest limit is no longer the reach of our imagination. It's our ability to order, make sense of, and connect everything demanding our attention... How we create clarity." (p. 6) So what is simplicity? Jensen explains: "We've all experienced simplicity in our hearts, homes, and history. The utility of a perfectly balanced kitchen tool, the grace of Fred Astaire, the serentiy of a Japanese garden, the pull of a Maya Angelou poem, the contours of an Eames chair, or the drama of humanity revealed in just 272 words in the Gettysburg Address. The simple elegance of these creations and talents ignites our imagination." (p. 8)

COMPETENCIES FOR INTELLIGENCE PROFESSIONALS Professionals must possess specific skills to effectively execute the various phases of the intelligence process. They obtain these abilities from four sources: 1) inherent traits, 2) coursework, 3) professional experience, and 4) mentors. Building upon one another, these four sources provide the range of competencies that successful practitioners need. Educational administrators must appreciate the importance of the four sources, rather than adopt the simplistic concept that course taught by inexperienced educators can serve as the exclusive means for gaining expertise. The following list of competencies was derived from discussions with practicing professionals. Note that teaching, experience, or mentoring can often enhance skills that were acquired from another source. Traits: creativity, persistence, written and oral communication skills, analytical ability, understanding of scientific methodology, independent learning skills, and business savvy. Teachable Skills: strategic thinking, business terminology, market research and presentation skills, knowledge of primary information sources and research methods; enhancement of: journalistic interviewing and communication skills, analytical ability, and a familiarity with scientific methodology. Professional Experience: knowledge of corporate power structures and decision making processes, industry knowledge; enhancement of: primary research skills, business savvy, and journalistic interviewing and observational skills. Mentoring: creativity, persistence, strategic thinking, and business terminology; enhancement of: communication skills, and research skills. The successful execution of the phases of the intelligence process requires this range of skills. Having the capabilities to frame research issues, to execute the research techniques and to analyze the data and communicate their findings, requires potential practitioners to fully develop their expertise. Professionals may attain some competencies from a different source. For example, lacking a specific trait, an aspirant may obtain a skill within a formal educational setting. However, deficiency in any one of these competencies within the workplace can prove detrimental; specifically, the organization will not act on the intelligence. Today's business executives are less tolerant of ill-equipped professionals and prefer to retain those with a broad set of skills. Therefore, potential practitioners, employers, and educators must recognize how inherent traits, experience, mentoring, and teaching together offer the composite of the required competencies. Source: Society for Competitive Intelligence Professionals (http://www.scip.org/education/module2.html)

References

Burwell, Helen P. (1999). Online Competitive Intelligence: Increase Your Profits Using Cyber-Intelligence. Tempe, AZ: Facts on Demand Press.
Jensen, William D. (2000). Simplicity: The New Competitive Strategy. New York: Perseus Books.
Miller, Jerry. (2000). Millenium Intelligence: Understanding and Conducting Competitive intelligence in the Digital Age. Medford, NJ: Cyberage Books.