Maximizing the Value of Competitive Intelligence

Maximizing the Value of Competitive Intelligence

Competitive intelligence in its truest form is an ethical and essential function that involves collecting and analyzing often public but little-noticed information with an objective of “connecting the dots” leading to a source of competitive advantage. The competitive intelligence function (CIF ) provides management with an external focus – it helps companies decipher the early signs of opportunity or trouble before they become obvious to everyone else.

Issue

Today’s senior management team must dedicate as much, if not more, attention to external market events and developments as to internal activities. The new reality is that stable, predictable markets are now relics of the past. Factors such as market globalization and faster technology innovations elevate the likelihood of swift market changes that could impact management’s strategy and business model to the point where they are almost inevitable. While internal process performance issues will always be important, the relevancy of the strategy and business model is even more so in a rapidly changing and uncertain world.

In such a dynamic and complex business landscape when the time horizon for decision-making becomes shorter with each passing day, an effective CIF is needed. The question for any CIF is twofold:

  1. Does it maximize market opportunities by providing the information necessary for capitalizing on emerging growth opportunities such as new markets for existing offerings or fresh revenue streams?
  2. Does it minimize the threat of industry dissonance (the risk of critical strategic assumptions becoming invalid) by gaining a better understanding of the warning signs and the actions the firm might take in executing its strategy as the business environment changes?

Challenges and Opportunities

There are four challenges to maximizing the value of competitive intelligence:

  • The focus on identifying market exploitation opportunities that may offer sustainable competitive advantage is either fuzzy or nonexistent, limiting the scope of intelligence gathering to pricing or other tactical issues.
  • The CIF is not focused on the vital signs affecting the critical assumptions underlying the strategy.
  • The CIF is not connected with operations and its success is not measured based on its effectiveness in driving business performance.
  • Its scope is not sufficiently comprehensive in covering all relevant aspects of external factors.

These four challenges point to the opportunity to make the CIF an integral part of the strategic management process.

Our Point of View

A robust CIF monitors the overall competitive landscape for an organization, enabling strategy-makers to identify new opportunities and mitigate strategic risk at the most opportune time. More importantly, it provides insights that may challenge an organization’s “blind spots.” As organizations strive to become leaner to streamline costs, improve productivity, achieve greater operational efficiency, and/or sustain or regain competitive advantage, the CIF serves as a catalyst for change, adding value to the top and bottom lines. While establishing a CIF can be accomplished in a relatively short time frame, elevating the function to a world-class level, with an organized forward-looking capability, can take years.

How We Help Companies Succeed

Our Performance/Risk Integration Management Model (PRIM2) is a framework for converging and integrating strategy-setting, performance management and risk management with the objective of positioning the company as an early mover. Our Performance Management services help organizations realize this convergence by delivering deep business insight based on a holistic view of how value is created so decision-makers can better anticipate future business outcomes and receive better information for decision-making. We also help companies improve their enterprisewide capabilities to identify, source, measure, manage and monitor the critical assumptions and risks inherent in their corporate strategy and business plans.

Example

A large financial services firm sought to improve its competitive intelligence through better relationships between the CIF and its intelligence consumers. The CIF had initially been providing intelligence to the sales and marketing functions through existing external market research channels. But over time, the CIF changed its tactics to deal directly with the sales function to better determine its intelligence needs as well as to develop a partnership to collaborate on new projects and the collection of raw data. The CIF realigned itself to operate largely in concert with the sales and marketing functions, providing early warnings to senior executives of competitors’ new product introductions and marketing initiatives, critical changes in the businesses of the firm’s key clients, and significant legal and regulatory changes.

Contacts

Jim DeLoach
 
+1.713.314.4981
 
Jay Thompson
 
+1.713.314.4923
 

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