Information is Strength and Power. Gathering intelligence is ethical – it is built in the business and essential to success
A business strategy is a set of steps and approaches taken by the management or the ownership of a business to improve performance and revenues. Competitive Intelligence is one of the tools for building a business strategy.
Intelligence and commercial information gathering are at the core of business economical activity, both as basic infrastructure information for creating added values and advantages in the competitive business environment as well as a decision-supporting tool.
Competitive Intelligence, which relies primarily on the collection of basic information on other competitive business entities as well as on potential partners or competitors, is one of the most important tools in the toolbox of businesses and organizations, to survive and succeed in a sometimes very rival business environment.
The use of Competitive Intelligence is vital both for the business at the beginning of its establishment and for a working and active business. Today, more than ever, we see many young entrepreneurs opening businesses hastily without understanding the business world. Using intelligence, specifically at this early stage of evaluating feasibility of a business or any economic initiative is an essential step for success.
Businesses and organizations are operating in an increasingly complex environment that requires them to formulate a picture of relevant data for making current and future decisions in their business activities and even in organizational contexts such as the appointment of employees and management – both senior and junior.
Competitive Intelligence helps evaluate what opportunities are there in the market? Who can we team up with and who is a competitor that can endanger us? Whether the candidate for the position is indeed worthy or may be his CV document overestimate his actual abilities.
All of these – and other key questions – are inherent issues that require exploitation and the use of intelligence methods for the business needs. This, to a point that they have to be routine activity in the day-to-day conduct to any existing or planned business.
Over the years, intelligence in the civil and business context has been associated with deterrent and even negative connotations, because of the past usage of illegal methods. Today, due to developments of legal regulations and the availability of business information in the open market, more than in the past, Competitive Intelligence gathering became acceptable and feasible at an affordable cost or no cost at all. Detailed collection of information is done from available sources, cross-referencing information, in-depth analysis, research, and by carrying complex Competitive Intelligence activities and investigation if necessary
One of the simple definitions of Competitive Intelligence is: "a discipline that enables organizations to reduce strategic risk and increase revenue opportunities by having a deep understanding of what has happened, what is happening, and what may happen in their operating environment". In other words - collecting and analyzing information about a market in which a particular corporation operates, as a basis for making business decisions. Competitive Intelligence includes collecting information about competitor's products, work procedures and elucidating his behavior patterns. It is a systematic and ethical program for gathering, analyzing, and managing external information that can affect your company's plans, decisions, and operations. This is done by collecting information from diverse sources, using a variety of structured analytical techniques.
Moreover, since the external environment is complex and rapidly changing, there is usually expertise specialization and differentiation between departments, therefore a thorough integration within a business is essential. This integration enables cross updates and sharing of important internal information found in the organization and among its employees, to help formulate a snapshot of the situation and an accurate Intelligence Picture for decision making.
Thus, for example, it enables a manager in an organization to obtain business and Competitive Intelligence from both his marketing and sales managers, as well as other functions in the organization and formulate a complete picture that helps him - more effectively - arrive at more informed and intelligent decisions. This is relevant whether or not there is a separation between the marketing manager and the sales manager. This becomes even more valid and important in remote work situations and lack of contact or physical encounter – as we have become accustomed and adjusted to in the coronavirus era and probably will be required in the future as well.
THE USE OF MARKETING AND SALES FUNCTIONS IN AN ORGANIZATION AS "SENSORS" FOR GATHERING INTELLIGENCE FOR DECISION MAKING
Naturally, Marketing and Sales in any business or company are those who meet the external world. They are those who are involved in orders, sales, customer service, tenders, competitors, and target audience analysts as well as exhibitions. All this treasure, consciously and unconsciously, of data and insights may almost always serve as verified or informed data for decision makers. This, especially when it comes to the basic questions of "what's going on out there", what the discourse or interest among the competitors is, customer preferences and so on.
In many organizations, data are also entered into internal business updates and various information systems – whether in a simple customer software of the company, through internal update and alignment systems and organizational knowledge sharing, in functions of data processing for statistical trends or preserving internal knowledge.
In a reality where almost every field has fierce competition, Competitive Intelligence is a valuable resource. Business Development, Marketing and Sales Managers are responsible for collecting relevant information regarding market competitors and pricing, etc. Increasing awareness of the potential of the knowledge they hold, the ability to asses it, arrive at conclusion and share the intelligence value of the data after processing, are key to saving resources and streamlining processes in order to formulate recommendations and decision making.
What are the areas that Competitive Intelligence deals with?
- Potential competing activity and threats
- Feasibility tests and Due Diligences
- Competitive Intelligence - Marketing Strategies of competitors
- Information gathering, analysis and disclosure
- Information about launching new products and services
- Business opportunities and new markets
- Background checks, business reliability, economic activity
- Reliability of partners, employees and candidates
- Economic testing, business stability, resources, credit, rating
- Locating properties and assets
- Discovering embezzlements of employees and partners
Competitive Intelligence –how to do it?
The operation of intelligence gathering and the monitoring capability of the work environment, the competition, various threats, and opportunities can be carried out in three ways:
- Establishing a dedicated function by setting up a unit for a comprehensive solution that is tailored to the exact needs and focus of the organization and the business. It can be managed continuously and supervised closely. The unit can be a part-time job according to the workload or the business need. This solution enables locating and recruiting personnel that suits the organization's preferences, enables information and preferences to be stored without exposure to external factors and parties. It is suitable for those who do not want to pay or communicate with a third party or an external supplier. Choosing this path will require financing inputs, time, recruitment as well as developing or acquiring intelligence acquisition capabilities (mostly products and services available in the market).
- Outsourcing. Contracting with a third-party provider for Competitive Intelligence services. This method enables the attainment of the intelligence needs of the business without adding people to the payroll (for all that it implies). On the other hand – tailoring the need for the business will take longer time and the recruiting process of the best people for the mission is in the hands of the hired supplier. Information and exposure of company needs and preferences will also be exposed to external parties and the work interfaces will be affected by circumstances that are internal organizational. This method is suitable mostly for organizations that can afford the cost or those that are in need of intelligence or information gathering capabilities that are not present or not performed by the ordinary intelligence or investigating companies (such as the use of special private investigators, forensic experts, etc.).
- Increasing the skill/training of an existing team in the business. Such a team will provide an Intelligence Picture and evaluation in addition to its role and thus provide at least a partial solution for the needs of the business. Although this solution is not the most professional and less than ideal, it is suitable and useful for a private family business or a starting business or for those in need of some specific and focused information which does not require a professional expert, and can be obtained without extensive training and cost.
The implementation of the information obtained from Competitive Intelligence dictates the business strategy from which various organizational actions are derived or implemented:
- Change in vision, goals and objectives
- Change in business/organization values
- Change in the organizational structure of the company and its departments
- Definitions change in the role of employees
- Cultural and perceptual change
- Change in workflows
- Different pricing for an existing spectrum of products
- Change in product spectrum
- Mergers & Acquisitions
- Business information received by a retail furniture company in central Israel led the business to understand very well how businesses like them operate, what their conduct is, what their pricing is, and what difficulties they face. This data was invaluable information for them and changed their insights. Consequently, they immediately made changes to the business. As a direct result, the business increased its sales significantly, managed to sustain important organizational changes, streamlined their products, and succeed in the challenging Coronavirus outbreak period.
- Competitive Intelligence efforts in a construction company succeeded to identify that a potential partner was a front man for organized crime. This information was not discovered by the business and marketing departments of the company, neither by the accounting personal or the company lawyers. The company's managers received an outside information about it and refrained from going into the partnership.
In short, the use of Competitive Intelligence beyond its competitive advantage also produces clear savings in money, time, energy, and resources. It is a cornerstone for making adjustments and organizational changes in the face of a changing and dynamic reality and for the realization of goals and objectives. We emphasize that the use of Competitive Intelligence is not a one-time operation, but one that need to be maintained throughout the life of the business. The information, knowledge and business data must flow regularly into a business in order to provide identification capabilities ahead of time, in order to enable it to respond in time to the frequent changes happening in the business environment especially during these challenging times.
Yossi Tal, a veteran of the Intelligence and Security Community with over 30 years of experience in intelligence, security, counterterrorism, and the diplomatic arena. In recent years he has specialized in management and consulting in the fields of security and in the worlds of Competitive Intelligence.
Michal Stein, Organizational and Business Development Consultant (M.A. in Organizational Consulting and Development and MA in Agriculture) who accompanies businesses and organizations for change and growth while providing practical management tools. The owner of "The Bigger Change”. More than 20 years' experience in Management areas.