Curbing competitive intelligence dissapointment

If you see two competitive intelligence folks talking to each other, you can guess the conversation. One is telling the other about how the Big Boss has just paid them a visit. The BB had heard some very juicy, surprising, and disturbing news. The BB had come down to inquire how they’d happened to miss the briefing on this item. The CI guy had to explain he’d heard nothing about it. The BB replied with the obvious: Why do we have you here if you’re not going to find this stuff out for us?

I suspect everyone who’s ever done competitive intelligence work has had this moment, probably many times. CI is often sold as an asset that will prevent surprises, and when surprises still happen it’s no wonder those in charge ask why.

The problem isn’t that CI is ineffective, it’s that it’s not implemented properly.

I think the problem is that while CI can help with surprises, the mechanism is different than people often expect. First, let’s look at the method that doesn’t work. The one that grew out of traditional military thinking.why the traditional thinking doesn’t work so well for business.

CI grew out of military intelligence, and much of traditional CI doctrine comes from that history. After all, business is war, right? Well, not really.

In the military intelligence is gathered at the bottom. The folks in the field, the people observing the enemy, people sifting through data gathered from everywhere. It has to be this way, because the leadership of opposing sides either isn’t talking to each other, or isn’t saying much if they are. After all, if they got along they probably wouldn’t need to spy on each other quite so much, right?

So intelligence is gathered at the bottom, analyzed in the middle, and presented to the top. Obama isn’t on the ground in Afghanistan, so he’s got to rely on the people who are.

Business has a better mechanism.

Opposing leaders not only chat with each other on a regular basis – through trade associations, trade shows, charity work, and other occasions, they probably have a rapport with each other. They probably have much in common. Business is not war – the leader we vanquish tomorrow could show up as the CEO of our best customer tomorrow – and everyone knows this. This is the reason that the traditional bottom-up CI mentality is probably going to fail in being the source of all new juicy stuff. It’s not that it is inherently flawed, it’s that there is a more effective mechanism at work int he business world.

Who has a better chance of hearing of a possible new direction or intention? The guy who’s got a rapport with the target CEO and is having dinner with him tonight, or or someone a few layers down who might hear the same news as a rumor filtered downward through the target chain of command, and back upward through their own COC?

That’s why the BB is hearing about it first. That’s not a bad thing, and once it’s understood a CI effort can be rearranged to provide much better value.

In business CI is better seen as a tool for understanding and validating what is learned, not as the source of learning.

Traditional or not, CI folk do have good means to sift through data, consider many facts from disparate sources and validate what is coming in.

Upon hearing something new, the BB shouldn’t be concerned that she heard it first. Instead she should be happy she’s got a CI team who has the time to investigate it, validate it, and tell her what it really means. Was this real? Was it a trial balloon? Or was it just a little polk to get a rise out us?

Leaders need to realize they not just consumers of intelligence, they’re sources of it.

Until they realize this, and leverage it, they will be disappointed.

Export data – useful for estimating market size

In my recent article about estimating market size, I mentioned that one tip is to determine if you really need to know an exact market size, or whether you just need to know if it is big enough.

This was exactly the situation when a member called asking about a particular equipment category. They were considering a new product effort, but needed to know whether the market was large enough. While he started out asking for exact numbers, once I provided some useful export data relative to the product cateogry he was able to make his decision quickly – the numbers were an order of magnitude above the minimums he needed, so it was a go.

You can get this data from the government for free at some level, but if you want to go to specific harmonized system codes you will probably need to pay. If you belong to a trade association, they may be able to provide it for you as AEM does for its members.

The data may or may not be very specific. Some harmonized codes, the system of codes for identifying different items, are quite specific, and some are quite broad. Usually there will be total dollar value, and then a supplemental unit. This is often weight, but for equipment it is often units. This is usually the more useful number.

However, if only dollars or weight is available, and average price or weight can be used to get an estimated number of items. You don’t need to be terribly accurate to get within an order of magnitude, and in this context that should be accurate enough.

New data available: Construction, Agriculture Equipment Export Data

We’ve now put a few new products on the AEM store – namely our Global Markets Export reports.These cover construction equipment exports and agricultural equipment exports

Construction Global Markets Report $59/quarter ’96 This report contains US export data for a number of construction related items, including:

Top 5 countries receiving US exports
Emerging markets
Total exports & imports by region
Top 10 countries US Imports equipment from
Total exports, and units & export value for the top 25 countries for:

  • Lifting Equipment
  • Air compressors
  • Backhoes
  • Bulldozers
  • Concrete mixers
  • Cranes
  • Crushing & Screening Equipment
  • Ditchers & Trenchers
  • Dumpers, Off-highway
  • Earthmoving Equipment
  • Excavators
  • Aggregate Bituminous, Concrete & Compaction Equipment
  • Graders & Levelers
  • Wheel Loaders
  • Light Equipment
  • Pavers/Finishers/Spreaders
  • Scrapers
  • Concrete Saws
  • Aerial Work Platforms
  • Compactors
  • Tampers
  • Generator Sets

Agriculture Global Markets Report $59/quarter ’96 This report contains US export data for a number of construction related items, including:

Top 5 countries receiving US exports
Emerging markets
Total exports & imports by region
Top 10 countries US Imports equipment from
Total exports, and units & export value for the top 25 countries for:

  • Combines
  • Tractors & Parts
  • Sprayers & Irrigation Equipment
  • New Tractors
  • Harvesting Machinery
  • Dairy/Milking Machinery
  • Cultivating Machinery
  • Components

This is in addition to the equipment industry wage and benefit survey data, along with our industry conditions survey data.

What should SCIP do?

A while back Ellen asked me to suggest what scip should do.

I’ve thought about this for quite a while, and until I read SCIP’s mission and goals, I really couldn’t articulate what was wrong. Having read them, now I can.

When I read SCIP’s mission and goals, it’s clear to me that there’s not much focus on increasing value for members or their employers. Instead the focus is on increasing recognition for SCIP and CI. The problem is that without value there isn’t anything to recognize. I left SCIP because it stopped adding value to me and my employer and became impossible to justify.

Things like certification, codes of ethics, and having a Body of Knowledge sound good, but they don’t help members or their employers thrive or even survive.

Consider what SCIP stands for: Society of Competitive Intelligence Professionals. The emphasis is on the professional, not the profession. Compare that with ASQ, or AMA, or BMA.

When I used to work for a ~100 million company, I was asked to create a CI function. It was in conjunction with pricing, not a dedicated position. A sensible move. Based on the reactions I got from others, and observations, I think it’s pretty odd to have a formal CI effort in a company that small, let alone a dedicated person. But for the sake of argument let’s say that $100 million is the minimum company size to have a dedicated CI professional. $100 million companies and larger account for about .2% of the total number of companies out there – an unneccessary limit on market size, and a huge loss in potential value to bring.

Focus on the value created by the profession, not the recognition of the profession.

Let’s look at a few graphs. First, competitive intelligence’s popularity as a search string in google:

A decline. Not usually the sign of something that is increasing in value.

Let’s compare with business intelligence (red line):

Ouch! A nice reality check. I tend to think of business intelligence folk as IT report writers, but really it’s understanding your business and companies are interested in that.

Then let’s add market research:

Ok, no wonder when you say competitive intelligence most people say ‘Huh?’ Competition is only part of one’s market so we shouldn’t be surprised. Also notice the downward trend, even in market research.

Google trends is not the final word, but I think the data are useful because they help put things in perspective. CI can be useful, but it’s not a solution. It’s part of the solution, and a part that needs to earn its keep.

The most valuable stuff I ever did in CI fed middle managers who used to make profitable decisions almost immediately. It was also some of the cheapest & easiest stuff I did. It wasn’t glamorous, and it didn’t even brush against the c-suite, but it didn’t need to. There needs to be a strong focus on creating value whereever possible. If the value’s there, the recognition will follow.

The value needs to be accessible. Real world stuff that non-PhD, non-ex-CIA people can do and it needs to address the needs of companies that exist in large numbers. This means small companies who will NEVER have someone do CI full time. Pharma, insurance, aerospace and giant consumer products companies have a strong interest in CI, t the CI approaches & budgets of those companies are irrelevant to 99% of the companies out there. They’re not a useful example to anyone but their peers.

So what to do?

How about this mission and these goals:

Mission: SCIP will show companies how to enable better decisions through competitive intelligence by educating their staff, providing guidance in ethics, and enabling them to learn from the community they form through SCIP.

Goal 1: Make CI accessible to more companies

  • Increase the usage of CI by smaller companies through education and outreach.
  • Create membership opportunities aimed at the part-time practitioner.

Goal 2: Increase the value CI brings

  • Education practioners on how to identify and communicate the value intelligence brings to decision making.
  • Educate practioners on how to identifiy and anticipate situations where intelligence can bring value.
  • Educate practioners on how to obtain the intelligence they need to bring value.