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Jan 20 / heathgross

Pros and Cons of ‘Do It Yourself’ Competitive Intelligence

do it yourself competitive intelligence

illustration by Cat Scott

I can say with confidence that 99% of companies in the world practice some form of competitive intelligence (CI). It may not be a formal, sophisticated process, but almost all companies have some way of trying to figure out what their competition is up to.

Often when I am explaining what our company does, individuals will tell me, “Oh we do that. My boss had me call all the competitors to try and get their price list.” This is what I call DIY CI, or Do It Yourself Competitive Intelligence.

In some ways doing competitive intelligence yourself is like trying to build a deck yourself:

A few years back my wife and I bought our first home. It was a nice, modest, three bedroom, two bath house on a cul-de-sac. One shortcoming of our new house was the deck; a small, dilapidated structure clinging to the back of our home. At the time I was still employed by Uncle Sam so cash was pretty tight, if I wanted a new deck I was going to have to build it myself. I had helped a friend build a deck once, so I wasn’t completely inexperienced, and, as most men will claim, I am pretty handy with power tools. If I was going to build a new deck, I didn’t just want a boring, run of the mill deck; I wanted something special. I took some time, and some chances, and drafted a nice big deck with an attached, screened-in gazebo. I borrowed some tools from my neighbor and set out in earnest. I’d like to say that my hard work and planning paid off, but the fact is, I am not a professional contractor; it was, after all, a do it yourself project. In the end we ended up with a lopsided, oblong octagon gazebo with a crooked roof and a door that scraped when you tried to open it. (To my credit, in addition to being fairly inexpensive, it was also pretty sturdy.)

Every company has competitors. Even if no one else does exactly what you do or makes exactly what you make, you still have competitors. Knowing what your competitors do, what they sell, how they sell it, how much they charge and what they are going to do next is important. Understanding even just these basic things about your competition will enable you to better position your company. Should you add a new product? Change your prices? Adjust your marketing? It is very difficult to compete in any market if you don’t know what the other players in that market are doing.

This is a pretty basic concept, of course. But how do you get that information? Oftentimes managers know what they need to know, but don’t know exactly how to go about getting it. In the absence of a formal process for gathering competitive intelligence they typically just task someone to ‘get’ the information. Because of requests like this there are probably 50,000 people online right now Googling their competition: browsing their competitor’s website, poring over financial reports, surfing through message boards, and sifting through press releases.

There are both pros and cons to DIY CI. Let’s talk about the pros first.

PROS OF DIY CI

  • It’s cheap.
    If your company or department does not have a budget for competitive intelligence then the easiest way to get information on your competitors is to do the research yourself, or have a staff member get it. You are leveraging the resources you have available and, in some cases, that may be your only option.
  • It’s fast… usually.
    Browsing a competitor’s website and reading through their quarterly reports does not take long. With a little practice and perseverance you can put together a very high level snapshot of a competitor in less than a day. That’s pretty fast. Of course the devil is in the details; there are limits to what you can learn with this approach. One pitfall to avoid here is what we call the rabbit trail. It is very easy to get so caught up in following every little twist and turn, every subtle hint of information, that before you know it you look up at the clock and realize you have just spent an entire day Googling a competitor and all you have to show for it is 120 bookmarks and a lot of disconnected bits of data. This is not intelligence and is seldom helpful for planning strategy.
  • It’s better than nothing…usually.
    Knowing a little about your competition is better than nothing at all. Trying to run a business without knowing your competition is just plain dumb. At the very least, DIY CI can provide you with a basic snapshot of your competition. If nothing else, this overview will help you identify your knowledge gaps, facilitating more efficient follow-on research.

CONS OF DIY CI

  • Limited Information.
    What happens when you can’t find the information you want through Google? What if your competitor does not publish their price list? What if their quarterly report does not say when they plan to open the new plant or how big it will be? This brings us back to where I started with this post.
  • It’s unethical.
    People often tell me how they ‘just called their competitor and pretended to be a customer’. This is a great idea in theory, but also highly unethical and, in some cases, even illegal. What I just described is known as pre-texting which was outlawed under the 1996 Economic Espionage Act. To some this might just sound ‘resourceful’ or ‘shrewd’, but by claiming to be someone you are not for the purpose of gathering information, you are in fact putting yourself and your company at risk of being sued, or worse, prosecuted. What I tell my clients is ‘there is nothing you are going to get by breaking the rules that is worth the risk.’

    So what does this mean? It means that a company conducting competitive intelligence internally should limit itself to secondary research, which unfortunately, as I have already pointed out, has severe limitations.

  • Lack of expertise.
    It is one thing to spend a day Googling your competition and building a nice little PowerPoint deck for your boss that provides an overview of your competition, but how useful is that? Believe it or not, there are big, multinational companies that make game-changing strategic decisions based on little more than the PowerPoint overview I have just described. DIY CI is limited by the expertise of the individual doing the research and the means that they have to gather the information.

As a competitive intelligence firm, we do not provide our clients with just data, or information; we provide them with intelligence. Intelligence is actionable, it is insightful. What we provide our clients is forward-looking and predictive. It is based on fact and analysis, not speculation and projections. Do you see where I am going with this? DIY CI can seldom produce the level of depth or granularity that you will need to make well-informed tactical and strategic business decisions.

If you can’t convince your boss or your senior executives to give you the budget you need to do real competitive intelligence, then it is imperative that you explain the limitations of what you can legally and ethically do within your skill set. If you really want to know what your competitors are up to, what they are doing today, and what they plan to do tomorrow, then you need primary competitive intelligence. Hiring a professional competitive intelligence vendor might help you avoid building a lopsided business strategy with crooked walls and a door that scrapes when you try to open it.

Note: DIY CI does not refer to companies that have sophisticated internal competitive intelligence functions. Generally these CI functions are responsible for overseeing the secondary research efforts, managing CI vendors, interfacing with internal clients and conducting tactical and strategic level analysis on the competitive intelligence that is collected.

Mar 4 / heathgross

CI in short: What is Competitive Intelligence?

competitive intelligence in short

What is competitive intelligence and why should businesses use it?

Learn all about competitive intelligence in this fun but informative video.

Video not displaying? Click here to view it in YouTube.

Jan 6 / heathgross

See No Evil, Hear No Evil, Speak No Evil

See No Evil, Hear No Evil, Speak No Evil

illustration by Cat Scott

This is a picture of why many companies and products fail. How is it that a company with a multi-million dollar market research budget can get caught off guard? I will tell you how.

Several years ago I was doing contract competitive intelligence (CI) work for a CI firm. The firm had contracted me to provide primary research support on a project for one of their clients, a major pharmaceutical and biotech company. The project lasted almost a year. During that time I learned some very valuable, albeit disturbing, things about how some companies think and act. Since then I have witnessed this same problem in many of the companies I have come into contact with, from small, nimble, start-ups, to large, multinational conglomerates. It’s what I like to the call the See No Evil, Hear No Evil, Speak No Evil Phenomenon.

This is what happened. (I am omitting a number of details in order to protect the ignorant)

The client was developing a new vaccine, a vaccine for which there was no current competitor on the market. The company had already spent millions of dollars in development and was quickly approaching the pre-launch phase of the program. The vaccine had the potential of being a multi-billion dollar vaccine… but there was one problem. The problem wasn’t the science, it was sound. It wasn’t the market, the market was ready. It wasn’t even with the regulatory authorities; the FDA had already given subtle indications that a vaccine of its kind would be given a fair and speedy review. The problem was that the company was not alone. A rival biotech company was speeding along, neck-and-neck, with the development of a competitor vaccine. It was a race to the finish line.

The first part of my job was to talk to Key Opinion Leaders and provide feedback on how they felt about the two vaccines. By the time I got involved it was already clear to many in the industry that the client’s vaccine was slightly inferior. This was not good news to the client, though it surprised me that this was the first time they were hearing this news since both vaccines had been under development for several years.

My second objective was to determine what the launch timeline was for the competitor’s vaccine. If the client’s vaccine could get to market first, it could establish a strong market presence, limiting the scientific advantage of the competitor vaccine. However, after interviews with a number of key competitor stakeholders, I learned that the competitor program was right on schedule and might even beat the client’s vaccine to market!

My next objective was to provide ongoing monitoring of the competitor. I was to provide up-to-date competitive intelligence on the clinical trials, regulatory status, and pre-launch marketing activity of the competitor’s vaccine. This, as you will see, proved problematic: Not because I couldn’t get the intelligence (I did), but because of the See No Evil, Hear No Evil, Speak No Evil Phenomenon.

This is what I learned.

Problem 1 – See No Evil: The product managers, scientists, and marketing personnel driving the program for the client had never bothered to pull their head out of the sand and look at the world around them. For several years they had been developing their vaccine in a virtual vacuum, paying little attention to what their competitors were doing. They did not see simply because they were not looking.

Problem 2 – Hear No Evil: By the time I got involved in the project there was a growing minority of client employees that had begun to peek through the hands covering their eyes; what they saw concerned them. My reports were very clear: The client was losing the race and something drastic had to be done, and it had to be done quickly. But by the time the product management team began to voice their concerns, the executive team would not listen. They had spent millions on development and were sticking to their course. It was the blind leading the deaf.

Problem 3 – Speak No Evil: The CI firm that had contracted me had been working for this client, providing competitive intelligence monitoring, long before I was brought on. They had read the writing on the wall just as I had, but they had failed to sufficiently warn the client. It’s not that they were negligent in their duties; the reports contained all the facts. Anyone on the client’s side that would have opened their eyes or their ears could have seen and heard the warning signs. But they didn’t. And the CI firm did little to persuade them. This was one of those instances where the CI firm needed to grab the client and shake some sense into them (metaphorically, of course). But that would have been risky, that could have meant possibly losing the client. So, they did their research, typed up their reports, and said very little, and quietly watched as the client poured millions of dollars into a vaccine race that everyone knew they were going to lose.

And lose they did.

So what is the moral of the story?

For product managers and those mid-level executives charged with bringing a new product to market, or defending an existing market position: Open your eyes! Pull your head out of the sand! Ignoring the world around you will not make it go away. Rest assured, if you have a good idea, there is a very real chance someone, somewhere, is already working on it. Hire yourself a good competitive intelligence firm and find out what the competitive landscape looks like. If you are already doing competitive intelligence, then read the report and ask your vendor what they really think.

For executives: Open your ears. There is a good chance that someone, somewhere in your company is warning you of the impending iceberg. Someone in your company has a better understanding of your competition than you do. Listen to them. If there is no one in your company that can provide you with a comprehensive view of your competitive landscape, then that means no one is doing competitive intelligence. Find yourself a vendor you can trust, one that not only does great research, but one that will be objective and candid (I personally think that my firm, Sedulo Group, is your best choice, but for a list of other vendors visit the SCIP website). Hire them…and listen.

For Competitive Intelligence Firms: Yes, our job is to answer our client’s questions, but sometimes our clients don’t see or hear the world around them and, therefore, are not asking the right questions. You may be doing your job while at the same time doing your client a disservice. If and when you see your client heading down the wrong path, when they won’t open their eyes or ears, it’s your responsibility to grab them (again, metaphorically of course) and shake some sense into them.

Warning: I practice what I preach, and I can personally attest that there is risk involved here. Look for my post Getting Fired Never Feels Good to read what happened when I tried this recently with a client.

Every day companies are losing business because they don’t see, because they don’t hear and because no one is telling them what their competition is doing or plans to do. Don’t fall victim to this phenomenon: Open your eyes, open your ears, or, pick up the phone and call me – I will candidly tell you exactly what your competitors are up to.

Jan 3 / heathgross

The Four Disciplines of Competitive Intelligence

Four Disciplines of Competitive Intelligence

illustration by Cat Scott


When I first got involved in the competitive intelligence (CI) industry, I assumed that competitive intelligence was synonymous with primary research.

It was not until I attended my first SCIP conference that I learned that there was more to competitive intelligence that just primary research; there were in fact a number of disciplines that fell within CI that I knew very little about. Of course, that was a long time ago. Since then I have developed an understanding and appreciation for all of the disciplines that make up the competitive intelligence industry. What’s more, I believe that all four disciplines, working together in concert, are required for an effective competitive intelligence program.

Let’s take a brief look at the four disciplines.

  1. Secondary Research CI is a discipline that uses a number of methodologies to sift through various published sources in order gather information (data) about a competitor or industry. These sources include online search engines, company financial reports, public records, periodicals, job boards, social media sites, syndicated reports, etc. Secondary Research is valuable in that it enables a company to gather large volumes of data very quickly. When used properly it can also provide a tool for monitoring an industry or competitor’s activity on an ongoing basis (though it is limited to monitoring activity that has been made public).
  2. Technology CI generally refers to software developed by third party vendors, or in-house solutions, that are designed to help store, process, and analyze competitive intelligence information. Some of these systems are designed specifically for CI, while others are designed for broader applications but can be used to support the competitive intelligence process (SharePoint is a good example of this). While these systems can be very beneficial in supporting the competitive intelligence process, the software itself does not conduct research, it merely helps store, process and analyze information.
  3. Competitive Intelligence Consulting is more of a general term that I use to describe all of the soft services that help a client utilize competitive intelligence. Consulting services could include war games, scenario planning, product launch strategies, etc. Essentially, CI consulting is about taking the intelligence that has been gathered and figuring out how it impacts the company’s business decision or objectives. It also includes operational elements of competitive intelligence such as CI Program Audits, Counter-CI Evaluation, and Training and Best Practices Assessments. Like CI Technology, CI Consulting does not gather information, though it can be used to transform raw data into intelligence. Good CI Consulting can help paint a picture of what a competitor is likely to do based on analytical projections.
  4. That leaves us with Primary Research Competitive Intelligence. Primary Research is the process of gathering information directly from individuals who have access to the information one needs. Unlike secondary research, primary research does not focus on published information. Primary research sources could include competitor employees, competitor vendors and suppliers, competitor customers, etc. While primary research can address questions about past and current activity, the primary goal is to learn about what the competitor is going to do: ‘what are the intentions and plans of the company?’

The four competitive intelligence disciplines together can provide a company with an accurate and detailed view of the competitive landscape, enabling one to better understand the past, current, and future activities of competitors. Primary research should be the cornerstone of any competitive intelligence program. Without primary research, you may know what your competitors have done, but you have no real way of knowing what they will do next.

For more on this, read Are You Driving Your Business Blindfolded?, and check back for Primary Research: Seeing the Future.

Dec 30 / heathgross

Is Competitive Intelligence The Same As Spying?

Is Competitive Intelligence the same as Spying?

illustration by Cat Scott

When I am at a dinner party and someone asks me, “What do you do for a living?” I often find myself hesitating, searching for an easy and understandable explanation of exactly what it is that I do. I have had this conversation literally a thousand times:

“So what do you do?”

“I run a global competitive intelligence consulting firm.” I throw “consulting” in there because in fact that is what we do…and because it sounds credible.

“Um, I see. So what is ‘Competitive Intelligence’?”

This part I have rehearsed over the years so it comes very naturally, maybe a little to mechanical sometimes, “Well, basically, if a company wants to find out what their competitors are working on, they hire us to find out.”

At this point I can actually begin a silent countdown in my head as I watch them processing this information.

3…

The response is always the same.

2…

Here it comes.

1…

A smile, then a flash in their eyes as the false realization sinks in, “Oh, so you’re a corporate spy!”

Boo. Wrong. Not at all, you dummy. That is what I think but not what I say, of course. What I say is much kinder but perhaps a little over simplified, “Well, sort of, except that we have strict laws and ethics that we have to follow.”

Okay, so I won’t be given any awards for the most concise and accurate definition of competitive intelligence, but keep in mind, this is a dinner party conversation we are talking about. If given more time, and under the right circumstances, I would say this:


Competitive Intelligence (CI), as an industry, is not that unlike market research. In fact, in many companies the CI function falls under the market research budget and organizational structure. However, most of these companies limit their competitive intelligence activity to secondary research (find out more on this in The Four Disciplines of Competitive Intelligence.) Secondary research relies on leveraging published data via the internet, periodicals, public records or syndicated reports, in order to construct a profile of a competitor. This type of research is very benign and few people would have any qualms with the ethics or legality of Googling information on your competitor in order to gain some insight.

The rub usually occurs with primary research competitive intelligence. Primary research competitive intelligence refers to research that involves direct contact (in person, on the phone or via email) with individuals for the purpose of gathering intelligence about a company, product, or an industry. Generally, this direct contact is focused on individuals with first-hand access to the information the researcher wants to know. Unlike qualitative market research, the purpose is not to gather opinions about a topic from a thought leader, but instead, to gather facts from key stakeholders and decision makers.

There are two potential ethical and legal pitfalls here:

  1. That often the best sources for this kind of information are actual competitor employees, and there are legal and ethical guidelines on what a researcher can say or do in order to get this information. I won’t go into all the details here, but in simplest terms, a researcher must use his or her real name and they may not falsify their place of employment. In other words, a researcher cannot call a company and claim to work for IBM or Techtrend unless of course they actually work for IBM or Techtrend.
  2. That legally they cannot gather information that has been clearly designated as confidential, even if the information was collected inadvertently.

Early in my competitive intelligence career I had a colleague and mentor tell me, “Getting the information is easy if you cheat, but we don’t cheat. We do it the right way because we are professionals.” I use this statement often when training new competitive intelligence analysts. If you are willing to lie and make false statements then it is not hard to get whatever kind of information you want – but at what risk? Competitive intelligence professionals understand that the risk is not worth it. By gathering information unethically or illegally you put yourself and your client at great risk, a risk far greater than any benefit they may gain from the information you gathered inappropriately.

To avoid these pitfalls, primary research competitive intelligence professionals use techniques that enable us to gather information directly from stakeholders without breaking the rules. It is harder, and it takes longer, but in the end the intelligence is reliable and risk free. Sometimes it means that we have to make a hundred phone calls in order to talk to ten people, and seldom will any one of those people tell us everything we need to know. However, each person can provide a piece of the puzzle that when assembled gives us the whole picture.

Competitive Intelligence is not spying. Yes, there are those unscrupulous individuals that break the rules; every industry has those. Competitive intelligence professionals are consultants that have developed techniques that enable us to ethically and legally provide a client with detailed and accurate insight into a competitor’s activity, plans and motives. We can do this legally, ethically and… without spying.

You can see why I keep it short at dinner parties.

Dec 27 / heathgross

Are You Driving Blindfolded?

driving blind

illustration by Cat Scott


IF YOUR COMPANY IS NOT DOING PRIMARY COMPETITIVE INTELLIGENCE RESEARCH THEN YOU ARE DRIVING YOUR BUSINESS BLINDFOLDED!!!

I have read various reports that estimate that about 30% of companies worldwide have a formal process for gathering competitive intelligence (CI). My own informal research leads me to believe that less than a third of these companies are actually using PRIMARY research.

Primary Research is the process of gathering information directly from individuals who have access to it. Unlike secondary research, primary research does not focus on published information. Primary research sources could include competitor employees and former employees, competitor vendors and suppliers, competitor clients and customers, etc. While primary research can address questions about past and current activity, the primary goal is to learn about what the competitor is going to do; ‘what are the intentions and plans of the company?’ This is why Primary Research CI is the only way to really know what your competitor, and therefore the market, is going to do next. It is the only way to drive your business without a blindfold!

What’s the difference? Competitive Intelligence can be broken down into four, very distinct, disciplines:

  • Secondary Research CI
  • CI Technology
  • CI Consulting
  • Primary Research CI

One could easily make the argument that all four disciplines, working together in concert, are required for an effective competitive intelligence program. However, I would argue that only one of these disciples, Primary Research CI, can truly provide you with accurate, forward looking, intelligence.

Read The Four Disciplines of Competitive Intelligence for more on this.

I will say it again: Primary CI research is the only business discipline that can provide a company with accurate, forward-looking intelligence. All other disciplines – market research, secondary research, tactical and strategic analysis (consulting) – rely on gathering and analyzing data about what has already happened. Using a number of fancy tools, models, and technologies, this historical data can be used to try and predict what a competitor will do next. The methodology and techniques behind this practice are sound; the results can be both insightful and beneficial to a company. However, they still fall short in that they are merely projections; predictions of what could happen based on what has happened.

What this means is that if you are relying on market research, secondary CI research or CI software alone, you can’t accurately see what is in the road in front of you. Would you drive down a road blindfolded, making decisions on when to turn, or break or accelerate, based on the road behind you? Of course not! Yet that is exactly what most companies do every day. They are making tactical and strategic business decisions without really knowing what their competitors, and therefore the market, are going to do next. They are driving their business blindfolded!

What if you could just call up a competitor and ask them what they plan to do? What if you could ask their head of sales what market they plan to expand into? What if you could ask a product manager what the new product will look like and how it will function? What if you could ask the senior scientist how the new product testing is going? Well, you can. It’s called primary research competitive intelligence. The only way to really know what a competitor plans to do is to pick up the phone and ask them.

WARNING: Consult a professional before attempting to conduct primary research competitive intelligence.

I should point out here that there are both legal and ethical rules regarding how primary research is conducted. We have all seen the disclaimers on television that warn viewers that the activities were conducted by professionals and should not be attempted at home. The same could be said of primary research CI. Check back for my post Amateur CI: Pros and Cons for more on this.

Dec 23 / heathgross

Competitive Landscape

Generally, a competitive landscape refers to a product produced through competitive intelligence collection and analysis. A competitive landscape is a comprehensive view of an industry or industry segment, with particular focus being placed on the competitors in the space. A competitive landscape usually includes competitor profiles as well as an in-depth analysis of the trends impacting the industry. At times Competitive Landscape and Environmental Scan are mistakenly used synonymously; whereas a competitive landscape is a comprehensive study of a competitive set, an environmental scan is a high level overview of an industry, competitor, or product or service.

Dec 22 / heathgross

Secondary Research

Secondary Research Competitive Intelligence is a discipline that uses a number of methodologies to sift through various published sources in order gather information (data) about a competitor or industry. These sources include online search engines, company financial reports, public records, periodicals, job boards, social media sites, syndicated reports, etc. Secondary Research is valuable in that it enables a company to gather large volumes of data very quickly and efficiently. When used properly it can also provide a tool for monitoring an industry or competitor’s activity on an ongoing basis (though it is limited to monitoring activity that has been made public).

Dec 21 / heathgross

Primary Research

Primary Research is the process of gathering information directly from individuals who have access to it. Unlike secondary research, primary research does not focus on published information. Primary research sources could include competitor employees and former employees, competitor vendors and suppliers, competitor clients and customers, etc. While primary research can address questions about past and current activity, the goal is to learn about what the competitor is going to do; ‘what are the intentions and plans of the company?’ This is why Primary Research CI is the only way to really know what your competitor, and therefore the market, is going to do next.

Dec 20 / heathgross

Competitive Intelligence

Wikipedia Definition
A broad definition of competitive intelligence is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization.

A more focused definition of CI regards it as the organizational function responsible for the early identification of risks and opportunities in the market before they become obvious. Experts also call this process the early signal analysis. This definition focuses attention on the difference between dissemination of widely available factual information (such as market statistics, financial reports, newspaper clippings) performed by functions such as libraries and information centers, and competitive intelligence which is a perspective on developments and events aimed at yielding a competitive edge.

My Definition
Competitive Intelligence (CI) is intelligence that is specifically adapted to the commercial world. It is a systematic, ongoing business process to ethically and legally gather intelligence on targets such as customers, competitors, personnel, technologies, and the total business environment. (I can’t claim total credit for this definition, I have used it for some time and modified it over the years. I like it because it is concise and to the point)