Over the last year or so, we've been working hard to help companies throughout Atlantic Canada understand more about how to make strategic decisions with confidence through competitive intelligence.
As part of that, we’ve put together a few terms that you may or may not know. Let us know how you make out! How many do you know?
Competitive Intelligence is the process of monitoring the competitive environment and analyzing the findings in the context of internal issues, for the purpose of decision support. (www.scip.org)
In other words: This is really understanding what's happening around you, putting it into the lens of your business and then using that to make effective decisions. Simple, right?
I also really liked this description from Cipher:
"To understand competitive intelligence, let’s consider an example of intelligence on board a ship. The captain of a ship in the ocean cannot worry about only what occurs on board. In order to stay on course and avoid rough waters, uncharted territory, or unforeseen dangers, the crew and the captain need to also keep a close eye on the surrounding environment and changing conditions. Are there any threatening ships in the distance? Is the ship on the charted course? What lies ahead? In order to navigate effectively attention needs to be focused within the ship and without."
Early warning systems are systems to detect events (or potential events) before they happen, to allow a company to respond with appropriate action.
In other words: Early warning systems basically say, “If this happens, then we know in a given period of time that it means this other thing will happen.” While not a crystal ball to the future, you can use something like this to let you know that a competitor is likely to launch a product that competes directly with yours. One such signal might be that they hire someone with the expertise needed to make your product (or something similar). If they start to hire a team to do this, this likely reinforces the possibility. Depending on your industry and how long it takes to develop a product, that’s basically a warning shot to you.
Key Intelligence Topics (KITs) - These are the key questions that you are trying to answer about what’s happening outside of your organization. The “what you need to know” to be successful. These can either be one-time projects or ongoing.
In other words: At any given time, you’ve probably got 10-25 key things you’re wrestling with. “What is my competitor doing?” “What is happening in the market?” “What product should I develop next?” “Where should I export?” These questions - if they’re REALLY important to your organization and will help drive a decision - can be key topics for your company. This doesn’t have to be crazy: Microsoft (as big as they are) have only 10.
Key Intelligence Questions (KIQs) are the specific questions you are trying to understand within a given topic.
In the example below, if the KIT is competitor reaction to a new product, your KIQs might be:
1. What are they currently spending on R&D? Has that changed in the last 3 years?
2. Who are they hiring (and what salaries come with that)?
3. What's their current cash flow situation?
Portfolio and Strategy
4. What current products do they have? Will they respond to our new product? Or, have they always had the same products?
5. Where is their product in terms of market maturity and adoption? What percentage of the market do they hold?
Senior Management Orientation
6. Are the senior leaders risk averse or risk-takers?
7. What actions and decisions have they made in the past?
8. Where do they fall in a Myers-Briggs assessment? What does this tell you?
While those are just a few examples of questions that may be applicable, you start to see how
Information – This is data that can be gathered from either primary sources (people) or secondary sources (published information). This information can be either inside your organization or outside.
In other words: As you can see from the graphic below, information comes in from all directions and you can't really act on it, until you've made it into intelligence by really understanding it.
Intelligence – This is data that has been evaluated and interpreted through the lens of your company or organization.
In other words: This is data that has been evaluated, organized and made actionable. See competitive intelligence, above.
Market Insights - “It's a new understanding of change that makes a difference” to decision making, thinking and action.” – Liam Fahey
In other words: This is yet another term for competitive intelligence that you will hear from time to time. Different words, same concept!
Open Innovation – When you bring customers, suppliers, and other stakeholders into your intelligence and innovation process to help in what you’re doing.
In other words: This is really about being open and honest with those around you, and laying your cards on the table. While you might think this sounds a bit scary, companies like GE, Samsung, Lego, P&G, Quirky and others do this. Closer to home, companies like Atlantic Lottery Corporation hold public hackathons to come up with new ideas and many companies, including Fitiv, ask trusted users for input on future products. These are both examples of open innovation.
Primary Research – When you conduct surveys, in-person interviews, focus groups or otherwise gather information from people. This can be internal within your organization or external.
In other words: If you are speaking to a person, you are conducting primary research. Often, we do this informally, but this can become really powerful for businesses when done with a solid process.
Secondary Research – When you gather information from the internet, books, documents or other written assets. This can again be internal or external.
In other words: Secondary research is often a great way to gather data and is best used along with primary research. The two complement each other very well.
How many did you get? Any surprises in there for you? Still have questions on this?
Click here to connect with Jonathan Dunnett - he'd be happy to chat with you via email, phone or in person!