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BEST PRACTICES IN MANAGING A CI FUNCTION June 6, 2007.
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Transcript of BEST PRACTICES IN MANAGING A CI FUNCTION June 6, 2007.
BEST PRACTICES IN MANAGING A CI FUNCTION
June 6, 2007
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GOALS AND OBJECTIVES
• Provide an overview of competitive intelligence, what it is and what it is not
• Description of how competitive intelligence is used within an organization
• Competitive Intelligence Usage Survey Results
• Instruction on the basics of a competitive intelligence process
• Overview of best practices from our experiences with clients in managing a competitive intelligence function
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AGENDA
What is Competitive Intelligence
The Uses of Competitive Intelligence
Competitive Intelligence Usage Survey Findings
The Competitive Intelligence Process
Best Practices in Managing the Function
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WHAT IS COMPETITIVE INTELLIGENCE?
Knowledge and foreknowledge of the competitive Knowledge and foreknowledge of the competitive environment — the prelude to decision and environment — the prelude to decision and action.action.
Competitive Intelligence:
The organizational means by which information The organizational means by which information is systematically collected, analyzed, processed is systematically collected, analyzed, processed and disseminated as intelligence to managers and disseminated as intelligence to managers who can act on it.who can act on it.
Competitive Intelligence Process:
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WHAT COMPETITIVE INTELLIGENCE IS NOT
• Traditional competitive studies
• News clipping service
• Databases / data warehouses
• Market research
• Knowledge Management
• Unconnected pieces of data
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– John Naisbitt
We are drowning in information but starved for knowledge.
“
”
CHALLENGES IN CI
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CI TRANSFORMS DATA/INFO INTO INTELLIGENCE
Data Unconnected Bits Employment at the site dropped from
1100 to 950
Information Knowledge build by
looking at several data points
They implemented new labor-saving
technology
Intelligence The implications of
the organized information
This gives them th e ability to ノ
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INTELLIGENCE IS EXTERNAL
“(I)t can be argued that the information revolution has caused managements to be less well informed than they were before . . . (T)he most important changes affecting an institution today are likely to be the outside ones, about which present information systems offer few clues.”
— Peter Drucker, “A Survey of the Next Future,” The Economist, 11/3/01
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COMPETITIVE INTELLIGENCE IS NOT LIMITED TO COMPETITORS
CI GroupCI GroupCorporate Corporate Security Security ThreatsThreats
TechnologyTechnologyDevelopments Developments
& Sources& Sources
Political, Political, Economic, Economic,
& Social & Social ForcesForces
Markets & Markets & CustomersCustomers
Competitor Competitor Capabilities, Capabilities,
Plans, & Plans, & IntentionsIntentions
Industry Industry Structure & Structure &
TrendsTrends
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AGENDA
What is Competitive Intelligence
The Uses of Competitive Intelligence
Competitive Intelligence Usage Survey Findings
The Competitive Intelligence Process
Best Practices in Managing the Function
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USES OF COMPETITIVE INTELLIGENCE
Defensive
• To provide early warning of new competitors or disruptive technologies
Offensive
• To spot new markets or opportunities ahead of competitors
Short-Term
• To determine how a key competitor will price or position a new product or service
Long-Term
• To forecast the viability and attractiveness of a future market
Intelligence is forward-looking, predictive, and actionable
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INTELLIGENCE IS ANTICIPATORY
– Wayne Gretzky
On the ice, everyone goes to where the puck is. Me? I go to where the puck is going to be.
“
”
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AGENDA
What is Competitive Intelligence
The Uses of Competitive Intelligence
Competitive Intelligence Usage Survey Findings
The Competitive Intelligence Process
Best Practices in Managing the Function
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CI in US Companies
71%
29% Have anorganized CIprocess
Do not have anorganized CIprocess
More than 7 our of 10 companies claim to have an organized CI function . . .
. . . But most say they do not have the means, interest, or understanding to use it properly.
Source: Ostriches and Eagles: Competitive Intelligence Usage and Understanding in US Companies, Outward Insights, February 2005
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Tactical Uses Strategic Uses
Support sales
Support newproduct launches
Strategicalliances, JVsand licensingR&D planning
SURVEY SAYS…
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ROADBLOCKS TO EFFECTIVE CI
38%33%
28%20%
0%
20%
40%
60%
80%
100%
Insufficient Funding
InternalBureaucracyCI Team Lacks Clout
Executives Don'tSee Value in CI
Source: Ostriches and Eagles: Competitive Intelligence Usage and Understanding in US Companies, Outward Insights, February 2005
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AGENDA
What is Competitive Intelligence
The Uses of Competitive Intelligence
Competitive Intelligence Usage Survey Findings
The Competitive Intelligence Process
Best Practices in Managing the Function
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HOW TO CREATE INTELLIGENCE: THE CI CYCLE
Most corporate intelligence programs consist of four broad functions:
• Planning and direction: management and oversight of intelligence to ensure a demand-driven, needs-based program.
• Information collection: exploiting secondary and primary (human) sources for information, observations, and insights.
• Analysis: interpreting information, drawing conclusions, identifying implications, and making strategic recommendations.
• Reporting: disseminating finished intelligence products, in time, to those managers with the responsibility and authority to act on the information.
AnalysisAnalysis
InformatiInformation on
CollectioCollectionn
Planning & Planning & DirectionDirection
Report & InformReport & Inform
NeedsNeeds
Decision MakersDecision Makers
Other UsersOther Users
The Intelligence Cycle: Each step is necessary and adds value
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KEY INTELLIGENCE TOPICS FOCUS THE CI GROUP TO DELIVER THE HIGHEST VALUE INTELLIGENCE
• KITs are high-level business concerns upon which management must take action
• Define KITs based on the critical decisions that must be made
• Provide direction to the competitive intelligence effort and overall strategy
• Improve the quality and timeliness of decisions; prevent surprise through early warning
Definition
Management Role
Purpose
Benefit
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What are the strengths, weaknesses, and future strategic intentions of our major competitors?
What new, or non-traditional, competitors could enter our key markets?
What new technologies are emerging that could impact our business?
What are the emerging legislative or regulatory changes that could have a significant impact on our customers, products, and services?
What M&A or JV activity might be on the horizon and what are its implications for our company’s products and services?
SAMPLE KEY INTELLIGENCE TOPICS
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INVESTING IN DEVELOPING ESSENTIAL CI FUNCTIONS YIELDS COMPETITIVE BENEFITS
Provides Early Warning of Opportunities & Threats
Provides Early Warning of Opportunities & Threats
Collect DataCollect Data
Prepare Report & Disseminate
Prepare Report & Disseminate
Analyze & Forecast
Analyze & Forecast
Essential Functions Primary Benefits
Supports Strategic Decision-Making Process
Supports Strategic Decision-Making Process
Supports Tactical and Operations Decisions
Supports Tactical and Operations Decisions
Assesses and Monitors Competitors
Assesses and Monitors Competitors
Supports Strategic Planning & Strategy Processes
Supports Strategic Planning & Strategy Processes
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Communications
• Verbal
• Written
• Presentation
Project Management
• Planning
• Implementation
• Monitoring
Leadership & People Management
• Strategic Thinking
• Coaching
• Team Building
CI Specific
• Ethics and Legal Guidelines
• Research Planning
• Tradeshow Management
• Analysis Techniques
RECOMMENDED CI SKILLSETS
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CHECKLIST OF SUGGESTED ANALYTICAL TECHNIQUES USED BY CI TEAM
Competitor and Industry Analysis
SWOT Analysis
Porter’s 5 Forces Model
Four Corners Analysis
Competitor Benchmarking
Competitor Response Modelling
WIN/LOSS Analysis
Value Chain Analysis
Forecasting
Early Warning Indicator Development
Hypothesis-based Tools
War Gaming
Scenario Planning
Financial
Financial Forensics
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AGENDA
What is Competitive Intelligence
The Uses of Competitive Intelligence
Competitive Intelligence Usage Survey Findings
The Competitive Intelligence Process
Best Practices in Managing the Function
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BEST PRACTICE #1: COMPETITIVE INTELLIGENCE IS ALWAYS LEGAL AND ETHICAL
Exploit newemployees forproprietaryinformation
Use illegalmethods
Compromisecustomerproprietaryinformation
Conductfalse jobinterviews
Misuseconsultantsor agents
Misrepresentourselves
We will not ...We will not ...
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BEST PRACTICE #2: IDENTIFYING USER NEEDS IS CRITICAL TO THE OVERALL SUCCESS OF PROGRAM
• CI users are engaged regularly to understand their intelligence requirements
•These requirements are used to focus CI efforts and resources
• Efforts are focused primarily on issues management has identified as threatening
•But, CI has an obligation to alert management to emerging issues
• Management regularly shares its actions and decisions with CI producers
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THE FLIP SIDE OF BEST PRACTICES: COMMON MISSTEPS TO AVOID
1. Failure to focus – “Get me everything you can on our competitors.”
2. Not linking CI to decisions
3. Placing the CI team too far from decision makers
4. Focusing only on competitors
5. Neglecting early warning
6. Letting ad hoc tactical requests overwhelm the CI effort
7. Confusing the intelligence function with market research or knowledge management
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TO SUM UP
• Competitive intelligence is about providing actionable intelligence, not repackaged data
• Competitive intelligence is successful when it is driven by management’s top business needs and decisions
• While all organizations are different, there are some common elements to successful CI programs including: ongoing dialogue with management, a focus on Key Intelligence Topics and adherence to ethical and legal guidelines
• The competitive intelligence process should be structured around the intelligence life cycle: planning and direction, information collection, analysis and reporting
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The Intelligence to Anticipate. The Strategy to Lead. TM
Karen Rothwell, Director
1-888-447-5501www.outwardinsights.com
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KEY FINDINGS FROM OSTRICHES AND EAGLES SURVEY (CONT.)
Insurance differed from the survey norms in the following areas:
1. Most likely to make intelligence an integral part of its strategic planning process (100% vs. 85% norm), the best of all industry groups.
2. More likely to make CI an integral part of operational or tactical decisions such as business development/sales (86% vs. 78% norm) and strategic decisions such as R&D planning and execution ( 71% vs. 55%).
3. More likely to use CI to anticipate and thwart competitor strategies (71% vs. 64% norm).
4. Most likely to integrate likely competition reactions into plans for launching new products and services most of the time (72% vs. 40% norm), the highest of all the industry groups.