systematic methodology, providing a step-by-step overview of points, issues, and tips to consider when deciding how to implement an CI function in your organization.
A competitive intelligence
function should distill all
available information to the
most salient and actionable
points to enable key
decision-makers to act faster, with
greater confidence.
A competitive intelligence (CI) functionality pro-vides a mechanism to make sense of our infor-mation-driven global economy. In the CI process, a company collects market information on com-petitors, products, and consumers before applying analysis to identify key strategic implications. These insights not only help your executives make better-informed business decisions, but also have a positive impact on general operations. Organizations with internal CI functions outper-form peers without similar capabilities, according to nearly two decades of empirical evidence. A 2013 study found that a company with a success-ful, proactive CI process will respond quicker and more wisely to market conditions than competi-tors (Ezigbo and Uduji, 2013), and a 2012 survey found that CI benefits innovation, cost contain-ment, and revenue (Nasri, 2012).
The road to establishing an internal CI function can be challenging. Likely hurdles include an ina-bility to systematically recognize or access intelli-gence; geographic distance and/or language barri-ers; technological limitations; ill-defined areas of expertise; internal conflicts; lackluster incentives to employees; inadequate training/mentoring pro-grams; and culture barriers (Simmons, 2013). Nevertheless, it is possible to leverage clear strate-gic vision and a well-articulated roadmap to cre-ate a world-class internal CI function. The eight steps listed below integrate five key underlying tenets of a successful CI function – people, pro-cesses, structure, technology, and culture – in a
cess; nascent counter-intelligence functional-ity; early signs that non-CI employees are becoming auxiliary intelligence resources.
Stage 4 – Becoming proactive, long-term stra-tegic thinkers, with good coordination and training; CI function is well-defined.
Stage 5 – Proactive CI team with long-term strategic goals and excellent coordination; focus is on creating actionable, strategic intel-ligence; CI team has strong executive support.
Establish clear roles and
responsibili-ties for internal CI team members.
Internal CI team capabilities have a significant impact on overall research quality, making per-sonnel a top concern for any organization devel-oping an internal CI function. Finding and hiring the right people and placing them in the correct roles is crucial to ensuring the CI team operates smoothly. Consider designating some non-CI em-ployees as “knowledge leaders” who can evange-lize the importance of intelligence.A core CI team requires three key roles:
The research director (RD) develops and im-plements overall strategic vision for the CI team. RDs should be skilled CI practitioners with substantive management and strategic development experience, as well as solid lead-ership, communication, and relationship management skills.
The research manager (RM) implements re-search requests and directly manages analyti-cal teams. RMs should be skilled CI practi-tioners experienced in project management, employee oversight, team building, and com-munications. Organizations may have more than one RM.
Outline objectives and assess existing
CI capabilities.
Setting research objectives and assessing current strengths and weaknesses is a critical first step of implementing a CI function. Invest time in artic-ulating end goals before selecting a CI tool, defin-ing a process, or developdefin-ing workflows to ensure the end result will meet requirements.
Consider adopting a two-pronged approach when establishing research objectives. First, identify and document key business challenges facing im-portant departments such as business develop-ment, marketing, R&D, and sales. Then create specific goals corresponding to each challenge, so you can easily articulate how and why resources are being spent on CI.
Confirm that research objectives cover both im-mediate and long-term strategic goals. Meeting and/or exceeding short-term goals will provide valuable feedback on strategic direction. Long-term goals, on the other hand, are equally im-portant to help create and communicate the “big picture,” ensuring all employees are working to-ward a shared vision of the future.
Once you outline initial CI goals, the next step is an honest assessment of current CI capabilities to provide a baseline on which to build or expand. Organizations will fall into one of five categories based on current capabilities, strategic intent, and current knowledge management practices:
Stage 1 – Little to no CI capacity; reactive and tactical approach to issues; no coordination between departments.
Stage 2 – Minimal CI capability; primarily reactive but mostly still tactical; little coordi-nation between departments.
Stage 3 – Still mostly tactical but developing an ongoing, repeatable, coordinated CI
pro-es rely on proprietary information – such as automotive, financial services, manufactur-ing, and pharmaceuticals – are more condu-cive to these types of relationships.
Research analysts (RAs) conduct primary and secondary research to support CI requests. The optimal number of analysts varies based on the CI team’s scope of activity, current/ expected workload, and reliance on external partners. Some organizations may employ a large enough CI team to justify a tiered struc-ture of junior and senior analysts.
Determine balance between internal
and external CI resources.
A key part of setting up an internal CI function is establishing an equilibrium between internal and external CI resources. Your goal should be to keep overall capabilities high and total resource costs low. Keep in mind that almost any employ-ee can be an internal CI resource. A foreman’s conversation with a deliveryman or a marketers’ tradeshow interactions can provide valuable in-telligence to the CI team.
In most cases, organizations will also need to lev-erage external CI professionals. These resources augment internal capabilities, but the ultimate responsibility for integrating and leveraging in-sights must rest with the internal CI team. Exam-ples of external CI resources include:
The research contractor, an external partner used to augment internal capabilities on an ad hoc basis. Contractors should be selected on a case-by-case basis using a tailored set of crite-ria to ensure the arrangement will meet in-ternal needs. The relationship should be as collaborative as possible, to ensure full value from tailored inquiry.
The research contact, an independent, unpaid external connection who provides valuable on-the-ground insights on developments that affect the business of the organization or its external clients. Industries in which
business-Follow these key steps when setting the
bal-ance between internal and external resources.
A properly-configured KM system with workflow management tools and integrated databases can substantially decrease this resource commitment. A well-functioning KM system ensures collected intelligence is easily accessible to internal stake-holders, making it quickly translatable into stra-tegic value.
The best KM systems are comprehensive toolkits that facilitate user actions through all phases of the CI process – sourcing, collection, classifica-tion, monitoring, validaclassifica-tion, analysis, collabora-tion, distribucollabora-tion, and archiving – while main-taining the security and reliability of hard-earned intelligence and confidential information.
Implement well-defined protocols for
intelligence gathering.
Well-defined protocols are the backbone of any CI team in maximizing efficiency and ensuring compliance in the intelligence gathering process. Err on the side of caution, particularly in highly competitive or litigious industries.
Establishing an ethics policy can mitigate many of the risks associated with intelligence collec-tion, and the Strategic and Competitive Intelli-gence Professionals (SCIP) organization provides a general code of ethics that:
Complies with all applicable domestic and international laws;
Discloses all relevant information prior to interviews;
Avoids conflict of interest in collection; and
“Faithfully” adheres to all corporate policies, objectives, and guidelines. For more infor-mation about ethical intelligence collection, see SCIP’s frequently asked questions.
Determine how raw intelligence will
be accessed and analyzed internally.
Identifying information gaps and collecting intel-ligence can be facilitated by a platform to collect, sort, and disseminate research. Microsoft esti-mates research professional spend approximately 30 percent of the workweek looking for infor-mation and an additional 10 percent working on business document production.Cipher is a market leader in tailored strategic research services, consulting programs, and customized knowledge management and CI
software solutions.
Cipher’s research services include custom CI research, strategic decision support, CI optimi-zation, and decision facilitation workshops, all executed using a repeatable process and time-proven techniques based on CI best practices.
Knowledge.Works is an award-winning, cus-tomizable CI solution with more than 85 global installations. Knowledge.Works supports all steps of the CI cycle and allows users to proac-tively stay ahead of the competition while re-ducing information overload, increasing productivity, and eliminating duplicated effort.
Knowledge.Hub optimizes the strengths of Mi-crosoft SharePoint with features designed to assist small departments with monitoring re-search tasks. Knowledge.Hub helps users share content and generate value-added strategic in-telligence across their organization.
Once you have found a balance between automa-tion and human analysis, introduce a strategic scenario planning initiative that includes regular war games, internal working groups, and market or competitor studies. Bring together the CI team and key internal stakeholders to focus on exploit-ing CI to inform institutional knowledge.
More importantly, always have an implementa-tion plan in place so insights can be quickly ap-plied within your organization. Do not just “check the box;” ensure there is a dissemination mechanism that feeds a positive feedback loop and drives future research.
These scenario planning initiatives are a prime opportunity to leverage external partners, whose outside knowledge and independent perspective will foster creatively and augment strategic in-sights. Benefits of consistent scenario planning include:
Ensuring CI activities align with current and future core business strategies;
Clarifying how CI is used in practice;
Identifying unrecognized knowledge gaps;
Increasing collaboration between the CI team and key departments;
Highlighting how CI can optimize internal business processes; and
Garnering the CI team credit for its efforts.
Develop a tailored performance
meas-urement system.
Although CI is widely recognized as having a positive impact, determining how effective a par-ticular CI team is can be difficult and frustrating-ly subjective for many organizations. Much of the challenge stems from the fact that there are few established performance metrics for CI that easily
Convert raw intelligence into
actiona-ble insights.
Facts are just facts if there is no consistent, me-thodical way to analyze them and develop a larg-er strategic picture and specific sales tactics. Im-plementing a strategic plan allows an organiza-tion to leverage intelligence in multiple ways while working toward the same goal – a smarter, more agile, more competitive business. This plan should include provisions for both information workflow and decision facilitation.
An information workflow system will provide the means to process CI and other supplementary information coming in from all parts of the or-ganization. Strike a balance between automation (i.e., computer-generated market updates) and human-based contributions from internal stake-holders and/or external third-party vendors. Encourage employees to use the solution to sub-mit information to their CI team but recognize the value of automated technologies to better fa-cilitate human intelligence. Technology solutions can streamline the CI staff’s workflow, and this will leave more time for the tasks best suited to human analysis – responsible for centralizing in-telligence, identifying what matters, and under-standing how it relates to the organization.
Embrace automation with a human hand.
Automation will have the greatest positive impact on business operations if it is used to optimize human resources. CI professionals can use software to automate routine tasks such as distributing market and competitor updates, then utilize the time savings on hu-man analysis – the “so what?” meaning – to bring true value to their company.
Foster a culture that embraces CI.
A corporate culture that embraces CI will provide the internal CI team with the organizational sup-port it needs to operate effectively. Consider im-plementing the following steps to create this cul-ture: Discuss any stakeholder reservations, using these opportunities to thoroughly explain how CI works and how it will be leveraged. Highlight examples showing CI’s positive op-erational impact.
Reassure employees that their CI efforts are visible to executives. Incorporate knowledge sharing behavior as a metric in employee ap-praisal, performance, and promotion policies.
Give executives a role in articulating how CI supports the organization. This support will mitigate much of the friction from lower-level managers or territorial employees.
Conduct regular strategic reviews with key executives and update lower-level depart-ment heads or key employees. Use these meetings to ensure CI efforts align with cor-porate goals and encourage a sense of collec-tive ownership.
Conclusion.
Following the roadmap outlined above will set your company on the path to implementing a suc-cessful internal CI function. With the right peo-ple, processes, structure, technology, and culture, CI can provide strategic insight to stay one step ahead of competitors in a fast-paced global econo-my where the competitive, product, and consum-er landscape is continually changing.
identify specific, quantifiable work output; score targets against results; or measure how clients and competitors respond to a given action. Developing a tailored performance measurement system aligned with corporate goals and expecta-tions allows executives to develop a clear, con-sistent picture of CI contributions to the organi-zation. Focus on creating a balanced scorecard that considers performance, quality, compliance, and value, while recognizing particular needs (Simmons, 2013).
Another option is to create a review mechanism to track internal CI contributions. Include provi-sions (Kerr, 2007) based on the following consid-erations:
Direct financial impact – Tie CI to specific revenue increases and/or cost savings to de-termine the CI team’s ROI and organizational impact.
Indirect financial impact – Recognize some CI efforts will set the stage for future gains but will not provide any immediate financial benefit. In these cases, the CI team can claim partial responsibility for long-term ROI.
Support to other departments – Highlight the underlying influence of CI on daily opera-tions and overall organizational efficiency when no measurable immediate or longer-term financial impact can be attributed to the CI team’s work.
Traffic and/or internal utilization – Maintain detailed records of all internal CI requests to document the CI team’s value and remind executives of the utility of CI throughout the organization.
About Cipher Systems
Cipher Systems is a full-service strategic and competitive intelligence consulting firm that supports cli-ents through strategic research and two industry-leading technology solutions – Knowledge.Works and Knowledge.Hub.
Who We Work With
Cipher has worked with over 100 clients to complete over 125 engagements in 23 countries since 1996.
Where We Work
Headquartered outside Washington, DC, Cipher maintains offices in Brazil, China, Switzerland, the UK, and the US, as well as a trusted global KOL/SME network with a presence in nearly 20 countries.
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