There are probably as many definitions of “competitive intelligence” (CI) as there are CI professionals. So I want to start by telling you about my experiences with CI and how I have developed my own definition, which has helped organizations generate hundreds of millions of dollars in profits. This definition comes from ten years of work with CI professionals, ex-military spies, academics, and start-up and corporate professionals. What I’ve learned can help you build a more dynamic, competitive, and successful organization.
Discovering Competitive Intelligence
I first heard about competitive intelligence (CI) in 2003, while I was in graduate school in Los Angeles. At a career fair I met Tony, a former military spy and the founder of HealthIQ. Tony Page is the first person in the US military to publish on the topic of early warning intelligence, and HealthIQ is the first ompetitive-intelligence consulting agency focused exclusively on the pharmaceutical industry. After several conversations with Tony, I decided to join HealthIQ as an intern.
During my internship, I felt in love with CI, and I did my own research on CI in biotech start-ups. In 2005, together with Tony and Dr. David Finegold (currently senior vice president for lifelong learning and strategic growth initiatives at Rutgers School of Management), I published two articles in the journal Nature Biotechnology. The first article was on the Role of Competitive Intelligence in Biotech Companies. The second was on How to Conduct Competitive Intelligence in a start-up environment. While I was at HealthIQ, I had the opportunity to work on projects for small and large biotech companies, Big Pharma, and the US government.
Although my experience at HealthIQ was amazing, I felt that something was missing. I had spent endless hours gathering and analyzing intelligence, writing proposals, and presenting finds. But it wasn’t clear to me how all my work was being used inside our clients’ organizations. It was time for me to join Big Pharma to get a closer view of CI. In 2008, I joined Novartis Pharmaceuticals.
During my four years at Novartis Pharmaceuticals, I built and headed one of the largest CI teams in the pharma industry. Under my leadership, our global CI team was recognized as a high-performing team, and we received numerous prestigious awards. We conducted projects in all corners of the world, we worked with dozens of CI providers, and we worked with all the functions of the Novartis Pharmaceuticals organization.
I learned a lot there, and I want to share my knowledge with you. I’ve decided to revise the articles I published in 2005 and add material based on the CI experience I’ve had over the last seven years.
Defining Competitive Intelligence
People sometimes mistakenly think of competitive intelligence in narrow ways. They often see CI as a means of gathering and processing secondary market information. Sometimes they see CI as simply repeating what other people say, and sometimes they see it as gathering secret information about competitors.
I have adopted a more strategic view of CI. I define it as the proactive and ongoing analytical process that gathers and transforms disaggregated future-looking market and competitor data into relevant actionable knowledge that can be readily put to use by key decision-makers of the organization.
Let me break this definition into its different components.
- First, CI is proactive and ongoing: To be effective, the CI professional needs to anticipate intelligence requirements and gather information before it is in the public domain. Intelligence-gathering should not be done on a project basis; instead, it should be continuous. That is the best way to maximize resources.
- CI is also an analytical process: Competitive intelligence has to be a well-defined process in order to be successful. A defined process will help different stakeholders understand what CI is within the organization. It will help define the resources CI requires, and it will help align different stakeholders.
- CI is future-looking: CI must be focused exclusively on future-looking information. “Future-looking” means it comes from non-public sources. Non-public information gives you a competitive advantage; it is proprietary knowledge, and this type of intelligence puts your organization in a proactive mode.
- CI is actionable knowledge: In order to make a business impact, the CI process must generate action that allows the organization to be successful in the marketplace.
- CI is for decision-makers: The CI process should be built around the intelligence needs of the people making decisions. The CI professional has to ensure that the intelligence will support key upcoming investment choices.
From this broader perspective, you can see that CI is closely related to other core management concepts like strategic planning, market research, business intelligence, market analysis, and knowledge management.
Understanding the Competitive-Intelligence Process
We will cover the details of the CI process in upcoming blog posts. For now, however, let me explain how I see the competitive intelligence process as a whole.
For a simple view, we can divide CI into four steps. The first step is identifying your intelligence requirements. The second is gathering information. The third is analyzing the information. And finally, the fourth step is adjusting your organization’s strategy to reflect the new findings.
We can divide that four-step process into several other parts, as shown in the figure below:
But for more information about those parts of the CI puzzle, you will have to keep reading this blog.
Getting Competitive-Intelligence Benefits
I want to end this post by talking about some of the benefits CI can generate. I’ll write a more comprehensive blog post on this topic, with specific real-life examples, in the future .
CI can help your company and its distinct business functions in a variety of ways. For example:
- CI can map the competitive landscape and identify key regulatory milestones and new competitor product launches. This type of competitive intelligence is vital input to enable your firm to define its strategy and market.
- Competitive intelligence can also warn your managers when their key strategic assumptions need to change or when unforeseen events require your company to react and adjust its business model to maintain its competitive advantage. CI can help your organization identify new opportunities, set competitive benchmarks, and help executives assess merger and acquisition candidates, joint-venture and alliance partners, and team partners.
- Most importantly, if a robust CI system is in place, your company can conduct timely competitive simulations to pressure-test its strategy and tactics and to develop new actions that reflect changes in your competitive landscape.
Competitive intelligence is an ongoing process. It’s useful at all levels and across all functions of an organization. It allows the forward-thinking business leader to clearly define the marketplace, ask disciplined questions, and receive timely and reliable answers. It also helps the organization learn about new technologies that will improve research and development or reduce manufacturing costs. In addition, it can keep an organization functioning well when key employees leave, by ensuring that they do not take all of the firm’s knowledge with them. And it can be used to train new employees, helping them more quickly understand the firm’s strategy and competitive marketplace and therefore become fully productive faster.
For all these reasons, well-gathered competitive intelligence can enhance your company’s probability of success in today’s highly risky environment. A failure to conduct CI, however, can lead to loss of revenues. Before I joined Novartis, one of the product teams failed to gather intelligence showing that a competitor’s product was going to launch ahead of theirs, and this led to loss of billions of dollars in revenue.
In the next blog post, I’ll be discussing the types of intelligence needed across an organization.