Competitive Intelligence / Competitive Strategy, by Arik Johnson
by Arik Johnson

Entrepreneurial Intelligence: Best Practices in Strategic Competitive Intelligence Development

Competitive intelligence (CI) as we know it is dead. It has been and will continue to be a failed concept. Why, you ask? Because competition in business as we know it, is likewise a dead animal; those CI functions that continue to focus so narrowly on competitors will continue to be folded up and endlessly redeployed in an a never-ending cycle of trying to fill a vacuum for decision-support that exists in most business organizations today, whether those organizations are for-profit or otherwise.

There is a need today for an "entrepreneurial" approach to building intelligence systems - which might include an end to calling it "competitive" intelligence. Respected author and consultant Ben Gilad has recognized the need and wrote an essay, in title at least, similar to my own below. However, I think a call to merely focus on "thinking outside the box" of what CI has always been falls short of the goal.

Opportunities and Threats

Traditionally, competitive intelligence has focused its attention on competitive threats, most often in the form of direct competitors battling the zero-sum war-game of inch-by-inch struggle for marketshare and, for those left standing, market dominance. But, competitive intelligence in the modern business enterprise must think more broadly than simply competitors -- there's no guarantee those competitors will be in any kind of financial shape for a real fight a year from now anyhow. CI professionals, like the SCIP professional association ( itself, must retool to think more broadly; there is an ultimate need to think of the intelligence function as a "business within a business" in its own right. After all, half of a SWOT analysis is oriented towards opportunities, right? Further, organizations go in and out of business all the time. What large company today can sustain the criticism of its shareholders for investing in the wrong businesses? The question becomes then, what are the right businesses in which to invest -- just those that are fast growing? In fact, it's arguably more important for any firm to plan for and execute the steps necessary for it to dominate fast-growth, future businesses and markets, even more so than to perpetuate market positioning by status quo in the businesses of today, however profitable.

Then why do so many CI managers, market analysts and business researchers as well as their internal customers think only about competition? It's largely because the word "competitive" inherently implies competitors and the threats to the status quo that they pose. While the debate has raged over the past dozen years or more about whether what we, as CI practitioners, do is "business intelligence" or "market intelligence" or "competitor intelligence", finally we've settled on this "competitive intelligence" as something that supposedly captures all of these notions in terms of "driving competitive advantage". But, I think, in the minds of many CI stakeholders, this still means competition and threats, more than it means opportunities. And, I think this comes from the governmental legacy of intelligence departments focused on beating political and ideological competitors (in the form of nation-states) in the military arena, both hot and cold. I would ask all those involved in helping a company to strategically select from the breadth of options facing them each day in every area of operational decision-making to drop the word "competitive" or "business" or "market" from the their title and start thinking in terms of simply "intelligence" and its products and services.

Evolving towards Entrepreneurial Intelligence

So, how should the intelligence unit be organized? What should it produce? What kind of personnel and budget should it have and to whom should it report in the management hierarchy? All of these are valid questions and each has been endlessly discussed elsewhere, so I'll spare you here. But these are also questions that largely ignore the evolutionary context of deploying an intelligence function and the simple fact that none of these activities can be considered "turnkey" -- you can't just drop a bunch of people into an organization, hand them a budget and expect it fire on all cylinders from day one. Rule number one: there is no switch that can be flipped that will put an intelligence group in place that will satisfy all customers or be able to answer all the questions they have about the environment around them or even be able to provide all of the services the organization needs it to provide.

The implementation of any function, especially one as elaborate and complex as an entire decision-making infrastructure such as this, must evolve over time. In fact, many of the functions that should be part of this intelligence unit are already inside the company in one shape or form. Here are a few examples of some other functions or departments who are almost certainly already in place that will fight over ideological territory with an intelligence team, but which might actually have synergies with an intelligence group:

  • Market Research

  • Knowledge Management

  • Library or Information Center

  • Customer Analysis

  • Strategic Planning

  • Financial Benchmarks

  • Information Systems

  • Competitor Analysis/Intelligence (pre-existing)

Just as companies win or lose in the marketplace based on execution of their operational business strategy founded on core competencies, so too must the intelligence group. Territorial enmities aside, there will invariably be competition internally for scarce resources and, perhaps more importantly, management attention-span, and each of these internal forces will be focused on just a few main competencies that make up the decision-support function of an intelligence team:

  • Prioritization and Planning

  • Information Collection and Verification

  • Performance and Operational Analysis

  • Strategic and Roadmap Analysis

  • Knowledge and Information Management, Storage and Processing

  • Packaging, Delivery, Recommendations and Execution

It might even make sense for the entrepreneurial intelligence team to consider another well-heeled business strategy - growth by acquisition. How many of these other departments of the firm are taking the same approach to their own growth? None, I would reckon, seriously think of themselves in such an entrepreneurial way, at least in the near term.

Entrepreneurial Strategy

From having customers to producing products and services to building and updating a business plan complete with breakeven analysis, the intelligence team must think like a start-up -- thinking of itself as a "business-within-a-business". The same goes for how the intelligence team must deal with competition. What do companies in the marketplace do when faced with competitors? They might choose to merge with or acquire them -- as so many libraries have with the CI collection activities at the secondary level -- or as many CI groups are doing to their libraries. The same goes for strategic planning -- often the acquirer of the CI team, in my consulting experience. A multi-party merger is the best strategy here -- perhaps even better thought of, at least in the early stages, as an alliance or consortium among the groups outlined above -- until some more formal merger of entities can be handled, should such a merger be suitable.

The case for this approach is the same one that most businesses are facing as we consider the implications of a short-term downturn in the business cycle - do they continue to fund what is arguably the most important function to their continued survival - CI that is? Or, do they retrench and shore up more "fundamental" areas of the firm as they cut staff in the less tangible areas of ROI (like CI)? The adoption of this intelligence philosophy not only helps to insulate companies from cutting their own throats, it also helps to achieve operating efficiencies by pooling budgets and centralizing strategic intelligence decision-making - which is just what management is after when it starts slashing "costs".

What's Next?

In short, for intelligence programs to succeed moving forward, they will need to think like entrepreneurs - real entrepreneurs, not the dot-com value-challenged start-ups of the late 1990's suffering so heinously these days because of their ambitious exit-strategy. In many ways, it's a small-business approach to staying nimble and being able to consistently satisfy the needs of its internal customers on an ongoing basis in all realms of decision-support. This also assumes there are as many internal threats to the intelligence group as there are opportunities - what is most often an ironic inversion of the operational focus of most competitive intelligence teams in times past.

Arik R. Johnson is Managing Director of the Competitive Intelligence (CI) outsourcing & support bureau Aurora WDC. Learn more about Arik at his firm's Web site