Competitive Intelligence is suddenly hotter than ever!
Over the last four years in my job as a business analyst, I have been amazed to see how much emphasis companies place on managing their internal information. With the advent of Web 2.0, corporate blogging and company wikis have dominated the enterprise information framework discussions. I have often wondered how much resources companies deploy to understand their external environment - the key factor for their very survival in the business ecosystem.
This post is not to discount the efficacy of corporate blogging or employee knowledge sharing - these tools in fact drive innovation and besides other benefits, have also become the hotbed for some of the best new business ideas for an organization. My thoughts are, however, directed towards how a company looks at its external environment vis-a-vis the proactive approach it takes in managing internal information.
Most companies spend a fraction of their time and effort in analyzing the external environment - and this is in light of the fact that nearly every strategic surprise is based on an event that takes place outside the company. Failure to track, analyze and interpret external market developments has often proved detrimental for market leaders. The absence of an early warning system inevitably results in competitive surprises that could go to the extent of wiping out a company’s business model completely. If the external environment is so critical, why do companies invest so little time and effort on this activity?
As Indian companies gear up to take on their global peers, competitive intelligence is going to become the key driver for formulating business strategy. The need for an early warning system that can quickly anticipate market shifts is much higher than ever before. Senior management across companies needs to start devoting a significant portion of their time in studying the changing competitive landscape and take risk control measures continually - a laid-back and passive approach is now passe.
I was having an interesting discussion on growth versus survival strategy with one of my colleagues, a few days back. We were trying to define why companies formulate different strategies, viz. growth, technology, operations, et al. My colleague was all out for growth, and believes that every strategy element is linked to growth in some way or the other. I was trying to pick his brains and debate that every strategy has an inherent backward linkage to the basic need for survival for any organization. A growth strategy too is part of a long term survival strategy - targeted at driving innovation and bringing out new products, increasing market share, entering new geographies, et al - but with a tacit focus on ensuring that the market position is not significantly affected by any unforeseen events. All efforts in terms of strategy formulation, risk control, war mapping, et al would prove to be futile in the longer run - if the same efforts are not supported by a real-time continuous competitive intelligence framework. This is the need of the hour in the current “flat” world.
“Strategy is about what your company wants to do with the world. Intelligence is about what the world wants to do with your company” - Joseph H.A.M. Rodenberg
The bottom line is: Do you have an effective early warning system in place?
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