Monday 25 September 2006

Think why information is available

When I teach people about competitive intelligence, I always emphasise the importance of understanding why information is available.

Competitor information becomes public for a number of reasons, but these can be summarised into three categories:
  • Intentional dissemination of information about the company by the company - for example, an annual report or a press release
  • Accidental dissemination of information about the company by the company - for example, a leak or rumour
  • Information that comes from a third party. This itself can take a number of forms. One is like a footprint in the sand - so competitor actions can provide clues to their plans or strategies. A typical example is when a competitor signs a contract with another company. This company may mention the contract - giving out information about the competitor. A second example is where a third party has managed to collect information on a competitor from a variety of sources including interviews and non-published sources. In this case, the third party may decide to publish their information as a market research report. Sometimes the third party may include a synthesis of information that combined gives further insights.
Of course, all three are important for competitive intelligence - although perhaps the third is the most important. One of the aims of a competitor analyst is to gather intelligence from both published and non-published (but legal and ethical) sources - and synthesise these so as to give something that conveys an advantage not available to competitors.

Sometimes though, information can come too easily. Part of the skillset of a competent competitor analyst should be an ability to evaluate why information became available. Which of the above was the reason and how reliable is the information? There is a risk that the gathered intelligence is wrong, and a validity check can help assess the chances of this. (One common approach is to grade both the intelligence and source, giving a likelihood of accuracy). Whatever method is used, however, there is always the risk that sometimes things will be wrong.

A simple approach is to consider how easy the information was to obtain. This works on the assumption that competitors will try and protect information that they would prefer not to be in the public domain. So if information is easily available it has a lower value and may be more suspect than information that took a lot of thought and work to obtain.

This is illustrated by the following story - in this case there was an ulterior motive in providing information that on the surface, looked like a real money-saver. The true reason came out as an accidental disclosure following a pointed interview type question!
A man was having problems with the quality of the print from his printer so he called a local repair shop where a friendly man informed him that the printer probably needed only to be cleaned. Because the store charged $50 for such cleanings, he told him he might be better off reading the printer's manual and trying the job himself.

Pleasantly surprised by his candor, the man asked, "Does your boss know that you discourage business?

"Actually, it's my boss's idea," the employee replied sheepishly. "We usually make more money on repairs if we let people try to fix things themselves"