Dissing the competition through dirty tricks!

An article in the New Zealand Herald - Cloak & Dagger Tactics Hit the Office gives an interesting perspective on how dirty tricks, espionage and other unethical practices can hurt companies. Unfortunately there is nothing new in the idea that competitors and others can deliberately aim to hurt rival organizations using unethical and illegal approaches.

Competitive intelligence (CI) is primarily about finding information on your competitive environment - competitors, customers, suppliers as well as general business trends that could impact you. (AWARE's brief guide to competitive intelligence tells you more about this).

One common technique is to identify the key intelligence topics (KITs) that you need to focus on to give you that competitive edge. These KITs will are aimed at helping you understand competitor strategies and the reasons competitors are doing what they are doing - as one example.

One topic that all organizations should look at is what others are saying about you.

• What do your customers think about your products and services?
• What do suppliers think about your negotiating skills - are you a push-over?
• How do competitors view your position in the marketplace - and what do they see as your vulnerabilities?

You need to do this globally. Don't just focus on your key local competitors, but consider those from further afield. New threats could be coming from anywhere: Brazil, India, China.... In fact, CI is a truly global discipline, and it is essential to know thy competitors - wherever they are located.

Sometimes what you'll discover may be uncomfortable. In 1993, Virgin Atlantic discovered that BA had gained access to confidential files and was using these to poach customers from the airline. This led to a protracted court case - BA lost.

More recently, the Canadian insurer, Fairfax, was the target of a campaign of malicious disinformation from a group of Wall Street Hedge Fund managers. The company is now suing them for $6 billion - claiming that their aim was to manipulate the market by creating uncertainty about the company and its future. These include a variety of dirty tricks - false emails and letters, espionage attempts and more.

The lesson from these two cases (and there are many more) is that it is important to watch out for what others are doing to you. Don't assume that your competitors always play fair - some don't.

You need to keep a look out for unethical practices:

• the phone call from the "student" asking for help with a school project;
• the visit from an "industry analyst" claiming to be writing a stock report

and so on.

Always check that they are who they say they are before confiding anything. If suspicious refuse to give any information away.

Even more important, beware of scams that may try and lull you into a false sense of security: the "official" who claims to be a government tax inspector, who then gives a phone number that you can use to check him up. Except that the people answering the phone are in on the scam! (For any official organizations it should be easy to verify that the phone number is real).

Or the organization using a fake, but official sounding name (e.g. in the UK, many companies are conned into paying more than needed by companies calling themselves things like "Data Protection Office Ltd" which sounds sufficiently similar to the real Data Protection Registrar.)

The old adage Buyer Beware (Caveat Emptor) holds. A key intelligence topic that all companies should include in their armory is the one that focuses on what competitors are doing aimed directly at you - what they are saying, what they thinking, and what they are doing, especially if they have a propensity to play dirty!

Looking Forward - but don't ignore what is behind you!

I left school many years ago, but I still remember some of the lessons taught by Jeremy Rosen, who was, at that time, my headmaster. I'm still in contact with him - and both of us now have gray hair! In a recent newsletter he writes:

There’s a Russian proverb that goes, ‘He who looks to the past is in danger of losing an eye. But he who ignores the past is in danger of losing two eyes.’

Jeremy Rosen states that he doesn’t know if this is really a Russian proverb - he heard it from Lord Bullock, the historian, biographer of Hitler and Stalin, who was speaking at the Van Leer Institute in Jerusalem many years ago. However the origin is less important in this case than what is being said.

Too often, people make decisions based on insufficient information - they ignore the past, creating excuses saying that the past is a closed book - and base their decisions on the perceived problems of the present, tearing up all that has gone before in an effort to create a desirable future. Others take the opposite view - and dwell in the past, refusing to realize that it is the future that shapes our fortunes, not what has gone before.

In marketing and business the same rules apply. Some are "Risk seekers" - always anticipating a bright future, irrespective of warnings, and ignoring the past. Others are "Risk adverse" scared about what the future may bring - and essentially living in the past. In reality, businesses need to balance both approaches. They need to build for the future, and should grasp emerging opportunities with both hands. However this should be based on knowledge of the risks involved, and this can only come from prior experience and knowledge. Even brand new innovations are built on past knowledge.

There are organizations that seem to focus on past (or should that be passed) glories. They stress how they did this or that - and how they became the market leader through their past actions. However if they fail to see how the present has changed then they will inevitably lose this leadership position. There are numerous companies that have fallen because of this. One of the best examples is J Sainsbury - the UK supermarket giant, currently in the midst of a bidding battle. Sainsburys used to be the largest UK supermarket, but it lost direction, and with it share - it is now no longer the market leader. Sainsbury saw itself as the market leader, but failed to recognize the innovations and different approach of competitors such as Tesco and Asda (owned by Walmart). Essentially, Sainsbury was looking at the past and reveling in it, but in reality was ignoring the past and the lessons it held on success. Sainsbury had grown by being innovative - it was the first UK supermarket, building a major presence by giving customers what they wanted. However by not keeping both eyes open on what was happening in its market, it lost its market position.

A key business skill is being able to anticipate the future (using techniques such as scenario planning). This depends on using drivers and trends from the past to anticipate what could happen in the future. We need to look to the past and learn from it. However our aim should be to build a better future. This cannot come by ignoring what has gone before. Instead we should aim to understand why something happened, so that we can learn from it and not repeat the same mistakes. As George Santayana said in 1905: "Those who cannot remember the past are condemned to repeat it."

There is a widely known Zen story that shows this in another way:

"When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise that it distracted them. So the teacher ordered that the cat be tied up during the evening practice. Years later, when the teacher died, the cat continued to be tied up during the meditation session. And when the cat eventually died, another cat was brought to the monastery and tied up. Centuries later, learned descendants of the spiritual teacher wrote scholarly treatises about the religious significance of tying up a cat for meditation practice."

The importance of lateral thinking!

A story is told about a supermarket that was having problems with gangs meeting in its car park after the supermarket had shut for the night - trading drugs, fighting and generally making a mess and nuisance.

The supermarket tried various conventional solutions to solve the problem: fences, increased security, and the like. Nothing worked long-term and, moreover, they were all expensive. Then somebody thought that perhaps a different approach might work.

The gangs were all trying to look cool, and the supermarket car-park had gained a reputation as a cool place to hang out at night. So what did the supermarket do? They thought about what could make the car park an uncool place to be, and started up a loud-speaker system piping the music of Mantovani over the parking spaces. Quickly the problem disappeared - as what kind of "cool" 16-18 year old wants to be associated with visiting a location that plays the kind of "easy listening" music beloved by their grandparents!

I teach a weekly diploma course at Thames Valley University, as part of the UK's Chartered Institute of Marketing's Marketing Research & Information module. One of the joys of teaching is that you often learn a lot from your students. Last week was no exception, and provides another great example of lateral thinking - combined with a crucial awareness of the importance of ensuring customer satisfaction while still making money!

One of my students had spent some time working as a hospitality manager in a Greek hotel. He was working the night shift, when a package group of 15 tourists arrived at the hotel. They'd just landed, and the time was 3.00am. All were tired, having had a delayed flight, and all were looking forward to the rooms that they'd paid for. Except because they hadn't turned up, they had been treated as no-shows, and their rooms had been sold on.

Overbooking is a not-infrequent problem faced by hotels. Normally the way round is to find another equivalent hotel, and transfer the overbooked guests there. Nobody is particularly happy about the arrangement.

• The guests are unhappy as they had been expecting hotel A and got hotel B - and have to move on, when they were looking forward to resting from their journey.
• The hotel is unhappy as the replacement hotel needs to be as good, if not better than the original. This means that the hotel has to pay for its mistake - financially, and if the replacement hotel is not better, in good will and reputation as well, which can be even more important.

At 3.00am, with tired and irritable visitors desperate to sleep, the problem is even worse. You have to phone around your competitor hotels in the area - speaking to the night staff - to find a replacement. Often the other neighborhood hotels will also be full, meaning that the group will have to be split up - guaranteed to cause problems. Furthermore, you are likely to have to book people in lower quality hotels. You will also need to arrange several taxis to transfer people to the replacements. All told, you have a PROBLEM!

Christos found another way.

The locality ran regular cruises to the Greek island of Santorini - which necessitated an early morning start, and a couple of nights on the island.

Santorini is one of those magical islands that, once visited, you never forget. It offers all that is best of the Greek islands - white washed villages, great beaches and views, fun restaurants, archaeological sites, monasteries and churches. However this is not all - it also has a volcano in the middle of the archipelago, with regular trips to see its caldera. This volcano has been attributed to the destruction of the Minoan civilization on the nearby island of Crete, and even the cause of the plagues that the Biblical book of Exodus mentions as having led to the release of the Israelite slaves from their Egyptian servitude (so, for example, the plague of darkness resulted from a cloud of ash that fell from the volcano). This eruption, 3500 years ago, was undoubtedly one of the largest ever volcanic eruptions during human history - much bigger than the infamous 1883 eruption of Krakatoa. The island has even been linked to the legend of Atlantis.

Christos knew that there were always places on this trip. He also knew that the costs of the trip, including the island hotel costs, would be considerably less than what would need to be paid to competitors to find beds for the group so early in the morning, as well as the less tangible costs in lost goodwill and so on. Accommodation on Santorini was much more basic and low cost - but the surroundings compensated for this.

Rather than apologizing to the group, and then getting on the phone to search for replacement hotels at 3.00am - a depressing and tedious task - he welcomed the group and said that they were really lucky. They were the hotel's 1000th tour group and as such had qualified for a superb prize - a free trip to Santorini to start their holiday with a bang. The tour bus that would be taking them to the boat would be arriving shortly so there was no point in checking them in. They'd check back into the hotel in 2 days time, after their mini-cruise.

The tourist group may have been tired. But tiredness evaporates in such circumstances, and instead of an unhappy and probably angry crowd, you now had customer satisfaction par excellence. Instead of a short-night's sleep and then a day recuperating by the pool, this group had been chosen to visit one of the highlights of any trip to Greece - for free. The tour group were overjoyed at their lucky break.

Next morning, the day-shift manager queried why the hotel was paying for 15 tourists to go on the Santorini trip. This was normally seen as a profit center by the hotel - as the margins were considerable. Christos explained the situation: how, instead of paying out to competitor hotels to accommodate the overbooked tourists, the hotel had covered its costs by just diverting the payments already made to the tour. Quickly the wisdom of the decision was realized, and it is now part of the hotel operating manual.

More importantly - this second story shows some of the skills all great marketers need:

1. Ability to be able to think quickly, laterally and if needed, sidestep conventions and rules;
2. Awareness of the importance of customer satisfaction: a happy customer leads to a strong reputation, and repeat purchase;
3. Awareness of the importance of profit and that customer satisfaction needs to be balanced by an ability to make money.

Successful marketing is not all about reading the text books. Generally it is about solving everyday problems using innovative approaches. Many of these require skills in lateral thinking. Such solutions often are low-cost or save money, and build reputation at the same time. There are many examples of how lateral thought has been used to create opportunities or limit threats to the business. These two stories illustrate two different ways problems were solved through lateral thinking.

Thoughts for 2008

It may seem like we've only just started 2007 - after all it is still only February. However marketers should be thinking ahead, and it's never too early to start. After all January 1st 2008 is less than 330 days away and the US presidential elections, taking place on November 4th, 2008 are under 650 days away.

So what can we expect for 2008 - which we should be planning for today!

1) There will be a US presidential election - and the winner will not be George Bush. It may be a Republican colleague - I'm not going to forecast who I think will win. Or it may be a Democrat. Whoever wins will want to show change - and will want to be seen as their own man or woman. (Yes - woman. As this election promises to be significant in that Hillary Clinton may become the Democrat nominee - meaning that for the first time, there will be no First Lady, just a First Man, to accompany the First Female President of the USA.)

So political change in the US is inevitable. This will have an impact on all aspects of life both in the US and the world.

2) In the UK, Tony Blair will be just a memory and history. He's announced that he will be standing down this year. 2008 will be the year his successor will start making the changes that will gear up to the next UK general elections which must take place before June 2010. If Tony Blair's successor fails to win hearts and minds, then they will not survive and it takes at least a year for this to happen. So 2008 will be the make or break year.

3) Globally, the Iraq war will still not be sorted out - and deaths from bombings and terrorism will continue. Whether the USA and UK will still be involved is less clear - although my bets are that both countries will still have forces in the country.

In fact, I suspect that the situation today in the Middle East will still be broadly the same. The Israel-Palestine conflict will still be a dominant factor - although I think that the leaders in both Israel and the Palestinian authority may be different. I'd like to say the same for Iran - but even though President Ahmadinijad (don't you think this sounds a bit like "I'm a Dinner Jacket") may be highly unpopular globally and even among many of the intellectuals in Teheran, he won't be ousted unless the Mullahs and the masses turn against him.

I'd also like to see President Mugabe of Zimbabwe go. Again, this is unlikely - unless he dies of old age. I don't see him stepping aside, despite the dire straights his country is now in. And Mugabe will continue to blame Britain and the West rather than accept that he has destroyed what was once a flourishing and successful economy.

4) In the information / computer world - Vista will become the dominant operating system, not due to its quality but purely due to inertia. People will be dithering in 2007, but by 2008 will feel that they need to upgrade their PCs - which will all come pre-installed with Vista. However there may be small changes.

It is possible that in the home market, people may start thinking about Macs - especially if Apple's marketing succeeds in emphasizing the Mac as a better computer for the home in contrast to the PC for the office. The iPod effect may help drive this, as well as the aspirational aspects of the new iPhone which will start being seen in people's pockets. Meanwhile in the world of the web, many of the Web 2.0 applications will be seen as mainstream - possibly with a new killer application taking pole position. Google will, however, still be the dominant search engine although I believe that it will have lost share to others - both newcomers and perhaps Windows Live and Ask.

I've not mentioned other areas that I think will be important - the threat of climate change for example will lead to increased demands to control carbon emissions, and flying may start to be seen as a luxury if taxes increase to make airlines responsible for their carbon footprints (although I somewhat doubt this will come in by 2010). I think that predictions that 2007 will be the hottest year ever will, if they come true, lead to an international effort to prevent global warming. However unless China and India come on board not much will be done, so I feel that any major changes won't occur in 2008. If they do, then the impact on economies will be "interesting"!

Finally terrorism will still terrify - increasingly, as the prospect of mega-terrorism comes to the fore, with terrorists gaining (or being prevented from gaining) nuclear or biological material. The war on terror will not be won until all countries perceive the threat equally and stamp down hard on this scourge. Currently many just play lip-service to the concept in the hope that by keeping their heads down they won't get targetted. However that is not how the terrorists see them. They see them as soft and ripe for take-over, as that is the ultimate objective: to make the world follow their particular concept of God!

A new dawn - we hope you like it!

At last - the update on the AWARE site has been completed. After a marathon late night session all pages, both new and replacement, have been uploaded.

We've included more FAQs, more humour, more white papers, copies of presentations given at conferences and many resources to help competitive & marketing intelligence professionals stay at the top of their field.

There are a few bits we are still working on, but over the next few weeks these should be finished too. So bear with us. Our Business Sites for CI Professionals pages still require work - so that we can create the definitive resource of top sites to aid secondary research. We also plan to change a lot of the images and pictures - with new sharper, snazzier versions. And that's just for starters. Other changes will happen over time - with new content and support for competitive intelligence professionals worldwide.

This site update involved almost a complete rewrite of the way the site was built - and EVERY page had to be modified. Most of the changes are behind-the-scenes and apart from the new menu bar, you may not even notice differences on some pages. Believe us though - there were. The site now allows text size to be increased or reduced - complying with disability legislation and allowing visually impaired readers to read the site with ease. We've also labeled most (not yet all) images so that visitors using Braille readers can identify the graphic elements.

As with any undertaking this size, there may be mistakes, typos, errors, or pages that just don't work. There may also be some pages that look inconsistent, or where fonts change half-way through or between pages. Some pages may look odd on your browser and although we've tried to check for this, we may have missed something. (The look of a page can vary depending on the computer used, the screen resolution and the browser. Our favourite browser is Firefox, and all pages looked OK using Firefox. We also tested the site on an older version of Internet Explorer - but may have missed some things).

So, if you do spot errors, or things you don't like, please let us know.