Businesses are embracing a technology-driven approach to gain a competitive advantage.
I t is rightly said, that “The future belongs to those that see external threats before they become obvious to others”. The immediate challenge for the survival of many organizations during the current time is how to recognize, prioritize, and adapt to the range of real external threats that now impact competitive advantage.
Actively monitoring external threats is not a new concept in the business landscape, rather its use cases are available around us for ages. In the world of sport, scouts are employed to spot precocious talent as well as monitor their rivals at a deeply technical level. A merchant shipping captain has a team not only to keep an eye on the internal instrumentation and numbers but also to keep a 24 x 7 eye on the horizon for danger. Risk assessment is deeply engrained in all military leaders. Governments have their “eyes and ears” on the ground in countries around the world.
Despite that, many leading organizations are still caught out by surprise. They often believe they “know everything there is to know” about their market and competitive landscape. A trained MI/CI professional knows this is not possible. Markets are dynamic and subject to constant change by external forces. An insight analyst cannot hope to enjoy 20/20 foresight. Yet the analyst is increasingly expected to create an “early warning” for business leaders to assess opportunities as well as mitigate risk.
Historically, employees responsible for setting up CI units were trained to consider the 3 Ps of people, process, and platform. However, we still witness many strategic errors that would have been easy to predict if random “signals” had been identified. Until leadership teams see an early warning radar as an investment rather than a cost – these mistakes will continue. It is often after a huge, strategic, and costly error of judgment that an early warning system is created. The analyst becomes a truth-teller. The platform a form of insurance.
From the 3 P’s, we can add 4 Rules ‘ABCT’ to face the challenges of the 2020s.
1. The right to challenge assumptions (A)
An internal market analyst should be expected to challenge internal assumptions that are not robust. The analyst should be drawing on a variety of both primary and secondary intelligence. The analyst needs to be skeptical by nature. They need the technology-driven market intelligence system, easy access to relevant data, and an appropriate budget to report facts that support quality decision making. Being overly optimistic is easy, but delusional. I have witnessed major corporations continue operating with assumptions that prove to be fundamentally flawed. How many organizations predicted a global pandemic? Here in the UK, the All England Club (who runs the Wimbledon Tennis Championships) invested £1.5m per annum in a virus-related insurance clause. Wimbledon Tennis now benefit from this clause that is set to be worth over £100m. In hindsight, the early signals of the pandemic did exist. How easy would it have been for a manager of the All England Club to cancel their £1.5m insurance premium citing “cost” as an excuse?
2. Identification of Blind-Spots (B)
It is rightly said, “We do not know what we do not know”. With the aid of increasingly sophisticated technology embracing AI machine learning and human intelligence, organizations can now use technology to gain actionable insights and minimize the chance of surprise. We know the majority of surprises bring negative news. An empowered analyst needs to minimize the frequency and nature of a surprise. In parallel, organizations need to invest in their processes and market intelligence, and early warning system, where appropriate information can be captured and shared throughout their enterprise. Internal experts within a large company could be encouraged to feedback on rumors as well as share their tacit knowledge. Employees should be encouraged to challenge and raise red flags when further investigation is required.
3. Cultural intelligence (C)
From SWOT to TOWS. We are taught SWOT – but a better model is to identify the external risks first. TOWS, therefore, is a more powerful way of thinking. The global pandemic has created an unprecedented external threat which has made many internal strengths irrelevant. Analysts can live purely in the world of numbers running detailed quarterly forecasts. However, how do these time-pressured insight teams examine their ever-changing environment to assess the level of change? Do they truly understand the DNA of their direct rivals’ business culture? How often are they invited to “play skeptic”? How are new facts reported to their senior leaders without deference to hierarchy? How are salespeople managed if they reject the findings of sales intelligence? How often is win-loss analysis deployed? How are mistakes identified and corrected?
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4. Timeline analysis (T)
I have witnessed numerous examples of organizations failing the first two “rules”. Several leading pharmaceutical companies working with flawed assumptions were operating with serious blind-spots. How often are we caught out by a competitor launching a new product earlier than we had pre-supposed? How often are we blind-sided by a direct rival achieving the necessary licenses and/or reimbursement to go to market quicker than we had possibly imagined? How often do we wish we had created a natural alliance, or entered a new market, faster than our nearest rival? How often are we surprised by a non-direct competitor launching a radical innovation? A bio-similar entering a key market that we simply did not foresee? It is these events that cause leading organizations across industries such as pharma, healthcare, etc. to connect with a reputed market and competitive intelligence company and leverage their technology and robust processes to minimize or eliminate these risks.
A market and competitive intelligence company is often contacted when a senior management team has experienced a substantial error of judgment that has cost them dear. Multi-million dollar mistakes can often happen as a result of choosing not to make a modest investment in a bespoke secondary monitoring capability. This capability should be considered a productivity tool to optimize the efficiencies of the organization and support internal decision making.
A manager who has witnessed one serious mistake will be determined never to allow it to be repeated. They experience a light-bulb moment. Like an investigative journalist, they will aspire to a level of intelligence in advance of news becoming in the public domain. Their goal will be to achieve not only better insight but also strategic foresight. They will encourage assumptions to be challenged when appropriate.
These leaders see these 4 rules (ABCT) as a form of criterion. Like the All England Club, organizations should monitor the external market environment, not only as a source of risk but also as a way to identify new markets. A source of current intelligence to find new alliances, new partnerships, innovations, and new opportunities.