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User-driven Competitive Intelligence: Crafting the Value Proposition

  • ID: 42901
  • Report
  • January 2003
  • 126 pages
  • American Productivity & Quality Center, APQC
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The topic of user-driven competitive intelligence is a natural extension to the previous competitive intelligence studies. Up to this point, the studies have focused on gaining a better understanding of how competitive intelligence programs emerge, the development of actionable intelligence, competitive intelligence’s links to the knowledge management process, the coordination between strategic and tactical intelligence, and the structure of science and technology intelligence. Thus, the focus in past studies centered on the producers of intelligence—their roles, responsibilities, and impact on organizational performance. Because competitive intelligence programs exist to assist executives, sales, planning, manufacturing, and other functions within the organization, understanding how to develop close working relationships with intelligence users is central to both the application of intelligence products and the survival of the intelligence program.

Unfortunately, little systematic research has been devoted to how close working
relationships between intelligence producers and users are created, nurtured, and maintained. Even less attention has been devoted to how competitive intelligence is used during strategic and tactical implementation. Competitive intelligence products are often “thrown over the wall,” and users are left to decide if and how the intelligence will be directed toward implementation initiatives. Thus, it was time to study how bestpractice organizations develop close, working relationships with users and how competitive intelligence is applied during implementation. The study of how competitive intelligence is applied during implementation challenges one of the fundamental assumptions of the intelligence cycle. The intelligence cycle is the analytical process that underlies competitive intelligence work processes.

This model of the intelligence cycle was first developed in national security
intelligence agencies. One of its primary purposes was to assist policy makers in matters of national affairs. As such, there was a perceived need to separate policy making from intelligence producers to maintain the integrity of decision making. In other words, intelligence producers were to report intelligence, develop alternatives for consideration, and identify significant implications but never be an integral part of the policy-making/decision-making process.

In a business setting, the separation of intelligence producers and users is problematic; organizational goals, limited resources, and the speed of competitive dynamics require an integrative approach. One of this study’s main objectives is to modify the intelligence cycle to include competitive intelligence professionals in both decision making and ongoing implementation processes. Several key benefits arise if the study is successful in this respect. First, fact-based intelligence becomes the foundation of effective decision making. Second, competitive intelligence professionals add value as they become part of decision-making and implementation teams. Third, competitive intelligence professionals will increasingly gain the trust of intelligence users as they begin to share the same language, goals, assumptions, and knowledge base. The increased level of trust will raise the social capital of competitive intelligence professionals and their influence. Finally, the field of competitive intelligence will gain increased legitimacy as users recognize the central role of intelligence in contributing to sustainable and profitable growth.


Drawing on input from Subject Matter Expert (SME) John Prescott and secondary
research, the APQC study team identified three key areas for research. These areas guided the design of the data collection instruments and study focus.

1. Developing a close working relationship with competitive intelligence users
- Processes and tools for understanding competitive intelligence user needs and
- Engaging and educating competitive intelligence users
- How users set the ethical tone of intelligence in the organization
- Building trust and credibility with users

2. How users apply competitive intelligence during strategic and tactical implementation
- Defining formal structural and operational links between the competitive
intelligence unit and intelligence users
- How users collect and process intelligence
- How users integrate competitive intelligence into decision making and
- Integrating competitive intelligence into user intelligence networks and key
teams or committees
- Characteristics of competitive intelligence projects, presentations, and reports that lead users to action

3. Measuring the value of competitive intelligence from a user’s perspective
- Linking competitive intelligence activities to revenues, costs, and/or profits
- Soliciting and incorporating user feedback
- Competitive intelligence contributions to knowledge development, sharing,
and transfer
- Calculating competitive intelligence’s return on investment

Integrating Competitive Intelligence

Competitive intelligence has traditionally focused on strategic and tactical
formulation. Although this is a valuable endeavor, integrating competitive intelligence into implementation initiatives such as new product launches is an untapped and valuable activity. Competitive intelligence currently addresses only 50 percent of the formulation/implementation decision cycle. The influence of competitive intelligence professionals will be enhanced if they more fully participate in the entire decision-making cycle. The goal of this study is to better understand how competitive intelligence producers and intelligence users become cooperative producers, disseminators, and implementers.

The literature in competitive intelligence is virtually absent with regard to the role of competitive intelligence in implementation. This study attempts to begin to fill the research gap by answering several fundamental questions for the field of competitive intelligence related to implementation.
- Are there new and different skills that a competitive intelligence professional needs to develop to effectively be part of implementation initiatives?
- How does a competitive intelligence professional develop close working
relationships with intelligence users so that he or she is invited to participate in implementation initiatives?
- What types of activities and intelligence can or should a competitive intelligence professional address during implementation?
- Is strategic implementation different from tactical implementation, from an
intelligence perspective?
- Is the measurement of competitive intelligence effectiveness affected by focusing on implementation initiatives?
- Is the social capital of competitive intelligence professionals, and thus their influence, enhanced when they work on implementation initiatives?

The remaining chapters in this study will address these questions in detail.
Certainly, others will arise as competitive intelligence professionals further integrate their efforts into implementation initiatives.

Getting the User’s Attention

There is increasing evidence that the first step necessary for competitive intelligence to be used in decision making and implementation involves gaining the attention of a manage1. There is further evidence that the quality of the relationship between the two parties is the driving force in whether the manager will pay attention to the competitive intelligence professional. Three conclusions can be drawn. First, understanding how a competitive intelligence professional develops close working relationships with intelligence users is critical for gaining access and attention. Much of this study focuses on learning more about this process. Second, if there are other reasons why competitive intelligence is not used, is there anything that can be done to overcome these barriers? Some of the reasons why competitive intelligence is not used are:
- an unwillingness to act on the part of the intelligence user;
- organizational inertia;
- a lack of confidence in competitive intelligence;
- cognitive dissonance and blind spots;
- a lack of access to intelligence due to security concerns; and
- filtering intelligence, such as with bad news, through coloring and/or timing

This study examines how to successfully overcome many of these barriers during
implementation. The third and final point the study will examine is that gaining a manager’s attention is a necessary but not sufficient condition for intelligence use. This study will examine tactics that the best-practice partners use to address these conditions. Once a competitive intelligence professional gains the attention of intelligence users, the following steps need to play out before intelligence will be applied during implementation initiatives:

1. Managers evaluate the relevance and ramifications of competitive intelligence to solve a problem or provide an opportunity.

2. Managers resolve the reliability of the intelligence because intentions of
competitors are difficult to assess and often change.

3. Managers must determine a viable course of action given the intelligence and
apparent constraints.

4. Managers must determine the implementation capability of the organization to act on the intelligence.

The study team’s interest is to better understand the role that the competitive
intelligence professional can play to address the above concerns during implementation initiatives.

The Role of Trust and Credibility

Central to developing a close working relationship with competitive intelligence users is building trust and credibility. A summary of research findings in the area of trust related to researchers such as marketing and competitive intelligence professionals suggest three major findings.

1. Interpersonal factors are most important in building and maintaining trust.
2. The perceived technical competence of a professional is significantly related to
building and maintaining trust.
3. The position of a professional in the organization’s network is a significant predictor


This study resulted in key and secondary findings within the three study
focus areas:

- Developing Close Working Relationships With Users

- Use of Competitive Intelligence During Strategic and Tactical Implementation

- Measuring the Value of Competitive Intelligence From the User’s Perspective


The consortium benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It was recognized by the European Center for Total Quality Management in 1995 as first among 10 leading benchmarking organizations’ models. It is an extremely
powerful tool for identifying best and innovative practices and for facilitating the actual transfer of these practices.

Phase 1: Plan
Phase 2: Collect
Phase 3: Analyze
Phase 4: Adapt
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- Sponsor and Partner Organizations

A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their competitive intelligence activities.

- Executive Summary

A bird’s-eye view of the study, presenting the study focus, the methodology used throughout the course of the study, key findings, and a profile of participants. The findings are explored in detail in following sections.

- Study Findings

An in-depth look at the findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the
partner organizations.

- Partner Organization Profiles

Background information on the partner organizations as well as their innovative competitive intelligence practices.

- Index
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Note: Product cover images may vary from those shown