Optimizing market intelligence monitoring systems

By Arik Johnson

One of the foremost and most visible outputs of any competitive intelligence (CI) function is the production and distribution of a market or competitor intelligence monitoring product—aka “The Industry Newsletter.” It’s usually produced weekly or monthly and broadcast throughout the organization to anyone interested in reading about competitors, industry events and thoughts related to the company’s ability to compete in the marketplace. However, since CI got its start as a formal business discipline, organizations have struggled with a variety of issues related to its effectiveness and efficiency:

• What topics will it cover? What will be skipped?;

• How often will it be produced? Daily, weekly, monthly or quarterly? Will it even have a schedule at all, or will it be driven by events and behaviors observed in the market?;

• What format will intelligence consumers find most useful? E-mail, Web, print or something else?;

• How will it add value over other tools—many free of charge—that are available to consumers?;

Those are tough questions—ones that might help decide ultimate judgments about the success or failure of the CI program more generally. And since such newsletters are often the only tangible product the intelligence team delivers, at least in the beginning, getting it right has never been more important to a CI team’s future success (and survival).

The process

First, it’s important to understand what this sort of intelligence product is and is not. Monitoring deliverables like those are not intended to answer such specific questions as the ones sure to arise among consumers in the course of day-to-day market competition. Rather, monitoring applications are designed to produce a level of “current awareness” for the organization about its environment and, ideally, an early warning of risks and opportunities to come. Intelligence users and consumers must first understand that if they have questions about specific comparative metrics or strategies a competitor might consider, they’re talking about an entirely different methodology and process than producing a consistently familiar, pre-formatted current awareness output.

Once consumers understand its purpose, a market monitoring function can take many forms, but the most common and useful approach is to produce a periodic briefing directed at a comparatively broad audience with broadly defined topical coverage. For example, in the beginning of a CI team’s typical life cycle, keeping track of competitors is most often defined as its primary (or even sole) mission. So, most CI teams will focus on building the infrastructure required to satisfy that mission so that more sophisticated and value-added application priorities—from helping the sales force win bids to making merger and acquisition recommendations—can be satisfied later on. A monitoring product, therefore, must be based on the broadest possible understanding of the organization’s particular market priorities from both its risk and opportunity perspective.

Most companies have a list of top-tier competitors and a list of secondary competitors that could become a serious threat at some point and are worthy of watching. For the CI team, it’s important to focus on all such competitors—and the list can sometimes grow to be pretty long. I’ve seen monitoring applications among the Fortune 500 with a few dozen competitors listed as top-tier and hundreds more listed as secondary in importance, depending on market niche, positioning strategy and geography. The same goes for the other peripheral organizations that need to be scanned periodically—customers, vendors, regulators, etc. Sometimes, it’s even necessary to monitor firms that have nothing to do with your current marketplace, but who might be a future threat should they decide to enter it. Finally, geography is important—will it cover just the United States and Canada or will individual components look at Europe, Asia and Latin America as well?

The CI team then needs to define those topics that within that subject set, will rank high enough to be reported. It is a very “human filter” activity—I don’t believe software will be able to do that for you with any level of sophistication due to its highly situational context relative to the importance of events to a particular interest group. Topics such as M&A activity, product launches, partnerships and alliances, key executive changes and even intellectual property activity all rank pretty high on the list for most firms; in other cases, those are much less important and more obscure topics—say, staffing actions—are the real driver of interest. The final and often toughest nut to crack regards what conditions will cause the periodic format of the monitoring product to break out of schedule? In other words, events will often occur that are so important that to wait until next week to report them would be anathema to the very mission of the CI function.

Complicating the list of issues further is the fact that most of those events are already covered in the editorial publications common to an industry. That alone makes it tough to differentiate the need for a CI output focused only on reporting (with its own costs and hassles) when everybody in the company could sign up for the trade pubs. The answer is simple: Intelligence does not focus on the commodity business of spamming decision makers with every change in janitorial staff (or some other adminis-trivia) a competitor might decide is of strategic interest to its stakeholders and worthy of a press release. The real value provided by a CI team when it comes to market monitoring and current awareness is in the form of the implications analysis and situational recommendations that can be produced within the context of such events. That, alongside the ability to harness human sources when necessary, provides all the differentia an intelligence team needs to succeed in comparison to any industry’s editorial output.

The tools

If you’re reading this article, you’re probably already knowledgeable of the litany of newsfeed and document retrieval services that exist to support business today. A myriad of providers are available, ranging from super-expensive to free. Additionally, the feature sets of such products are so sophisticated today that CI teams could pretty effectively pre-assign search-and-retrieve specifications based on keyword includes and excludes to ensure they won’t miss a thing.

It’s unwise to select a provider with a pricing scheme linked to pay by the item or pay by the seat. You’ll find it’s tough to link back to original sources if you have to deal with per-seat and per-item copyright hassles at the raw collection and delivery level, when your real value-add is in the form of your interpretive analysis of those items in the aggregate for your consumers.

Along these lines, one of the most innovative intelligence tools turning up at client sites lately is in the form of Weblog—aka “blogger”—tools that allow a research analyst to publish output easily to a portal or intranet simply by writing an aggregate analysis of the day’s relevant news items.

One company’s CI team struggled with the volume of event notifications and other news that clogged their inbox each day with both trivial and crucial developments in the market. Understanding that the team’s real role was twofold—to reduce that volume and explain its meaning—the intelligence manager decided to try an experiment. Because more than 60% of its people-hours were devoted to current awareness and early warning activities (the other 40% went to ad hoc and commissioned deliverables), she wanted to shift the focus away from the sort-and-report output consumers were used to and move up the value-added ladder toward a deeper level of analysis and recommendations—a positive step in her department’s long-term career (read: “survival”) strategy.

So she had one of her research analysts learn how to publish to the intranet site a twice-weekly blog about a key global competitor, writing an impact analysis addressing her company’s context of daily events regarding that competitor, along with any subsequent recommendations and plans for follow-up research and analysis on subjects of interest, with hyperlinks citing secondary sources, just in case users wanted to read the source material referenced in the analysis.

Along with those baseline activities, she established a threshold understanding that would break out of the twice-a-week broadcast schedule, should events transpire on the part of the competitor—an acquisition announcement, new product announcement—that would be too important to wait until the next update. Then, she turned on a mailing list application (already present in the portal software) so that subscribing intelligence consumers could be pushed their competitor analysis once it was published with a synopsis of its content. Likewise, the corpus of collected alerts was indexed and made searchable for consumers, in case analyses of past output was required. After a few tweaks and as word spread, the approach to market monitoring eventually proved to be in such high demand that she converted all of her analyst resources to that format, working out the overlaps in topical coverage (by competitor, by activity type) so that her people didn’t cover the same ground twice unless the situation required it.

How to really add value

In the end, one of the greatest benefits a monitoring deliverable can provide is harnessing and leveraging human-source intelligence as an additional component to add clarity and satisfy demand-related requests from intelligence consumers. Human intelligence means talking to people in the marketplace—customer and competitor staff primarily—and eliciting the information required to fill in the gaps not provided by public domain sources. Although it’s usually too tall an order to expect or call for human intelligence collection as a component of a fledgling monitoring system, it’s worthwhile to think ahead about the ultimate evolution of the monitoring system to include knowledgeable human intelligence sources to augment the secondary (document) sources and impact analysis.

Likewise, as mentioned above, the key to adding value and fulfilling the mission of track-and-scan intelligence is not in publishing everything there is to be known about a competitor, a product or a market that could just as easily be had from a trade mag’s Web site. In fact, one of the values of an intelligence function is in its ability to purify the signal-to-noise ratio and focus organizational attention span on just those factors that truly matter to the company’s present and future ability to achieve success. In the end, the most consistent key to completing that mission is a focus on building a relationship with decision makers that, in the management consulting business, we call “the trusted adviser.” The process of reaching such status is long and arduous, requiring both guts and smarts, but done right, it’s a high-risk/high-reward career move for any executive deciding to move into CI in the first place. And, once such trust is earned and has come to be relied on, the real mission of the CI team blossoms—showing the organization how to avoid risk and grab hold of opportunity—providing a roadmap for the firm to create its own future while also succeeding in the present.

Arik R. Johnson is managing director of the competitive intelligence (CI) outsourcing & support bureau Aurora WDC. To learn more or chat with Arik, go to aurorawdc.com/arik.htm.