The global economic crisis heightens the vulnerability of companies to external environmental threats and the difficulty in predicting what will happen.
Therefore, senior managers believe they need to be better prepared for developments. New research by Professor Carl Spetzler from Stanford University's Business School shows that before the crisis, 90% of managers' strategic decisions were based on their personal experience rather than on reading the map! The situation also affected competitive intelligence (CI) activities. Companies must take intensive measures to reduce expenses, and the sword of cuts is also raised against CI units, although they are often among the last to be affected.
CI units in large firms typically operate in a decentralized structure with a unit head operating at the management level (in company headquarters) and CI experts in business units reporting to the unit head and their direct managers. In smaller companies, a centralized model is standard, with a CI manager operating from the firm's headquarters, usually without institutionalized activity in sub-units. In recent years, awareness of CI has steadily increased, and senior managers understand the importance of the ongoing analysis of "players" in the business arena, not just competitors but trends in business environments. Since economic difficulties have not yet dissipated, but on the other hand, the recognition of the importance of intelligence products has been maintained, companies have found interim solutions to continue CI activities.
One of the interim solutions is reducing the workforce engaged in CI, sometimes to the point of closing these units and assigning some of the tasks to employees whose field of work is close to CI to perform in addition to their role, especially among intelligence consumers. This mainly involves product managers, brand managers, sales managers, marketing, finance managers, R&D leaders, strategic planning, and supply chain managers.
A few years ago, a process began that deepened the cooperation between CI units and marketing research and Business Intelligence (BI) - receiving information from company databases, which found its place in the ongoing activities of firms. The model that prevailed before, where the CI manager was a mysterious figure whispering in the CEO's ear, has passed from the world and will not return. It has been replaced by a professional CI function whose capabilities include systematic and orderly monitoring of external environments, understanding what is happening, and transferring processed business information to decision-makers while creating internal collaborations. For several years, CI has been perceived as one of the various capabilities the firm develops, such as sales, marketing, R&D, human resources, logistics, strategic planning, etc.
A new model of CI activity is now developing in the business world, which experts in the field do not see as an optimal solution. Still, it can be a reasonable solution for an interim period. Companies are looking for solutions centered on managerial flexibility, including layoffs and internal role changes, but without losing focus on the external environment, which is mainly a threat and sometimes an opportunity. This preparation is gaining momentum and is usually not the result of a thoughtful process and assessment of the correct way but a product of economic constraint.
The CI model that prevailed until the recession is undergoing changes that affect the activity of CI units. Intelligence personnel were required to adapt their resource allocation and priorities to the new situation. Employees in various positions were asked to do CI as part of their role and replace retired experts in the field. The result is prioritizing training company employees on how to perform CI activities. Companies are assisted by consulting firms specializing in CI, guiding them on how to carry out this organizational change process. One of the main difficulties is in imparting an intelligence mindset to employees - that is, developing the ability among employees to give proper priority to information gathering, reporting, and often assisting in its analysis and understanding its implications.
The change described requires clearly defining the characteristics of the CI discipline and sharpening training skills in this subject. One key to the success of the process is the involvement of training units in firms and their assistance in its implementation.
A few months ago, I was asked by a prominent company operating in global markets that was severely affected by the recession and forced to make extensive layoffs to suggest how to continue maintaining the CI issue after it was decided to terminate the employment of the CI manager in the company. A quick examination of the situation led to the conclusion that several position holders should be identified as those performing CI tasks in addition to their roles. Eight position holders were recognized at the company headquarters, and seven more worldwide. The position holders underwent intensive three-day training that included learning the discipline, defining the company's topics of interest, external and internal information sources, reporting procedures, preparing periodic and ad hoc summaries, and periodic training activities for refreshment and lessons learned. It was also determined that they would be evaluated for their activity in this subject and compensated accordingly. A position holder in the company was also appointed, who will coordinate the subject and be responsible for it in addition to his role. This move received the company's senior manager's approval, and its employees were updated accordingly. We must wait and see if this plan will yield the hoped-for fruits, as happens in companies worldwide.
One of the positive implications of the trend described above is a more significant number of company employees exposed to CI activity and the development of their awareness of the importance of the subject, as well as that of others. When better days come, companies will be prepared and have an infrastructure of employees with capability and experience in CI. The goal of the interim solution presented is to bear fruit until the end of the recession, hoping that with the return to good days, CI activity will again be concentrated in the hands of experts in their field.
In conclusion, companies understand there is no substitute for CI work, and decision-makers know the importance of continuing this activity. In this, CI receives a return on its success in implementing the subject among senior management members.
* The author is a former senior member of the intelligence community. A strategic consultant for competitive intelligence for companies in Israel and abroad. Teaches the subject in the MBA program of Ono Academic College and various programs for managers. avnerpro@netvision.net.il
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