Competitive Intelligence: How to Assess a Competitor's Corporate Culture to Predict Behavior

In compiling competitive intelligence, you want to have an idea of the possible and likely future behaviors of your competitors. Every organization has a personality. Some are buttoned-down, nose-to-the-grindstone sweatshops, and others are abuzz with laughter and creativity; some are roll-the-dice risk-takers, whereas others focus on tradition and consistency; some encourage and reward individual ingenuity, whereas others encourage and reward group efforts.

Developing an accurate understanding of a competitor's corporate culture can help you predict a lot about an organization's ability to execute strategic initiatives. In fact, a lot of research in this area compares the success of firms with adaptive versus nonadaptive cultures.

To assess a competitor's corporate culture, rate the following areas on a scale of 1 to 5:

    ____    Attitude toward change (1= defends the status quo; 3 = indifferent toward change; 5 = embraces change)
    ____    Value of employees (1 = devalues employees; 3 = indifferent toward employees; 5 = highly values employees)
    ____    Rewards and incentives (1 = rewards historic performance; 3 = rewards productivity; 5 = rewards creativity and risk taking)

Total your scores to come up with a composite score and use the composite score to predict the firm's future behavior based on its corporate culture assessment:

3–5: This score reveals a competitor with a classic frozen bureaucracy, indicative of future organizational failure.
6–10: A score in this range is typical of companies in the middle of the pack. Depending on whether the score is closer to 6 or closer to 10, you can expect the competitor to be very slow to moderate in terms of responsiveness and execution.
11–15: Companies that score in this range are typically rock-star organizations — the most agile and creative. Assuming that the firm's strategy is solid, it's probably in the top 10 percent of its competitive segment.
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