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

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

By James D. Underwood

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.