How to Create Actionable Competitive Intelligence - dummies

# How to Create Actionable Competitive Intelligence

Your data is no good when it can’t lead to any action. The best approach for converting information into actionable competitive intelligence is the see-mean-do (SMD) approach:

• What do I see?

• What does it mean?

• What should we do?

Take a piece of paper and draw two vertical lines on it to create three columns of equal width. At the top of the first column, write “What do I see?” at the top of the second, “What does it mean?” and at the top of the third, “What should we do?”

Credit: Illustration by Wiley, Composition Services Graphics

## Observation: What do I see?

Whenever you first look at a piece of information, jot down a list of what you see, being very careful not to read anything into it, make any judgments about it, or draw any conclusions from it. List the facts as stated in the article, speech, interview, or whatever source you’re looking at.

Note: This step of untangling strands of information is crucial to conducting quality analysis — even when it gets a little tedious.

For example, suppose a short newspaper article reports that a major competitor is going to build a plant in Bentonville, Arkansas. In the “What do I see?” column, write the following:

Competitor B is going to build a new manufacturing plant.

Competitor B’s new manufacturing plant will be in Bentonville, Arkansas.

Keep your facts straight and keep them separate, as in this example. By separating the facts, you improve your ability to analyze each claim.

Don’t try to interpret what you’re seeing during the observation stage. Save the interpretation for the mean part of the see-mean-do approach.

## Interpretation: What does it mean?

When you have a list of observations, you’re ready to interpret what the facts mean by asking your Why? questions. Continuing with the example, here are the Why? questions you may be inclined to ask:

• Why is Competitor B planning to build a new manufacturing plant?

• Why is Competitor B building said plant in Bentonville, Arkansas?

To answer these two questions, you probably need to circle back and perform additional research. Competitor B may be planning to build a new manufacturing plant for any number of reasons, including the following:

• It’s planning to close an existing plant somewhere else.

• It’s planning to ramp up production to meet a future increase in demand.

• It’s developing a new product that its current manufacturing facility isn’t equipped to produce.

• It’s moving forward to take advantage of emerging technology.

• It’s trying to slash manufacturing costs by moving to a new area.

Jot down all these possibilities in the “What does it mean?” column of your SMD sheet.

Likewise, Competitor B may have its sights on Bentonville, Arkansas, for any number of reasons, including the following:

• Workforce availability and affordability

• State or local tax incentives

• Geographical location nearer to suppliers or distributors (or both)

• Fewer costly regulations

Jot down all these possibilities in the “What does it mean?” column of your SMD sheet, grouping them according to the “see” event they apply to. In this example, you have two “see” events — the fact that Competitor B is building a new plant and the fact that it plans to do so in Bentonville — so you should have two sets of reasons in the “What does it mean?” column.

Look for patterns. For example, you may find out that Competitor B has also assigned a marketing executive to its Bentonville office. Why would it do that? As you begin putting all the information together, you may be able to conclude that the competitor is preparing to pursue a client called Walmart, which is headquartered in Bentonville, Arkansas.

Drawing two or more conclusions from your observations is not unusual. What’s critically important to the process is that you begin to develop a picture of exactly what a competitor’s intentions are and why a competitor is engaging in the observed behavior.

## Action: What should we do?

The first two steps of SMD analysis give you insight into what’s happening and why. Now you need to decide what to do about it. How should your organization evolve to take advantage of the new reality or defend itself against a perceived threat?

There’s not much step-by-step guidance here because each situation is so unique. Even the example of Competitor B with Walmart in Bentonville is loaded with variables. If your company has been trying to get Walmart as a client, then Competitor B’s plans could gum up the works and require you to ramp up your efforts.

If Walmart is already a client, then you may be facing a competitor that’s planning a full-frontal attack against your company or planning to introduce a new, innovative product as a back-door entry point to gain a foothold with Walmart. Each possibility presents different challenges that your strategy must address.

Here’s where you have a great opportunity to strengthen your internal ties with key members of your intel team. Here’s one approach to do just that:

1. List four or five responses that your organization may consider implementing.

Record these responses in the “What should we do?” column of your SMD sheet.

2. Create a one-page overview of the issue that asks one representative from each department (including finance, marketing, advertising, product development, and brand management) to rank the responses from best to worst.

3. Ask each rep to explain her reasoning for the rankings.

4. Ask each rep to summarize any thoughts about the competitor, the product, or any other relevant issues.

The combined input from this process should allow you to propose a solution that may already have some level of acceptance within the organization simply because of the collaborative approach you used.