Danger is the Early Warning Sign of Opportunity- Valutrics
Competitive intelligence comprises the actions of defining, gathering, analyzing and distributing intelligence about innovation, customers, competitors, government actions, and any other aspects of the marketplace to enable more effective decision-making.
As a process, it gathers information about the external environment, converts this information into relevant and timely intelligence, and then utilizes this intelligence to analyze key factors impacting the company’s strategy. While competitive intelligence looks at the many disparate elements in the business environment that affect a company’s ability to compete, its methods should ensure it is focused on the elements that matter most.
Needless to say, executive management should dedicate sufficient attention to external market events and developments. Stable, predictable markets are relics of the past. Factors such as globalization and faster technological innovations make the likelihood of swift market changes that could impact management’s strategy and business model almost inevitable. While internal process performance issues will always be important, the relevancy of the strategy and business model is even more so in a rapidly changing and uncertain world. Therefore, early warning capability is of paramount importance.
To provide early warning in a dynamic, complex and uncertain business landscape, a competitive intelligence process must address two fundamental questions:
• Does the process maximize market opportunities by providing the information necessary for capitalizing on emerging growth opportunities such as new markets for existing offerings or fresh revenue streams?
• Does the process minimize the risk of industry dissonance1 by gaining an understanding of the vital warning signs of one or more critical strategic assumptions becoming invalid as the firm executes its strategy in a changing business environment?
Successful identification of market exploitation opportunities is about obtaining sufficient knowledge and insights regarding economic trends, competitors, customers, suppliers, regulators and other external factors by monitoring them to evaluate changes that may present opportunities for company executives to exploit before others do. With regard to industry dissonance risk, management should focus on the vital signs that provide early warning of the risk of changing assumptions so the organization’s options can be evaluated before the risk becomes common knowledge.
The very things that made you different – how you went to market, a product breakthrough – limit your ability to thrive in the new world of today. Perhaps regulations are changing, or import or export laws make it harder to move swiftly.
The world has been moving at the pace of the market for more than a decade, but you’ve stayed still. Everything has changed, except your company. OK, you may have made an incremental improvement in execution or attained operational excellence. Here’s a consolation prize.
New brands have been born. New business models have entered the market. Service means something else than it did when you started to gain traction. Old customers have not been loyal in the long run. Be real. Back to danger.
Your dangers may save you. They can instruct your next move. An informed and intelligent response to danger, rather than a knee-jerk reply to it, can force a company to make changes that will empower it to thrive – but the firm must to be willing to change and capable of being honest with itself.
Woe be on those companies whose pride will not let them adapt, change and reinvent themselves. Companies so vain as to not change their story and their culture if they are losing market share deserve to live in an isolated, airless bubble.
Wake up – it’s dangerous out there – and that’s the good news.
The Chinese ideogram for danger also means opportunity. This is not to suggest that we seek out danger, but that we look for openings: broken brand experiences, a chance to wildly redesign service expectations, or outdated business models to reinvent or revise.
Noticing danger means you notice opportunity. Noticing the new connections in the cracks of an older system produces insights about what you can do to reset market expectations by redefining what the category means to customers.
When you are ready to reinvent your business or take a leap into a new market, notice the dangers first. That is where opportunity will be hiding.