Why should I care about CI? I’m in Sales!

Calls, pipelines, meetings, and more calls. This is what sales people do: make calls, make contacts, and build relationships. It seems simple, doesn’t it? So, when a marketing person comes in with charts and diagnostics, what happens? The eyes roll, the hands go back behind the head, and you can almost hear the brain turning off.

Why do you think salespeople don’t care about CI? What have you done to show them of their benefit? Salespeople work primarily in the business of relationships, and on the surface it doesn’t seem as if Competitive Intelligence matters. Therefore, they believe that what they need is to get themselves in front of the right people, and their sales abilities will finish the deal.

Therefore, when someone outside of sales approaches them with statistics and magic quadrants, they don’t see the correlation to their efforts at creating and maintaining their relationships with prospects.

Maybe a different tactic is needed. Maybe it’s time for the market research person to use a little salesmanship to promote CI to those who can use it most. Consider these questions before approaching the sales team:

1. What information can I share that matters in a sales scenario?
2. What can it tell them that impacts their ability to win more opportunities?
3. What can I leave out that isn’t critical to their specific needs?
4. How can I present this information in a way that gets their attention?

Whether we realize it or not, we are all salespeople. We need to position our product in a way that attracts the attention of those we wish to influence. Remember that when you try to sell to the biggest skeptic: your own sales force.

Competitive Intelligence Webinar – Key to Setting Up a Win Loss Program

Yesterday, Ralph Nielsen (Director of Research Operations) and I co-presented a webinar on how to set up a Win Loss program that works. We took the opportunity to talk about best practices, obstacles, unexpected value. If you are thinking about setting up an in-house effort or you work with a 3rd-party vendor for your Win Loss, we gave you a ton to consider.

Also, I have recently spent some time with our great clients talking about how they use Win Loss, to whom they distribute it and where it makes a difference in their companies. I turned the results of this work into a section in the webinar that I refer to as Seven Secrets of Making Your Win Loss Program More Effective. That’s kind of a long title, but it leaves little room for confusion.

If you would like to download the slides alone, you can find them HERE.

If you want to watch the entire webinar with audio and video, you can download that file right HERE.



Over the next few days, I’ll spend some time sharing the ideas from the webinar in the blog.

Also, we appreciate the many people that gave their time and attended. If you watch the presentation and have any questions or comment, let me know. Leave a comment on this blog, email me (cdalley@primary-intel.com) or give me a call (801.838.9600 x5050)

Podcast: Competitive Intelligence + Sales Team = Big Success

Recently, Dave Stein (CEO of ES Research Group) interviewed our CEO, Ken Allred on the affects of sales intelligence: competitive intelligence that can be brought to bear on all aspects of the sales process. His goal was to understand how Primary Intelligence uses intelligence to increase sales close rates.

As Mr. Stein’s company focuses on the evaluation of sales training and enhancement companies. His reports detail the performance of key players like Miller Heiman, The Complex Sale, The TAS Group and dozens of others. His goal is to help companies that want to sell more find the right resources to meet their needs.

To this end, Mr. Stein took time to understand how the right kinds of intelligence can be leveraged to provide:

Competitive advantages

Increased visibility into your company’s performance

Identification of your competitors’ movements

The audio program is 25 minutes long and can be downloaded here.

If your responsibilities include sales management, sales training, competitive intelligence or marketing, this podcast is well worth your time.

And, if you feel like you’re not sure where you stand in relation to the competition, you’ll find usable insights and take-aways you can use today.

Competitive Intelligence Tip #3 for 2008 – Leverage Your Intel to Beat the Competition to the Battlefield

In a marketing case study published by SCIP way back in 2001, the following description of the competitive environment illustrated the need to involve more sales and marketing people within the competitive intelligence efforts.

“A truism: In the face of economic uncertainty, companies must be more aggressive in order to gain competitive advantage. A fact: Under pressure to deliver against difficult odds, sales and marketing groups increasingly are being embedded into company-wide CI operations. The result: A real difference in revenue generation, from winning a small sale, to taking advantage of a major market opportunity.”

In a case study of Merck’s intelligence efforts, a description of the objectives included the following:

“The project involved re-positioning a current Merck drug so that it claimed the competitive space a rival's product was aiming to occupy -- thus delaying the competitor's launch to the point where, because of patent expiration timetables, a major rollout no longer made financial sense.

Summed up, this project involved using publicly available data to predetermine the competitor's plans for marketing and positioning a brand still in development. Once anticipated, a pre-emptive counterstrategy was conceived and employed by Merck, by repositioning a product already on the market. This forced the competitor to conduct new trials to reposition its brand, resulting in a significant delay in market entry, and allowing Merck's existing brand to enjoy sustained growth and increased market share.

While the specifics may relate to pharmaceuticals, basic CI technique was at the heart of this success. Early warning of the competitor's intentions was gleaned by attending professional medical meetings and gathering public domain information such as efficacy and safety data, and clinical trial results -- providing clues on how a forthcoming development may be marketed.

‘We found that the message around the competitor's product, which hadn't been introduced yet, was very strong. Not only strong, but in a market segment that no one else occupied," related Mr. Kalb. "Our own original data about a Merck product showed if our product was positioned in the same area where their product was most likely going to be positioned, we could block them. We could get into their space before they got there, and occupy it in a way that prevented them from claiming a unique selling proposition.’”

Merck ended up running simulations of marketing messages, strategies, product marketing and attempted to anticipate where the competitor’s product would be of most value. As a result of these exercises, Merck was able to beat the competitor to its intended market, causing the competitor to delay its product launch 18-24 months due to repositioning efforts. Additionally, Merck was able to take advantage of being first to market and weakening all subsequent efforts of the competitor.

Merck estimated a gain of $150-200 million over the competitor due to its competitive intelligence project, which was still bringing in gains. These gains may have eventually total out somewhere in the $300-400 million range.

Not a bad bit of ROI for a hard working competitive intelligence team.

Not every competitive intelligence initiative is such a big hit. In fact, some CI efforts do little more than monitor trends. But, if you are in a position to understand company strategy, future direction and aspirations, you need to step away from the day-to-day and examine how your current CI might lead to bigger insights. If you can improve your company’s overall performance by just 1-5% with intelligence, the ROI story can be very impressive.

And remember. Every extra dollar you earn for your company is a dollar your competition will never see.

Competitive Intelligence Tip #1 - Make Your CI Produce Revenue

In a post by Jan P. Herring titled “How Much is Your Competitive Intelligence Worth,” the distinction between information and intelligence is made in a way that speaks to me:

“In the final analysis you can evaluate your company’s CI effort if you properly define what and how you intend to measure. In my experience, senior level users of BI/CI are not as interested in financial or quantitative measures of your CI products & services as they are in having intelligence that visibly affects their decision-making or business actions in a positive fashion. They do, however, expect to see some form of related action. Those actions that result in grater sales, profits, or other measures of business success are the most valued.

An old friend and associate, Robert Steele, probably put it best, “Information costs money. Intelligence makes money!” Essentially, any competitive information that a business manager acts on becomes intelligence. And, intelligence used by a company that makes money is good intelligence!”

He also discusses various ways that Competitive Intelligence can produce ROI, but more importantly, can be measured to validate the ROI:

Time saving: Savings for both professional and support personnel

Cost savings: Elimination or reduction in expenses

Cost avoidance: Elimination of planned expenses

Revenue increases: Increases in the number of sales or size of sales

Value added: Benefits not easily related to specific dollar values, e.g., more effective strategies or better new products and services.

In so many places, we have tried to espouse the same message. Competitive intelligence professionals need to be looking for the ROI in their initiatives. Or, too often, you will be known as the producer of information, not intelligence. And, really? What value is there in that?

Links to other Primary Intelligence thoughts on CI/ROI
Webinar: CI with ROI
Another Endorsement for Win Loss Analysis
Competitive Intelligence – The Difference Between “Interesting” and “Effective”
What are the top challenges with regards to Competitive Intelligence?
Making Competitive Intelligence Effective with Cross-functional Teams (Part 2 of 4)
Increasing ROI from Competitive Intelligence Efforts
Analytics in Competitive Intelligence: Stated Importance vs. Derived Importance

Using Win Loss to Win Back Business (After they have experienced the competition)

During our most recent webinar (hosted on 10/25/2007 and available for download here), Ron Sathoff and I talked about three of the biggest benefits of Win Loss. One of those points was the ability to win back business that was previously lost to a competitor.

At Primary Intelligence, we emphasize competitive intelligence that will help your sales, marketing and business development organizations create more revenue, strengthen competitive positioning and refine value propositions to be more effective than your competitors. Our goal is to provide your company with increased revenue through your sales and marketing efforts.

How do we do this? Primarily, we use Win Loss studies to measure competitive performance during some of the most valuable times; namely, when your company, product and sales performance are being compared with your direct competitors. We also take the opportunity to ask about the key loyalty drivers based on their current experience with their new vendor.

Using these data, combined with additional client satisfaction questions based on their current experience, Primary Intelligence provides a win-back index that helps prioritize sales and account management efforts with your lost deals long before their current vendor starts to worry about retention.

Imagine begin able to target your competitors’ defectors before the competitors can develop retention strategies.

One of our current health insurance clients said that using this system, they were able to win back 7 of 30 losses within 12 months of the initial loss. What would a 23% win back rate do for your company’s top line revenue?

If you have any questions, experiences or thoughts, let me know. I’d enjoy talking with you to understand how you achieve these same types of results. (cdalley@primary-intel.com, 801-838-9600 x5050)

Competitive Intelligence Newsletter – Tips for Beginners

This week, the cover story provides some of the basics that even seasoned competitive intelligence veterans need. You’ll also find information on why sales doesn’t receive as much intelligence as you might like. Finally, a report from ES Research Group will help your sales leadership make sense of sales effectiveness enhancement companies.

Cover Story
The Top Three Box Office Flops for Beginning CI Researchers
By Ron Sathoff, Primary Intelligence
For a lot of people (myself included), a good piece of Competitive Intelligence research can have all the beauty of a piece of art, such as a poem, a painting—or even a film. Like these art forms, CI can inspire or instruct those who take the time to understand it, and can even effect significant change. However, unlike a beginning filmmaker, whose poor initial efforts may only result in a bit of ridicule at a local film festival, a “flop” from a beginning CI specialist may have some significant consequences—for both the researcher and his or her organization (For more, click here)

Announcing the 2008 Sales Training Vendor Guide from ES Research Group
Corporations continue to spend a significant portion of their revenues on sales training. Unchanged from last year, enterprises spend between $4 billion and $7 billion per year training sales professionals. Of all the excellent sales training vendors out there, only a few are a fit for your organization. This ESR/InDepth™ Report is designed to help your organization increase the return on your sales training investment.
ES Research Group has compiled their findings into a 200 page report. This 3rd party evaluation is a “must read” for companies seeking sales performance enhancement.
For a free summary, CLICK HERE.

BlogCentral
Why Doesn't Competitive Intelligence Flow to Sales?
Only 56% of sales managers claim competitive intelligence as one of their tools. A higher percentage of sales reps (68%) say that they use competitive intelligence to sell. All this seems to beg the question… why isn’t the sales department organizing competitive intelligence initiatives more often (For more, click here)

The A-List Archive
A-List – R-G Crown Selects S1 over Fundtech for Online Banking Services
Originally Published in June 2005.
R-G Crown Bank acquired 18 banks from SouthTrust Bank in October 2004 and wanted to implement new online banking solutions in order to provide better service to its customers and satisfy federal banking regulators (For more, click here)

Three Benefits of Win Loss You Can’t Ignore – Analytics & Strategy (1 of 3)

There are few revenue-generating competitive intelligence tools more valuable than Win Loss. If done correctly, a Win Loss exercise provides insight into competitive strengths/weaknesses, marketplace innovations, loyalty factors and steps to improving win rates. From a tactical standpoint, Win Loss derived intelligence can show steps to increase a company’s competitive positioning right now.

I know that today’s post will be a pretty strong commercial, but Primary Intelligence has developed sophisticated predictive analytics that crate an unparalleled strategic view. Let me show you what I’m talking about.

Below, you will see an example of a Strength/Weakness evaluation based on data from recent sales opportunities, taken from a win loss study of 50-60 opportunities. Half of the data come from new business that was won and the other 50% come from opportunities that were lost to competitors:


The data are sorted from biggest negative competitive gap (weakness) at the top to the biggest positive competitive gap (strength) at the bottom. The scores are based on a 1-10 scale where 1 is Poor and 10 is excellent.

If you were to make strategic changes in your company based on the data in this table, you would probably look at the weaknesses and evaluate the most effective ways to close the competitive gap.

But, would this make a difference? What would happen if you were to increase your performance in Overall Solution Cost or Understanding Needs by ten percent? (A 10% improvement would mean that you increase your score of 8.1 to 9.1) How much would your win rate increase? Would making improvements in your weaknesses correlate with a stronger competitive preference, or would you be pulling the wrong levers and pouring time and money down the drain?

Traditional intelligence looks at Strengths and Weaknesses
• Should you “fix” weaknesses or accentuate strengths?
• Strength/Weaknesses don’t always correlate with decision making.
• Where is your opportunity to increase win rates and market share?

Can you rely on today’s strength and weakness assessments to point your company to the strongest positioning tomorrow? Does a measurement of strengths and weaknesses provide the foresight to recommend company-changing shifts? Where is the crystal ball that will show the actual gains that might be made on performance changes in your company, product and sales efforts?

Primary Intelligence does this all the time. To show your company where the real opportunities exist, we:

1. Interview recent wins and losses where your company competed head-to-head with specific competitors.
2. Measure your competitive performance in 20-30 specific decision influencers
3. Determine strengths and weaknesses (Not the gap score in the table below. Positive gaps indicate weaknesses. Negative gaps indicate strengths)
4. Use predictive analytics to determine the influencers that, it improved, would result in the greatest increases in market share. (Impact column, explained below)

Impact identifies your expected improvement in market share. For instance, in the chart above (a real-world example taken from one of our clients), if you were to improve your company’s performance in Product Knowledge by one point (In other words, if you improved the 7.7 rating to an 8.7), you would expect your win rate and market share to increase by the impact score of 5.7% (at the 90% confidence level).

And, Product Knowledge is already a competitive strength. Overall, you outperform the competition by 5% in this area. The key may be to make this competitive advantage more consistent throughout the company.

In other words, there are influencers that would provide 2x, 3x and 4x the results of others if improvement were made in those specific areas. This could result in gains of millions or billions of unexpected dollars, based on some potentially simple improvements in the right areas.

This approach takes a lot of the guesswork out of the equation. No espionage required. And, yet, the company makes the biggest gains in increasing its client base.

Another Endorsement for Win Loss Analysis

One of our clients in the Blue Cross Blue Shield network was kind enough to provide an assessment of the success of their win loss program, which they have outsourced to Primary Intelligence:

“The real value of the Primary Intelligence System to us, is their uncanny ability to drill through Producers directly to Group Leaders and Group Decision makers and engage them at a level denied to us over and over again.

At that level, Primary Intelligence uncovered the truth, the real drivers of decisions on healthcare, and gave us the opportunity to address those directly the following year.

We won back 7 of the 30 losses the previous year and those wins were driven by knowing the truth.” - Senior Healthcare Intelligence Analyst

If you are considering a win loss program, you might consider the following:

How much more successful would your company be at selling new deals if you really knew why you win and lose?

How much revenue would you gain if your company could win back 23% of lost sales within 12-24 months?

What would the ROI be if you were able to create a more solid “win” and increase the likelihood that your current client base would stay with you longer?

These are the results that Primary Intelligence delivers daily. If you are missing out, let’s chat.

Download our recent webinar on the topic (click here) or we can talk. (cdalley@primary-intel.com, 801-838-9600 x5050)

Military Intelligence – A Template for Effective Competitive Intelligence

More than 95% of U.S. based businesses indicate that they have dedicated some amount of resources to the gathering of intelligence. This may include market, sales or competitive intelligence, but the goal is usually the same: be better at business than the next guy.

But, few companies would rate themselves as being very effective with the intelligence. And, the funny thing is the discrepancy of the perception between those that gather the intelligence and those that would use it. Executives usually rate themselves as “somewhat effective” or “very effective” as using intelligence while the intelligence professionals generally rate the executives as “not very effective.” Hmmmm. Why so many axes to grind?

Every organization should examine and reexamine its practices to create a continual improvement process. During this process, I would recommend that each organization take a little time to review other organizations that make intelligence a priority.

Now, it would be difficult to peek into other businesses and discover their secrets. You wouldn’t open your doors to this kind of review. Why would anyone else?

But, you can look at an institution that, overall, leads the world in the gathering, analysis and use of intelligence – The military. In fact, you can make the case that the military has the longest running and most successful intelligence system in history. (We won’t talk about policy makers and their use or misuse of intelligence. That’s another story for another day…

Where else are the stakes higher than on the battlefield? In a situation where lives and equipment are constantly at risk, we can learn some very critical things about how the military values its “competitive intelligence”, from gathering through strategic use.

“Most militaries maintain a military intelligence corps with specialized intelligence units for collecting information in specific ways. Militaries also typically have intelligence staff personnel at each echelon down to battalion level. Intelligence officers and enlisted soldiers assigned to military intelligence may be selected for their analytical abilities or scores on intelligence tests. They usually receive formal training in these disciplines.”

“Critical vulnerabilities are…indexed in a way that makes them easily available to advisors and line intelligence personnel who package this information for policy-makers and war-fighters. Vulnerabilities are usually indexed by the nation and military unit, with a list of possible attack methods.”

“Critical threats are usually maintained in a prioritized file, with important enemy capabilities analyzed on a schedule set by an estimate of the enemy's preparation time. For example, nuclear threats between the USSR and the US were analyzed in real time by continuously on-duty staffs. In contrast, analysis of tank or army deployments are usually triggered by accumulations of fuel and munitions, which are monitored on slower, every-few-days cycles. In some cases, automated analysis is performed in real time on automated data traffic.”

“Packaging threats and vulnerabilities for decision makers is a crucial part of military intelligence. A good intelligence officer will stay very close to the policy-maker or war fighter, to anticipate their information requirements, and tailor the information needed. A good intelligence officer will ask a fairly large number of questions in order to help anticipate needs, perhaps even to the point of annoying the principal. For an important policy-maker, the intelligence officer will have a staff to which research projects can be assigned.”

“Developing a plan of attack is not the responsibility of intelligence, though it helps an analyst to know the capabilities of common types of military units. Generally, policy-makers are presented with a list of threats, and opportunities. They approve some basic action, and then professional military personnel plan the detailed act and carry it out. Once hostilities begin, target selection often moves into the upper end of the military chain of command. Once ready stocks of weapons and fuel are depleted, logistic concerns are often exported to civilian policy-makers.” (http://en.wikipedia.org/wiki/Military_intelligence)

The points that catch my attention are:

1. Intelligence professionals are present at each level of the military
2. They receive formal training in intelligence practices
3. Good intelligence officers stay very close to the policy-maker or war-fighter
4. Good intelligence officers ask lots of questions to make sure that the intelligence program is on the right track and can anticipate the leaders’ needs
5. Good intelligence officers package the intelligence in ways that the users can easily consume while still getting the intended “nutritional value”
6. While competitive intelligence personnel are not responsible for policy, direction or decisions, they should try to understand how these decisions are made. This will provide a deeper context to make future intelligence efforts more valuable.

In the next post, we’ll look at the usual structure of intelligence in today’s business.

And, if you have any thoughts, leave me a comment. I dare you.

Effective Competitive Intelligence - Problem 5 - Acceptance

In my last post, I started talking again about effective competitive intelligence. Again, my definition of effectiveness is:

– Strengthen your company’s position
• How is our value proposition perceived?
• What is the competition doing?
• Which industry-wide best practices will truly apply?
– Discover new markets
• What is possible with new technologies?
• Where should we steer the company?
– Develop new products/services/solutions
• What problems do our clients experience that we can address?

So, you (the intelligence professional) have figured out how to develop an intelligence program that provides the right information at the right time. You have listened to intelligence needs, adapted your techniques to generate information that has been requested and you have time on everyone’s calendar to present findings.

So, you have done everything right. Personal and professional success are yours, right? Hopefully so, but, no guarantees.

In a recent poll, Primary Intelligence found that 51% of sales, market or competitive intelligence people said that their executives were either mediocre or poor at using intelligence. At best, they listened to intelligence briefs but rarely incorporated the intelligence into their decision-making processes.

This same topic was addressed in our recent webinar which can be downloaded HERE.

The truth of the matter is that executives may or may not rely on intelligence to make strategic decisions. Very few executives receive formal training on the use of information and too few know how to accurately assess the value of different information sources.

To be clear, I’m not questioning the intelligence of corporate leaders. And, I am also happy to acknowledge the fact that a large percentage of executives are intelligence driven. But, the reality of the situation is that a great number of intelligence professionals work in companies where the value of their efforts will not be fully realized.

So, assess your situation. Figure out where you are. And remember, if nobody will listen, it doesn’t matter how loudly you shout.


If your goal is to make a difference in your company with your efforts, you need to be honest with yourself about your (or your department’s) ability to engage the executive level. If you can’t see that happening in the near future, either find a situation that will allow you to accomplish your goals or readjust your expectations. Anything else is fooling yourself, or drawing a paycheck. (No disgrace in feeding the family). Make sure you learn as much as you can in order to improve the résumé while you’re there.

I am personally associated with a gentleman that moved through three different companies in a 12 month period until he found a situation where he had potential to provide guidance at the executive level. When he was hired at the last company, he was brought on to provide competitive intelligence. Now, he is part of regular strategy meetings. He found a company that was receptive to his efforts and proved the worth of his skills and experience. He went for his goal.

As a last thought, answer this question about your company’s commitment to intelligence: ““If we find intelligence to answer our most pressing questions, are we willing to change?”

Let me know what you think. If you are in a great situation (or otherwise), I would enjoy hearing from you. (cdalley@primary-intel.com, 801-838-9600 x5050)

Webinar Wrap-up: Effective Competitive Intelligence

Last Thursday, Mike Brose and I hosted a webinar called, “The Sad Story of Intelligence that Didn’t Make a Difference.” That is a fairly lengthy title and I’ll work on being more concise in the future.

But I digress…

Over time, we have seen many organizations that spend money on intelligence initiatives. Those initiatives might be market, sales or competitive intelligence. Most every company conducts some form of intelligence gathering. Whether primary or secondary, the intelligence is deemed important enough to have an effect on the success of the business.

However, we have also observed that many companies spend resources on the gathering of intelligence but have very little commitment to the use of that information. Rarely will a business spend so much money with so little regard for the potential return on investment. I take that back. Advertising seems to often fall into that category. But, that’s not the topic…

The topic of the webinar was based on helping companies make more effective use of the intelligence at hand. We expressed that we were not so concerned with the source or topic of the intelligence. Instead, we suggested how any type of intelligence might display more potential simply by making sure that it would be acted upon.

If you would like to download a copy of the presentation, please click HERE


And, if you would like a summary, delivered in person, or would like to subscribe to our webinar notifications, send me an email and I’ll make sure to keep you in the loop. (cdalley@primary-intel.com, 801-838-9600 x5050)

Competitive Intelligence – The Difference Between “Interesting” and “Effective”

I always think that it is critical to make your competitive intelligence efforts as effective as possible. Over time, we at Primary Intelligence have seen so many initiatives, either in play or proposed, that seek to know just about anything you can imagine. Many requests have been merely puzzling while others have been, at best, illegal.

These questionable requests include things like: (Skip to the bottom of the list to resume the idea of the thread)

How is LaborFree’s sales organization structured (numbers; roles; management structure; span of control; by product)? Is there a sales organization chart that presents this structure? In a more general sense, is there a detailed, company wide org. chart? If so, please provide.

To whom does sales report, both regionally, and at the corporate level?

How are the sales offices geographically dispersed?

What is the role, and extent of, inside sales?

What is the typical, daily experience of a LaborFree sales associate (number of prospect/client contacts; “roll-calling” requirements; prospecting vs. account maintenance/growth; interaction with accountants and existing clients to acquire referrals; support from other LaborFree’s organizations and management, etc.)?

How extensively do LaborFree sales associate make use of product demos in the sales process? Describe the typical sales call.

Describe LaborFree’s discounting practices, at the time of initial sale.

How does LaborFree calculate its customer retention rate (by client, or by revenues)? What has that rate been over the last five years?

Does LaborFree use its LaborFree Agency commission revenue to support discounting to customers who use the pay-as-you-go insurance products? If so, to what extent?

Number of orders submitted / % errors

Number of payrolls setup / % perfect

Number of first payrolls processed /% perfect

Number of hot-start orders submitted / % actual starts

Average cycle times

How does LaborFree categorize its expenses? Provide specifics.

As compared to SOFTTIME-ES, are similarly-labeled expenses actually alike, or are there definition differences? What are these differences?

As compared to SOFTTIME-ES, does LaborFree match us expense-for-expense, or are there whole categories of expense not present in the LaborFree business model?

Where LaborFree and SOFTTIME-ES expenses are similarly defined, where are their expenses materially less or more (proportionately) than SOFTTIME’s expenses?
Per the above question, why are their expenses proportionately less or more than ours, for similar activities?

Of course, those RFPs always included the instructions, “No illegal methods may be undertaken to gather this information.”

When I see such requests, I have to ask the question, “How will this help a company sell more? I can see why the information is interesting. In fact, I have a definition of “interesting information.” Basically, anything that a company doesn’t know is easy to categorize as “interesting.”

But, “interesting” doesn’t often generate revenue. “Interesting” doesn’t make more sales happen. “Interesting” might not even make the company stronger. Interesting might only be interesting to one person; not to an entire company.

So, how does one sort out the difference between “interesting” and “effective”?

Start by defining those things that your company defines as effective. How do you make choices about services in other industries? How does your company define ROI? Certainly, healthy companies do not make a habit out of wasting dollars.

If you need some ideas, let me share some of ours. What makes intelligence effective? In order to be effective, the intelligence should:

1 Strengthens your company’s position

• How is our value proposition perceived?
• What is the competition doing?
• Which industry-wide best practices will truly apply?

2 Discovers new markets

• What is possible with new technologies?
• Where should we steer the company?

3 Develops new products/services/solutions

• What problems do our clients experience that we can address?

Apply this litmus test to your current efforts. Compare the day-to-day requests against these standards. If the comparison leaves you wanting, you have to figure out how to put changes and such in place to stop the cycle of “interesting, but worthless” information.

If you have a different set of “ effective” definitions that work for your company, let’s chat. I would appreciate your input. (cdalley@primary-intel.com, 801.838.9600 x5050)

New England Patriots Take Competitive Intelligence Too Far

Recent NFL headlines have been filled with the tactics employed by the New England Patriots. Apparently, the Patriots have been filming the opposing team’s defensive coordinator, recording their hand signals, analyzing them against actual field play to break the code and, subsequently, feeding their offense with the defense’s anticipated points of attack and weaknesses.

Some might wonder what the problem is. I have heard some say that “every team can do it,” and others have mentioned that the Patriots are certainly not the only team engaging in this activity.

And, the truth is that if the Patriots had employed a method of using binoculars, a pad of paper and a pencil to steal signals, they would not be in any trouble at all. Those methods are legal (if not ethical) in the NFL system. But, the NFL strictly prohibits the use of video capture of the opposing team’s signals.

What is the penalty for this “indiscretion?”

Head Coach, Bill Belichick was fined 10% of his salary this year ($500K), the Patriots were fined an additional $250K and the team loses a first round pick in next year’s draft. These are some of the heaviest fines handed down.

Is it possible that everyone else is engaging in this type of behavior? Football at the NFL level is hypercompetitive. While there is no evidence of anyone else doing this, there is no reason to believe that other teams haven’t engaged in this activity, assuming (just like the Patriots) that they won’t be caught or that the penalty would be outweighed by the positive benefit. In either case, the NFL has sent the message firmly that cheating will not be tolerated. I suspect that many teams had to examine their own operations this last week in light of the heavy judgment handed down to the Patriots.

For you in your company, take this lesson to heart. Know the law and stay away from the edge of the darkness. Grey areas still carry risk and the people that break or bend the laws suffer the consequences as much or more painfully than do the companies in which they are employed.

Just to jog your memory, you might consult the actual text of the Economic Espionage Act of 1996:

(a) Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly—
(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
(4) attempts to commit any offense described in paragraphs (1) through (3); or
(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy,
shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.
(b) Any organization that commits any offense described in subsection (a) shall be fined not more than $5,000,000.

Competitive Intelligence, The Super Bowl and a Very Small Detail

In the book, Greatest Team Ever: The Dallas Cowboys Dynasty of the 1990s, (Norm Hitzges and Ron St. Angelo), Norm Hitzges tells the story of “competitive intelligence” incident that had a powerful effect on the outcome of Super Bowl XXVIII, played in 1994.

According to NFL.com,

“To win, the Cowboys had to rally from a 13-6 halftime deficit. Buffalo had forged its lead on Thurman Thomas's 4-yard touchdown run and a pair of field goals by Steve Christie, including a 54-yard kick, the longest in Super Bowl history.

But just 55 seconds into the second half, Thomas was stripped of the ball by Dallas defensive tackle Leon Lett. Safety James Washington recovered and weaved his way 46 yards for a touchdown to tie the game at 13-13.”

This recap doesn’t tell the whole story of this fumble and recovery for a touchdown. The fumble was no accident and the impact it had on the game was extremely important. The Cowboys’ accidental discovery of a bit of intelligence ended up turning the entire game around. I’ll relate the story as I have heard it from Norm Hitzges.

As you know, there is an incredible amount of hype and press coverage leading up to the Super Bowl. Reporters are everywhere and no story is too small to receive significant coverage.

It just so happens that the day before the game, Buffalo Bills coach Norm Levy was being interviewed for television. He was down on the field with his team, but talking to reporters as his players walked through some drills. Coach Levy didn’t know that the camera was catching some of his players in the background. He probably thought that the camera was tight on him. Had he known that his team was on display, he certainly would have changed his angle.

Turns out that the Bills’ offense was adding a new wrinkle especially for the Super Bowl game. In the background, almost off camera, the offense was walking through a new play from shotgun formation. The idea was that the Bills’ running back, Thurman Thomas would take a direct snap from the center rather than the ball going through the quarterback’s hands. This type of play is meant to confuse a defense and create a quick strike opportunity. This play might be most effective in a passing situation, where the quarterback can fake the reception of the snap and distract the defense while the running back gets up to speed with the ball. This is a play that Buffalo had not used all year, and they figured that the element of surprise would work in their favor in the biggest game of the year.

In their hotel rooms, the Dallas Cowboys’ defense was watching Coach Levy’s interview. The Defensive Coordinator happened to pick up on the trick play being practiced in the background. It was almost sheer luck (or very thorough attention to all things related to the next day’s game) that he noticed at all, but the play caught his attention and he made note of the Bills’ formation.

He immediately called a meeting of the Cowboys’ defensive players. He explained what he had observed happening behind the coach during the interview. The defenders created a code word that would be called out if they observed the formation on the field during the game.

On Sunday, at the halftime break, the Bills lead 13-6 and were playing very tough football against the Cowboys. Just after halftime, the Bills had the ball again and in less than a minute, they had moved the ball to midfield. With only 55 seconds played in the second half, the Bills decided it was time to do something unexpected and break the game open. As they lined up in shotgun formation, the Cowboys began to yell their code word, indicating the trick play. Sure enough, the ball was snapped, the quarterback faked backwards as though he had received the snap while Thomas attempted to grab the ball out of the air and start around the left side of the line.

Completely prepared, Leon Lett of the Cowboys’ defense raced around the left side of the line and hit Thomas before the ball was secured. Thomas went one way and the ball went the other. Dallas’ safety, James Washington, scooped up the ball and returned it 46 yards for the tying touchdown.

This dramatic turn of events apparently demoralized the Bills while pumping up the Cowboys. The Bills did not score again all game and the Cowboys went on to win the game, 30-13.

So, what are the takeaways (pardon the fumble reference) of this Competitive Intelligence story?

1. Keep your eyes open and ear to the ground. Information is always in the air. You just have to know where the most likely places are to intercept that intelligence. (Too many people try to get that one silver bullet that they completely miss the dozens of little arrows that go by constantly)
2. Make sure that you can interpret what is happening. Any regular fan sitting at home watching the interview would certainly have missed the significance of the play being practiced. Find people that know how to interpret data and trust their opinion.
3. Everyone on the team needs to know how to assimilate and react to the intelligence. If not, there will be no coordinated action based on the information and the value will be compromised, at best.
4. Counterintelligence – Make sure that your secrets stay safe. Who knows where the camera is pointed, even at seemingly insignificant times?
5. Do something with the intelligence. Information that doesn’t result in improvement is interesting but completely worthless. And, there really isn’t any glory in telling someone you knew something was going to happen if you didn’t take action on the information. Hindsight may be 20/20, but for CI purposes, it may be very low on the value scale.

I might recommend a very fertile area of intelligence that should be mined often and consistently. Your current client list is full of people or companies that have shopped the competition, listened to their pitches or even have been previous clients of your competitors. If you want to stake out a very promising bit of territory and set up listening ears, I would make sure to include the current client base.

If you need some help incorporating these ideas, give me a call. I’d be happy to talk you through. (cdalley@primary-intel.com, 801-838-9600 x5050)

Using Data to Make Decisions in Marketing

Marketing. An Art? A Science? An amalgam of both. Historically, marketing has been a craft owned by the creative rather than the methodical. And, it is likely that the creative will never leave. But, technology continues to push the envelope on what can be tracked and measured. Each day, demand increases for marketers that can measure their results.

“There is such tremendous change in the marketplace that marketing techniques that used to work may not work anymore,” says Roland Rust, chairman of the marketing department at the University of Maryland’s Robert H. Smith School of Business at College Park, Md., and author of numerous books on marketing. “Companies are trying a lot of new things and don’t know whether they work. The companies that are getting ahead these days are those that use data to make decisions,”

Prof. Rust adds. Conquering highly profitable markets, or having the right market focus and position, is one of the key building blocks of a high-performance business, says Mr. Merrihue of Accenture. And a high-performance business today demands cost-effective, results-driven marketing” (http://online.wsj.com/ad/accenture/)

The source of this information comes from an advertisement -, but the message, while a touch bombastic, remains the same. Understanding your marketing position and tracking progress against goals has become one of the most important topics in marketing. That is no secret at all. Determining what to measure and how to improve is a large challenge.

I’ll toss out my two cents on how Competitive Intelligence can improve a marketing department’s ability to compete.

If done properly, competitive intelligence should be able to tell you:

Crucial business needs that lead people to consider your product/service/solution

How the competition positions itself against you

The perception of the prospects in regard to your value proposition

The right message at the right time of the evaluation process

Your company’s image compared with that of the competition

What are the most important factors that cause a prospect to use you vs. anyone else.

Competitive Intelligence should feed your marketing department with these types of answers, allowing the most effective messages to be refined. Tracking this information over time will provide the ability to measure improvement and/or keep pace with a changing marketplace.

These ideas are some of the most basic possibilities. If you have other ideas or need suggestions, let’s chat. (cdalley@primary-intel.com, 801-838-9600 x5050)

Competitive Intelligence and Analysis Paralysis

The repository of all truth and knowledge, Wikipedia, defines Analysis Paralysis as “an informal phrase applied to when the opportunity cost of decision analysis exceeds the benefits. Analysis paralysis applies to any situation where analysis may be applied to help make a decision and may be a dysfunctional element of organizational behavior.”

For the past few posts, I have tried to make a strong case for using competitive, sales and market intelligence at the highest levels of a business to effect change and create a stronger market position. While intelligence is key to making the right moves, every decision-maker has to employ methods of evaluating intelligence and interpreting it based on the entire market picture.

Information is ubiquitous. Analysts tell you their opinion. 3rd-parties produce prodigious amounts of intelligence. Emails, RSS feeds, newsletters, web scrapers, financial reports, word of mouth, and dozens of other sources never stop producing “must-have” information. And, much of this information contradicts (partially or entirely) information from other sources.

So, how do you overcome Paralysis by Analysis? Let’s look at a few points that should help clear the logjam and get the business decision-making process back on track:

1. Define what success looks like for your company. Create initiatives that support the plan.


2. Concentrate on what you really want to know - Are you concerned with increasing market share or do you want to know the competition’s proprietary commission structure? How much will knowing the square footage of your prime competitor’s new warehouse in Des Moines help you attract new business and partners? Figure out what really matters.


3. Ignore intelligence that doesn’t support your initiatives that support success. The rest is distracting fluff at best. We all know that taking your eyes off the road to text-message is a recipe for disaster. Don’t take your eye off the ball, no matter how intriguing a data source may be.


4. Create a weighting system to deal with the intelligence that remains. Make sure that the critical intelligence supports or protects your success goal. If it doesn’t, categorize it as “interesting, but not essential” and move on.


5. Employ or contract with an analyst to help interpret the intelligence that is considered valuable.


6. Make a decision, move forward and refine your direction – Most of the time, moving in a direction is less harmful than staying put. And, if you are using the right kinds of intelligence, a bad decision will likely stub your toe before you crash into something dangerous.

For more information, I recommend an article by Michael Useem, Wharton School of Business. In his article, he comments, “A less than ideal action stands a chance of success, whereas no action stands no chance.”

Well said.

Good luck sifting and prioritizing. Intelligence is important and essential, but too much of a good thing can create big problems.

As always, if you have thoughts, leave me a post, call (801-838-9600 x5050) or email (cdalley@primary-intel.com)

Secret of Strategy, Competitive Intelligence Style (Part 2 of 2)

Last post, I provided the first in a 2-part series on strategic thinking and preparation. It is my assertion that Competitive Intelligence is too often used for tactical purposes only (sales and marketing) and is not featured in the boardroom for critical decision-making as often as it should be.

While this may not be the case in your company, you should still evaluate how often executives turn to your competitive intelligence programs. Even better, have the executives had a hand in designing the intelligence initiatives? If your executive team has helped create the intelligence programs, odds are good that they are invested in the program. Otherwise, you risk being relegated to the “nice to have” category; at least, from the strategic level.

And, if your company does not use competitive intelligence for strategic decision-making, what can you do to increase the visibility and usefulness of your intelligence initiatives in the boardroom? My first recommendation is to make sure that you personally are thinking strategically. Evaluate your intelligence programs and determine if your current information meets the strategic needs of the company. If your information is too tactical in nature, at best, it will be interesting but worthless at the highest levels.

Without further ado, I’ll let Mr. Lemberg finish his thoughts on Strategic Thinking:

Secret of Strategy - Part 2
Of course you've heard that when you do what you've always done, you'll likely get what you've always got. In this case that means playing the tactical game: coming up with acceptable--or worse--comfortable options and executing them as time permits. Likely, what you'll get is business as usual, and things will be... well, they'll be fine.

But "fine" may not be what you're after, and you are probably reading a series called "How to Create Strategies That Work" so you can do better--perhaps much better...

And if you are willing to take some time and do your homework: the research, inquiry, analysis, synthesis, and the activation of strategy--you can add dramatically more power to each one of your individual tactics, and potentially revolutionize your entire business.

In the beginning of this series I showed you how to start the process of selecting a market-dominating business and marketing strategy.

The first four steps are:
• Set your vision
• Gather environmental and competitive intelligence
• Take stock of your organization's strengths and weaknesses
• Answer the Global Strategy Question

I covered those in The Secrets of Strategy, Part 1. In this article I'm going to cover the next four steps:

• Establish decisive objectives
• Rate and rank your "SWOTs"
• Match your internal and external factors to identify strategic alternatives
• Select the highest-impact strategies for implementation

Establish Decisive Objectives
Strategy is contextual. This means you should not make any kind of strategic decision--choosing strategy A over Strategy B, for instance--without first setting a context with Decisive Objectives.

The word decisive is from the Latin decidere, which means to cut off. Decisive objectives are the goals that cut off irrelevant business opportunities and distracting details. They define the boundaries of your company's efforts and direction, and establish the measures by which you will gauge your success.

This step is to select company-defining goals, the attainment of which will mean your vision has started to become a reality. These objectives or goals should relate to the following:

• In what markets will you do business?
• What market share will you have? Will you be a marginal player with a small percentage, a big player with a significant portion of the market, or will you dominate your market and crush all competition?
• Where will you operate geographically? This question ties back to the issue of market share; you might dominate the market locally but be a small player nationally.
• How much revenue and profit will you earn? Larger revenue goals will have different strategic needs.
• What impact will your business have on your industry, your community, your world?
• How will you exit your business? Will you run the business and eventually pass it on to family members? Will you sell it privately? Will you go public?

These are examples of the kinds of goals which shape your company. The decisive objectives create the context for the strategy alternatives you generate.

Rate and rank your "SWOTs"

Previously, you analyzed your external environment and internal strengths and weaknesses. Now rate and rank the most important factors.

Evaluate each external factor: is it an opportunity to be taken advantage of, a threat to be defended against, or is simply something neutral you can safely ignore? Do the same for your internal factors: are they strengths to capitalize upon, weaknesses which much be bolstered or outsourced, or neutral conditions?

Using your Decisive Objectives as a guide, select amongst the potential opportunities, threats, strengths and weaknesses, those factors you consider critical to the success of your business. (Ignore the neutral factors.)

Group the critical factors into internal and external. Rate each internal factor from .01 to .99 based on its perceived importance to your business. The total should add up to 1.0. Do the same for the external factors.

Select the top five to ten internal factors and external factors for matching.

Match your internal and external factors to identify strategic alternatives

Matching combines each internal factor with an external factor, generating a potentially relevant strategy. A software manufacturer might match an internal strength such as flexibility with an external opportunity of a new law in a related industry, yielding a strategic alternative to reconfigure the software and provide solutions to the new legal requirements.

Or, a duck farmer might match his internal strength of breeding expertise with an external opportunity demanding low-fat, high-protein foods to yield a strategy selling low- fat duck.
Strengths are matched with opportunities to create SO strategies. These are generally your strongest, highest leverage options. Strengths match with threats to create ST strategies. These use your natural assets to minimize external threats to existing revenue streams and your current competitive position. But since the best defense is often a strong offense, you may find yourself reverting to an SO strategy-- typically a better alternative.

WO strategies use external opportunities to reduce the impact of internal weaknesses. Of course, you may simply choose to put your resources into areas of strength and outsource weak factors.

WT strategies are the weakest of all: defensive approaches designed to minimize internal weaknesses or external threats. Sometimes necessary to protect weakening revenue streams, there are often other, more powerful approaches that take better advantage of company strengths.

This process is often called SWOT, named for the four types of internal and external factors. I prefer to call it SOT, since the most powerful options will not pay much attention to weaknesses. In our business philosophy you will gain more ground more quickly by amplifying and exploiting your strengths and outsourcing--or ignoring--the areas in which you are weak.

Select specific strategies for implementation

At this point many people choose to intuitively select which strategies to pursue. Others may prefer to bring rigor to the ranking process. This final step combines your various subjective analyses into a defined framework, giving each strategy a strategic impact score.

Compare your new strategic alternatives to your list of critical factors to find those factors affected by each strategy. For each match, rank the attractiveness of the strategy relative to the factor from 1-4 (1--not attractive, 2--somewhat attractive, 3--reasonably attractive, 4--highly attractive) and multiply it by the factor's rating (.01 - .99). Sum all the scores for that strategy into a total "strategic impact score."

Lastly, select your go-forward strategies based on the highest strategic impact scores.

This is a demanding process with many steps, but it is well worth the effort. The strategies you create will take greatest of advantage of your strengths and opportunities, while protecting your company most effectively against threats and weaknesses. They will provide your company with leverage to make the most of your assets, your competitive position and your markets, all while insuring your strategies are consistent with your company's vision and goals.

Important notice for strategy-minded entrepreneurs:
Strategy creation is a long road to hoe, and goes much more smoothly when you know what questions to ask and in what sequence. To make it easier for you and your senior team, I've created the Growth Strategy Roadmap.

This program of flowcharts, questions, checklists, and detailed processes takes you through the entire progression of evaluating your external and internal environments, and provides all the steps and forms necessary to generate matched options, and rate, rank and select a high-leverage, high-growth strategy.

© Copyright 2004 Quantum Growth Coaching. All Rights Reserved

ABOUT THE AUTHOR:
Paul Lemberg's clients call him "the unreasonable business coach" because he insists they pursue goals and take actions far outside their comfort zone to make more money than they previously thought possible. To get business coaching, tips, tools and strategies like these, visit http://www.paullemberg.com/execoach.html.

Strategic Planning - Making the Most of Competitive Intelligence

The following article is part 1 of a 2 part series written by Paul Lemberg, Executive Director of Stratamax Research Institute

A step-by-step guide to creating a growth strategy based on your current situation and future possibilities.

I’ll bet you think you already have a strategy.

And well you may, but strategy as a concept is just like love: much used and little understood. Many businesses (and that includes small entrepreneurs, large corporations, non-profits, community organizations, governments, NGOs…the works) neither know what strategy really is, nor how to get one.

And even if you do, in fact, have a strategy—is it the right one? The best one? This is so important—marketing guru Jay Abraham says—and I agree—a superior strategy badly executed will beat a bad strategy well executed, any day.

It’s easy to say, “This is big company stuff. We know what we need—why should we do all the extra work.” While a “strategy-less” group of marketing tactics may work well and produce good results, is it taking your business in the best direction? You may be making money, but are you making the most money possible? Could another suite of tactics implementing a superior strategy produce far better results?

Which brings me to the point of this two-part article: how to formulate strategy.In the next 1500 words, I’m going to present the first half of a basic system for identifying high-impact strategies in your business. (Just the first half? Yes. While I strive to make this as simple as possible, it still takes a bit of explaining, and editors and readers alike detest long articles!) So Part 2 will finish the outline, and in future articles, I will discuss each system component in finer detail.

Let’s begin with a working definition of strategy.

Strategy is the guiding principle on which are based a series of interlinked decisions regarding the selection and deployment of resources and tactics, whose purpose is realizing a vision and achieving decisive objectives in a competitive and changing environment.

This definition tells us a few things:

The purpose of all strategic decisions is achieving your vision and “decisive” or critical-to-purpose objectives. Strategy is about selecting specific resources and tactics to get the desired result. Strategy is not static; it is decisions in a series, and evolves continuously over time.

Strategy is broad and all-encompassing. With that in mind, here are the 8 steps to formulating strategy: Set your vision Gather environmental and competitive intelligence Take stock of your organization’s strengths and weaknesses Select your “grand strategy” Establish decisive objectives Rate and rank your “SWOTs” Match your internal and external factors to identify strategic alternatives Select specific strategies for implementation Of course, there is one last step: turning your strategy into tactics and game plans, and execute. We won’t get into that in this article.

Step 1. Establish your vision.
People complicate the idea of vision. A vision is simply a story describing how you want things to be in the future. Some people can tell these stories easily—they know exactly where they want to be and what it will “look” like.

Others need help. The best approach is to answer a series of questions regarding what your organization does, who are it’s clients or beneficiaries, what its impact is, how big it is, where it is, how it operates, when all these things will occur, and so on. As a result of answering these questions, your vision will emerge. (For a detailed article on crafting a vision visit www.paullemberg.com/articles.html.)

Of course, you may already have a vision. If so, now is the time to insure that it is relevant and powerful.

The test of a good vision is if it inspires; not only you and your management team, but all of your stakeholders: your partners, employees, clients, investors, vendors, lenders, your community, your government—and perhaps the public at large. A great vision inspires, and it also provides direction. Every action you take should further your vision. If it doesn’t, don’t do it.

Step 2. Gather environmental and competitive intelligence.

To develop the best strategies you must understand the world outside your organization. Quantify and qualify, not just absolutes, but trends. And importantly—identify changes in the status quo. Key areas for focus include competitors, technology, market size and trends, your clients’ industry health, macroeconomic trends, availability of key resources (people and materials) government regulations and other political considerations, and changes in demographics and psychographics—like customer taste.

Devise relevant measures for each of these key external areas. For instance, examine your competitors for revenue, profit and market share growth (or decline), product and service changes, shifts in marketing and sales strategy, changes in geographic distribution, strategic alliances, and major customer announcements.

Macroeconomic factors include the obvious such as interest and employment rates and trends, production and consumption statistics, along with finer grained-industry issues such as new home buying—which impacts a wide variety of businesses, or defense spending—which impacts a completely different set of sectors.

Step 3. Take stock of your organization’s strengths and weaknesses
Now it is time to shine the light on your organization. Examine each functional area looking for strengths and weaknesses. Identify strengths that will help the company realize its vision, and weaknesses that will impede its goals.

The following is a starter list of focus areas:

Ability to get new prospects (Marketing) Ability to get new clients (Sales) Products and services, both existing and those in R&D. Finance or Money, including cash flow, access to capital, revenues, profits, ROI Leadership, including values and vision alignment, decisive objectives People, including skills inventory, staffing levels, employee loyalty, compensation Other areas to examine include:

Client satisfaction Client services Logistics Competitive positioning Unique Client Proposition Management team Administration

Step 4: Select your Grand Strategies.
This “grand strategy” approach is based upon industry/product revenue growth rates. It is specific to a business unit with one major industry and/or product focus. If your business is more complex, you may repeat the process for each focus sector.

First, consider your industry and product sector growth rate. Is it growing or declining?

Second, consider your competitive strength within that sector. For this analysis Competitive Strength has two components, the size and trend of your market share, and your organization’s
financial strength; specifically either cash flow from operations, or access to capital.

To simplify: strong market share + strong finances = strong competitive position. Either strong market share or strong finances = average competitive position. Neither strong market share nor strong finances = weak competitive position.

This defines a two-by-three matrix of strategic choices from which to select your grand strategy. (Click for illustration. www.paullemberg.com/grand-strategy-matrix.html).

The exact choice you make will be dictated by the specifics of your situation: sector strength and competitive strength, along with your stated vision and purpose. Choose from the list which best describes your business:

Strong sector, strong competitive position.

This means that you are in a growing market, hold a commanding market position, and have cash with which to maneuver. Your strategic choices include:

Market strategy to increase demand and sales for existing products and services, in existing and new markets Marketing strategy to increase market penetration for existing products and services and capture greater share. Enhance or extend existing products and services; add-ons, backends, strategic joint ventures. Gain control over distribution – bring external sales inside. Take sales from distributors. Gain control over suppliers Acquisition, merger, or joint-ventures with competitors Develop strategic partnerships to increase distribution, or gain new products. Develop related products and services for existing customer base – backend strategies.

Strong sector, average competitive position

Here you are in a growing market, but have either a commanding
position, but limited cash—or vice versa. The exact choice available to you depend on your situation. You can:

Seek underserved niches: move into small, defined and profitable markets.
Marketing strategy to increase market penetration for existing products and services and capture greater share.
Enhance or extend existing products and services; add-ons, backends, strategic joint ventures Strategic partnerships – seek products/services for existing customers Exploit assets via joint ventures and host-beneficiary relationships Develop related products and services for existing customer base – backend strategies.
Increased marketing penetration via distributors and 3rd parties
Get more money: raise capital via debt or equity.

Strong sector, weak competitive position

You are in a strong sector, but have relatively small market share, and limited or no cash. Your choices include:

Seek underserved niches: move into small, defined and profitable markets. Marketing strategy to increase market penetration for existing products and services and capture greater share. Strategic partnerships – seek products/services for existing customers Develop products and services for existing customer base – backend strategies. Sell your client base to a competitor or cooperator; or reposition your existing products to appeal to new customer types. Sell the product line and use cash to reposition remaining assets Sell the company Weak sector, strong competitive position

In this case, you dominate a weak market and have cash to exploit your position. You should: Add related products and services for existing customer base – backend strategies. Add un-related products and services for existing customer base – backend strategies. Add new products and services for new customer base Create joint ventures in unrelated markets

Weak sector, average competitive position.

You are in a mediocre position in a weak market. Depending on your exact circumstances, you can retreat, use what’s left of your cash to buy your way out with new products, or try to enroll a strong partner. Choices include:

Reduce costs however you can.
Add related products and services for existing customer base – backend strategies.
Add new products and services for new customer base Seek to dominate the smallest definition of your market using low-cost / no-cost strategies.
Create strategic partnerships and joint ventures Weak sector, weak competitive position

Sorry to say, you are in a bad place. In a word—retreat! You can do this by:
Reduce costs however you can.
Sell product line Sell company If you don’t want to liquidate, seek to expand your marketing using low-cost / no-cost marketing strategies – but this may be a losing proposition.
Also, as above, attempt to create strategic partnerships and joint ventures, but it may be difficult to attract partners to a market with poor fundamentals.

At this point you might say, “…sell the customers? Sell the company? No way. I’m holding on.” That just isn’t a strategic point of view.

Strategy says you can make more money doing something else—so you best start thinking about it.

In general, these choices are listed from most attractive to least. Your organization’s best choices will be based on your particular circumstances.
By now you have formulated a vision, gathered analyzed your external environment and organization, identified relevant strengths, weaknesses, opportunities and threats, and begun to zero in on a grand strategy. That should keep you busy for a while.
In The Secrets of Strategy, Part II, we’ll complete the process.
Remember—you don’t need a strategy. But having one increases your chances of generating the greatest profits from your resources. After all, that is the whole point of strategy.

Paul Lemberg is the executive director or Stratamax Research Institute, a business coaching and consulting firm specializing in helping entrepreneurial companies quickly increase short term profits for sustainable long term growth. Of course, he is available for keynote speeches and workshops and can be reached via http://businessknowledgesource.com/blog/archives/www.lemberg.com

Analytics in Competitive Intelligence: Stated Importance vs. Derived Importance

If your company uses market information to make decisions, you are almost certain to be familiar with the “Of these items, how important was…” or “Which of these would you consider to be first, second and third most important?” These questions result in a measurement of stated importance, or those things that are easily identified and verbalized as important.

While these data are easy to generate and generally seem reasonable at face value, there is evidence to show that decisions based solely on stated importance are subject to important limitations. Those areas of your company’s performance that are identified as most important often do not correlate well, if at all, with purchase decisions. Which means that your company can act on those performance areas identified as most important and yet, no measurable improvement be made from those efforts. In most companies, that is defined as poor ROI or “a waste of money.”

For example, through your research, you may identify a performance area with a relatively low performance score and might initially trigger discussion regarding ways to improve the performance. However, you wouldn’t want to do much about it if it had a low correlation to overall increases in market share. For instance, let’s consider this principle in a Win Loss setting. Suppose we had created an interview and included the measurement of professionalism of a sales force against a prospect’s likelihood of choosing a vendor. Whether the performance rating against the competition was positive or negative, it would be difficult for an executive to understand the impact that professionalism actually has on the company’s sales win ratio. It would be impossible to know how much a change in performance would affect that win ratio. If it turns out that the correlation to the sales win rate is high, the decision to put emphasis on increasing professionalism would be very easy and relatively risk-free. If the correlation were low, resources could be assigned to improve other parts of the sales process.

There is much evidence to indicate that responses on importance scales can be affected by other factors that distort the accuracy of the response, for example the need to please, social demands, cognitive dissonance, and generic importance, among others. In the entertainment industry, for example, television viewers using such scales will continually rate the value of news and information above sex or escapism. However, would anyone wish to predict, based upon these data, whether the ratings of the program Seinfeld will be lower than those of The PBS News Hour? Thus, there is a much deeper level of insight to be gained from deriving the information from the respondents’ answers rather than taking them at face value.

The quadrant below shows how actual data from our win loss studies has plotted on stated importance and derived importance:

Legend
• Stated importance is plotted on the Y-axis; it represents the average importance rating given by respondents for each influencer’s characteristic or attribute.
• Derived importance is plotted on the X-axis; it is obtained by assessing the company’s performance in each influencer and determining (through proprietary modeling techniques) the impact that each influencer had on the sales outcome. The higher the derived importance, the more impact that influencer has on the overall sales win ratio.

• Upper left quadrant—“Declared important”: This quadrant consists of items that are stated to be important, but which ultimately have little correlation to a respondent’s decision-making process.
• Upper right quadrant—“Key influencers”: This quadrant reflects attributes that the respondent both states as being important and which prove to be highly influential at a derived level.
• Lower right quadrant—“Hidden opportunities”: This quadrant consists of attributes that the respondent cannot readily identify at a stated level, but which do impact overall satisfaction at a derived level.
• Lower left quadrant—“Limited impact”: Attributes in this quadrant have both low stated importance and little influence on overall satisfaction.

Now, one caveat is in order here. Some performance areas may be ranked high in stated importance, but will be low in derived importance. This doesn’t mean that a company can cut back efforts in the areas of stated importance. They still have an effect on the sales process. When an attribute has a high stated importance, the data are saying that this is a performance area that can’t be neglected without adversely altering the win loss ratio, but significant improvement may not provide actual gains in the win loss ratio.

In the end, using the most sophisticated analytics tools to determine the key influencers will eventually provide the greatest strategic decision-making ability for your company. In so many cases, this approach has improved company performance so much more than “gut feeling,” reactive competitive intelligence programs, and stated importance measurements.

This is where Primary Intelligence makes its living; providing powerful predictive analytics to our clients in order to grow their market share. Perhaps, we should discuss how this might work for you. (cdalley@primary-intel.com, 801-838-9600 x5050)