Companies operating in today’s roller-coaster economy have increasingly turned to competitive intelligence (CI) as an effective means of building and maintaining a business edge. Revealing their secrets for monitoring competitive forces and keeping on top of the trends, opportunities, and threats within their industries, this book presents 15 leading CI researchers and their hard-earned secrets. These CI researchers are from such Fortune 100 firms as Compaq Computer, Dell Computer, Lockheed Martin, Merck, and United Technologies. The tips, techniques, and models provided can be successfully applied to any business intelligence project, and the range of sources and strategies discussed will help any organization stay several steps ahead of the competition.
About the Author
Margaret Metcalf Carr is the owner of Carr Research Group, a custom research information services firm. She is the past president of the Association of Independent Information Professionals and an active member of the Society of Competitive Intelligence Professionals and the Special Libraries Association. She lives in Baltimore, Maryland. Reva Basch, the executive editor of the Super Searchers series, has written four books of her own, including Researching Online for Dummies, Secrets of the Super Net Searchers, Secrets of the Super Searchers, and Electronic Information Delivery. She lives on the remote northern California coast with her husband.
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Super Searchers on Competitive Intelligence
The Online and Offline Secrets of Top CI Researchers
By Margaret Metcalf Carr, Reva Basch
Information Today, Inc.Copyright © 2003 Margaret Metcalf Carr
All rights reserved.
CI Advocate for Winning Business
At the time of this interview, Kim Kelly was a manager of business development for International Launch Services, a joint venture between Lockheed Martin (LM) and two Russian companies. He has worked in proposal development for 20 years. He started in 1982 with IBM Federal Systems, which was later acquired by LM. Since 1991, he has been a full-time competitive intelligence professional and has provided major CI studies to proposal teams at 10 different LM locations. He is a member of the Society of Competitive Intelligence Professionals (SCIP) and was instrumental in LM's selection as one of 12 companies (and the only aerospace company) honored for their best-practice CI operations by the American Productivity and Quality Center (APQC) in 2000. Kim is now an independent competitive intelligence consultant and a partner with Knowledge Link.
Please tell me about your background and how and when you started performing competitive intelligence.
I have an Operations Research and Industrial Engineering degree from Cornell University and an MBA in Finance from George Washington University. I've worked with Lockheed Martin for 20 years. I really spent the first 18 years in one facility and changed companies three times but never left the building! In the aerospace industry there's been a lot of consolidation. Originally, we were known as IBM Federal Systems — a little bit of an anomaly since IBM was more of a commercial computer-oriented company, while we applied computer technology to the DOD (Department of Defense) and civilian government area. We were eventually bought by Loral, and Loral was sold to Lockheed Martin. Two years ago our unit was known as LM Naval Electronics and Surveillance Systems (NESS), in Manassas, Virginia. From there I went to my current position.
I started out in an area called Cost Engineering, which is a function that estimates costs for production and development programs. "Engineering" was in that organizational name because we were involved in initial production of a new system. In other words, we weren't producing chairs or widgets, we were developing new systems. Instead of having cost tables to refer to for material and labor costs, our engineers had to calculate hardware costs — also referred to as "should costs." Should cost is a cost projection for a not-yet-manufactured or not-yet- developed product. So it was in this cost-analysis-oriented job from 1982 to 1991 that I had my first analysis apprenticeship. Much of my stint was doing software cost engineering — estimating the cost of software development — a complex process particularly since it is very labor intensive. We had a specialized department that would look at software project costs, at what the cost drivers were, and we came up with cost approaches to software development, system engineering, and documentation. This provided me with a total program cost estimation capability, leading to my competitive intelligence position in 1991. The total program cost capability was an important point, because we started CI long before most people had heard of the profession. And through the CI process, I was able to achieve a win rate of 80 percent at NESS Manassas, which was way above the industry average. The largest proposal I have worked on is the Joint Strike Fighter Program, the largest contract ever ordered by the DOD or by the U.S. government. And in 2000, when I moved to Lockheed- Martin's joint venture called International Launch Services, I helped assist in improving our win rate by 30 percent. So certainly I'm a big advocate of competitive intelligence and its impact on the business.
How would you describe your current function in a nutshell?
I'd like to split that into two pieces; tactical competitive intelligence and strategic competitive intelligence. I spend most of my time on the tactical side — day-to-day proposal bidding activities. Strategic is higher level, broad-based analysis that affects the organization over a much longer period of time. My role is to figure out the right price to bid for our proposal in order to have a competitive bid. In that process we need to forecast our competitor's bid and technical approach, our competitor's team structure, team strengths and weaknesses, and how the customer will evaluate our proposal vs. our competition's. We try to conduct this analysis months before the proposal has to be submitted so that we can have an actual effect, a real influence on how our proposal is postured, and improve our chances of winning. We'll try to influence our own team to be doing the right things by showing what our competition is doing. We'll look at our competitor's technical solution, we'll come up with a should-cost, we'll try to estimate what their win strategy will be, and go from there.
One way I like to describe our job is that we are an advocate, or a window into what our competition is doing. We have to be objective from that standpoint. I am the only person in the organization that is objectively communicating what our competition is doing. We're starting to have an influence at the executive management level of our respective companies. People know it's a valuable input and are seeking that kind of expertise, which may be why you're doing a book on it. The fact that you're doing a book about CI is a good indication that we're making a lot of progress in the business world.
With strategic CI, we conduct market analysis or look at our business strategy, and try to show how our competition or our customer may influence our assumptions and our strategies. As I perform my tactical work, over months and years, I keep an eye out for trends or issues that will affect the business at a broader scale, particularly if my customer or competitor is doing a right turn and changing something dramatically. For example, we were making a product and there was a key subsystem, like the engine of a car, and I noticed that, of the five companies that made the subsystem, two had been purchased recently by our competitors, and a third was rumored to be in the process of being acquired by a fourth. I wanted my management team to know now, as early as possible, that the five alternatives were down to three, now going down to two, and that our competition was becoming vertically integrated by buying the companies that produced the subsystems. That certainly could limit the choices that we really had in the marketplace — now what should we do about it?
You've mentioned some of the types of research that you perform now, such as SWOT analysis and market research. It also appears that you're looking at the environment and at customer trends. Can you expand any more on the kinds of research you perform?
Maybe we can divide that into primary and secondary, primary being person-to-person discussions and secondary being mostly online databases or magazines and articles, things of that nature. Both pieces are very important, and what we've found is that you've got to have the two integrated to get the best value out of both. The CI person can interweave that person-to-person discussion into the secondary research. Surprisingly, integrating these two kinds of intelligence is often overlooked.
When I'm working with organizations on a bid, I'll be working not only with our company, but I'll be getting information from our teammates. They obviously know their business better than we do, so they will know their competition in their business area. We get a lot of good intelligence from a variety of functional organizations within our own company. I'm a big promoter of internal intelligence contacts because folks who are just getting started in competitive intelligence will focus on the more obvious parts of the organization, like business development, to get an understanding of what the competition is doing. But really, there are other departments that can provide even more intelligence on what the competition is doing than business development or marketing and sales. Don't overlook program management, procurement, communications, and engineering.
Almost every organization in the company has insights on what's going on with the competition. I communicate to anyone I can get a chance to talk to about CI. One of my tricks of the trade, when I go out into organizations and promote CI, is to actually look for people that no one listens to or that no one approaches very often and asks for input. Because many times, those folks are a little bit out of the mainstream, and you need these original, out-of-the-box thinkers.
I make a point of meeting with the secondary research experts on a regular basis. If my research people know a little bit about how I do my job, how a CI process works, it makes them a lot more effective in providing information to us. The only way they can get that insight is to talk and meet regularly with the CI people, and that's what I do. It makes it into a teamwork atmosphere, which really promotes an effective and efficient process.
How do you feel CI differs from business and market research, or alternatively, how do you define CI?
I think there are two differences, and I don't want to upset the business research community in the way I'm differentiating the two. The first difference is that we're a little bit more focused in CI. From our standpoint we're not just looking at the competition. For example, we're looking at customer behavior, which actually forces us to look at the information world in terms of those constraints. The other difference is that we're an independent group; we have to present an objective view of the competition and of our customer, so we often bring up things that are controversial.
Before, you spoke about the importance of primary research and the human intelligence aspect of the process. What other resources do you feel are essential in your CI toolkit?
We have the computer software tools, the spreadsheets. We also have a lot of industry-specific online newsletters that we review. There are also for-fee databases like DialogSelect [21, see Appendix], commercial databases of government data such as regulatory filings, contract awards, things of that nature. In my toolkit, I include people in the know in particular areas, such as technology or customers. I'll call those folks and run things by them. We also use alert emails like DialogSelect and Fed Sources FSI State & Local Headline News  — systems that collect your queries, retrieve related news or articles, and automatically send you email inputs on a daily basis.
The people-to-people network is very important. I founded a network of internal CI experts called the Lockheed Martin Competitive Intelligence Working Group whereby we have on tap other organizations that might be technology- or engineering-oriented that we can talk to. Every time I work on a proposal, I meet experts in a particular field that I can go back and contact — a year or two, three, four years later — because I know they'll be up to speed on the latest sensor technology or the best software language for writing commercial applications, or the best relational database that has some bells and whistles that everybody is asking for now.
When we're trying to predict the competitor's technical solution, that gets us into the engineering area, so we sometimes have to go to conferences that discuss technologies. We certainly will hook into our engineering people who are doing the same thing. They're getting Independent Research and Development (IRAD) money to study new engineering applications, and the conferences they're going to are the same conferences that the engineers at the competition are going to, so there are a lot of ways to network and find people who are doing that.
But you would be amazed at how knowledgeable folks are, particularly folks who aren't always asked for input. Certainly everybody has a really important job in your company, otherwise they wouldn't be there, and they have knowledge, and it's like uncapping something that's been waiting to burst. People get so happy that you're interested in what they know. Nothing makes me happier than to know down the line that that person's business intelligence or knowledge of the marketplace made a huge difference in our final decision making, and in connecting those dots. I really get excited about that.
You've talked about your internal network, which is very important. Do you also have an extensive Rolodex of external experts, such as industry analysts and magazine editors, whom you've hooked up with through your years of experience in going to trade shows, reading, and so on?
Not as much as you would expect. I tend to concentrate more on my internal connections, because they're so vast. That may sound way off-base, because I'm trying to project an external view of the world when I am primarily talking to internal people. Don't get me wrong; I do have external sources, but I have to be careful about contacting them. You have the unintentional opportunity to give away information that you don't want to give away. I've really cultivated my internal organizations, and I use the folks that know the external sources.
How do you weigh or balance the Internet with the for-fee database services in your workflow and research?
That's a constant challenge because the marketplace and resource capabilities are always changing. Sources are not always improving; when the dot-coms blew up, a lot of the services that were offered for free went away. There are huge differences, obviously, between the for-fee data services and the free Internet services. The Internet is cheaper but you could argue whether it is easier to use, and the data is not as reliable or accurate. Sometimes you get excited when you find something on the Internet, and it might be really misleading. But people in the CI profession are aware of getting information that is rumor or may not be accurate, and filtering it.
A very important point is that there are so many databases and sources of data out there that you really need to utilize your specialized business research or information specialist or librarian with a science degree. However your company describes that position, those folks are specialized even to the point that one might be best at accessing technical journals, another one might be really good at wading through DialogSelect, and yet another might be good at looking at LexisNexis . There's really no one person that has all the answers, so the more you can identify the specialties that people have and use them, the better.
How do you cope when you are in the middle of a search and just not finding what you want or what you believe exists?
I have a couple of answers to that. One is that I expand my networking net, and pull more people into the search. Another is that I go back to the researcher and we work on our search words again. The search words may have been too broad-based, or too narrowly focused. Maybe we were a bit off the mark on what we were actually searching for. If I'm really in trouble, I will sometimes go back and reread some of the early research data to see what I might have missed.
It sounds like your secondary and primary research get quite intertwined; it's not a simple case of doing one before the other. Can you tell me a bit more about the process you go through after your research to provide the intelligence that you need to deliver?
Actually, that is an interesting point. I don't ever consider the secondary research really "done." If I had to make a process flow chart on how we do the work, certainly the secondary research would be a large activity at a certain point in the process. But then I would show that, over time, we still go back and collect more information, one obvious reason being that every day more articles are being published and made available in those databases that we want to look at.
But more importantly, the process is like a feedback loop that you keep going through over and over again. For example, you might get intel from an industry paper and then get intel from a primary person who knows something in an industry, and then see another article that by itself looks kind of bland, but there's a sentence or two in that article that, when you hook them up with the other two data points, supports a new direction that your competition is considering, that you wouldn't have gotten before. For example, let's say I'm trying to figure out what technology my competition, a software company, is going to use. If they have a teammate on board that specializes in X, or a teammate that always goes one way vs. the other, then that can be a piece of intelligence. If there's a new technology that no one's using yet, and you think maybe they would consider it because of their background and history, or if you find out that a commercial software company is trumpeting your competitor as being a beta test user, that's pure marketing to most people, but what it tells the intelligence guy is, oh, they're using that software, they only have so many engineers, and their engineers will be focused on the important pieces they really need.
Excerpted from Super Searchers on Competitive Intelligence by Margaret Metcalf Carr, Reva Basch. Copyright © 2003 Margaret Metcalf Carr. Excerpted by permission of Information Today, Inc..
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Table of Contents
Foreword by Jan P. Herring,
Kim Kelly CI Advocate for Winning Business,
Renee Daulong Risk Analyst,
Mary G. "Dottie" Moon Just-In-Time Intelligence Delivery,
George Dennis Human Source Intelligence,
Ann Potter On-Site Intelligence Gathering,
Roberta Piccoli Client and Consumer Intelligence,
Deborah Sawyer CI Services Marketing,
Clifford Kalb Knowledge Sponge,
Wayne Rosenkrans Pattern Recognition,
John Shumadine Team-Based Research,
Bret Breeding CI Artist,
John Wilhelm Systematic Focus,
Ken Sawka and Cynthia Cheng Correia Leveraging Internal Competitive Knowledge,
Doug House and Anne Henrich Decision-Driven Research and Comparative Analysis,
John Prescott CI Teacher,
Appendix: Referenced Sites and Sources,
About the Author,
About the Editor,