If your competitors don’t know what you’re planning, it’s simply because they decided that it wasn’t worth the money and time to find out.  It’s not because you could reasonably prevent them from knowing.  Not anymore.

Some of the ways that information flows out of your building are nothing new.  Your employees do leave, and they do go to work for the competition, and they do carefully (or not so carefully) use their knowledge of your plans against you.  Nondisclosure agreements don’t protect you from much.  Consider a sales rep who, while working for your company, had (and was encouraged to have) all kinds of conversations with potential clients about how your product is the best, how it beats the competition and what features future versions of the product will have (selling the roadmap, as they say).  If, while working for you, they were free to have these conversations with people external to your company, without having those people sign an NDA, then this information is now public and they can continue to talk about it when they no longer work for you.

What does this look like in practice?  Consider the story of Arista Networks.  There are 570 people working for Arista with LinkedIn profiles – but LinkedIn does this wonderful thing and shows you “Insights” about a company.  One of those insights is that 139 Arista employees formerly worked at Cisco.  Cisco has no secrets when it comes to Arista.

Then there’s the World Wide Interwebs.  Just do a search for “battlecard confidential filetype:pdf”.  Is this information confidential, proprietary, DO NOT DISTRIBUTE?  Not if you put it on the Web.  And this Google search is strictly amateur-hour stuff.  Competitive intelligence professionals are very adept at crafting a search that will get some great nugget of information off of Page 47 of the Google search results, and right on the first page.

Finally, there’s real espionage.  Now US-based competitive intelligence firms like ours keep our white hats on tightly and steer very clear of espionage, but much of the world doesn’t.  When it comes to cybersecurity, by all accounts, we’re losing.  And cyberattacks are penetrating companies large and small.  And while China is the scapegoat in these articles, cybersecurity chiefs in Fortune 500 companies will tell you, “Not all the attacks are coming from the East.”  And while the planet is collectively deciding whether it should freak out over Google glasses, the technology to embed covert cameras and microphones into a satchel have been here for quite some time.

Even if some business secrets can be kept today, ask yourself, “Where is this headed?  Is it becoming easier to keep secrets?  Will competitors have to spend much more money and effort in the future to find things out?”  Clearly not.  Whatever the cost and effort required to get information on your plans is today, it will be cheaper and faster in one year, and again in five years, and again in ten.

So if business secrets are increasingly an illusion, where does that leave us?  It leaves us with strategy – the way Michael Porter defined it long ago – a set of activities that gives you a sustained competitive advantage.  It means developing products or services that your competitors can’t or won’t copy or thwart – even if they know exactly what you’re planning.  It’s about choosing a position that requires trade-offs that your competitors will not make (as examples, consider Southwest Airlines and IKEA).

Already, some pushback to NDAs is forming and equity crowd funding (open to the public) is on the near horizon.  It’s hard to crowd-fund a stealth startup.  The secret sauce is no longer secret.  Is your strategy ready?

Sean Campbell:  Welcome to another episode of CI Life. In this episode we’re going to drill down into a subject area that I think has caused a lot of confusion for folks over the years, and it’s one of the significant differences between competitive intelligence and market research. The topic at hand today is what in the world is the real difference between “elicitation” and “interviewing”? Why does it even matter, and how can you spot the difference?

We’re going to spend a little time on this today because it’s a classic thing we hear come up and it’s something that we sometimes see folks get mixed up. Wouldn’t you agree, Scott?

Scott Swigart:  Yeah, definitely. I think there are some subtle differences from the perspective of the person you’re talking to.

Sean:  Fundamentally, if you think about this from a classic standpoint, let’s take the easier one first. What is interviewing? Well, we’re not talking about interviewing for a job, so let’s just leave that to the side. We’re talking about when the classic market researcher decides to set up 20 interviews with someone as part of a qualitative research project. Or as part of discussions during a focus group. Usually the very first tool that they need to develop in that case is the discussion guide. The discussion guide is full of…

Scott:  Questions.

Sean:  Exactly. Meanwhile, an elicitor, if we take it from that standpoint, someone who’s about to embark on an elicitation project, they also have questions. They have key intelligence questions. They have questions that they may even insert as questions in the discussion. But fundamentally the difference is they’re focused a lot more on statements and having a conversation than they are around questions. We’ve even shared discussion guides, our version of them, sometimes, for competitive intelligence projects, and we see someone from a market research team say now wait a minute, there’s not enough questions in there.

Scott:  Right, right. It’s not, word-for-word, what are you going to ask? It’s what are you going to find out.

Sean:  It’s not like you’re avoiding questions altogether, but your questions might be more in the beginning and the end as you’re dealing with broader topics, as opposed to having them sandwiched right in the middle. I think that’s a big difference. Your typical market researcher might be taught to some degree, even, to keep questioning until you take the coal and turn it into a diamond, no matter what the interviewee tends to think about that process.

Scott:  I think maybe it’s worth talking about an example. A clear place where you can see the difference between interviewing and elicitation would be something like trade show intelligence. Trade show intelligence, you might just mosey up to the competitor’s booth, look at the products that they have sitting there, and say something like, “That looks expensive.”

Sean:  Right, exactly. Then there’s all these kind of…and this is what’s fascinating about it. If you were to say that to someone, what you’re banking on as an elicitor is that, essentially, people have all these natural, wet‑wired desires in their brain, to basically say, “Well I’ll explain for you why that makes sense!”, or, “How dare you think our product doesn’t make sense in this market?”, or all those things that we tend to do, just naturally, because you’re having a conversation about it and you’re not trying to go from question 3A to 3B.

Scott:  Right. The other thing is, that that implies is, if you walk up to somebody’s booth and you did what I said, an elicitation, they don’t know that they are participating in research. When you’re doing interviewing, you have contacted somebody, you’ve reached out to them/ You may be doing blind research, you may not have disclosed who your client is, but they know that they are going to be asked a series of questions. They know they are participating in some kind of research activity. In elicitation, you walk up to the booth, you look at their product, and you say, “Wow, that looks expensive.” They’re just wet‑wired to start filling things in. But they don’t know they’re participating in any structured activity.

Sean:  That’s another decoupling that happens. Market research is about asking the same question the same way, almost, sometimes, to the point where an interview looks very much like a quantitative survey. Fundamentally, that’s a trap that sometimes qualitative researchers will fall into. It almost feels like the interviewee is just being surveyed. They kind of recognize it and get bored.

Scott:   With elicitation there are all kinds of neuro-linguistic things that people do. If you make a statement, they will respond to it as if it’s a question. If you make an incorrect statement on purpose, they will correct you. They will take the time to really explain it to you in a lot more detail.

Sean:  Right. Another classic technique to make someone feel comfortable is word repetition. You use the words they use. To have a little fun with it, amongst Republicans, keep saying “socialist”. Amongst Democrats, keep saying “equal”. In other words, keep saying words that the other person’s using. To some degree the other person starts to feel like you’re more in‑tune with them – that you’re one of them. The same thing with paralanguage and body language and the whole discussion of things from neuro-linguistic programming.

There’s also this issue about alerting, which gets into a squishy gray area, because you’re obviously supposed to identify your own affiliation in competitive intelligence. But it’s a little different about how far you disclose what you’re actually learn in your research.

Scott:  Getting back to the trade show, if you are one of however many people walked up to that tradeshow booth during the day, with elicitation your goal may be to get a lot of information, and not even really have them remember they talked to you. In their mind, you were not the most interesting person who came up. But from your perspective, they told you all kinds of stuff that you didn’t know.

Sean:  Right, right, exactly. With that, I think we’ve done a good job just dealing with two words here in the last near 10 minutes or so. We’re going to wrap this up and let folks get back to their day.

By Sean Campbell
By Scott Swigart

For mobile users: MP3

This very accurately shows the history of Windows operating systems. Windows XP (red) was a huge success and stayed the dominant operating system until Windows 7 launched (green). Windows Vista (gold) briefly peaked above XP when it was launched and heavily marketed, then fell below XP and never recovered. Windows 8 launched with great fanfare, but based on interest as reflected in Google trends, it will not eclipse Windows 7.

This is outstanding information, at your fingertips, but it only goes back to 2004. For some trends, you need more history than that. Take, for example, the following graph:

This shows the terms “business strategy” and “market research” all in heavy decline since 2004 – possibly just now reaching a point of stability. “Competitive intelligence” and “market intelligence” barely matter. What’s going on here? We obviously need history prior to 2004 to know. Enter the Google NGram Viewer:

The Google NGram Viewer will let you find how frequently a phrase was used in books going back 200 years. This shows that “business strategy,” “competitive intelligence,” and “market intelligence” took off as terms around 1980 (with market research taking off much sooner). And these terms peaked in interest between 2000 and 2005. You can see how marrying Google NGram Viewer, which has data up to 2008, with Google Trends, with data going back to 2004, can give you a very good picture of long-term trends.

Sean Campbell: Welcome to another episode of CI Life. In this episode, we’re going to talk about a subject that is near and dear to our hearts, which we sometimes refer to with our clients as “defending the castle.” You can throw a rock and hit a thousand news articles that talk about how some disruptor is killing a long-standing company. But what’s not talked about as often are the times that those venerable companies actually killed the disruptor, or at least survived and maybe pushed the disruptor into a corner.

We’ve done a lot of research in this space, and we’ve had a lot of direct experience with working with folks in this regard. But without further ado, Scott, we should probably introduce the subject a bit, just to make sure people understand exactly what we mean by “defending the castle.”

Scott Swigart: There is a great body of stories out there about how Sears, Ringling Brothers and Barnum & Bailey Circus, or Encyclopedia Britannica got put out of business. Generally, the story is that some big Fortune 500 company ends up going under after facing a much smaller rival.

But a lot of times they don’t, and one reason is that the large incumbent has assets that the startup just doesn’t have. They have strategies and tactics that they can employ that are simply not available to the startup, and it ends up being a very asymmetric conflict.

There are things the startup can do that the large company can’t, but there are things that the large company can do that are unique to them. That’s a story that rarely gets told.

Sean: It’s worth mentioning here that all the stories we are talking about here are based on battles that are now public. You can look up the results of these battles and see what we’re talking about from the public domain, to be absolutely clear. Much like the anecdotes that appear in business books, these are cases where you can divine where the strategy came from.

We’re also not talking about scenarios where the cannons roll up and it’s only a matter of time before all castles are nothing more than tourist attractions, meaning that we’re not talking about situations not where something so fundamentally changes that there’s no way for anyone existing in the market to survive. We’re talking about all those other times, and perhaps the more interesting ones, that end with the old-timer company still being around. It’s valuable to consider how they managed to survive.

Scott: There are many strategies that can be employed, and we’re just going to talk about a few. The first one is significant in the sense that we have heard it associated with from everything from high tech software companies to tugboat operators. It’s a strategy we call the “Make a Suite Deal.” The scenario at work here is typically that the competitor does just one thing, and they do it very well. In fact, your company may be very threatened, because that competitor may do that one thing better than you do.

A large tugboat company told us that a smaller, low-cost competitor came into one of their ports and started to take a bunch of business from them. The larger company went to the shipping companies and we said, “We’re going to make you a deal across six or eight ports.” So even though that tugboat company might’ve been cheaper and better in one port, it was a better business decision for these large shipping lines to make a bundle deal.

Software companies do this all the time. They have several products, and rather than sell them to you individually, they sell them as a suite, so that even if you buy the competitor’s product, you have probably bought theirs too, because they’ve made it cheaper to buy the suite than to buy individual pieces. That makes it very tough for a competitor to make a sell, because in a sense, they’re forced to compete against a free product, which is a tough position to be in.

Sean: Many people in corporate America don’t realize that the reason they use SharePoint isn’t so much because SharePoint was the best product. If you ask someone in your IT shop how SharePoint originally got into the company, you are likely to get the response that it was part of license-bundling deal because they had already bought Windows and Office. Software is well-suited to this approach because you can just add another license to the bundle. But you can do this in other industries, too.

Another interesting one that comes into play a lot—especially in technology industries—is fast following.

There’s a book out called “Fast Second”. The fast-following approach is applicable for companies that have the resources to wait and develop a competing solution. They might wait and buy their way in by acquiring another smaller competitor, or they may alter an existing solution and extend it into a new space.

Scott: In this approach, the larger company may let the startup wander in the wilderness until it solves the key challenges in a new area. Then the incumbent swoops in with an army of resources, and assuming that the smaller company doesn’t have IP protection that prevents it, the larger company replicates the capabilities quickly.

Sean: Now, bear in mind that, as with a lot of things in the field of strategic analysis, it’s very easy to let your own biases drive this process. If you are the type of person who likes doomsday movies, maybe you are overly inclined to think that that upstart’s going to kill you. If you’re the person who always believes in the triumph of the hero, maybe you’re going to irrationally believe in your company’s survival, regardless of where the data points.

But, at the end of the day here, what we’re trying to say is that there are ways for the large companies in these scenarios to effectively defend themselves, rather than focusing only on the disruption.

Scott: Right, and in these David and Goliath stories, everybody likes to root for the underdog. If you’re Goliath, it’s good to know there’s some hope out there for you as well.

Sean: Exactly. There are other ways to go about this, rather than just mimicking the slingshot, so to speak. I think that’s really the key takeaway.

We’re going to come back to this topic in subsequent podcasts, and we’re also open to hearing from you. If you have particular strategies that you think we should be aware of that you can speak about in the public domain of effective ways to defend the castle, feel free to email us. And with that, we’ll let you go. Thanks for listening.

When you’re benchmarking a product or service against a competitor, you need to cast a wide net to gather as much information as possible, but equally important, you need to keep the scope manageable. That paradox lies at the heart of the balancing act that makes high-quality competitive benchmarking possible:

1. Look beyond feature comparisons. Of course you need to know what your offering can do that theirs can’t (and vice versa), but a holistic understanding of its competitive identity must look deeper, to include a customer’s pre-sale, sale, and post-sale experience.
2. Identify key differences and discard the little stuff. This advice may seem obvious, but many competitive intelligence organizations err on the side of exhaustive comparisons full of minutiae that probably have little or no effect on decision making by potential customers.
3. Focus on the factors that impact customer perception. The value of a comparison within a benchmarking study is directly related to how much influence the factor associated with it has over the perceptions of customers, in terms of the offering itself or the company that offers it.

This is the first installment of a three-part blog series to improve benchmarking of products and services against the competition. The second post, “Three Product Job Requirements Beyond Bells and Whistles,” shows the importance in the “job” an offering performs in shaping its competitive position, and the third, “Three Ways Customer Experience is Bigger Than Your Product,” discusses factors beyond the product or service itself that should be considered in benchmarking.

By Sean Campbell
By Scott Swigart

Using weighted ranking for structured decision making requires the participants in the process to establish what factors make various outcomes better or worse choices. This list of criteria needs to be the same for every potential outcome, so in the case of choosing a new industry for a company to enter, the list of considerations must embrace the reality that the presence of opportunity is not the same thing as being a good fit. After all, no company can compete effectively in every industry:

1. How fragmented are the industries under consideration? Entering an industry dominated by one monolithic competitor (or even several large ones) may present a steeper challenge than entering a highly fragmented one, and the size of your company compared to those rivals will also play a role.
2. What is the outlook for growth in each industry? Understanding this decision criterion will depend on the geographical and demographical aspects of that growth, relative to your company’s regional and demographic capabilities. Projected growth data in the US, for example, is available in terms of both revenue and employment from the Bureau of Labor Statistics.
3. How well do the industries match with your company? Key components of this factor include whether the products look like those your company sells (or could sell), the dominant sales approach in the industry (direct or via a sales channel, for example), and the amount of entry capital required, relative to your resources.

This is the second installment in a series of three blog entries for competitive intelligence professionals about using weighted ranking to make structured decisions. The first post, “Three Guidelines for Choosing New Horizons,” gives an overview of the process and introduces the process of identifying potential decision outcomes. The third post, “Four Directions to See Which Way the Wind Blows,” shows how potential outcomes are matched to decision criteria to achieve a result.

By Sean Campbell
By Scott Swigart

For mobile users: MP3