While participating in a discussion on Linkedin about business competitiveness, I suddenly realized that managers and specialists know almost nothing about the capabilities of commercial intelligence and the advantages it provides to businesses. It is likely that business people themselves have little understanding of these capabilities.

I found it strange, as the technology itself had its origins and development back in the 1990s. And yet!

Well, I will try in a few short notes to outline and remind in general already well known, in passing dispelling a few well-established prejudices and misconceptions.

Yes! I apologize in advance for my English. It's not perfect, but it's not my native language either.

Note:

How to use this cheat sheet? Read the note. If you're not hooked, then maybe it's just not your thing. Drop the case. It's not worth wasting your time and energy.

If you are interested, but not before! If you want to understand and implement the system in your business or company, I recommend downloading the guide at the link. It's pretty comprehensive. Anyway, I tried to create a guide that allows you to deploy the system from scratch. If you have any questions, I'm open to discussion.

You can download a “practical guide” to commercial intelligence absolutely free of charge here:

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About a major misconception

So, here we go!

Intelligence of commercial means it works in business (it's true).

The main purpose of intelligence studies is competitors! This is not that it is a lie, but it is a rather stable and established misconception. As they say - “it depends”...

Are the company's market competitors subject to intelligence studies? Yes! Absolutely they are! BUT! Extremely rare. I would guess less than 7% or 5% of the time. It really depends on the degree of market influence of specific competitors on your company's operations.

Try to remember how many companies in your memory have actually died because of the market power of competitors? Even in those rare cases when companies have died because of competitors, it was not a one-time and instantaneous event, but usually a long-term stagnation and demise due to the company's failure to meet market needs and real customer demands and expectations.

That is, the main reason for the demise is not competitors, but the market and the company's non-compliance with modern market standards and conditions. Although, the influence of competitors keeping up with the times and meeting the requirements and modern demands of the market is hard to deny.

I used the phrase “market influence” here for a reason. If competitors have a significant “market impact” on your business, on the achievement and realization of the company's business goals, objectives, and projects, then competitors can become the objects of intelligence research. As practice shows, studying a competitor is a relatively simple process that does not take much time.

However, if competitors do not exercise market influence on the activities of your company, for example, by methods of non-market or unfair competition, criminal methods, etc., then in this case, competitors should be and/or become objects of study not at all intelligence, but other, already existing in the company services and departments.

To counteract them in this case should be: Security Service; PR Service; Customer Feedback and Support Service; other services whose business competencies are exposed to this negative influence and whose competencies involve responding and counteracting.

The misconception that the key objects of study in business are competitors was transferred to business from military intelligence in the very early stages of the formation and development of intelligence and intelligence methods and technologies into business in the early 1960s.

Over time (more than 60 years), business intelligence technologies and methodologies have evolved and become increasingly customized to business needs. Today, anyone who wants and desires to conduct intelligence activities in business must understand the very important difference between military intelligence and commercial intelligence!

The difference in objectives between military and commercial intelligence implies a difference in methods and techniques of extracting information! And the difference is significant.

The key objective of military intelligence is to provide information and support for combat operations to defeat the enemy (defeat the enemy in war). This is why the main purpose of study in military intelligence is the enemy and everything related to it.

In war, the slogan: “The end justifies the means” is quite acceptable and is usually used by both sides of an armed conflict.

The key goal of commercial intelligence is somewhat different: information support and support for the profit-making business of a commercial company. Its activities are carried out not on the battlefield or combat theater, but in a competitive market environment, where the number of actors of influence is much wider than in military affairs.

This fact makes a lot of military intelligence techniques unacceptable in business. Why not? Because there is simply no real need for it. Blackmail, bribery, stealing secrets, etc., EVERYTHING you can get in this way, in commercial intelligence you will get by other overt methods. Moreover, you will get real advantages over your competitors from more effective activity in the external market environment and from a good knowledge of the environment itself.

Competitors are just one of the participants in the external market environment. Their influence is most often not so significant, compared to, for example, the impact on the market of: technology; changes in fashion and customer preferences; changes in local laws within the country; the emergence of new goods and materials with different (changed) physical and technical parameters.

All this makes market competitors out of the list of key and priority objects of study for commercial intelligence.

Business is not war, although many still believe otherwise. Take this into account.

Key objects of study in commercial intelligence

Now that we have set up that competitors are NOT the key objects of study in commercial intelligence, we need to point out the real and meaningful objects of intelligence study.

The scope of commercial intelligence deals exclusively with EXTERNAL market risks, threats and opportunities, at the three levels of a company's business activities:

Current (tactical) - day-to-day operations;
Strategic - realization of long-term goals, plans and projects of the company;
Operational - random and unplanned events and circumstances that can significantly affect the company's business activity.

Thus, it is EXTERNAL market risks that are the key focus of commercial intelligence. What kind of risks? This depends directly on the strength and degree of their influence on the company's business activity. Such influence, except for neutral (presenting neither threats nor opportunities), can be of two types: negative (risks and threats to business); positive (events/events presenting additional opportunities for business).

Risk - an event; phenomenon; (a set of events and conditions); intelligence object (or third-party object) and its activity (activity) that can significantly affect (complicate) the current activities of a commercial organization or the possibility of implementing strategic business objectives. Or the consequences of such events, objects or the consequences of their activity. One and the same risk can be single, multiple, recurring, ongoing.

Another area of business intelligence is TECHNICAL (technological) intelligence. It concerns modernization (improvement) within the framework of benchmarking, internal management, technological and other processes, techniques, technologies and products offered.

Inadequacies or inconsistencies in a company's internal processes can, over time, grow into a serious risk that poses major problems for the company's competitiveness in the market.

Finally, speaking about the business activity of the company and information service and support of this activity (which is what intelligence is engaged in), it is impossible not to mention information uncertainty. In practical terms:

Information uncertainty is the multivariate development of events in a specific market environment in which a business or a commercial company operates. Simultaneous presence of several options/opportunities for the development of events in the specified sphere, including those acting simultaneously or sequentially. Risks or opportunities may be related and/or unrelated to each other and act/develop in different directions and scenarios, affecting (influencing) different areas and aspects of the same business.

The practical task of intelligence is to manifest and clarify information uncertainty. Studying, understanding and determining exactly what scenario the events under review are developing. What can this lead to if we are talking about an event that is still in its infancy?

Intelligence activity in this area provides the company with opportunities to proactively respond to events that occur in the business environment. That is, BEFORE the event is realized or at the earliest stages of its realization. In contrast to reactive response, when a company is forced to react as a reaction to an event that has already occurred and, quite possibly, not expected.

This is how business intelligence ensures competitiveness and competitive advantage by enabling a company to respond to risks as quickly and as specifically as possible, especially when compared to those who do not do any such thing at all.

Thus, to summarize, we can say:

The object of study of commercial intelligence is specific: EXTERNAL risk; opportunity; object of market influence; group of risks; external commercial and non-commercial conditions; events affecting the business, etc., to be studied by commercial intelligence structures.

Why is it NOT recommended to talk about this out loud with random people?

Intelligence in business (as well as military intelligence) is absolutely secret and does not tolerate publicity and openness! No one from the uninitiated must know about

What is being done;
By whom it is done;
How and when it is done;
In relation to which objects.

Ideally, no one, even within the commercial company itself, except for the narrowest circle of dedicated individuals, should be aware of the existence of such capabilities. Leaking information about a company's use of intelligence capabilities to the outside world can itself have very undesirable consequences.

For example, it can lead to damage to the company's business reputation. Your competitors will probably try to make it look like you are engaging in industrial espionage, even though you are not using any of the industrial espionage tools listed. And that's not the worst of it!

- But let me! - some people will say - after all, you yourself wrote that commercial intelligence does not use in its arsenal of dubious methods of military intelligence! What is the need for such secrecy?

Don't rush to indignation! I'm not retracting my words. I just haven't told you about the main criterion for selecting risks to be studied by the commercial intelligence system.

As we already know, the basic requirement for an intelligence object is the materiality (significance) of its influence:

on business and business activity of the company;
on the possibility of achieving (realizing) the intended long-term goals (projects) of the company.

There is one key and overriding issue to identify and define future intelligence targets as accurately as possible:

What exactly, WHICH event; phenomenon; occurrence; incident - is capable of FULLY “KILLING” or DESTROYING the company's business or making specific planned business goals unattainable?

“KILL” - without the possibility of subsequent recovery or at very high cost?

Thus, the compiled list of identified intelligence objects is literally a list of weaknesses and vulnerabilities of your company, in case of occurrence (realization) of which, the business of the company expects very hard times and consequences.

Real questions of LIFE or DEATH of a commercial company! Is it worth sharing such a list with outsiders? Could it not be used to destroy your company or reduce its competitiveness?

If I were you, I would prefer that as few people as possible know about the existence of the list itself, and even less about its contents.

Bazil Ovchinnikoff

Articles by Bazil

2024

Commercial Intelligence Beginning