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HowCompaniesRespond ByBarneaCIMsept.08
HowCompaniesRespond ByBarneaCIMsept.08
HowCompaniesRespond ByBarneaCIMsept.08
Another common response was results and do not favor a more active goals. Management has a great need
repeating what the company did the approach. Fighting back strongly by to receive timely alerts regarding the
last time it faced a similar competitive using effective initiative steps almost intentions of the competitors and their
move. About a quarter said they would did not exist. potential moves.
seek advice from the board or external When executives found themselves The survey’s responses indicated
experts. in a delay which affected their business that executives had only limited access
Not only were these executives not results we expect that they will look to to powerful analytical information
worried by the long response times, but change the situation and to place their prepared for them by any function
they also did not consider changing the companies in a stronger competitive in the company. They relied more
situation or drawing lessons from the position. According to this survey, this on coincidental information than on
previous failures/situations. Around 40 did not happen. systematic intelligence. The survey
percent of all respondents and almost analysis pointed out clearly that those
50 percent of the C level executives said executives lacked a sense of urgency
that if they faced the same situation Competitive Intelligence and a low appreciation for the potential
again, they would conduct their analysis overview dangerous effects these competitor
the same way. I would expect that when moves had on their business results.
Although the survey stated executives find themselves surprised and Executives relied heavily on their
that “management theory says the affected badly by a lack of intelligence personal capabilities or on coincidence
first concern of companies facing a concerning their competitors’ rather than on a strong analytical
significant competitive move is to intentions, they would act firmly capability that would support them
protect their position or to try turning to improve their intelligence and to with the needed options concerning
enable a longer alert that would help business threats.
them to plan better response moves. Unfortunately we cannot learn
Competitors that Nevertheless, as we see from this survey, from this survey how many executives
this was not the direction most of them actually initiated inquiries about the
introduced successful pursued. current and potential moves of their
These survey findings suggest that competitors. My impression is that
competitive moves had companies were not conducting an there were few executive initiatives in
significant advantage, effective, ongoing, sophisticated analysis this area, although the probability of
of their competitors’ potential actions. being surprised was increasingly high.
more than could be They also did not take proactive steps The price a company paid for being too
expected to monitor systematically their markets confident and not looking proactively at
and their competitors. the business environment is significant.
Although there was no direct Executives did not seek original
reference to the contribution of a moves and relied mostly on obvious and
the situation to their advantage”, only a competitive intelligence function in the common information to develop their
quarter of executives said they intended responding companies, the results have counteractions. The lack of good and
their response to deny their competitors an interesting insight into the question timely intelligence on the competitor’s
any benefit. how intelligence might support firms to intentions plays a significant role in
gain competitive advantage. creating fewer response options and
Executives received alerts that potentially wrong decisions. It is not
Looking forward were not timely nor high quality, and surprising that while these executives
Additional information in this they did not have the time to take lacked strategic vision, they did not
survey described that since companies reasonable decisions and to respond feel the need to create a CI capability
focus on earnings and market share, to competitors’ actions effectively. to assist them in preparing results
more than half of the executives Competitors that introduced successful for longer time frames in advance of
limited the timeframe of the forecasted competitive moves had significant competitive actions.
potential impact of their competitive advantage, more than could be
counteraction to less than two years. expected. A lack of CI input in these
From this McKinsey survey we situations may lead us to assume that Conclusion
find that, contrary to what many either CI functions did not exist in Recent McKinsey surveys have
people in the business environment many of the responding firms, or that provided important input to CI
believe, managers are satisfied with low these functions were not fulfilling their practitioners and consultants. They
suggest the challenges executives face competitive moves, supported by their of Jerusalem and graduated from the
and how they can use or create better CI arm, give themselves a competitive Top Executive Program in Marketing
intelligence functions. advantage as they fulfill their business Management from the Tel Aviv
The results of this survey from CI plans. University Graduate School of Business
prism shows that executive awareness to Administration. He is a strategic
CI’s potential value is still low and that consultant in the field of competitive
companies still face major difficulties in References intelligence and business strategy in
applying CI discipline for their benefit. “How companies respond to Israel and abroad. He is a guest lecturer
Executives are the key to better CI competitors: A McKinsey Global on competitive intelligence at the
implementation. survey,” May 2008), at http:// Hebrew University of Jerusalem Business
I suggest using this survey’s results www.mckinseyquarterly.com/ School, at the Management School of
as a starting point to inquire how your Strategy/Strategic_Thinking/ the University of Haifa and in various
executives would respond if they had How_companies_respond_to_ business executives training programs.
a powerful CI to supply them with competitors_2146_abstract Avner has an intensive experience in the
timely intelligence about competitors’ integration of competitive intelligence
intentions and their moves. CI systems into Israeli corporations. Avner
capability supported by a strong can be reached at avnerpro@netvision.
analytical focus clearly creates many net.il.
potential positive effects on business Avner Barnea is a former senior member
performance. This may also change the of the Israeli Intelligence Community,
view of executives as presented in this holds a MA from the Hebrew University
survey. Companies that react strongly to