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The Prying Game

The Prying Game

Competitive intelligence doesn't involve back alleys, secret handshakes or off-shore bank accounts. In fact, it's quite legal. So why are Australian companies largely ignoring it?

Gathering competitive intelligence (CI) is a lucrative occupation that can deliver real rewards even to the most amateur of business spooks - but Australian managers are kidding themselves if they think they're doing it well. While savvy companies overseas keep close tabs on competitors by accessing a wealth of readily available information to win invaluable insights into the enemy's likely next moves, Australian companies have largely been slow to fully exploit this potent weapon. In fact, a report from the Macquarie Graduate School of Management MBA director, Dr Chris Hall, called The Intelligent Puzzle, finds Australian managers seem nothing less than schizophrenic when it comes to competitive intelligence.

"Managers seem to display a generic schizophrenia or blind spot: they assess their competitiveness as above average relative to the market, but acknowledge that they lack the CI capability to really compete effectively relative to their needs," the report finds. "It is even harder to see why, in a rapidly changing and increasingly competitive world, they persist with relatively unsophisticated approaches to CI, especially when all levels of management recognise that their CI needs outstrip their CI capability!"

Hall, the president of SCIPAust, the Australian chapter of the Society of Competitive Intelligence Professionals (SCIP), says the figures leave no doubt a "self-deception blind spot" prevails at all levels of Australian management.

For instance, while 67 per cent of respondents rate themselves as above average in their ability to compete and 48 per cent say they are ahead of the market ability to monitor their competitors, only:

38 per cent make regular or continuous use of market research 24 per cent make regular or continuous use of competitor audits 30 per cent make regular or continuous use of benchmarking 15 per cent make regular or continuous use of integrated competitive intelligence systems (CIS).

"It is difficult to see how such a large percentage of firms can be ahead of the competition when such a large proportion make such a small effort to keep track of what the competition is doing," Hall's report says.

Contrast that with the situation in the US, where a March PricewaterhouseCoopers (PwC) Trendsetter Barometer found about one-third of fast-growth CEOs saw competitor information as more important than a year ago. Almost two-thirds rate it as having equal importance, and only 4 per cent say it is somewhat less important. Moreover, the vast majority of fast-growth CEOs surveyed (84 per cent) viewed competitor information as important to profit growth of their company, including 42 per cent who saw it as "very" or "critically" important, and another 42 per cent for whom it was "somewhat" important.

Back in Australia, Hall's report finds the self-deception blind spot prevails at all levels of management, with average needs for CI rating 7.81 on a 10-point scale, while average capability is at just 4.15 on the scale. Perceived competitiveness is at 5.64, well above capability but below needs. CI satisfaction is even lower, at 3.74 on the scale.

"This pattern prevails across all levels of management, and confirms the essence of the Â'intelligent puzzle' - that is, managers are somewhat schizophrenic," the report says. "They assess their competitiveness as above average relative to the market, but acknowledge that they lack the CI capability to really compete effectively relative to their needs, and that they really are not happy with the CI available to them."

The situation may be slowly changing. Babette Bensoussan, managing director of Sydney-based CI consultancy The MindShifts Group, says there are signs that more organisations are beginning to train staff in how to deploy and use CI. "We are, I would say, about five years behind the US as far as CI levels are concerned," Bensoussan says. "We really don't have companies that have, like Merck, a team of 25 dedicated analysts. We don't have people with titles like CI manager. We don't have directors of strategic analysis. They do.

"[But] having worked in it, I must say there seems to be a little bit more activity growing. I think the key sign that I'm seeing is the amount of people that are training their staff in CI. That's what changed; I think that people are now moving more to in-house competitive intelligence, rather than outsourcing their intelligence. Competition is a big issue - CI is about company survival in a competitive environment," she says.

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