Gathering information about competitors can be relatively easy if you know where to look and what you're looking for, according to competitive-intelligence professionals.
"You would be surprised at some of the things you can find out," says Jonathan Calof, an associate professor at the University of Ottawa's school of management and director of the Canadian Institute of Competitive Intelligence. "There's a wealth of information out there if you just know where to look."
Calof says he talks to a company's suppliers and goes through public sources such as annual reports, financial statements, announcements and websites to look for nuggets of information that can be turned into gold.
It helps to narrow down what you're looking for, he adds. "It's far too broad for someone to say, I want to know everything about my competition. Keep your focus as tight as possible."
Calof recalls a Canadian bank that had accumulated a large database of information profiling their customer base. Senior executives gave him a blank look, however, when he asked if any of the information had been used to make important decisions.
"Ask the boss what information he needs to make key decisions about the company," he says. "See what questions are keeping him awake at night."
Major Canadian law firms regularly use competitive intelligence to stay on top of industry trends, says Asaph Benun, a competitive intelligence officer with McCarthy Tetrault LLP in Toronto.
"Most of the requests I get are project-based, where they will require a lot of research and interpretation," Benun says. "I think people would be surprised at the amount of information in the public domain... In most cases, you won't be able to find out all the facts, but the more the better when it comes to decision-making."
Benun says Internet search engines have made competitive intelligence easier, but people still need to know where to look. And once the information has been accumulated, it has to be analysed.
"Too many people think of this as cloak-and-dagger stuff when it's really not," says Alan Boras, media-relations manager at Calgary-based energy company EnCana. He declined a request for a direct interview with competitive-intelligence specialists at the company.
"They go through public sources and all public documents to get their information," he says. "I don't want anyone to get the wrong impression."
Calof cautions that information must be verified before using it in the decision-making process. In one of his assignments, Calof challenges students to do a detailed psychological profile of him using secondary sources. He then plants false information with selected friends and colleagues.
"You always have to validate your research. I had one student who thought he had me. He even dug up information about a son I hadn't spoken to in years," he says, adding that when he pointed out his age and how old the long-lost son was supposed to be, the student realized it was impossible.
David Gibson, co-ordinator of the Toronto chapter of the Society of Competitive Intelligence Professionals (SCIP), says he is uncomfortable with the term competitive intelligence. "I don't know what it should be called. It doesn't accurately reflect what we do. Competitive intelligence is more about understanding the real world and how it impacts on decision-making."
The U.S.-based SCIP has chapters around the world, including Canadian ones in Toronto and Edmonton. The non-profit group's website says it is designed for "everyone involved in creating and managing business knowledge."
Gibson, who is a principal with management consulting firm Gibson Kennedy and Co., says he is familiar with one pharmaceutical company that had a product dominating a particular market niche.
Patents were scheduled to expire in Britain and the United States however, and the company was worried a rival might be planning a generic equivalent that would seriously threaten its market share.
The company identified 75 different signals that might indicate the rival would be getting ready to launch such a product, ranging from stockpiling ingredients to designing marketing and packaging.
"It turned out none of the signals were there," Gibson says. "They finally figured out the rival wasn't planning to come out with any sort of generic equivalent at all, so the company actually put together their own and got an even bigger share of the market.
"There's no silver bullet or one place you can look for all the information. You have to dig around. That's what makes this so hard," he says.
At a recent SCIP meeting in Toronto, Calof told members that June is one of the best months for competitive intelligence because it is the peak season for tradeshows.
"Tradeshows are literally a gold mine because all of your competitors are in the same place at the same time," he says. "You just have to know how to work it."
Most exhibitors will get suspicious if someone comes to them with a list of questions, Calof says. So he organizes teams that approach the booth individually at different times and ask three questions each.
Calof suggests putting together packages, each containing a key intelligence topic (KIT). Individual pieces of information are then methodically funnelled into each of the packages until all the topics have been covered. He also advises approaching booth staff on the last day when they are starting to pack up for home. "That's a time when they are usually the most vulnerable. People will sit and chat with you about anything."
But again, he warns, it must be done ethically. Calof says he wears a tradeshow badge identifying him as working for whatever client for whom he's doing competitive intelligence.
"Ethics are a big part of this," says Craig Curran-Morton, a consultant with Interthink Consulting Inc. in Edmonton and president of Alberta's Competitive Intelligence Network (CINet). "Ultimately you have to look at: Would your reputation suffer if your activities were on 60 Minutes or W5 or something. How would your company come across?" Curran-Morton says competitive intelligence isn't just for large companies such as Microsoft or Motorola either. "The principles can help anyone. It comes down to a question of how well you know your competition."
The cost of a competitive intelligence project can range from $1,000 for a "very quick scan" to $10,000 and up for a more complete report, Curran-Morton says. "But the information you get out of it can be much more valuable."
(David Hatton can be reached at hatton@businessedge.ca)
