Intelligence Dictionary

Fuld + Company's Competitive Intelligence Dictionary teaches you the language of intelligence, defining more than 100 key terms in the field of competitive intelligence with links to other useful CI resources both on the Fuld website and on the internet.

What is Competitive Intelligence?

Competitive Intelligence is the process of ethically gathering and refining information enough so that it can be used to make a strategic business decision.

What is Competitive Intelligence?

By Leonard M. Fuld President, Fuld + Company, Inc.

The past 30 years have amazed me. Despite having trained thousands of executives in competitive intelligence and delivered over 3,500 competitive intelligence assignments to corporations around the globe, I have found that many business people still misunderstand what intelligence is and what it is not. Below you will find ten of each: Ten descriptions of what intelligence is and does for a corporation, and ten common misconceptions that I would like to dispel.

Competitive Intelligence Is ... Competitive Intelligence Is Not ...
Competitive Intelligence is Information that has been analyzed to the point where you can make a decision. Competitive Intelligence is not spying. Spying implies illegal or unethical activities. While spying does take place, it is a rare activity. Think about it; corporations do not want to find themselves in court, nor do they want to upset shareholders. For the most part, you will find spies in espionage novels, not in the executive suite.
Competitive Intelligence is a tool to alert management to early warning of both threats and opportunities. Competitive Intelligence is not a crystal ball. There is no such thing as a true forecasting tool. Intelligence does give corporations good approximations of reality, near- and long-term. It does not predict the future. .
Competitive Intelligence is a means to deliver reasonable assessments. Competitive intelligence offers approximations and best views of the market and the competition. It is not a peek at the rival's financial books. Reasonable assessments are what modern entrepreneurs such as Richard Branson, Bill Gates, and Michael Dell need, want, and use on a regular basis. They don't expect every detail, just the best assessment at the time. Competitive Intelligence is not database search. Databases offer just that — data. Of course it is wonderful to have these remarkable tools. Nevertheless, databases do not massage or analyze the data. They certainly do not replace human beings who need to make decisions by examining the data and applying their common sense, experience, analytical tools, and intuition.
Competitive Intelligence comes in many flavors. Competitive intelligence can mean many things to many people. A research scientist sees it as a heads-up on a competitor's new R&D initiatives. A salesperson considers it insight on how his or her company should bid against another firm in order to win a contract. A senior manager believes intelligence to be a long-term view on a marketplace and its rivals. See our Strategic Intelligence Organizer tool on fuld.com for examples of the many flavors of competitive intelligence and tips on how to develop it. Competitive Intelligence is not the Internet or rumor chasing. The Net is primarily a communications vehicle, not a deliverer of intelligence. You can find hints at competitive strategy, but you will also uncover rumors disguised as fact, or speculation dressed up as reality. Be wary of how you use or misuse the Net. Its reach is great, but you need to sift, sort, and be selective on its content.
Competitive Intelligence is a way for companies to improve their bottom line. Companies, such as NutraSweet, have attributed many millions of dollars in earned revenue to their intelligence usage. See our CI Success Stories on fuld.com for over 100 excerpts telling how companies have used CI successfully. Competitive Intelligence is not paper. Paper is the death of good intelligence. Think face-to-face discussion or a quick phone call if you can, rather than paper delivery. Never equate paper with competitive intelligence. Yes, you must have a way to convey critical intelligence. Unfortunately, many managers think that by spending countless hours on computer-generated slides, charts and graphs, and footnoted reports, they have delivered intelligence. All they have managed to do is to slow down the delivery of critical intelligence. In the process, they have likely hidden the intelligence by over-analyzing it. Remember: Paper cannot argue a point — you can.
Competitive Intelligence is a way of life, a process. If a company uses CI correctly, it becomes a way of life for everyone in the corporation — not just the strategic planning or marketing staff. It is a process by which critical information is available for anyone who needs it. That process might be helped by computerization, but its success rests upon the people and their ability to use it. Competitive Intelligence is not a job for one, smart person. A CEO might appoint one individual to oversee the CI process, but that one person cannot do it all. At best, the CI Ringmaster, the coordinator of the program, keeps management informed and ensures that others in the organization become trained in ways to apply this tool within each of their SBUs.
Competitive Intelligence is part of all best-in-class companies. In my 20 years of consulting in this arena, I have witnessed that high-quality, best-in-class corporations apply competitive intelligence consistently. The Malcolm Baldridge Quality Award, the most prestigious total quality award for American corporations, includes the gathering and use of external market information (a.k.a. CI) as one of its winning qualifications. Competitive Intelligence is not an invention of the 20th century. CI has been around as long as business itself. It may have operated under a different name or under no name at all, but it was always present. Just review the story surrounding 19th century British financier Nathan Rothschild, who managed to corner the market on British government securities by receiving early warning of Napoleon's defeat at Waterloo. He used carrier pigeons, the E-mail of his day. He knew the information to watch and how to make sense of it; in the end, he used this intelligence to make a killing in the market.
Competitive Intelligence is directed from the executive suite. The best-in-class intelligence efforts receive their direction and impetus from the CEO. While the CEO may not run the program, he dedicates budget and personnel; most important, he promotes its use. Competitive Intelligence is not software. Software does not in and of itself yield intelligence. The CI market is hot, and numerous software houses are producing products for the intelligence marketplace. Many more are repositioning existing software — in particular, data warehousing and data mining packages — for use in intelligence. Software has become an important weapon in the CI arsenal, but it does not truly analyze. It collects, contrasts, and compares. True analysis is a process of people reviewing and making sense of the information.
Competitive Intelligence is seeing outside yourself. Companies that successfully apply competitive intelligence gain an ability to see outside themselves. CI pushes the not-invented-here syndrome out the window. Competitive Intelligence is not a news story. Newspaper or television reports are very broad and are not timely enough for managers concerned with specific competitors and competitive issues. If a manager first learns of an industry event from a newspaper or magazine report, chances are others in the industry already learned of the news through other channels. While media reports may yield interesting sources for the CI analyst to interview, they are not always the most timely, or specific enough for critical business decisions.
Competitive Intelligence is both short- and long-term. A company can use intelligence for many immediate decisions, such as how to price a product or place an advertisement. At the same time, you can use the same set of data to decide on long-term product development or market positioning. Competitive Intelligence is not a spreadsheet. "If it's not a number, it's not intelligence." This is an unspoken, but often thought of, refrain among managers. "If you can't multiply it, then it is not valid." Intelligence comes in many forms, only one of which is a spreadsheet or some quantifiable result. My firm has completed numerous strategic assessments, where the numbers only address one aspect of the problem. Management thinking, marketing strategy, and ability to innovate are only three among a host of issues that rely on a wide range of subjective, non-numeric intelligence.

Leonard Fuld is president and founder of Fuld + Company, a Cambridge, Massachusetts, USA consulting firm and a pioneer in the field of competitive intelligence. His latest book is The Secret Language of Competitive Intelligence (Random House, 2006). In the past 20 years, his firm has served over half the Fortune 500 in the United States, as well as many European companies.