In recent weeks, corporations have been screaming hoarse about the impact of poor governance on business. In India governance is related inextricably to politics. Some headlines in the last week alone…

• Telenor writes off Rs 3,500 crore India assets …saying “the uncertainty has increased significantly”
• Honeywell Warns India Is Scaring Away Foreign Investors
• India’s Steel Dreams Are Dying – “I feel sad. I feel a bit concerned,” Arcelor chairman Lakshmi Mittal said about the stalled projects
• Ruchir Sharma’s new book gives India a 50:50 chance to emerge as a breakout nation

It is the job of competitive intelligence professionals to scrutinize all aspects of the business environment. If politics is a significant part of the environment, then that needs to feature in the analysis too. While CI has many tools and frameworks for analyzing the market, competition, industry forces, etc., tools for analyzing the political landscape are relatively weak.

Many of us (and I too plead guilty) find it easier to simply skip the “politics” section of the newspaper, than track the seemingly unending stream of murky scandals, name-calling, mud-slinging, corruption, and just plain incompetence of the politicians and bureaucrats.

The IT software industry in India grew “despite the government”, as many put it. This, in part, has led to the segregation of politics and business into separate compartments in our minds. “India will continue to grow regardless of which party forms the government” was heard before every election in the last decade or more, perpetrating this divorce of business from politics.

Typically competitive intelligence studies for evaluating a market entry in India delve on the market, competition, trends, and regulation, but dedicate only a short sections to “government & political stability”. The fact is that policy and regulation is very closely related to politics and government. If CI wants to be truly “actionable”, it needs to incorporate politics and its impact on government policy and regulation more directly, particularly in the current scenario.

The government (and hence politics) has very direct bearing on many of the industries that are expected to drive growth in India, going forward. This is certainly true for infrastructure and affiliated industries.  Further, many technologies are changing rapidly, calling for faster revisions of regulations and policies. There are very few industries (if any at all) that are insulated from government and politics.

Competitive intelligence analysts in India therefore need to better incorporate politics into their analysis frameworks. I have yet to see a robust framework for this. Do you have one? If so, please do share it…

Here is how a conversation could flow…

What did you do? – “We found the market size, customer segmentation, names of competitors, their product portfolios, key customers, etc.”

Why? –  “Because XYZ asked for it”

But without knowing why XYZ asked for it, how can the analyst know if they helped XYZ? How did they even know HOW to help XYZ?

So lets revisit the basics…

Competitive intelligence helps companies meet their objectives, by showing them what strategy will work. The very basic objectives of every company are to increase revenues and profits.

What is strategy? It is the decisions that companies make on where to play and how to win in a  sustained manner over the long term. (Very eloquently put in this article) All activity undertaken by CI analysts essentially address these two key questions of decision-makers.

Where to play consists of product/service areas to be in, geographies, markets and customer segments  to target, their needs, buying patterns, etc. Companies want to “play” in places where they have a competitive advantage over their customers.

How to win consists of the USP of the company (from the potential customers’ standpoint), what value proposition it offers to the customers. The decisions here revolve around product packaging, pricing, positioning, branding, marketing, messaging, distribution, and so on.

Finally the keywords in the strategy definition are “sustained” and “long-term”. Strategy is not what “fly by night” operators employ, because they may make profits in the short run, but often don’t survive to see the long term. Wherever there are multiple options, companies need to choose those that will ensure company’s survival and maximize the value in the long term.

Whatever CI analysts do – news monitoring, product benchmarking, market sizing, price tracking, or any one of the numerous CI activities – they must ask themselves how the activity links to strategy – where to play and what to win? If they cant find the linkage, they will not be able to provide “intelligence” to the decision-maker.

If a competitive intelligence activity cannot be linked to strategy, the activity is a waste of time and should be abandoned!

CI teams face a dual challenge in terms of getting an internal buy-in within an organization. First, they need to show a good ROI to the senior management in order to justify their very existence. Unless senior management perceives their value in helping the company meet its business objectives, they will a) not be consulted b) not be respected c) not get support (and funding and resources) required for creating effective CI for the organization. But establishing the ROI of a CI team takes time, as the CI process as well as capabilities evolve over time. During this time, the CI function needs an internal champion or a sponsor who can encourage the organization to support the team.

Second, given that the organization itself is a rich source of information and insights, the CI team needs to be able to elicit it from the employees . Further, the CI team needs these inputs to flow to them, not once or twice, but on an ongoing basis. For example, the CI team may want to request regular inputs on customers and markets from the sales force.

What can the CI team do to ensure that they get the decision-makers to take notice of what they can offer to the organization? And what can they do to get all employees in the organization to contribute what they know?

Competitive intelligence practitioners who attended the SCIP India Chapter meeting held in Mumbai on 12^th April 2012 discussed precisely these issues. The topic for the evening was “How to set up a competitive intelligence function in your organization”. The attendees included executives from companies such as Tata Communications, Oracle, Syntel, Cipla, Novartis, SKF and Galaxy Surfactants.

Here are some best practices that were highlighted during the discussion, for getting an internal buyin for CI at all levels in the organisation:

• Go for quick wins to establish the value of your function with the key users of CI. A good way to do this to concentrate on one or two key pain points of the organization to start with and address only those. Teaming with the line functions when they are in a firefighting mode firmly establishes CI team as being on the same side as the business.
• Make those who provide inputs for CI, co-authors of the final deliverable. In other words give them credit and visibility in the organization. Also, seek their feedback on the intelligence you have created irrespective of whether you actually decide to incorporate it or not.
• Persuade the management to create reward or incentive schemes for the employees to consistently give inputs to the CI team
• Build rapport on a personal level, with key employees who can provide valuable inputs to the CI team. Also build rapport with the users of intelligence in order to get clearer briefs and feedback on intelligence delivered.

Do you have any other best practices that have worked in your organization? Do share them with us…

With the Indian government opening up its renewable energy market to foreign players, India has now become a battleground for global giants in the wind energy industry. Many companies are entering the market to capitalize on the huge energy demand in the country.

Energy deficit high and rising

In the financial year 2010-11, energy deficit was about 17000MW or 12% of the required energy at peak demand. Despite this, no major addition happened to the 190GW odd power generation capacity in the previous year. Of this total capacity only around 11% comes from renewable sources (wind, solar and small hydro projects inclusive).
According to an estimate around 327GW power generation capacity would be needed in India by the year 2020.  Renewable energy companies will without doubt have to make a larger contribution to meet this. The huge opportunity that this energy deficit provides is sure to kick off competition by luring more companies to enter the Indian market.

Nuclear energy in the woods

The nuclear disaster in Fukushima has caused many nations to reconsider their energy policies. The Indo-US nuclear deal that India boasted about until a year back now seems less relevant, as the prospect of having a nuclear plant in the vicinity is likely to trigger protests. The nuclear project plans in India suddenly seem to have become comatose.
With the nuclear plans on hold and thermal power primarily controlled by government. Renewable energy investments which earlier seen only as tax saving measure by the rich, now seem to lure more and more investors for the returns it is promising.

There is need for clean energy companies to take on a greater role in filling the energy deficit in the country.

Heated competition in renewable energy sector

Suzlon and Enercon which are the leaders in terms of market share, face serious competition from the other global giants and smaller Indian companies entering the arena. Going forward, companies that were enjoying first mover advantage till now will be on level ground with the new entrants.

Thus far, Indian projects account for around 21% of the total CDM (Clean Development Mechanism) projects registered worldwide. In the past couple of years two major government initiatives worth mentioning are the Jawaharlal Nehru national solar mission and allowing 100%FDI in renewable energy. While solar energy companies are fighting hard to overcome the technology limitations, in wind energy the country has seen some really big names like GE, Siemens, Gamesa, etc. enter the market in the last few years. These companies with larger product portfolios and better technologies will give tough competition to the incumbents who have limited design and manufacturing capabilities.

Need for CI in wind energy

All the players need to have their antennae up, to stay relevant.  The incumbents need competitive intelligence to protect their turfs against the new entrants, while the new entrants need smart strategies to penetrate the market.

In the fight to stay ahead, wind power companies are competing on many fronts. From acquiring high wind potential land, finding quality vendors for their components, building capacity and partnerships, and most of all to lure big corporate clients these companies are poaching on their competitors. Companies that have been relatively complacent so far will now need to strengthen their competitive intelligence systems and initiatives to maintain and gain competitive advantage.

These companies did not have incompetent senior management. They were large companies with deep pockets. It is difficult to see how they could have missed, what in retrospect, seems obvious to us. That organizations that don’t do any CI at all fall into such traps is understandable. But history shows that this can happen even in organizations that do competitive intelligence.

Does the boss really know best?

There could be many reasons for this. One possible reason is related to the CI function itself.  CI analysts provide an objective third party view on the organization’s business, as they are not involved in its operations.  They have a responsibility to bring to the notice of decision makers, trends and risks that they may otherwise miss.

It is true that converting data and information into intelligence requires an in-depth understanding of the business. And who has better understanding of the business than the senior executives/ decision makers? Senior executives have a deep and hands-on  knowledge of the industry, the company, organizational dynamics, etc.

The CI analyst is justified in worrying that his intelligence may appear shallow in comparison to what the decision maker can produce. Very often the boss may actually tell him not to bother with the analysis, but to give him only the raw data and information. But does the boss really know best?

History suggests that bosses don’t always know best.  They may miss what the data is saying to them for several reasons:

• Although bosses do have more experience, knowledge and insights on the industry, they have, like all the rest of us, their own pet peeves, prejudices and biases.
• Their perspective may be limited to the particular function or aspect of business they have experience in.
• Since they operate within a certain set of constraints,  they tend to think only within the boundaries of those constraints.
• Familiarity breeds neglect -  They may not notice things they see and encounter regularly.  I liked the reference to a Sherlock Holmes and Watson conversation (A Scandal in Bohemia)  I came across in Ben Gilad’s book on Early Warning:

“For example, you have frequently seen the steps with lead from the hall to this room.”

“Frequently”

“How often?”

“Well, some hundreds of times”

“Then how many are there?”

“How many? I don’t know.”

“Quite so! You have not observed and yet you have seen. That’s just it. Now I know that there are seventeen steps, because I have both seen and observed.”

The CI  analyst may be doing the organization harm, by not giving the bosses what they  “need”,  irrespective of the whether they “want” it.  This is trickier for consultants than it is for CI practitioners. Clients are not always forthcoming with explaining the real “need” to the consultant, but want only information that they have identified as their need.  If consultants want to truly make a contribution to their client organizations, it is in their interest to persuade the clients to explain…