17 Jun 13 Competitive intelligence is an overhead during a recession!
When growth is slack, and budgets are being brutally slashed, what chance does competitive or market intelligence have? It doesn’t directly result in a sale, benefits are hard to quantify – so why not cut the research budgets and the people?
Logical, wouldn’t you think?
Well, yes – in a way. After all, when survival is the issue, who cares about generating more data or analysis?
This happens (with varying intensity) during every slowdown or recession, and we accept this as par for the course.
But what does it say about the research business? Why don’t managers think intelligence is valuable? Why is research only a “nice-to-have” and not a “must-have”?
There can be several opinions or answers, but essentially the user does not see value in the research. And this goes directly back to the root – why did the user commission the research in the first place? What tangible benefit did she hope to achieve?
More often than not, research conducted by in-house analysts tends to be template driven, with a focus on data collection/compilation. For example, one of our clients has a team that continuously builds and updates competitor and customer profiles, in each of which more than fifty data points are captured. This looks impressive and the list of companies is comprehensive. But the sales team told us that less than 5% of the data was useful.
Similarly, at a strategic level, research studies are often unconnected with specific strategy decisions, and hence, poorly scoped. As a result, the user ends up thinking the entire exercise was a waste.
So when research is useless (provides no value), it makes obvious sense to cut budgets – especially during a recession.
But we know that recessions are periods of heightened competitive intensity – and much greater need to be smarter in targeting customers or markets, staying ahead of the competition, watching for threats, etc. I agree that short-term tactical priorities may push aside long-term strategic goals. But working without adequate intelligence about customer needs, competitor tactics, technology evolution, regulatory change, changing cost structures, etc. is only going to worsen the problem.
Recessions force us to review all costs, and reduce the bloat. However, rather than cutting intelligence costs to zero, it might be more worthwhile to see how greater value can be delivered with the same or lower spend. Stopping the activity altogether is like throwing the baby out with the bathwater.
A carpenter, who throws out his hammers and saws, then cannot make furniture. Similarly strategy leaders cannot make good strategy without reliable intelligence.
The SCIP India (Mumbai) chapter has arranged a meeting on the 20th in Mumbai, where participants will discuss “Balancing need for short term profit with long term strategic plans in a recession”. Entry is free: Please connect with email@example.com, 020-66231743.