24 Aug 11 Global uncertainty and competitive intelligence
Competitive intelligence can be likened to an insurance policy for a company – it helps mitigate risks arising from developments in the external environment by providing timely warnings.
Thanks to heightened global economic uncertainties, the CI insurance premiums have been rising sharply. Increased risks have also changed the way companies strategise.
Sources of uncertainties in the external environment are arguably at a record high at present.
The world economic forum buckets these risks neatly into
- Geopolitical risks – failure of governance, regulatory failures, corruption, terrorism, fragile states, organised crime, etc.
- Economic risks – global recession, volatile commodity prices, energy prices, financial crises, liquidity crunch, unemployment, currency imbalances and so on.
- Environmental risks – including increased water shortage, climate change, pollution, loss of biodiversity, cyclones, flooding, earthquakes, and so on.
- Societal risks relate to economic disparity, diseases, food security, migration, etc.
- Technological risks including online data securtiy, critical infrastructure breakdown and so on.
As the year end approaches, and many companies go into their annual offsite strategy meets, they will find that they cannot approach strategy as they did in less uncertain times. The cookie – cutter formats that worked for them for several years in the past are no longer relevant. Their planning horizons are shrinking and they are revisiting their strategies more often. This is because, while long direction remains stable, they are having to constantly revise their short term tactics for implementing strategy. They are also having to decentralize the strategies as greater granularity is required in planning.
What this means for competitive intelligence is that companies will now need to
- Keep track of more parameters relating to their environment
- Increase the frequency with which they review their intelligence
- Have larger CI teams due to greater decentralization
Do you see this trend in your company/ industry? Do share your stories…