Surprise! MBAs Do Not Make Use of Competitive Intelligence

August 2, 2015

I read “Companies Collect Competitive Intelligence but Don’t Use It.” The author, Ben Gilad, is a level headed person. His view is:

the competitive perspective is almost always the least important aspect in managerial decision-making. Internal operational issues including execution, budgets, and deadlines are paramount in a company’s deliberation, but what other players will do is hardly ever in focus. This “island mentality” is surprisingly prevalent among talented, seasoned managers.

What’s the fix?

Gilad seems to realize the magnitude of the challenge. He states:

a company can’t force its managers to use information optimally. It can, however, ensure they at least consider it. In many areas of the corporation, mandatory reviews are routine- regulatory, legal, financial reviews are considered the norm. Ironically, competitive reviews are not, even though the cost of missing out on understanding the competitive environment can be enormous.

In short, MBAs talk the way they learned in Harvard-type business schools. The walk, on the other hand, is different.

From my point of view, biased by my work at Booz, Allen & Hamilton before it became the two separate outfits Booz and Booz, Allen, I hear a different drum cadence.

  1. Managers are unable to deal effectively with available information. As a result, many are emulating the leatherback sea turtle. Shutting down and making decisions based on what other turtles say is the preferred course of action.
  2. A number of MBAs shift the discussion to data. The notion that competitive insights may be based on inputs which are tough to quantify is sufficient evidence to accept the outputs of an Excel spreadsheet or some canned analysis ginned up by an intern at a mid tier consulting firm.
  3. Quite a few senior managers, in my experience, live in a state of fear. The happy attitude and rah rah, go team approach is like a coat of drive through car wax. Beneath the surface, there is real concern about keeping a job, dealing with life’s little challenges, and being able to pull off another Board meeting.

Competitive intelligence, like business intelligence and military intelligence, get quite a bit of marketing attention. But in today’s business environment, turtles, data addicts, and cheerleaders stumble with basics.

The evidence falls readily to hand: Security woes at government agencies, fumbling with immigrants in Calais, automobiles which can be hacked, and enterprise search systems which cannot locate information.

From my point of view, the problem is cross cultural and deeper than competitive intelligence. Executives struggle with strategy, planning, and personal conduct too.

Perhaps business schools and management experts are not symptoms but triggers?

Stephen E Arnold, August 2, 2015

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