I don’t need Competitive Intelligence, I work for the Government!?

Recently I visited a BI-seminar where I exhibited on Competitive Intelligence basics. Afterwards I spoke to several people who wanted to discuss whether or not Competitive Intelligence would do them any good. Especially government or semi-government employees struggled with the necessity of CI in their particular situation. “We don’t have competitors” was one of the most heard phrases. Most likely that isn’t even true, but even if it is, I’d like to quote Seena Sharp here from her excellent book “Competitive Intelligence Advantage” where she explains the difference between competitor and competitive intelligence:

The puzzle […] graphically and deliberately demonstrates that competitor intelligence is merely one element in the business environment. Competitive intelligence is more expansive in that it considers all the elements that impact the company’s success – customers, suppliers, distributors, substitutes, regulations, technology, the economy, other industries, demographics, culture/societal issues – and competitors.

Though competitors may be the best known part of that environment, CI definitely is not solely about that. In fact, some – and obviously Seena Sharp is one of them – believe focus should not even be primarily on competition but on customers. Be that as it may, in this blogpost I’d like to discuss the above statement – about the necessity for CI in governments – considering both competition and other external factors. For every organization has a competitive environment that influences it. Regardless the industry you are a part of and regardless whether or not you are on the government pay-roll.

For the sake of example, let’s focus on any city council. To influence their competitive position – which I will discuss later on – they have similar tools compared to companies. Where companies can directly influence their product/service in terms of quality, pricing structure and promotion, governments can do the same, although somewhat more indirectly: by means of infrastructure (product), taxes/subsidies (pricing structure) and lobbying (promotion).

And there are more similarities. Like companies, governments have a vision on where and what they want to be. And they have a plan to get there – strategy. This vision can be that they want to be economic leader of the country, the number one tourist attraction or the knowledge centre. The strategy to achieve those goals will be a mix of the above instruments. If you want to be economic leader, you might want to invest heavily in infrastructure, but you can also create a friendly tax/subsidies climate to attract companies to settle in your city.

So far, I hope you agree that governments don’t differ all that much from companies. And completely similar to companies, government organizations need to know their (internal) strengths and weaknesses compared to competition, in relation to the (external) environment factors, to be able to determine opportunities and threats. After this analysis, they can determine which tools are most effective to achieve their goals and improve their competitive position.

This competitive position can be related to the strategic goals the city council has determined. Different strategic goals may require a different scope of external factors that influence these goals. For example, a company with an expansion strategy in upcoming markets can also thrive on market share in its existing markets. For both strategic goals the company needs to watch different competitors (possibly), customers (most definitely) and legislation, demographic factors, et cetera. So back to our city council – the one that is willing to become economic leader of the country – and its competitive position. Who are the competitors? Who are the customers? What other external influences do they have to take into account?

In random order, let’s start with competitors. If you want to be economic leader, then your (relevant) competitors are the alternatives that companies have to run their business in. Any city that is also anxious to become economic leader, but that is not an option for the companies you’d like to attract, is at this point not a relevant competitor (for this particular strategic goal anyway). In order to attract the desired companies, you have to create a more beneficial economic climate than your opponents. And you have to know them to know how you can outsmart them.

Whilst discussing the competition we’ve already seen the (potential) customers. You need to know what drives your customers to choose a specific location. You need to understand their business to know which tools to apply. A transportation company for example will need an outstanding transportation infrastructure. For consultancy firms, your city (or region) should contain potential customers for them and if you are a dairy company, the availability of grass for your livestock is a key requisite. So in order to efficiently apply your tools to attract companies, you need to know what their requirements are.

I will not discuss all the external factors in this post, but I think the point is clear. If a city council wants to be the country’s knowledge centre, it needs to have (or create) the necessary demographic conditions for it. A university will not prosper without enough potential students with the required level of education. Providers of this education may be considered suppliers in this situation. Legislation (on a higher level than the city council) may influence how successful you are in achieving your goals. All of this is completely comparable to non-government organizations.

So with all these similarities, is the business case for CI in government organizations the same as for companies? Well – no, not quite. Mainly the difference is caused by culture and nature of the organization in question. In companies, not meeting strategic goals may lead to dramatic financial results and lay-off of staff. Ultimately, not achieving your goals challenges the existence of the company. A healthy company may be able to survive this once or twice, but even the most successful companies cannot handle consequent underperformance and strategic failure.

In government organizations we see a totally different mechanism. City councils do not cease to exist. There is no culture of harsh measures when targets are not met. And the other way around, no huge bonuses are rewarded when they do a good job. So where a company leader has plenty of incentive to make sure he makes the right decisions based on the proper intelligence, in government organizations this is a bit different. So how can we convince government leaders to invest in decision supporting intelligence regarding their environment? One of their main incentives in this would be re-election. If a government organization malfunctions, the public has a chance every once in a while to either keep supporting the city council, or not. It’s like the annual review for the public sector. That’s when they are held accountable for the results. So for all you CI people out there, whenever you want to approach a government organization, make sure you do it just before election time!

References
Sharp, S. (2009), Competitive Intelligence Advantage. How to minimize risk, avoid surprises, and grow your business in a changing world, John Wiley & Sons, Inc., Hoboken (NJ)

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One Response to “I don’t need Competitive Intelligence, I work for the Government!?”

  1. [...] Dit blogartikel was vermeld op Twitter door Jeroen van Luik, Dink Intelligence. Dink Intelligence heeft gezegd: RT @JeroenvanLuik: New post: "I don’t need Competitive Intelligence, I work for the Government!?" http://bit.ly/bEOgvI [...]