Fuld & Company's Competitive Intelligence Blog

As the FCC auction of newly available radio spectrum continues into March, tech and telecom watchers have barely said a word. If you do see an article or two, it is usually burred on page 10 of the business section.  But don’t be fooled.  This is not a non-event.  You can be sure that lightning has already ignited in the distance, but  you just haven’t heard the thunderclap yet. Believe me, it’s coming.  When it does, the telecom and Internet businesses as we know them will rapidly head down a road of change.

 That is why my firm is running the first-ever national championship war game on this subject on March 4 in Cambridge, Massachusetts.  Top-ranked business schools from Harvard, MIT, Northwestern, and the University of Chicago will stress test various corporate strategies and attempt to predict how the wireless Internet will look a year or two after this pivotal auction.

 Google has bid for a piece of the 700Mhz spectrum, which is a prime candidate for promulgating WiMax.  WiMax, unlike its weaker space-bound cousin Wi-Fi, can leap tall buildings with a single antenna – and even pierce those buildings.  Some tech watchers have accused Google of not being serious in building any infrastructure whatsoever. Instead, they contend Google’s sole purpose is to goad all the incumbent telecom wireless carriers to move their wireless systems to open platforms, platforms on which Google wishes to place its Android search screen (a shrunken version of the desktop search box).  Mobile phones are growing at a meteoric rate (according to IDC, the number of mobile phones sold in 2007 was about 1.14 billion – approximately 12.4 percent more than in 2006), and Google wants a piece of the action. The thought of Google entering their turf is no doubt causing great concern to the likes of AT&T, Orange, Sprint, Vodaphone/Verizon, and dozens of other global wireless companies.

 What about Intel intentions to promote WiMax, or Microsoft co-founder Paul Allen’s investment in cable TV?  Both moves are emblematic of a vast array of corporate interests lining up to invade the once walled-garden world of telecommunications. Carriers will no longer control their own destiny. New entrants converging from widely different worlds with hugely diverging objectives want a piece of this new telecom gold rush.

 I will let you know in a couple of weeks how the war game turns out. If this public event, this national championship, plays out the way similar events have in the past, I will have a number of predictions for you that will prove prescient.

 As they say in the communications business, stay tuned!

Choke.  With the sting of the almost-perfect Patriots losing the Superbowl still fresh in my gut, I found it hard to write this note to you.  New England’s dashed hopes are old news by now, but a lesson echoes in my head nevertheless. It’s this lesson I want to share with you.

Yes, last Fall, well before any talk of a record-breaking season, the Patriots garnered a good deal of negative attention for the so-called Spy Gate incident. For those of you who don’t remember, Coach Bill Belichick and his sideline crew were accused of illicitly video taping the Jets’ defensive plays, an action outlawed by the National Football League.  You can either Google the news on the incident or look at an earlier blog of mine (See:                                     )

Yes, yes, I will get to the point that I allude to in the blog title. The Patriots are a superb organization, well-managed, well-run from top to bottom. They were within two minutes of winning the final battle, and even if they had, I still might have written this blog. In fact, I would have felt far more compelled to do so.

Let’s say the Patriots did win. This would have been their fourth Superbowl victory in half a dozen years–a miracle in this salary-capped, rough and tumble sport where a few bad plays nestled among many brilliant ones can cost you a game. Let’s say, therefore, that the Patriots continued to play nearly perfect ball all the way through the season, all the way to the finish line.  What then could I say about Spy Gate?

On the surface, the Patriots organization remains well run, with few outbursts and little outrageous behavior on the part of its players.  That’s fine, commendable even.  The New York Times published articles dogging the Patriots and Spy Gate up to (and on) Superbowl Sunday itself.  I’m not sure what the Times was attempting to accomplish, aside from selling more newspapers (I hope I don’t sound too cynical or biased). The Patriots may have deserved a greater punishment than the slap-on-the-wrist they received.

Sports commentators around the country continue to downplay the severity of the crime. After all, they said in various ways, video taping to catch play signals was common practice for many years, and likely continues still. The only difference here is that Belichick got caught with his video camera in the cookie jar.

Is that all we are worried about, getting caught?  Is that the only lesson the Patriots have taught us as we enter the remaining month of winter?  Is that all companies should worry about – getting caught? I hope not.

The worry about getting caught is just the symptom of a much larger problem. Football is an aggressive sport both physically and mentally. Players must be hyper focused in a somewhat chaotic environment.  Chaos – whether it’s the chaos of the trading floor, the hectic pace of a salesperson on the road, or the pressures and unexpected hiccups prior to a product launch – does not excuse stepping over the line.

Management teams that only worry about getting caught are the ones who actually will get caught because one day their actions will surface in the wrong places.  Executives need to think through the cascading results of turning their heads on unethical behavior.  They cannot condone (or pretend not to know about) desperate pleas to beat the competition at all costs.  These executives need to take responsibility to ensure that such desperate pleas are answered with rational, ethical, and legal methods.  Just ask Hewlett Packard (HP) about the damage incurred from its pretexting scandal a year and a half ago. Simple suspicion that a leak existed among the companies board of directors cascaded into a complex series of highly questionable intelligence-gathering activities.  Even though the gathering occurred through arms-length transactions, it resulted in law suits and a stain on HP’s reputation.

I have counseled many companies on their competitive intelligence and information-gathering compliance guidelines. Too often, I find these companies worry a lot, but give little thought as to consequences of their ill-defined guidelines. This is a dangerous game to play, when companies just worry but don’t ask “what if”?

At the same time, management cannot rely upon standard guidelines, such as those published by The Society of Competitive Intelligence Professionals. That list of general statements is just a start. Companies need to examine how they behave in their specific marketplace. Different industries have different norms; that’s a fact. 

So, I’m sorry the Patriots lost. What a depressing night it was at 11:30 pm that Sunday night.  The Patriots fought hard until the very end.  Still, it does not excuse the fact that the team broke the rules.  It does not excuse the fact that the NFL let the Patriots off with a slap on the wrist.  While I know this so-called Spy Gate scandal will become a sports footnote over time, in my mind it remains a core lesson of why companies should compete aggressively but fairly. 

Sometimes bad things do happen to good companies, deservedly so.

 Let’s start the new year by wiping some bad habits off the grease board.  I want to tear into my pet peeve of “competitor profiles,” an apparent CI staple.

 For nearly 30 years, I have visited, counseled and critiqued intelligence departments or their equivalents. Invariably, the manager or director shows me the array of competitor profiles lining the shelves, proof-positive the competitive intelligence department is doing its job. Doing what job, I ask?

 Back in the mid-eighties before the widespread use of email and nearly a decade before the World Wide Web, compiling a competitor profile made a lot of sense. It didn’t provide the final answer, but was a sensible activity nevertheless. Executives clamored for such documents because they assembled in one place recent news announcements about rivals, industry changes, government regulatory activity, and so on. Typically, these were weekly, sometimes monthly distributions.

 Fast forward to 2008; it appears not much has changed. Too many executives still receive these newsfeed profiles.  In sharp contrast, I have also witnessed a new crop of analysts who present pinpoint, high-value insights in competitor assessments designed to directly address their executives’ critical concerns. These in-house analysts are my intelligence heroes.

For the rest of you that still think a neat compilation of news articles will do the trick in today’s news-rich, easy-information-access world, you are just fooling yourselves.  If your profiles are simply mash ups of existing news articles, you are wasting your time, as well at that of your customers.  

Almost without a doubt, companies large and small nowadays can use technology, much of it free, to push news items of interest to management. Do not waste your precious time and political capital underwhelming management trying to duplicate the news-delivery capability of Google News, Factiva, or LexisNexis. 

 Okay, now that I have that rant off my chest, let’s focus on the intelligence heroes.  I am referring to Craig McHenry of Wyeth (See Intelligence Diaries, Pharmaceutical Executive, November 2007). I am referring to Daniel Vasella, CEO of Novartis who actively promotes open competitive discussion, or Gary Roush of Corning who always pushed his colleagues at Corning to ask the tough questions that go far beyond front page news (See, The Secret Language of Competitive Intelligence, Crown Publishing 2006).

 My intelligence heroes are always asking important questions as they create this new breed of competitor analysis: Why is the competitor doing what it is doing?  What does it intend to do next? If we react by expressing strategy A vs. strategy B, what might happen?  What other options do we have? These are all important questions, the answers to which rarely find their way onto stale competitor profiles.  Competitive intelligence folks must answer these and other similar substantial questions for executives. Profiles filled with rehashed news reports are not “actionable,” an overused but important CI phrase; only analysis combined with recommendations and probably some face-to-face arguments (excuse me, discussions) make intelligence actionable.

 Mash-up profiles, a time waster.  Analysis and recommendations, priceless.