Competitive Intelligence – Get Smart!

Thanks to the Web, you can learn more about the competition faster than ever. Fast Company’s panel of experts provides a six-point program for keeping an eye on your rivals. Now, where’s Agent 99?

Business moves fast. Product cycles are measured in months, not years. Partners become rivals quicker than you can say “breach of contract.” So how can you possibly hope to keep up with your competitors if you can’t keep an eye on them?


That’s why competitive intelligence is so important. Forget James Bond. And forget the occasional racy headlines about industrial espionage. We’re talking about new approaches to good old-fashioned business dish: a heads-up on a new product, information on a rival’s cost structure, a read on an ally’s changing strategy.

This kind of information gets exchanged all the time, of course. Engineers swap gossip at trade shows; rival salespeople compare notes at a restaurant. Thanks to the Internet, though, you can acquire more information faster than ever. The Net offers a remarkably wide variety of sources: content-rich Web sites, fast-as-lightning news services, online job postings, brutally honest discussion groups.

We’ve convened a panel of experts to teach you the new rules of competitive intelligence. Two top consultants (Leonard Fuld and Tracey Scott) and two in-the-trenches researchers (Marc Friedman and Edee Edwards) discuss their secrets for tracking companies and trends. (Their bios appear on page 270.) We also provide do-it-yourself tools, including the most reliable Net-based sources. So take our advice on business intelligence – and get smart.


The Net Changes Everything

Leonard Fuld: The Internet has dramatically accelerated the speed with which anyone can track down useful material, or find other people who might have useful information. Before the Net, locating someone who used to work at a company – always a good source of information – was a huge chore. Today people post their resumes on the Web; they participate in discussion groups and say where they work. It’s a no-brainer.

Recently we were asked to determine the size, strength, and technical capabilities of a privately held company. It was hard to get detailed information. Then one of our analysts used Deja News , a search engine that tracks online discussion groups. The company we were researching had posted 14 job openings to one Usenet newsgroup. That posting was like a road map to its development strategy. You couldn’t find that sort of thing five years ago.

Marc Friedman: The Net isn’t my only source of information, but it’s a major one. It’s where I start. One site I like to visit is CorpTech , which provides information on 45,000 high-tech companies and more than 170,000 executives.


Sometimes I’m really amazed at what searching the Net can turn up. One of our product lines consists of antennae for air-traffic-control systems. I got a call from our people in Canada, who needed a country-by-country breakdown of upgrade plans for various airports. I knew nothing about air-traffic control at the time. So I got on the Net. I found a site for the International Civil Aviation Organization, which had lots of great data. I also found several research companies that had done reports.

Edee Edwards: The Net can also waste time. I got a call from someone – I swear this is true – who wanted to know the time in Australia. He’d been searching the Net and couldn’t find it. Of course, all he had to do was open a phone book or an almanac and look at a time-zone map! That sort of thing happens a lot more often than you might think.

Put People First

Tracey Scott: I distinguish between secondary information – stuff that you read on the Web or in reports – and human-source information: stuff that real people tell you. Human-source information is more interesting and more accurate than secondary information. That’s why I spend a lot of my time tracking people. I always look for “star talent” and think about what the comings and goings of those people mean. I also love conference proceedings. Most companies send their best people to speak at conferences. It’s a great way to track talent and to track down people who might have useful information and insights.


Fuld: The “people factor” is so important. You can’t reduce competitive intelligence to a spreadsheet. One exercise we like to do is to profile the top managers in a company or business unit. What’s their background? Their style? Are they marketers? Are they cost-cutters? The more articles you collect, the more bios you download, the better you get at creating these profiles. All this material is on the Web.

One client hired us to help figure out whether a competitor was going to start competing more aggressively on cost. Our analysts tracked down all kinds of articles, including a profile in a local newspaper of the competitor’s CEO. The profile said, very matter-of-factly, that this guy took a bus to a nearby town to visit one of the company’s plants. Those few words were a small but important sign to me that this company was going to be incredibly cost-conscious.

One last point: Help-wanted ads are a very underrated source of business intelligence. They offer great clues about where a company is heading in its pursuit of markets and technologies. and the Monster Board are two sites that our analysts use all the time. Companies are between a rock and a hard place here. Most of them desperately need talented people, so they have to advertise their openings aggressively. But the more jobs they post, the more they expose themselves to people like us, who know how to analyze the postings. If you examine the kinds of backgrounds that a company looks for in its systems people, you can get a good sense of its technical infrastructure.


Search and Ye Shall Find

Friedman: You can’t talk about competitive intelligence on the Web without talking about search engines. I’ve had the most success with Excite , which lets you start with a broad search and then narrow it. Say a search unearths a Web site that’s really valuable. You click on a button (“More Like This”), and Excite immediately searches for items related to that site. It’s a nice feature.

Edwards: Search engines are a mystery. A few months ago, a colleague of mine did a training class on using the Internet. She had everyone in the class plug the same query into AltaVista – and every single one of them got a different result. The same colleague did a search that morning and got a bunch of hits. She did the same search in the afternoon and came up empty. I guess the moral of the story is, don’t take “no” for an answer.

Scott: I use AltaVista. It gets me to the hard-and-fast business stuff that I expect to find. I also use MetaCrawler , one of the leading “meta” search engines. It gets me to stuff that I don’t expect to find: obscure newsletters, reports that aren’t officially sanctioned by companies or research firms – material that AltaVista often doesn’t produce.


There’s No Place Like Home (Pages)

Fuld: It’s so obvious that I’m reluctant to say it: If you want to find out about your competitors, spend time with their home pages. Home pages are such an obvious resource that people often don’t take them seriously. I’ve been spending time with the home page for Unilever, the Anglo-Dutch consumer-products company . It’s a great place to gather intelligence on that company. It includes all kinds of data about R&D operations: where they are, what they specialize in. You can take that information and go to the IBM Patent Server , which archives 2 million patent citations. You’ll make some interesting connections and see how Unilever is using its scientific resources. That’s just one example.

Some companies go into real depth about their structure and leadership – complete with org charts of different departments and bios of executives. Unilever’s site is like a AAA Trip-tik: It allows outsiders to navigate through the organization. When a company lets people post personal home pages, you really get a feel for their personalities and intentions. These pages can be extremely valuable. They’re also a headhunter’s dream!

Freidman: Our competitors’ home pages are among my first stops. I’m really thorough about going through them. If you really push on them – if you focus on the minutiae and make interesting connections – you can generate valuable insights. We do business in 170 countries. Home pages can give you a quick take on what your competitor is selling in Argentina or who its partners are in Belgium.


Scott: Home pages are valuable. But they also contain lots of misleading information. On the Web, there’s no such thing as definitive truth; there are just too many people talking. And companies tend to post only their most optimistic messages. If you’re worried about when a competitor is going to release a new product, and all you do is track press releases on its home page – well, don’t be surprised when the product launches much later than those releases suggested it would. All the detail on the Web can be deceiving. Once, on a company’s site, I read specs for a new product, complete with engineering drawings, and then I called someone at the company, who said, “We haven’t started building it yet.”

Think Global, Snoop Local

Fuld: One of the great things about the Web is that it’s a window on the world. But often the best sources of information on a competitor are the most local – the community newspaper in the town where a company is headquartered or has a big plant. If [IBM CEO] Lou Gerstner moves his elbow, the papers in Westchester County report on it. The Web can get you to these local sources; even the smallest papers have Web sites these days. But you have to work to find them. NewsLink connects you to more than 3,600 newspapers and magazines from around the world – even college newspapers – and it’s searchable by state. NewsWorks searches through and links to all the newspapers in nine of the country’s biggest publishing chains.

Remember that CEO who rode the bus? A local paper did an in-depth piece on life at one of his company’s factories, complete with great data on how many people worked there, what the average salary was – remarkable stuff. We put that information together with other data and developed a pretty reliable estimate of manufacturing costs at this plant. Hometown papers are one of the few places where you can get that kind of information. Always look locally.


Scott: Be sure to look beyond traditional business sources too. I’m a big believer in preferring soft information to hard information – and in reading between the lines. Two of my favorite local sources are the wedding-announcements page and the lifestyle section. Remember Working Girl? Melanie Griffith is working on a deal and reads that the daughter of one of the big players is getting married – so she shows up at the wedding reception and makes her pitch. I’ve never done that. But you can make interesting connections if you combine business news with “social” news.

You Get What You Pay For

Friedman: We keep talking about “the Web” – a term that implies “free.” But I also use fee-based information services. One of my favorites is First Call It offers broker-oriented material on companies: analyst reports, earnings estimates. It also lets you subscribe to industry-based services. Not surprisingly, we subscribe to ones that track wireless communications.

I also use something called Profound . Profound is not a search engine – and it’s not free – but it’s a good place to begin searches. It gives you tables of contents for research documents and lets you decide which parts you want to download – and pay for. That’s important. One of the dangers of pay-as-you-go information services is that you can ring up serious bills pretty quickly. But competitive intelligence is like any other part of business: Usually, you get what you pay for.


Edwards: There are a couple of reasons why you might want to use proprietary services rather than the Web. For one thing, information you pay for is usually more reliable. There’s also a security issue. When you visit a Web site looking for information, the people who run the site often know that you’ve been there. You might not want them to know that.

I still use the Web all the time. And more and more of the proprietary services are making their search capabilities available over the Web. Dialog Web is a good example. If you go there , you can do free searches that tell you how much information you’re going to find in the 450 databases available through the site. You need a password to download the information, of course. Another service I use is called STN Easy, from the Science and Technical Information Network ( It has science information and patents from 200 databases on chemistry, life sciences, pharmaceuticals, and other subjects. Every industry has its version of this database – and it’s usually worth paying to use.

Gina Imperato is an associate editor at Fast Company. She couldn’t keep a secret if her life depended on it.


Meet Our Intelligence Operatives

Want to get smarter about gathering intelligence on your business rivals? Then spend some time at Fast Company’s school for snoops. Our four panelists – including big-name consultants and in-the-trenches researchers – have no secrets. In fact, they’re downright eager to share their lessons and techniques.

Leonard Fuld, 44, is the undisputed dean of competitive intelligence. His firm, Fuld & Company, founded in 1979 and based in Cambridge, Massachusetts, has done research and training for hundreds of blue-chip companies. Fuld is the author of three books and the creator of many research techniques that are now standard operating procedure in his field.


Tracey Scott , 31, is a past president of the Society of Competitive Intelligence Professionals (SCIP). She began her career tracking the competition at BellSouth and then moved on to Pacific Bell. In 1997, she joined Vivagy Inc., a customer-relations consulting firm based in San Francisco. With a partner, she recently started her own firm.

Marc Friedman, 50, is manager of market research at Andrew Corp. (annual revenues: $870 million), a fast-growing manufacturer of wireless-telecommunications equipment based in Orland Park, Illinois. Friedman is his company’s go-to guy for getting the goods on the competition – and the Web is where he goes first.

Edee Edwards, 30, is senior electronic-library specialist for Pacific Northwest National Laboratory, a 3,300-person research facility based outside Seattle. The lab, with a budget of more than $500 million, works each year on more than 1,500 projects in fields such as the environment, energy, health, and national security. It is owned by the U.S. Department of Energy and operated by Battelle Memorial Institute.