Chapter 13: Gathering Intelligence

The Art of ‘Ware [version 2.0] by Bruce F. Webster

[Copyright (c) 1995, 2008 by Bruce F. Webster. All rights reserved. Last updated: 04/30/08]

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We live, as we have been told for years, in the Information Age. Data floods us from all sides, and our challenge is to extract useful intelligence from it; after all, it’s easier to find gold nuggets in a mountain stream than in the Mississippi.

Sun Tzu, in his final chapter, talks about the need to gather intelligence about his enemy. With great passion, he points out that, given the terrible costs of war, to remain uninformed of the enemy’s situation out of an unwillingness to spend a little money or to grant honors is inhumane. How true.

When a company, division, or development team is formed and started on a significant development project, the costs will average $120,000 per year per person for salary, benefits, administrative support, office space, equipment, and other expenditures. There will be great stress both at work and at home for the employees, they will be exhausted from working long hours, and the lives of their families will be disrupted as well.

Development may go on for months or years in order to release a single product and win out over competing firms. In short, there are tremendous personal and resource costs in bringing a new product to market.

Given the great costs and sacrifices involved, for a CEO and others to remain less than fully informed on the marketplace, on the industry, on technology and tools, and on the competition because of reluctance to spend a few thousand dollars per year on information resources is inhumane. Such a CEO has failed the employees, the board of directors, and the company itself.

Besides being inhumane, it’s also downright stupid. It just makes no sense to spend vast amounts of money, usually millions of dollars, and vast amounts of employees’ time (and lives) to bring a product to market, and then jeopardize it all because of an unwillingness to spend a tiny fraction of those resources to gather intelligence.

Good industry intelligence enables a wise board and a skilled CEO to win out over competitors and to have spectacular results.

It’s not enough to be wise and skilled, you must also be informed.

This kind of intelligence does not come from wishful thinking, nor from history, nor from spreadsheets. It comes only from current sources of information.

Too many products, too many business plans are based on hope, old markets, and the 5% fallacy (“If we capture just five percent of the market!”).

There are five major types of intelligence: industry sources; inside contacts; competition sources; disinformation; and field research.

Note that “intelligence” includes disseminating information as well as collecting it.

When all five sources of intelligence are used, the whole is greater than the sum of the parts, and it is of immense value to you.

The interaction and cross-checking among the sources helps to sort out what’s important and what’s real.

Industry sources are periodicals, journals, newsletters, electronic information services, the Internet/Web, consultants, and contacts within other companies.

These are sources available to anyone who wants to spend the money, time, and other resources required to glean information from them.

Inside contacts are private sources of information within other firms, particularly the competition.

These are personal contacts, people within other firms who are willing (and able) to talk about what they know. The most valuable contacts — and the hardest to come by — are those inside the firms with which you directly compete. The next most valuable are those who have contacts inside or dealings with competing firms, and so on. Each step in the chain between you and the competition introduces noise and error, so you want that chain to be as short as possible. Lacking that, you can use multiple sources to help cross-check one another.

Note, however, that there are legal and ethical boundaries you should not cross. Certain types of information gathering can qualify as “industrial espionage” and can leave you open to both civil and criminal charges. Spend time with in-house or outside counsel before making use of such contacts within your competitors.

Competition sources are products, manuals, literature, seminars, advertising, and other sources offered publicly by the competition.

The best information about the competition (other than inside contacts) comes directly from the competition’s own materials. Read their ads and press releases. Attend trade shows where their executives are speaking. Buy their products and study them, including the documentation. Call up tech support. Get all the sales materials they offer publicly. Attend seminars they put on. Spend time in their on-line service conferences. Become a certified developer.

Disinformation is erroneous information about your company, plans, and products leaked to the competition.

Nature abhors a vacuum, and that’s as true in the virtual world as in the real world. Lack of information about your plans and efforts calls attention to itself and increases the competition’s efforts (and ability) to find out what’s going on. It is not enough to withhold information; something must be given in its place.

The challenge: maintaining good relations with your customers and the press while using disinformation. You want the competition to underestimate you, yet you want the press and your customers to be excited by you. It’s all a matter of timing and intelligence.

Field research is visiting customers, attending seminars, taking classes, and then reporting back with the information.

Not all information will come into your company; some of the most important information has to be gathered outside. Nothing is as valuable as visiting customers on-site and seeing what needs and concerns of the actual users are. Seminars convey far more information than can be gathered by the printed proceedings, both from direct observation of the speakers and from interaction with other participants. Likewise, ongoing educator of your employees (and yourself!) brings in far more information than the mere reading of books.

Debriefing is a critical part of field research. Emphasis should be placed on the intangibles that don’t appear on paper.

Therefore, you should work closest with those who are able to gather intelligence. Support and reward them generously, and be sure the information gathered remains within your company.

Too often, it is the CEO who questions the time and expense of gathering intelligence. Instead, the CEO should encourage it, demand it, and reward it.

The information gathered can only be effectively used in combination with wisdom, insight, humanity, and even-handedness.

In other words, intelligence in and of itself has little practical worth. Only when it is used appropriately can it benefit the company, its employees, its investors, and its customers.

Verifying information, especially from contacts in other companies, requires subtlety, cleverness, and delicacy.

Clumsiness can embarrass or even endanger the jobs of those sources.

If there are unplanned and unwanted leaks within your own company, confront and, if necessary, dismiss the employee.

Given that inside information is the most valuable type of intelligence, you must guard against unwanted inside information getting out. This means building a culture of internal confidence – which means being willing to trust employees with valuable information as it comes in.

Whether your aim is to broadly engage a company in competition, to capture a given market, or to win over a particular customer, you must first identify and learn about the competition’s people: the executive, the marketers, the developers, the sales force. Use your new sources to find this out.

The better you understand the competition’s people, the better you can interpret public statements; the better you can evaluate confidential sources; the better you can predict their behavior and performance; and the better you can mislead and manipulate them.

Take every opportunity to study and learn from competition sources. These will help you identify relevant industry sources. They will allow you to find inside contacts. They will guide you in transmitting disinformation. And they will aid you in conducting appropriate field research.

Most companies reveal a tremendous amount about themselves in what they release publicly. Take advantage of these sources to build up your other sources.

You must be steeped in all five sources of intelligence; these are guided by competition sources, so time, money, and effort must be devoted to obtaining and understanding that type of intelligence.

In other words, first spend money on the competition’s products, gather the competition’s literature, read the competition’s press releases.

If you’re smart, you’ll assign your best people to gathering intelligence. This information is essential for competition, and all the company’s employees rely upon it for their decisions.

There are individuals who are very good at dealing with each of the types of information sources. Find them, use them.

It is, of course, ironic that companies deeply rooted in an information-based economy often make such poor use of the information sources available to them. It is as if steel producers made no use of high-quality steel for tools and mills. But such firms are likely to be supplanted by those that indeed know how to effectively filter and use the torrent of data. Think of it as evolution in action.