Terry Frazier: How to Do Real Competitive Analysis
(You can also download from http://traffic.libsyn.com/skmurphy/TWF-SKM-interview131202.mp3 )
I have been collaborating on a new podcast series on competitive thinking and business wargaming with Terry Frazier who blogs at CompetitiveThinking.com Here is the audio from a short discussion we had on how to do real competitive analysis with a summary of the key points that includes three things to stop doing to make time for three things to start doing.
- Stop collecting information on competitors: Terry believes that too often we are swamped with information like stock fluctuations and press releases that is essentially redundant. Without a clear strategy for how to analyze it it’s a waste of time. The reality is that your team already knows 90% of what you need to know to craft a competitive strategy.
- Stop relying on SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis: Terry observes that these are too often performed from a purely “internal perspective” that fails to take into account customer, prospect, partner, and competitive perspectives. It can be a “silly way of thinking” if you are not careful.
- Stop assuming buy-in and cultivate it: Terry cautions executives not confuse a lack of opposition to a plan as agreement with or approval of the plan.
I worked at several large firms as a flying monkey for various evil emperors. My duties frequently involved gathering data on competitors and doing–and re-doing–SWOT analyses. I next asked Terry what I should have been doing instead.
- Engage managers effectively. Terry suggests involving them early; ask them to help define the questions and the approach.
- Filter and focus competitive information: Terry stresses the need for clarity on key intelligence topics: what are the key one or two drivers for your industry.
- Encourage debate that looks for where the plan is wrong: Terry believes that you need for a structured approach to encouraging dissent: require at least one manager to play the devil’s advocate. Someone needs to ask, “where’s the evidence against what we are planning to do?” As a senior manager you need to ask your managers to bring you contrary evidence and advise you where the weaknesses are in the plan. Separate your plan from your ego to enable you to accept criticism as suggestions for improvement.
This last strikes me as very rare and probably the most valuable.
Update Dec-3-2013: Brad Pierce left a comment related to the third item effective leaders need to start doing:
Tim Harford, in “Adapt: Why Success Always Starts with Failure”, recounts a lesson Jack Galvin taught David Patreus,
“It is not enough to tolerate dissent: sometimes you have to demand it.”