Feature: Ask the right questions

Unlike just any data, competitive intelligence needs to address specific strategic needs. Collaboration with key personnel – leaders, library and lawyers – helps construct accurate market profiles.

By Carolee Swallie, director of business development, Foley Hoag LLP

It is human nature to be motivated by the presence of competition. Undoubtedly in the earliest days, cave dwellers gleaned important information from the primitive drawings on cave walls to gain valuable information about where the best sources of foods were, and how to stay safe from danger.

Fast forward to the present day, and corporations routinely scour the landscape for information that might help them gain competitive advantage by expanding a territory, launching a new product or acquiring a company. That is a form of competitive intelligence. Political campaigns are zealous in their pursuit of information concerning what may have transpired in their opponents’ pasts that could leave them vulnerable and open to attack. In this case competitive advantage owns the sophisticated moniker ‘opposition research’. Colleges and universities do it in order to find out which regions of the country are producing students within their desired demographic, and it helps an institution draw from the widest and best pool of applicants. In all these cases, competitive intelligence is pursued in the general course of doing business and for the purpose of remaining agile. Why not in law firms?

Over the past decade, law firms have woken up to the idea that the practice is both a profession and a business. Thus, like marketing, competitive intelligence is something with exciting potential but still in its infancy. There are different views in the industry concerning what competitive intelligence really is, but it is very different from competitive information. ‘Information’ suggests a random data-dump. ‘Intelligence’ suggests a thoughtful framework has been assembled before data gathering and that rigorous analysis has been followed.

Levels of sophistication

Unsurprisingly, because of the varying degrees of sophistication around competitive intelligence, while many firms are actively collecting data, many others are not turning that data into actionable ideas. A successful competitive-intelligence programme needs to be actionable. Too often, law firm leaders are quick to say ‘we need to do some research’, without adding why. There is no strategy. In order to be used effectively, the end-user needs to identify the ‘what’ and ‘why’ in the pursuit of competitive intelligence: What is our end result? What are we going to do with this information to move our business forward? Why are we doing this? A good competitive-intelligence initiative is like a simple mathematical equation: data + analysis = action.

Smart firms recognise this and maximise the use of their resources, both staff and technology, to accomplish the goal. Smart firms also recognise that, like a strategic plan, competitive intelligence needs change. The marketplace changes. The competitive landscape changes. Companies grow, shrink and expire altogether. So the competitive intelligence developed in 2007 probably won’t suit the strategic plan for 2009. Like a strategic plan, intelligence is not something to complete, put in a ring binder, and put on the shelf. The results from such an exercise should be contained in a live document – something that by design and mandate is frequently challenged and updated. Competitive intelligence is not a random act of research. It is a carefully calibrated exercise that runs on a parallel track to company strategy, mirroring its twists and turns along the way.

Specific intelligence

What does competitive intelligence look like? Perhaps it is more illustrative to examine what competitive intelligence is not. It is not stand-alone bits of data existing in a vacuum. It is not reams of client or prospect information in the form of entire website printouts, or every news clip a company has ever received. It is not reactive, and it is not focused on a practice area or region.

That excludes some things, but still leaves a great deal of information. Intelligence is data that has been collected for a specific need. It is actionable. Data considered competitive intelligence has been analysed and filtered. Competitive intelligence is information that grounds strategic management decisions.

Competitive intelligence is almost a necessity in today’s consolidating legal market. For firms ready to take the plunge, adding competitive intelligence to its strategic planning can reap huge rewards. Below is a blueprint for success.

Setting the stage

Start with the firm’s strategic plan. If there is not one, back up a few steps and be sure that the foundation is in place. Knowing the ‘why’ connected to the task in hand ensures a greater probability of a successful outcome.

As with many far-reaching initiatives in professional-service firms, enlist the support of influencers. Usually appointed leadership and management, but sometimes in nominal leadership roles too, these are important allies, helping communicate the firm’s commitment to any given activity. It is not enough merely to have a few groups drawing on the support of competitive intelligence to make business decisions. In order to truly move an organisation forwards, the entire enterprise must make a habit of drawing on competitive intelligence to make strategic decisions, and that practice must be woven into the fibre of the firm until it becomes second nature and automatic.

Jay W. Lorsch and Thomas J. Tierney describe a ‘strategy pyramid’¹: a series of choices an organisation must make in terms of differentiation, target clients and its value proposition. Firms can benefit from bringing competitive intelligence into the construction of this pyramid, allowing the resulting strategy to be specific, and of course actionable.

Building the team

After ascertaining the need for competitive intelligence and committing to embrace it, what do you do next? While it is easy to argue that all law firm administrative functions should be collaborating and breaking down traditional silos, competitive intelligence is one area that particularly benefits from this. The best competitive-intelligence teams draw on the support of a firm’s library and marketing personnel, combining best-of-breed capabilities in a powerful way.

First, draw on the professional staff in the library. Research staff are one very valuable, professional resource already in place – knowledgeable about data sources, agile in sifting through information, and familiar with the lawyers and their clients. Combine this with a staff member resident in the marketing department. In addition to research skills, analytical thinking and good communication skills, marketers often have greater awareness of client realities and marketplace forces, which adds to the overall picture generated.

In their roadmap Lorsch and Tierney illustrate this concept using an ‘alignment pyramid’, reflecting the people systems needed for the implementation of a strategy². Their interrelated model speaks of the underpinnings necessary to support a firm’s strategy – the professional staff described above in assembling a powerful competitive-intelligence team.

What many organisations neglect at this point is to involve the internal clients; their lawyers. Lawyers will remind the research team of the importance of ‘why’, and provide much-needed perspective on real-time client developments, so that competitive-intelligence efforts can be dynamic and flexible.

Gathering the data

If the first two steps are carefully implemented, the next can be a relatively smooth process. Create the right framework by including specific and defined questions that can be acted upon. Client-service teams are useful, both for the broad perspective they bring and the deep industry knowledge that comes with repeated exposure to client challenges and opportunities. Teams can help shape what those actionable items are. Bear in mind that competitive intelligence does not always take the form of sophisticated, software-generated reports and giant printouts, however. Don’t neglect to include data gathered from direct sources such as surveys, lawyer visits and direct comments.

Above all, be vigilant about gathering data, with the purpose of analysing and converting it into actionable competitive intelligence always in mind.

Analysis and action

Even when firms are able to gather data successfully they can find themselves in a state of ‘analysis paralysis’. Data is collected, put in the ‘to be read later’ pile, but never acted upon. There is too much data, yielding too little valuable insight for helping firms make strategic decisions. The reasons for this are varied. Perhaps the volume of data is overwhelming, or the skills to interpret the data are missing. But most often, analysis paralysis occurs when data is gathered without a business strategy driving the process. If you don’t put some thought into what questions need to be addressed, or if your questions are too broad, your data becomes invaluable and useless.

Analysis is mainly pattern detection and simple interpretation, asking ‘what does this say to me? What patterns can we observe that can help make a better decision? Was this the best information we could find, or just the information that was easy to find or nice to know?’

This is where most firms fail to make their data actionable. The easiest way to make sure your data is actionable is to have a well thought out strategy beforehand. Know what you want answered, and make sure the questions are specific and actionable, before you start gathering data.

Remember, competitive intelligence has an end purpose; to help you make actionable decisions that will support firm objectives. If it is not integrated with firm strategy, the intelligence serves no purpose. The exercise merely becomes a random act of research and the results end up just sitting in a drawer.

References

LORSCH, J.W. and TIERNEY, T.J., Aligning the Stars: How to Succeed When Professionals Drive Results, pp. 36 – 37, Harvard Business School Press, 2002.
2. ibid, pp. 60 – 62

Carolee Swallie is director of business development at Foley Hoag LLP. She can be contacted at cswallie@foleyhoag.com