Business Intelligence Operatives Organize : Information: Group helps companies stay ahead, advising them on knowing their customers, competitors and industry.
The little old lady who runs the corner flower shop may not seem like a good source of business information. But business consultant Herbert D. Clough says she can be if your business is flowers.
She’s likely to know whether local customers are buying roses or prefer other blossoms, which flowers fade fastest in the store and which companies provide the best stock.
“These are the people on the firing line, who see any trends,” said Clough, who lives and works in Sherman Oaks.
Clough, 68, is president of Cointelsys International, a business consulting firm in Sherman Oaks he founded in 1992. He is a former FBI agent who has made security his specialty, and he has been called upon to help install computer systems with difficult-to-access data bases.
Clough recently helped start the Southern California chapter of the Society of Competitive Intelligence Professionals (SCIP). A Virginia-based nonprofit organization, SCIP helps businesses maintain a competitive edge by offering advice on how to gather information on their customers, their competitors and their industry. Through conferences and local chapters, it teaches members both the most obvious and the most obscure places to look for information. All of it is done legally.
SCIP counts about two dozen chapters with 2,300 members nationwide. Clough said the Southern California chapter has more than two dozen members. He co-chairs the local chapter, which will meet every three months.
Much of SCIP’s advice may seem like common sense, but members maintain that all too many companies operate on an information deficit: They don’t know what their competitors are doing, they don’t know enough about what their customers want, and they don’t know whether their industry is dying or thriving.
“You don’t want to be blindsided,” Clough said. “You may have been in the business for years and have an 80% market share, when someone out of the blue buys an unheard of young company that has a competitive edge on your products . . . that can reduce your market share.”
In his own business, Clough said, he keeps tabs on other business consultants who specialize in providing security by reading trade publications and attending seminars.
SCIP members say that up to 95% of the information a business owner needs to stay competitive is public, and they take pains to say they do not endorse illegal information-gathering methods.
Most of the information can be found in libraries, computer databases and government archives. Publications to look for include newspaper articles, trade magazines, government reports and even doctoral dissertations. A public company’s annual reports or documents they are required to file by the Securities and Exchange Commission, including earnings reports (10-Ks and 10-Qs), are also good sources of information.
Freedom of Information Act, or FOIA, requests can also dredge up hard-to-get documents. Clough said FOIA requests can provide information on investigations into companies conducted by government agencies such as the Securities and Exchange Commission and the Environmental Protection Agency.
In addition to providing information on business rivals, competitive intelligence “also works in positive ways if it locates potential partners,” Clough said.
If you don’t have the time to get the information yourself, some companies will do it for you.
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SCIP member Jan P. Herring is a vice president with the Connecticut-based Futures Group, which has offices throughout the United States. Profiles of chief executives and how they go about making decisions are among the services provided by the firm. Profiles run a minimum of four pages and cost from $10,000 to $50,000 depending on the information needed and the company’s complexity, Herring said. “If you’re in the process of a multimillion dollar deal, $10,000 is a good investment.”
Businesses also can glean information from interviews with university professors, journalists and government officials. Clough gives the example of an oil company interested in drilling for oil in the former Soviet republic of Azerbaijan.
“You find out who, say, in the U.S. Department of Commerce is an expert on Azerbaijan oil fields,” Clough said, “and you just get on the phone and chat with them.”
To get information on rival business people, SCIP member Deborah Schaff Johnson suggests interviewing their former employees and college professors. Is the new CEO of a rival company an aggressive person or mild-mannered and prone to maintain the status quo?
“Go and talk to the people he got his MBA from,” said Johnson, who works in the San Diego area for the Futures Group. “Be honest with people and tell them you’re doing a background on this person and ask pointed questions.”
Clough said he joined SCIP in the spirit of “know thy enemy.” While his job is to protect company information, the job of most intelligence professionals is to gather information.
Clough said that while most desired information on rival companies can be had through legal means, companies still must beware of computer hackers, thieves, and industrial spies who are hired to dig up secrets. And nowadays, more and more companies are likely targets, particularly those specializing in high-technology products, he said.
Clough said computer security systems cost from $1,000 to $100,000--depending on a company’s size and its computers. If a company “wants to retain its edge, it has to protect information,” Clough said.
