Note: The following post is taken from my new book, Competitive Intelligence: Improving Law Firm Strategy and Decision Making. You can learn more about the book here.
If you have spent any time studying or developing CI, you will have noticed that experienced CI practitioners spend more time discussing analysis than any other component of the intelligence cycle.
While all steps of the cycle are equally important and mutually dependent, analysis turns what all firms have -- information -- into actionable insights that are uniquely relevant to your firm. If you follow all other steps in the intelligence cycle, but skip the analysis, the best your firm can hope for is to be on par with the majority of its competitors, rather than enjoying a competitive advantage.
So, what do we mean by analysis? Simply put, CI analysis is the process of drawing actionable, relevant insights from external information. All the adjectives in this definition are instructive, and you should keep them in mind as you plan and do your analysis.
Actionable - Information on its own is benign and only becomes actionable through analysis. For example, a client dossier or competitor profile that doesn't identify the opportunity for your firm to act is just static data, not intelligence. In addition, "actionable" means "forward-looking." If your firm is going to take actions in the future, your analysis has to provide insights about the future environment, e.g., new cross-selling opportunities, an emerging overseas market or the strategic direction of a potential merger partner.
It must also be said that the same information can be converted, through analysis, into different intelligence for two different firms in different circumstances that are evaluating different decision options.
Relevant - "Relevance" is closely related to "actionable" and means that as you plan and deliver your intelligence you understand the context in which the intelligence will be used, including which actions your firm can conceivably take. For instance, the identification of a potential new overseas location would be neither relevant nor actionable if your firm has just had its worst year on record, has no available funds for expansion and is losing key partners. Likewise, an analysis of new opportunities in commercial real estate work is unlikely to be either relevant to your firm's needs or actionable if the firm has just declared growth of its litigation practice to be the firm's top priority.
Obviously, the information you gather and analyze must be brightly relevant to the decisions at hand, not merely easy to obtain. Too often law firm CI practitioners rely overmuch on secondary information developed by information aggregators who sell the same information to all competitors. Too seldom, firms seek out primary sources with information your competitors do not yet have. For example, primary sources (clients, industry experts and others) can provide attitudinal opinion information (about changing needs, satisfaction, loyalty) and behavioral information (about hiring and spending behaviors, attendance, etc.). You can obtain primary information through interviews or by simply observing the marketplace.
Relevance also applies to timing the delivery of your intelligence. For example, if you were to provide one of your firm's partners with an analysis of potential cross-selling opportunities at Client X one week after that partner had pitched a different set of services to Client X, you are unlikely to get much of a response from the partner, at least not a positive one.
External - While you certainly must understand the internal dynamics of your firm to be able to provide relevant intelligence, your analysis should focus only on factors outside the firm. Law firms are notoriously introspective, so CI should be the objective voice of the external environment inside your firm. More to the point, a law firm's opportunities only take place outside the firm; inside the firm there are only costs.