In the Black
Available at: http://www.businesstodayegypt.com/article.aspx?ArticleID=7721
Cartoon by: Karim Ezzeldin
Competitive intelligence is about more than just market research. Knowing yourself and knowing your enemy only gets more important as the world becomes increasingly wired and globalized.
By: Ethar El-Katatney
Market research is indispensable, but it will not always deliver results — not for highly competitive, fast-changing, action-driven businesses that need to make decisions every day. Corporate espionage is illegal and unethical, but there’s no denying that a lot of businesses would have much to gain from it. The solution? Competitive Intelligence (CI).
Although it began in the US in the 70s, CI entered the Egyptian market only four years ago. Dr. Giselher Dombach, CEO of German-based company GEDcom AG, is the pioneer.
49-year-old Dombach was born in Germany and graduated with a Ph.D. in biotechnology and bioengineering. But when he realized his skills lay elsewhere, he completed his MBA and embarked on a 20-year career in consulting. Dombach has lived and worked in the Americas, Europe, Africa and the Far East in addition to teaching at several universities. He also has extensive military training (and we’ll find out why this is important later on), having served as a lieutenant colonel in many of today’s crisis regions, including Afghanistan and Kosovo.
Dombach arrived in Egypt in 2000 to teach at the German University in Cairo. Believing that he had found a country with great potential, a country that was “the ideal hub” for this area of the world, he decided to open a second branch of GEDcom AG in Cairo. To him, the CI business here is “embryonic, [and] that’s why [Egypt is] a very fertile ground to expand our business in.”
GEDcom AG is a CI company, which also evaluates start-up companies, commercial due diligences, and business opportunities for German companies in crisis regions. The bulk of their work however, is CI. But what exactly is CI?
CI is a process carried out to profile your competitors in order to forecast their moves. We live in a very dynamic world, where CEOs and company decision-makers need to know what the competitors are actually planning and how they are responding to their own moves. CI is also considered a product, giving you a report on your competitor’s plans.
CI differs from market research, which is more stable, scientific, long-term oriented, and needs a certain sample size on which to apply scientific methods and get an overview of potential customer acceptance of one’s products. CI, on the other hand, directly addresses the specific, short-term intelligence needs of decision-makers in what Dombach calls Priority Intelligence Requirements (PIRs).
“I’ll give you an example,” he says. “If you, as a CEO of a company, would like to acquire another company as a move to get entrance in [to] another market, you’d like to know: Is that also what your competitor is planning? And if not, how will your competitor react? Will he or she retaliate and win? That is something which is much more short-term oriented but much more action-driven.”
Neither does CI focus on a specific study of competitors and the market, instead it includes studies of other factors outside of the direct market situation, such as technology positions and human resources. So how does it work? According to Dombach, it’s just like the military.
“CI concepts all come from the military. CI was invented by ex-CIA, NSA, and military intelligence agencies,” he begins. “The CI cycle is very similar to the military world [because] it’s about the PIRs of the CEO: What do I need as CEO in order to make my decision? Then it goes directly into the planning concept: Which target [do] I need to approach in order to get the information in order to come up with my intelligence?”
The information collected to develop intelligence briefings comes from secondary sources, primarily through ‘human intelligence.’ CI professionals network with industry experts to gather information at conferences, trade shows and industry events. That’s why companies usually hire external CI experts to get the information — because if you are a person with military background, according to Dombach, and “you are talking directly to your competitor, you will get the right information.” Therefore, the ‘human intelligence’ has to bring with them both military and economic experience to be successful in the CI field.
The information is then analyzed through static or dynamic simulations, and disseminated in the right way to decision-makers, providing them with recommendations and suggestions for action. If the intelligence gathered is not usable or actionable then it is ignored, meaning it is not intelligence. All you have to do, says Dombach, is “transfer and transform [the information collected] to the economic world, and that’s why  it’s good to have on one side the fully fledged consultant and on the other side combining this with  military experience.”
According to the Society of Competitive Intelligence Professionals (SCIP) — a global, nonprofit organization whose main goal is promoting CI as a discipline that is unlike corporate intelligence and bound by strict ethical guidelines and of which GEDcom AG is a member — CI “adds value to information-gathering and strategic planning by introducing a disciplined system not only to gather information, but also to perform analysis and disseminate findings tailored to the needs of decision-makers.”
GEDcom AG is the only fully dedicated CI consultancy in the Egyptian market. Its employees are a mix of Egyptians and non-Egyptians, but all have methodological expertise from the military sector, along with industry and economic expertise. The consultancy helps companies construct a suitable CI organization and trains their clients’ staff in implementation of CI activities.
An example of a CI activity is wargames, a method of analyzing the retaliatory potential of a company’s competitors. The company organizes several teams, brings them together in a room, and assigns each team the identity of a different competitor. Then they simulate what will happen if the company goes ahead with an operation move, whether it’s embarking on a new technology, bringing a new product to the market, diversifying their product line or acquiring another company in a mergers and acquisition operation.
In addition to providing companies with CI, GEDcom AG also provides them with counterintelligence services, because there’s nothing to stop your competitor from using CI against you in return. The services include identifying competitors’ CI operations and trying to neutralize them, in addition to teaching companies operation security (OPSEC) measures.
“Companies spend hundreds of thousands of dollars protecting their assets,” explains Dombach. “But in our high-tech world the real assets are the minds of the people. So by OPSEC measures what you try to do is to identify the secrets that may be of interest to your competitors, what are [your] vulnerabilities and how [you] can prevent the access of competitors to [your] trade secrets. It’s no secret that other companies try to use corporate espionage in order to get your trade secrets  [which] is the best way to try and find out what are the vulnerabilities [of your competitor].”
CI in Egypt
Know what your competitor is going to do before he does it. Keep them from knowing what you’re going to do. Completely legal. It sounds too good to be true. And if there’s one thing about Egyptians, they won’t reach into their pockets until they know where their money is going and have good reason to expect a return. It would seem that GEDcom AG might have a difficult time proving this since it does not divulge its client list, which would undermine their activities. So how did GEDcom AG go about securing business?
“The customers in Egypt,” says Dombach, “are [mostly] international customers because it’s quite a new field for Egyptians  who are not aware of [the importance of CI]. When you talk about [it], the first question [Egyptians ask] is, ‘what’s the difference between market research and CI?’ If you […] say ‘it is more action-driven oriented,’ then you see the eyes of your counterparts at the table widening, and they acknowledge [its] importance.”
And so what GEDcom AG is trying to do is create an awareness of CI, counter-intelligence and OPSEC measures in the Egyptian market through word of mouth and holding seminars, which they will start giving at the beginning of 2008.
Regarding his Egyptian client list, Dombach says they are companies in life science industries including high-tech and pharmaceutical companies, but also companies in the consumer goods industry and the B2B business.
Who does he believe his clients should be? “All companies which are in a very intense global and rapid competition,” he answers. “Companies where products have a very short life cycle, because these companies have to act now. Companies which are not protected by domestic home market but [are out facing] international competition.”
Our world today is complex and fast-changing. Instinct and intuition can no longer be relied on. Companies who need correct and action-specific information have much to gain from CI; companies who want to improve their competitive position, enter new markets, or acquire new technologies are all in need of CI. But it is yet to be seen whether Egyptian companies will realize that CI helps them gain a sustainable competitive advantage without venturing into the murky waters of corporate espionage.
In conclusion, says Dombach, “People say [that] we [progressed] from [an] agricultural society, to an industrial society, to an informational society, [now] we are living in a knowledge society, but actually I think this is no longer true. We are living in an intelligence society.” And because we are living in an intelligence society, “What we’d like to know is [how our] customers [can] outsmart competitors and how they can make the right decisions. It’s a game and they would like to have the best cards; we help them.”