Know Thy

Last year, a sales team at Rockwell Collins faced a rare sudden-death scenario. The aviation electronics supplier was bidding for a government contract to manufacture a particular kind of information technology. The catch was the technologies were changing rapidly, and this would be the final contract awarded under the old system. "Basically, this was the last shot," says Michael Thome, who at the time was a one-man competitive intelligence (CI) department at his division of Rockwell, based in Cedar Rapids, Iowa.

With such high stakes, Thome brought CI to the process. First, he interviewed his company's salespeople to see what they'd heard on the street about how their main competitor might bid on the project. Then he went deeper, tapping his contacts in the engineering department to get their take on how their rival might act. He even set up an internal team and asked its members to role-play the competitor, looking for possible motivations that could give him more insight. When his investigation was complete, he was able to tell the sales team that the competition planned to go into the bidding aggressive on price. So to counter, the Rockwell team prepared a killer pitch emphasizing its experience and stellar track record. The teams went head-to-head. Rockwell, with a higher price, but a stronger customer-service promise, won the contract. Had Rockwell not known the plans of its competitor ahead of time, it might also have used a price-based pitch—and lost to the lower bid. "Knowledge gave us an edge," Thome says.

Indeed, knowledge can make all the difference. In this weak economy where dollars are scarce and competition is fierce, an extra scrap of knowledge can mean the difference between a closed deal and a colossal mistake. Companies are increasingly turning to CI to determine the strategies of rivals and the needs of the customer. An SMM/Equation Research survey of 291 sales managers revealed that 89 percent ask their salespeople to double as information agents. Details on the competition's price and new products are most in demand. A recent study by PricewaterhouseCoopers (PwC) found that one third of CEOs consider CI more critical to success than a year ago; 84 percent consider it a prime driver of profit growth. "Our volatile economy has left businesses scrambling to neutralize or undermine whatever perceived advantages their competitors may have developed," says Steve Hamm, managing partner of PwC's middle market advisory services. "It's little wonder that competitive intelligence is valued more highly today—and why so many firms are focusing on ferreting out information about any new competitor initiatives."

They're also focused on the best and most creative ways to get that data. While CI is traditionally the task of an overworked sales force, more companies that make CI a priority are giving it a systemic makeover. Instead of simply