Know the competition: survey spotlights growing need for competitive intelligence in public relations.

Professional communicators' tools of the trade have remained relatively unchanged through the years. From media relations and financial/investor relations to issues management and internal relations, the fundamentals of public relations have been constant.

More recently, however, communicators have begun to value competitive intelligence as a distinct, recognizable discipline in public relations that can help them succeed in an increasingly complex, information-intensive communication environment. In addition to traditional tools and methods, they need a broader, more sophisticated understanding of business strategy to make a positive impact on business performance through communication initiatives. Competitive intelligence fills that need. Today's successful communication programs are based on a solid foundation of competitive intelligence and the understanding of business strategy it offer PR practitioners.

DEFINING CI'S ROLE IN PR

Competitive intelligence is a systematic, ethical process of monitoring a competitive environment by collecting and analyzing information that can affect the plans, decisions and activities of a business or organization. The basic goal of CI in PR is fundamentally twofold.

* Create better-informed communication programs.

* Make better-informed decisions about those programs.

CI provides communicators in virtually any business or organization with information on and analysis of a wide variety of business issues and factors, including a competitor's positioning, actions, messaging and strategies; trends and issues in an industry or field; strengths, weaknesses, opportunities and threats facing an organization; and many other factors. Part of this task includes identifying the views, needs and concerns of stakeholder audiences (customers, investors, employees, etc.) as they affect and determine the organization's success.

RESULTS OF BUSINESS CI SURVEY

This past spring, Fleishman-Hillard Inc. and Fold & Co. conducted a national survey of communication executives at 5.3 large U.S. and multinational companies. The survey indicates that a gap exists between the current access professional communicators actually have to CI and the access communicators need in order to analyze their company's competitive situation, the positioning and strategies of competitors and the overall business environment.

The poll indicates that business communicators are mindful of the value and potential of CI. Three-fourths of communication executives polled (7.5 percent) "strongly agree" that "business today requires corporate public relations practitioners to understand business strategy as well as the principles of effective communications." A similar majority (70 percent) agreed that having access to competitive intelligence in the past would have made their communication campaigns more effective.

The findings shed light on how corporate PR practitioners currently work and may affect how current and future communicators are educated. The PR profession stands to benefit from increased understanding of the fundamentals of business operations and business strategy, which are inherent in the information and analysis provided by CI.

Corporations and other organizations, in turn, will incrementally benefit from the work of PR professionals who have a stronger, broader and deeper understanding of business strategy and business operations, and thereby make greater contributions to business performance through communication activities that are more strategic and better informed.

The results indicate that a rethinking of educational curricula for PR practitioners may be in order, to include an emphasis on business strategy that is inherent in the use of CI.

The findings also indicate that increased use of CI likely will enhance the effectiveness of corporate communication, since respondents agreed that competitive intelligence would have benefited their past efforts. Increased awareness of CI's value can encourage corporate PR practitioners to make greater use of CI to increase the effectiveness of future programs, and potentially influence those companies that do not currently have a CI function but recognize its importance.

Greater appreciation of the importance of competitive intelligence also can have a positive effect on the attitudes of PR professionals toward CI, their willingness to change traditional methods of conducting communication programs, and their level of acceptance of this discipline if they have legitimate questions about CI.

AREAS OF OPPORTUNITY

PR executives responding to the Fleishman-Hillard/Fuld survey indicated a variety of areas in which their company experienced difficulties in obtaining competitive intelligence that can have a strong impact on business performance. They identified the following problem areas:

* Assessing a competitor's strategic goals beyond what appears in the annual report (40 percent).

* Analyzing market factors that influence a company's pricing strategy (19 percent).

* Predicting how rivals may react to an intended public announcement (17 percent).

* Determining critical issues driving a firm's stock price and overall value (9 percent).

These findings emphasize that business communicators need an effective means of obtaining, analyzing and evaluating strategic intelligence about competitors and the industry in which they do business--information that clearly helps communicators understand the plans and actions of competitors (and others) and, as a result, helps them make their own effective, competitive plans and take action. The findings also point to the potential advantages of bringing CI more fully into the communication process--that is, into the life cycle of communication programs, from planning and development, through implementation, to the ongoing impact and eventual conclusion of programs.

One way communicators are taking advantage of the value CI provides is in the area of competitive positioning and reputation management. For example, a major software developer realized that to become the leader in collaborative commerce software, it needed to examine current issues and trends in the industry in general as well as the strategy, positioning and messaging of its major competitors in the field. The company initiated a multi-pronged communication program that included CI research and analysis using both primary and secondary sources. Use of CI is successfully guiding the company in shaping its short- and long-term strategies in the marketplace, including product development issues, messaging, event planning, customer relations and a wide variety of other actions.

CORPORATE USE OF CI

The Fleishman-Hillard/Fuld poll found that a substantial percentage of the large companies surveyed typically maintain a CI function using an in-house capability of some kind (68 percent), an outside source (4 percent) or both (15 percent). In aggregate, four out of five companies surveyed make use of some kind of competitive intelligence capability (internal or external), though the scope and nature of the poll did not capture details on the specific types of CI functions used by respondents. For example, some respondents may have viewed a market research function as a CI capability. Only 13 percent of responding companies have neither internal nor external CI resources (or do not know what type of CI function exists in their company).

The survey results also showed that marketing and strategic planning are most frequently identified as the areas of corporate communication that could most benefit from using CI regularly. Business communicators view CI as "less useful" to their corporate public affairs and government relations function, investor relations and internal communications capabilities.

These findings are interesting and perhaps surprising. Some companies have discovered that CI has much to contribute to the practice of investor relations, where the perceptions of securities analysts about a company can be systematically audited and analyzed, from both primary sources (interviews with key analysts) and secondary sources (analyst reports and other documents), over a period of time. Armed with these types of information, they can construct a detailed competitive positioning matrix for the company and its key competitors, considering a variety of vital issues and factors, providing ready comparison of important players, and enabling development of gap analyses and other types of evaluations.

These analyses can be used by virtually any company in a wide variety of circumstances. For example, a merchant energy company that was dissatisfied with its stock price began to suspect that its corporate messages were not being understood by the securities analysts who evaluated the company and strongly influenced its stock performance. A detailed CI audit and evaluation of the company's communication with those people, as well as the nature and success of its competitors' messaging to the same audience, guided the company in making critical changes in its analyst relations program.

Internally, CI has been used by a major national retailer to alleviate employee morale problems by showing, through analysis of current issues and trends in human resources and compensation, that specific changes in the company's employee benefit programs would make those programs more proactive, popular and cost-effective. In this case, CI also demonstrated that the changes would have a substantial positive impact on the company's business performance in the marketplace.

FUTURE IMPLICATIONS

Communicators polled for this survey recognize the need for information about outside trends, business developments and stakeholder perceptions to monitor and anticipate market conditions and competitive forces, to stay current with best practices and to identify and plan responses to competitor actions, as frequently as daily. Research indicates that PR programs and practitioners that actively employ CI offer a significant service for their companies.

Given the usefulness of CI in contributing to the effectiveness of communication programs and promoting successful business performance, CI will likely continue to become an increasingly important component of the communication profession.

Ron Penoyer is senior vice president, competitive intelligence, in the Knowledge Solutions group of Fleishman-Hillard Inc., St. Louis, Mo. Contact him at [e-mail].