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What are the “Best Practices” in Using
Internal Organizational Sources for
Competitive Intelligence?
Gregory Tombs
INTRODUCTION
As firms begin to implement a competitive intelligence (CI) component in their management
structure, many CI managers, fully aware that approximately 75% of what they need to know
resides within their employees’ minds, wonder how to utilize the information within the
collective minds that form their organization. CI managers must wonder what other, more
experienced, firms do to tap into their company's internal resources. The purpose of this chapter
is to answer the question "What are the best practices in using internal organizational sources for
competitive intelligence?” The intention of this chapter is to provoke thought about the various
elements and linkages that are required to implement a best-practices program that will allow
firms to leverage internal organizational sources of CI. It is important to realize that there is no
one perfect way to accomplish this. Ultimately, the manager’s goal will be to design and
implement a tailored best practices program that fits his or her organization, rather than to adapt
What are the Best Practices in Using Internal Organizational Sources for CI?
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another firm’s best practices program to fit his or her organization. A review of the available
literature on designing and implementing CI departments and knowledge management (KM) in
best-practice firms reveals that there are six main best-practice elements that must be considered.
However, it is the element of organizational culture that “filters” the other elements of
technology, infrastructure, leadership, rewards, and measurement to make a unique best-practices
structure for sharing CI information internally within the firm.
BEST PRACTICES IN ORGANIZATIONAL CULTURE
The first component, organizational culture, is the fundamental element upon which the entire
best-practices philosophy for using internal organizational sources for CI is based. Without a
healthy organizational culture, there is little hope of developing an effective CI system that will
tap into the entire organizational resources of CI – regardless of how many memos, meetings, or
training sessions are attempted. A case in point is provided by Bob Buckman, chairman and CEO
of Bulab Holdings Inc., holding company of Buckman Labs, who, when asked what three factors
are most critical for success in knowledge management, replied, “culture, culture, culture”
(Grayson & O’Dell, 1998).
So, what is organizational culture? It can be defined as the blending of the values held by
the people of an organization based upon their shared history, their common beliefs and
expectations, the generally accepted rules, and social moral principles that influences all
employees’ behavior (Elliott & O’Dell, 1999). As a result of these strongly held values, attempts
to change anything with regard to the way information is shared within your firm may be met
with reactions of confusion, skepticism, or resistance; ideally, however, these changes will be
embraced with enthusiasm, willingness and anticipation – it all depends on the present culture of
the organization.
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The process of making changes to the way information is shared in an organization is
usually difficult. Some significant barriers may stand in the way. For example, some
organizational structures promote “silo” behavior where individual locations, divisions, or
functions are so focused on maximizing their own accomplishments and rewards that they,
consciously or unconsciously, hoard information and thereby sub-optimize the performance of
the entire organization. Some organizational cultures value personal technical expertise and
knowledge creation over knowledge sharing – a problem often seen in engineering and
knowledge-based organizations such as research and consulting firms. In some organizations
there is a lack of contact, relationships, and/or common perspectives among people who don’t
work side-by-side. Some studies even suggest that ignorance of the goals of the organization
itself is the biggest barrier to transferring information internally. In some companies, particularly
larger ones, those with a certain piece of knowledge don’t realize that someone else in the
organization could use that knowledge. Another barrier may often be the lack of resources (time
or money) or enough practical detail on the manager’s part to implement a better transfer of
knowledge to the organization. Finally, a lack of strong personal ties or relationships among staff
may thwart a desire to help fellow workers and could stand in the way of information sharing in
an organization (O’Dell & Grayson, 1998).
Managers in best-practice organizations who have successfully implemented a knowledgesharing or CI program know their company’s culture well and align these CI activities with the
company’s core cultural values. In fact, best-practice firms have taken steps to weave CI into the
fabric of the organizational culture and business practices of the firm (Prescott & Society of
Competitive Intelligence Professionals, 2000). But what does it mean to align CI with a
company’s core cultural values or to weave CI into the fabric of an organization’s culture?
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First, it means having a thorough understanding of what the company culture is, what its
needs are, and how the organization can be enriched by sharing information. In general, bestpractice companies are learning organizations whose people are committed to continuous
learning and who share in the vision of the company by making their contribution to the firm part
of their personal experience. A shared vision for the firm cultivates a long-term commitment
within each individual to the organization’s growth and success. With this commitment comes
the need to share information within the organizational community, to share ideas with one
another, and to stay connected. Sharing knowledge simply enables people to pursue the cultural
values of the organization more fully. These learning organizational communities are built, with
considerable effort, around important points of common interest. These common points of
interest need to be identified in such a way that acquiring knowledge and information around
them will add value both to the business and the organization’s employees. Employees will then
voluntarily attempt to share information and build knowledge in areas that they care about and
know will benefit the entire organization. Therefore by linking with a core company value,
matching the look and feel of other organizational processes, and building on the shared values
of a common vision, collaboration, and commitment, best-practice organizations make sharing
knowledge a natural step (McDermott, 1999a).
On the other hand, instituting a CI policy in which employees are simply ordered in a
memo to share everything they know is ineffective. The impact of this tactic will last only a few
months and employees will eventually slow down the information flow and will not regard the
“order” seriously. Instead, managers must take some time to assess the culture of the
organization, and determine what it needs and how it can be enriched through sharing
information. Without the right cultural fit, attempts to implement a company-wide CI program
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that is based on sharing information will probably fail. Rather than expecting some knowledgesharing or CI initiative to change the culture, management must fit its approach to the culture and
make a strong link to the core values of the organization. The dominant culture always wins
(Elliott & O’Dell, 1999).
BEST PRACTICES IN TECHNOLOGY
Best-practice firms recognize technology as a tool that helps leverage knowledge for CI. Indeed,
it is said that information technology (IT) inspired the vision of having a web of global
knowledge by simply getting employees from all over the world to document their insights and
then draw on each other’s work (McDermott, 1999b). While communicating through technology
is certainly not new, the extensive use of GroupWare, e-mail, on-line databases, and the use of
Internet/ intranet/extranet technologies have had a profound effect on people’s ability to collect,
analyze, and disseminate CI information. The result has been that it is possible for professionals
to contribute towards or access the most up-to-date CI information regardless of where they are
located. Technology does have an invaluable role to play in reducing communication costs and
increasing process speed for transferring CI information in best-practice organizations. However,
despite the invaluable role of technology, a few words of caution are warranted.
First, it should not be assumed that mere possession of the latest computer software,
internal electronic directories, and databases will encourage employees to input information. In
other words, IT availability doesn't guarantee the enthusiastic participation of employees in
collecting and sharing CI information. Often one of two obstacles may arise – either the
employees share relatively little information, or they flood the system with information. Both
situations will leave employees with a diminished sense of what to make of their environment
(Elliott & O'Dell, 1999). Technology cannot drive the sharing of CI information, nor can it sort
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relevant CI information. All of the important information about CI is too complex or experiential
to be captured electronically.
The second caveat regarding the role of technology in CI is that information or knowledge
regarding CI that is shared through a technology system requires a "human" factor. At this
juncture, it is helpful to point out two distinct types of knowledge. One type is explicit
knowledge; the other is tacit knowledge. Explicit knowledge is defined as that knowledge that
comes from books, documents, databases, policy manuals, etc. Tacit knowledge is defined as that
knowledge which is located in people’s minds, and includes general information in the form of
experiences and memories. Knowledge management for the purposes of CI encompasses both
types of knowledge because the essence of competitive "intelligence" is analyzed information.
This analyzed information therefore requires the ability of humans (the human factor) to
synthesize the explicit and tacit knowledge that has been collected by the CI technology system
in order to reconstitute it in a form that can be shared or made available to people through the
technology system. This is the only "system" which will ensure that useful, practical, and
insightful CI information is obtained and made available throughout a company.
The third and final word of caution surrounding the use of technology for CI is that the
effective use of technology in best-practice organizations is still very dependent on the
organizational culture (value of sharing CI through the use of technology) and the CI
infrastructure that exists.
BEST PRACTICES IN INFRASTRUCTURE
In order for CI information to be collected and shared internally, best-practice organizations have
built an explicit and institutionalized infrastructure specifically for this purpose. CI information
will not be shared by chance. Rather, it requires that the appropriate transfer mechanisms, such
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as technology, work processes, and people networks, be designed to facilitate the flow of
information. Infrastructure is essentially the means by which knowledge moves from being
captured by an employee to being represented in artifacts (such as files, documents, and
products), and finally manifested in connectivity and application through which it can be
leveraged to impact business growth and innovation. Infrastructure also includes the
organizational structure and roles supporting the processes (Elliott & O'Dell, 1999).
Infrastructure for CI can take various forms ranging from simple databases or repositories
(where access is obtained and the information is used on one's own initiative) to more elaborate
networks with CI services that organize information around issues and flow of information.
Ultimately, the most extensive infrastructure is characterized by a "facilitated CI information
transfer" where specific individuals assist, encourage, and champion the CI cause in a bestpractice organization. These individuals often have titles like Chief Knowledge Officer (CKO) or
Chief Information Officer (CIO). They are devoted to finding, filtering, and entering
information, as well as to teaching and training other employees about CI (McDermott & O'Dell,
2000).
Another aspect of CI infrastructure in best-practice firms is the development of networks
that are decentralized yet centralized. This apparent contradiction means that in diversified and
decentralized companies, the CI department makes every effort to be coordinated in its CI
approach – almost to the point of being centralized. This allows for more input from a diverse
group of individuals with expertise in various areas of the CI process. These formal or informal
networks of CI individuals facilitate regular meetings to assess and discuss the current and future
CI needs of senior management or the organization as a whole. As a result, these human
networks are not only important for collecting and synthesizing CI information, but they also
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have an important impact on the organizational culture by changing the way people interact and
generally accept CI within the organization.
CI infrastructures also require a clear system for requesting CI information, a mandated
analytical framework, and an implications-focused analysis. The request for CI information
should be a formal process that clearly identifies the CI customer, his or her specific needs,
feedback about the process, results, and implementation. This process ensures that required
schedules can be met for important decision-making, feedback about the process can be
documented, and that helpful information pertaining to performance evaluation is available.
Furthermore, this approach also ensures that documentation is available for the evaluation and
measurement of the CI production process for future reference (American Productivity and
Quality Center, 2000).
Best-practice organizations also further legitimize the CI department in their organizations
by offering a "resource" infrastructure to the CI department. This is accomplished by giving CI a
specific budget, information system, space, library support, time for network coordinators to
manage CI network affairs, and recognition for their contribution of CI staff (McDermott &
O’Dell, 2000). Furthermore, in the absence of highly involved leadership, organizations should
have mission statements and codes of conduct, as well as prescribed and evolving business
processes that ensure the continued functioning of the CI department as part of their corporate
infrastructure.
Another effective method used by best-practice organizations to build an infrastructure for
CI is a scheme that integrates knowledge-sharing with employee work by holding visible
knowledge-sharing events and/or embedding knowledge-sharing into routine processes.
Typically, much sharing of CI information revolves around electronic IT tools. Although this is
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an effective way to share information, it is less than ideal for "thinking" through information - a
uniquely human capability. Therefore best-practice firms will regularly hold forums for CI
individuals to ignite collaborative thinking and discussion around CI issues. Sometimes crossfunctional links are formed among various departments in the organization, through which
"cross-functional" CI problems that require collaboration and cooperation among departments
can be resolved. The results are that CI members build trust with each other and create a
common understanding of tools, approaches, and solutions while also entrenching CI more
deeply into the culture of the organization.
BEST PRACTICES IN LEADERSHIP
Leadership plays an important role in best-practice organizations that use internal organizational
sources for CI. Well-respected members of the organization model their support for CI by the
way they, themselves, share knowledge and information. Leadership is required to champion the
CI effort in best-practice organizations. Usually that leadership comes from the CEO and/or
other top-level executives, as one would expect. Some senior managers see their roles as
enabling, but not necessarily championing, the CI effort in an organization. The main concern,
however, is that the effort to establish best practices for using internal sources for CI should not
be seen as another "fad", or another tangent upon which management has embarked.
Management needs to make it clear to employees that it is committed to ensuring that CI
information is shared internally for the long-term benefit of the organization.
Various individuals, even though they may not be top-level management, also have the
potential to provide leadership to the CI effort throughout the various levels of an organization.
These employees might give aid or input to the CI department when dealing with certain issues
or may, in turn, bring issues to the CI department (Prescott, Herring & Panfely, 1998). Such
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employees are vital to the development of a corporate culture that will sustain good CI
capabilities.
Leadership is necessary to give people the unambiguous support they need when actively
participating in sharing knowledge. The leader's role is primarily to reinforce the core value of
sharing knowledge upon which internal best practices depend for sharing CI information.
Those employees who do not share knowledge or who hoard information can be seen as
contravening the core values of the organizational culture. In all best-practice organizations,
hoarding knowledge and failing to build on the ideas of others have visible and sometimes
serious career consequences. These consequences can be in the form of a direct sanction from
peers or a limit to one’s career (McDermott & O’Dell, 2000). In some best-practice
organizations, there is strong management and peer pressure for people to share their knowledge.
Staff who do not share are sometimes ignored, passed over for promotion, or "siloed"
(McDermott, 1999a).
BEST PRACTICES IN REWARD STRUCTURE
There is some question as to whether employees who effectively share knowledge pertaining to
CI should be rewarded. According to studies conducted by the American Productivity and
Quality Center, if the process of sharing and transfer of knowledge is not inherently rewarding,
celebrated, and supported by the culture, then artificial rewards won't have much of an effect and
will ultimately generate cynicism (O’Dell, 1996 and O’Dell, Davenport & Croy, 1997). But what
is an effective reward? Which rewards would have the appropriate valence required to encourage
the sharing of CI information? Since explicit rewards and incentives can only go so far, bestpractice firms also make great use of intangible rewards to encourage employees to engage in
transfer activities. A good knowledge transfer system should provide intrinsic rewards to the
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professionals who use it (O’Dell & Grayson, 1998). This can be accomplished by constantly
promoting the successes that sharing CI information has achieved. In doing so, employees will
feel drawn into the success of the CI operations, especially those individuals who make specific
contributions.
In some corporations that use best practices for knowledge-sharing, performance appraisals
and promotions now incorporate "knowledge-sharing" behavior as part of the criteria. In order to
get a high performance rating, employees must produce evidence of actual knowledge-sharing in
one of several forms. This may seem a little over-the-top for instilling the value of sharing CI
information internally. Nonetheless, this approach incorporates the adage that "what gets
measured - gets done", and underscores the importance of incorporating CI information-sharing
into the performance-measurement system of a best-practice company. The caveat remains,
however, that the chosen reward structure must fit with the culture of the organization.
BEST PRACTICES IN PERFORMANCE MEASUREMENT
Best-practice companies that use internal sources for CI explicitly measure the effectiveness of
the CI efforts within the company by using both formal and informal evaluations, gap analysis,
and continuous improvement efforts. The goal is to "propel" their CI processes closer to the
ultimate CI vision, a vision in which CI is inextricably intertwined with all business processes
and key strategic and tactical decisions (Prescott & Society of Competitive Intelligence
Professionals, 2000).
One measurement method used by best-practice firms is to solicit feedback from customers
of the CI department each time a service is provided. CI management must chronicle each
customer request, process used, and final report for the purposes of monitoring the impact of CI
on management decisions and the bottom line. This gives the CI department important feedback
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137
for use in continuous improvement efforts, and this loop is consistent with the findings that
successful CI programs develop over time through a series of upgrades and refinement cycles
(American Productivity and Quality Center, 2000). It will be necessary, however, to evaluate the
effectiveness, relevance, and precision of each recommendation or report generated by the CI
department.
As CI products and programs become more refined through these evolutionary steps, the
awareness and value of CI will become more apparent to all employees and will reinforce the
need to share CI information. Once again, the intrinsic rewards that each employee will receive
through witnessing the positive impacts made by sharing CI information will be very motivating.
CONCLUSION
What are the best practices in using internal organizational sources for CI? According to the CI
and KM literature, the best practices for using internal sources are dependent on a supportive
organizational culture that will filter and link all other elements of the best-practices program.
Therefore, when considering the implementation of a best-practices program to utilize the
CI that resides in an organization’s employees, the first step involves taking the company's
corporate culture temperature and assessing the current culture for the propensity to share
information. Does the firm naturally share information freely throughout the organization, or is it
a departmentalized company that functions in silos? Determine what impact changing the culture
to share information will have. Don't expect a posted memo declaring, "The CI department is
now open - please send us all you have" to satisfy the requirements of CI, particularly in the long
term. It is the organizational culture that is connected with all the other elements of best-practice
organizations that is of fundamental importance.
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Next, determine if the organization has the required technology to share information.
Remember that technology is a tool, not a solution. It can make information move quickly and
make information available almost instantly around the world. But it is still only information not intelligence. Genuine CI requires human involvement to filter facts through explicit and tacit
knowledge.
Another critical question to ask is “Is the appropriate infrastructure in place to support the
CI department's effort to use the internal organization as a source for CI?” An affirmative answer
will require the appropriate transfer mechanisms, work processes, and people networks to
facilitate the flow of information.
Other important questions include “Is the technological and personnel support in place?”
“Will the senior executive team champion the CI cause in your company and support the CI
manager, be it the Chief Knowledge Officer (CKO) or Chief Information Officer (CIO)?” and
“Is the firm prepared to operate the CI department in a centralized yet decentralized fashion?”
It is also important to establish a workable process for customers of the CI department to
follow in order to ensure that all procedures and schedules are met and that the necessary followup takes place. A critical question to ask in this regard is, “Will the firm supply the resources
needed for a CI department to function, such as an adequate budget, space, technology, time for
networking, and recognition?”
Leadership is necessary to champion the CI cause within the internal organization. Aside
from modeling the desired behavior, leaders from various levels in the organization should offer
their unambiguous support to the CI function and guard against those who would thwart the
cause.
What are the Best Practices in Using Internal Organizational Sources for CI?
139
Although tangible rewards may be offered as effective motivators to share information,
intrinsic rewards such as recognition have a much greater long-term effect. Often, peer pressure
will motivate individuals to share information even more than offering rewards.
It is important to measure the effects of CI on the organization. Every effort should be
made to track the impact of the CI department and assist in the continuous improvement efforts
of the CI function. Measurement of the positive impacts of CI in an organization will motivate
more sharing of information and reinforce the cycle. Such efforts will ensconce the CI
philosophy into the cultural fabric of the corporation.
This chapter has emphasized how almost all of these best-practice elements are linked
together by organizational culture. It is difficult to draw definitive lines between technology,
infrastructure, leadership, rewards, and measurement. Each element has some overlap with the
others. The degree to which these individual best-practice elements are emphasized or
implemented will depend completely on a company's culture. As Figure 8.1 indicates, the bestpractice elements must past through the "filter" of culture to determine the right best practices for
using internal sources for CI.
During the implementation of best practices for using internal organizational sources for
CI, the greatest chance for success will come from understanding your own company's culture
and molding the best-practice elements of technology, infrastructure, leadership, rewards, and
measurement to work within that culture.
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ENDURING ISSUES IN CI DATA COLLECTION AND ANALYSIS
BEST-PRACTICE ELEMENTS





Technology – Intranets, email & databases. Explicit Knowledge vs. Tacit
Knowledge. Speed and low communication costs.
Infrastructure – Structure, work processes & people networks. Dedicated
individuals e.g., CKO or CIO. Decentralized yet centralized communication
networks. Prescribed framework from request to delivery. Codes of conduct.
Sufficient resources for CI to function. Forums for discussion and cultural
entrenchment.
Leadership – Enabling but not necessarily championing. Model by sharing
information. Bring issues to the CI function. Unambiguous support for CI.
Committed leadership for the long term.
Rewards – Reason to do it. Valence. Intrinsic vs. extrinsic motivation. Peer
pressure. Positive vs. negative consequences.
Measurement – Formal & informal evaluations, gap analysis, continuous
improvement efforts. Series of upgrades and refinements over time.
CORPORATE CULTURE “FILTER”
1.
2.
Values based on shared history, common beliefs & expectations, generally
accepted rules and social moral principles.
Striving for continuous learning, shared vision, long-term commitment, sharing
information to be connected and to pursue the cultural values of the organization.
Best-practices in using internal organizational sources
for CI in your organization.
Figure 8.1 Best practices for using internal organizational sources for CI require that the
elements of technology, infrastructure, leadership, rewards, and measurement pass
through the filter of corporate culture.
What are the Best Practices in Using Internal Organizational Sources for CI?
141
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