By Dr. Ben Gilad, ACI Faculty
In a recent post on Business Insider from American Express’ Open Forum, writer Amy Cortese showcases a local business in Fort Lee NJ called Strictly Bicycles. While the story is a great one, what really stands out is how great instincts and competitive intelligence (CI) perspectives set the stage for its success.
Strictly Bicycles has carved out a unique position among the bicycle riders in NY and NJ. It starts with the store’s location – at the beginning of the bike trail going up route 9W, which is a scenic route meandering along the Hudson River all the way up to Bear Mountain Park. Thousands of riders, mostly New Yorkers, ride that route. On the way, they stop at Strictly Bicycles, which serves as a hub and meeting place with a coffee bar, bicycle shop, museum and all-around ‘central headquarters’ for the community of 9W riders.
You didn’t know the community exists, right? Neither did I. And when I lived in the area in the 80s, the community did not exist.
The Problem: Large companies don’t have the competitive intelligence (CI) perspectives that allow them to identify early signs of change
Despite all their advanced technology, sophisticated IT, and out of this world reach, many Fortune 500 companies are bad at finding and acting on opportunities. Business Development, which is aimed at locating opportunities is often just an extension of sales. Market Research is often late in discovering what consumers don’t know they want until they see it. And worst of all, the people with their ‘ears to the ground’- middle managers- have hardly any influence on top management. By the time their ideas percolate upstairs (if they do at all) the opportunity for first move advantage is long gone.
Nelson Gutierrez worked at a bicycle store in Hoboken, made it to manager, then borrowed $20,000 at the age of 19 to open Strictly Bicycles in a different location than the current one. It was a typical small business story, and Strictly Bicycles could have remained a small bicycle store on some forgotten street in Fort Lee (if it survived the real estate bust).
But Gutierrez saw what others didn’t: the rise of 9W as a route for enthusiasts.
So he borrowed $2 million backed by the Small Business Administration, bought a building sitting right on the entry to Route 9W and started his store/cafe/meeting place.
Gutierrez had an instinctive understanding of the competitive intelligence principles that guided his strategy from the start: “Building a community around a small retail store is key. It’s the only way to separate yourself from the competition.” It’s also the only way a small brick-and-mortar store can compete with the lower prices online.
Everything Gutierrez does is consistent with that strategy. He remodeled the building to have a huge glass panels at the front. Why? “That way cyclists can see their friends riding by and run out and greet them.” Ample seating inside and an outside patio give people a sense of home. The community of riders is tight knit, and word of mouth plays a huge role in affecting purchases.
With annual revenue of $4 million and 15 employees (12 in the winter time), that’s productivity of more than $250K per employee. How many Fortune 500s can say the same?
The Lesson: Success depends on seeing (and acting on) an opportunity earlier than others
Timing is an enormous factor in enterprise success. Acting on an opportunity before everyone and their cousin jumps on the band wagon is crucial. Route 9W was not on anyone’s radar screen when Nelson Gutierrez saw the trend. He could have studied it for years (like large companies often do with consulting projects and reports and market research and focus groups) and by the time he decided to act on what he sensed, he would have been way too late.
Today, Route 9W is a busier riding route than the Pacific Coast Highway in CA. This is called strategic early warning and is a fundamentally important part of a competitive intelligence perspective.
The Solution: Institute a competitive intelligence-guided process that identifies opportunities and risks more quickly
- Train your entire mid-level and sensory units’ managers (those in touch with the real world out there) to identify opportunities and risks. Not every sale is an opportunity. Not every competitor is a risk.
- Create an informal Early Warning system and appoint a chief analyst to be responsible for synthesizing its multitude of signals. Informal beats formal any day.
- Run war games to hear the voice of the market before it is a roar.
If you’d like to build a competitive intelligence perspective into your management team, these courses at the Academy are a great place to start: