The most fascinating thing in the world is a mirror.

Most organizations are good at collecting internally focused data, but few systematically provide insight about a company's external environment. For example, only 21 percent regularly track how their competitors are performing. Business is not an us-vs.-us exercise, yet management reports rarely touch on the world outside.

Information is not intelligence, and gathering information is not carrying out competitive intelligence. Many companies have mechanisms to accumulate large amounts of information; significantly fewer companies have mechanisms for conducting competitive intelligence.

Intelligence uses information as raw material, screening, sifting, sorting, verifying, analyzing, interpreting, and compiling it to create a useful output. And just as information is raw material for intelligence, intelligence is raw material for a higher-level process: decision-making

Every company has a well-defined competitive field of vision, which is usually too narrow. Long periods of equilibrium only exacerbate the problem. A whole raft of "minor little players" operates just at the periphery. They are difficult to see because traditional competitors focus on each other and not on new entrants and "nontraditional" entities lurking at the industry's fringes.

Therefore those who do not know the plans of competitors cannot prepare alliances. Those who do not know the lay of the land cannot maneuver their forces. Those who do not use local guides cannot take advantage of the ground. The military of an effective rulership must know all these things.

The contour of the land is an aid to an army; sizing up opponents to determine victory, assessing dangers and distances, is the proper course of action for military leaders. Those who do battle knowing these will win, those who do battle without knowing these will lose.