In the cult classic The Princess Bride, the villainous Vizzini repeatedly says, ‘Inconceivable’ each time his nefarious but poorly devised plans fail. Eventually, his frustrated henchman replies, “You keep using that word. I do not think it means what you think it means.” The same could be said about the term, ‘competitive intelligence’ or ‘CI.’ Too often, companies focus their CI efforts on competitors. It’s a reasonable assumption, after all, because both words come from the same root. But competitive intelligence goes beyond what your cross-town—or global—rivals are doing. Here are three ways you can enhance the value of your competitive intelligence.

 1. Broaden the Scope of Your Research

Certainly, you need to stay abreast of the competitive landscape, and competitors are part of the equation. How do you currently track competitors? You need multiple vantage points to truly understand the threats that competitors pose or to see gaps in their offerings on which you can capitalize. Media monitoring can help you track your competitors share of voice across multiple channels—social, print and broadcast media, online news—so that you have a more comprehensive understanding of where they are winning or falling behind with audiences.

2. Focus on Intelligence Sources that are Reliable & Current

A search on the open Web generates plenty of results, but you’ll waste valuable time vetting sources—or worse, make decisions based on intelligence that is inaccurate or outdated. Competitive intelligence helps you develop smart strategies for today and tomorrow: Do you really want to fuel your CI on last year’s news?  Media monitoring helps you capture up-to-the-minute information, and further analysis of the media identifies patterns related to audience needs enabling you to make strategic moves to lead, rather than chase, emerging trends.

3. Share Your Insights Frequently

Competitive intelligence, when done right, can reveal some pretty hard truths that call for action, even change. And we all know how difficult it is to drive change within an organization. One of the best ways to overcome reticence to change is to keep your colleagues and the C-suite informed. Your CI may not sink in the first time you share it, however, so be persistent. Just as consumers need to see an ad numerous times before they really “see” it, your company’s decision makers need a growing body of evidence—not just one PowerPoint presentation or report—to build a case for change.

Ultimately, you need to ethically capture a bigger CI picture—one that looks at more than rival brands—or you could very well end up like Vizzini, defeated by a reality that he refused to accept. 

Three Ways to Apply This Information Now

1. Find out why you need a broader definition of ‘Competitive Intelligence’ in our white paper, Making Competitive Intelligence Work: Why Some CI Strategies Fall Short & How to Ensure Yours Don’t.  Download it today.
2. Try LexisNexis® Newsdesk to see how our media-monitoring and analytics tools can fuel better competitive intelligence.   
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

The environment has consistently been a hot topic, but at the end of 2015, it dominated headlines for weeks due to unusually warm temperatures in some places and extremely cold weather conditions in other parts of the United States. From tornadoes to blizzards and record highs to unseasonable lows, December had people talking about the climate. Here is an infographic with some of the highlights. 

Wacky Weather

While the climate change debate goes on, everyone agrees that the weather phenomenon El Nino is contributing to the wacky weather. What is El Nino, you ask? According to Scientific American articles found in Newsdesk, it’s part of a naturally occurring, irregular cycle that takes place every two to seven years in the equatorial Pacific Ocean. “El Niño is characterized by a large area of warmer-than-average ocean surface temperatures in the central and eastern Pacific. The other half of the cycle is La Niña, when the surface waters are cooler than normal. There's also a neutral phase, when the temperatures are about average.”

Emoji Sensation

Coincidence or not, El Nino was front and center at the same time global leaders came together in Paris for COP 21, the 21st U.N. summit focused on forging a new global agreement to reduce carbon dioxide emissions. Twitter® was quick to get in on the action by unveiling three new, environmentally-focused emojis to coincide with the conference.  The social media website unveiled the icons, which are activated by hashtags, to mark the two-week-long Conference of the Parties to the U.N. Framework Convention on Climate Change. The emojis—an Eiffel Tower overlaid on a green leaf, a green Eiffel Tower and a heart-shaped Earth icon—appeared when users tweeted using the hashtags #COP21, #GoCOP21, #ActionDay and #ClimateChange. 

Generation Gap

With all this talk about climate change and the environment, how can we know who prioritizes this as a critical issue? Based on environmental media mentions tracked by Newsdesk across 100 days, Millennials are, by far, the most environmentally-connected generation, owning more than 71 percent of the conversation, or nearly 14,000 articles. That’s a lot of talking!

Connecting the Dots

• Rising temps seem to be here to stay. Tailor your marketing and product development to lifestyle changes that will come with warmer weather. People will be outdoors more months of the year and will need ways to stay cooler when summer rolls around.
• Social media is a part of all we do. When you roll out a new campaign, be sure you’re leveraging social. Create custom hashtags to turn your content into the new trend.
• Developing new products? Consider an environmental angle. From using minimal packaging to introducing products that are designed to help us use less energy, products with purpose are big. 

Cruise control comes in handy, especially when you’re hitting the road for an extended trip—for business or pleasure. Yet, as much as you appreciate the ability maintain a consistent speed on a straight-away, you still have to remain alert to your surroundings—the weather, the traffic and signs posted along the road. The same is true for conducting due diligence. You can develop processes that make it easier to stay on the right compliance track, but you can’t let down your guard. 

 Watch Out for Warning Signs

Would you use cruise control if you saw a warning sign that said ‘Dangerous Curves Ahead’? Probably not. Common sense dictates that you need more control so that you can respond proactively. Likewise, on-going monitoring is crucial to an effective due-diligence strategy, ensuring that you’re able to manage third-party risks before they cause a financial, legal or reputational crash. What should you be looking for?

Our eBook on mitigating third-party risk explores a number of warning signs, including political risks. Just look at the announcement by the Securities and Exchange Commission (SEC) last summer. In a settlement agreement, BNY Mellon agreed to pay nearly $15 million over student internships. In a statement at the time, Andrew J. Ceresney, Director of the SEC Enforcement Division, said, “The FCPA prohibits companies from improperly influencing foreign officials with ‘anything of value,’ and therefore cash payments, gifts, internships, or anything else used in corrupt attempts to win business can expose companies to an SEC enforcement action.” He went on to say that “BNY Mellon deserved significant sanction…” for offering internships to family members of foreign government officials. The problem wasn’t the internships themselves, but the fact that BNY Mellon ignored its own rigorous standards for intern selection in order to curry favor with goverment officials affiliated with a Middle Eastern sovereign wealth fund.

Keep Up with the Rules of the Road

In 2011, the World Bank released a report indicating that 70 percent of big corruption cases over the last 30 years had involved anonymous shell companies. As a result, demands for transparency have climbed. As a result, the UK accelerated adoption of a beneficial ownership disclosure rule last year. Such rules can help financial services companies better understand who they are doing business with and thereby mitigate risk exposure due to others’ bad actions.  But you have to know the rules, to abide by them. When it comes to anti-bribery and corruption, regulatory landscape is complex, particularly for companies conducting business across national borders. The U.S. Foreign Corrupt Practices Act (FCPA), the UK Bribery Act and a host of other laws implemented by the 182 countries that have signed the United Nations Convention against Corruption ensure that compliance professionals have their work cut out for them. Are your tools up to the task?

3 Ways to Apply This Information Now

1. Get your copy of the eBook, A Better Route to Mitigating Third-Party Risk: Third-Party Due Diligence for Financial Services to find out more about warning signs of compliance risk.
2. Request a free trial of Lexis Diligence® to see how this tool can improve visibility into risk.
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

In our ongoing series of Expert Q&As, we speak with Alison Taylor, Managing Director of Business for Social Responsibility (BSR), a nonprofit organization that works with companies and other partners on sustainable business strategies. She tells LexisNexis that there is a trend of businesses prioritizing ESG issues and the United Nation’s Sustainable Development Goals and contends that the use of data is becoming an “existential issue” for all companies.

What are the main trends in business regarding sustainability over the past few years?

First, increasing interest in environmental, social, and governance (ESG) issues from mainstream investors, not just socially-responsible ones. Our financial services work has grown exponentially as banks and private equity firms focus on establishing systems to measure ESG risks and opportunities in acquisitions, corporate finance, and their own portfolios. The growth in interest is most striking on climate and diversity, but there is a broad, underlying shift in thinking as to how business interacts with society. This focus on sustainability from the financial services industry is directly impacting how seriously corporations take the issue. We are seeing companies increasingly request “ESG” rather than “sustainability” strategies, and this shift in terminology is a direct response to investor scrutiny.

We have also seen the establishment and maturation of internationally-accepted frameworks to measure and frame sustainable business efforts: the Paris Agreement on climate, the Sustainable Development Goals, and the UN Guiding Principles on Business and Human Rights are a few examples. This is shifting the focus to how companies implement sustainability efforts inside the organization, and how they incorporate them into governance, management structures, and incentives.

Finally, we are seeing a convergence between issues of integrity and sustainability. Hyper-transparency means that companies need to behave as if anything they say or do might become public. Societal trust in business is falling, social and political activism is increasing (especially in the U.S.), and legal
compliance is no longer a reliable proxy for reputational risk. All these trends require rethinking on how companies manage a broad range of ethical issues.

What are the advantages for a business in focusing on sustainability, and what are the risks in ignoring it?

There is considerable evidence at this point that a focus on sustainability improves growth over the long term. It can help with employee retention, particularly of younger generations. It improves reputation and access to capital. Environmental efforts can reduce operating costs; efforts focused on societal value can improve license to operate. Conversely, ignoring sustainability increasingly signals that the company has a short-term mindset and an old-fashioned attitude holding that a business’ impact on society and the environment is just a matter of “negative externalities.” Such a mindset is no longer acceptable to many consumers, so businesses that think this way risk undermining public and investor trust.

What advice do you have for a business looking to increase its focus on sustainability?

The focus of sustainability efforts over the last several years has been to identify and act on issues that are in the interest of both the business and society: the “shared value” concept. This is a shift from earlier iterations of sustainability whereby it was regarded as philanthropic and divorced from the business, or as a risk-management and compliance effort. Today, the focus is on opportunity identification, and alignment with core business interests. Sustainability is a broad and evolving concept. Businesses should prioritize and have a clear strategy that is aligned with core business interests—ideally demonstrating leadership on a few key issues.

And how important is leadership?

Extremely important. The sustainability function inside companies remains poorly-defined and inconsistent. Executive and board support is critical to driving visibility and traction for sustainability efforts. Sustainability leaders that have a strong track record in business tend to be more credible and are adept at driving the organizational change needed to make this work succeed. We believe that change management skills are highly underrated in the field of sustainability—subject matter expertise varies enormously, but a sophisticated approach to organizational dynamics is always going to help.

Did any findings in your latest annual survey on sustainable business surprise you?

This is the tenth year of our annual State of Sustainable Business survey, which we refreshed to take account of the new trends we are seeing. I was surprised to see ethics and integrity emerge as the top issue for sustainability practitioners at companies, as this subject has traditionally been the domain of compliance teams. Still, although companies clearly understand the link between sustainability and reputation management, they are clearly not yet ready to tackle some issues that concern the public. Our partners at Polecat conducted social and online media analysis of ESG issues and found considerable attention being paid toward lobbying and business influence on politics—to an even greater degree than toward climate, water, or diversity. At the same time, directly addressing concerns over political influence did not show up as a priority among companies.

It was also interesting to see diversity and inclusion flagged as the second-highest priority, alongside the finding that 41 percent of companies have so far done nothing to address the #MeToo movement. There
remains a lack of focus on such major societal issues as inequality and inclusion, which is troubling, given their dramatic effect on our lives.

The survey found that AI is the main “mega-trend” in sustainable business. What does this mean?

I think it may reflect the overwhelming media and business focus on this issue. Companies are getting to grips with the fact that the use and misuse of data and technology is an existential issue for most businesses, not just technology firms. Compelling changes are happening in real time, and the future is highly uncertain. There is no clear playbook for how to proceed.

How do you think AI and big data will change businesses in the future?

AI and big data have the potential to transform supply chains, customer interactions, market knowledge, and much more. Abusing this new capability (intentionally or not) can violate a broad range of human rights and constitute deeply unethical behaviour. We are at the start of efforts to understand, regulate, and manage the capabilities of this powerful new technology.

Next Steps

1. Find out how ethical expectations from investors and consumers encourage commitment to UN SDGs.
2. Read more about trends in CSR and ESG on our blog.
3. Share this post with your colleagues and connections on LinkedIn.

Just a few weeks ago, the GFMI conference brought together experts and leaders from across the financial services industry to share their strategies and insights in managing risk. Naturally, due diligence and third-party risk featured heavily in discussions, but in a reflection of the complex environment in which financial services organizations operate, fourth-party risk was, perhaps, one of the hottest topics. Why? Just as pressure has ramped up on other industries to thoroughly vet their entire supply chains down to the raw materials to bring forced labor into the light, pressure is growing for financial organizations to identify risk in outsourced services.

 What’s Driving the Focus on Fourth-Party Risk?

One interesting presentation on the topic of fourth-party risk during the GFMI Conference came from Philip Edwards, Chief Procurement Office at Synovus Financial Corp. He pointed out that while regulators apply a broad definition to third-party risk, in recent years they have increasingly used language suggestive of fourth parties. In particular, the guidance from the Office of the Comptroller of the Currency (OCC) changed significantly. The current 2013-29 guidance uses the terms ‘subcontractor’ or ‘subcontracting’ 34 times while the same terms only appeared four times in the 2011-47 guidance.  And the OCC is not the only regulatory body highlighting the necessity to conduct more far-reaching due diligence to manage risk. The FDIC has indicated that “Contracting for a technology solution by using one lead provider may lessen [institutions direct involvement]…, but it does not diminish the responsibility for monitoring … subcontractors through the primary service provider relationship.”

 Moreover, the high-profile data security breaches that have taken place in recent years only emphasize the importance of knowing who your third-party vendors use as sub-contractors. A few years ago, in an interview with FierceFinanceIT , Albert Belman, principal for third-party risk management practice at Booz Allen Hamilton said, “What has happened for services providers, very specifically in financial services, is the recognition that you need to have a data supply chain. If you are going to allow third parties to access your data, and they are going to, in turn, allow access to other third parties, you are going to need to have a full line of sight and visibility into that.” Are you just a cyber-breach away from a financial and reputational disaster caused by a third or even fourth party subcontractors and agents?  What other risks may these outsourced relationships pose?

 Where Should You Start in Addressing Fourth-Party Risk?

Of course, conducting due diligence on how organizations can incorporate fourth-party risk management in their due-diligence process.  Here are some steps recommended in the presentation:

1. Determine the criteria you will use to define sub-contractors and agents beyond third parties. Not all sub-contractors offer the same level of risk. Just as you conduct a risk assessment to determine which third parties are subjected to enhanced due diligence, you need to determine which fourth parties constitute the greatest risk to your organization. High risk, for example, might be cloud-storage vendors sub-contracted by third parties since a cyber-attack could ultimately put your customers—and your organization—at risk.
2.  Identify “concentration risks” for multi-service and geographical categories. Even if you consider some fourth parties to be low risk, you need to also consider situations in which that risk could quickly escalate. A landscaping company contracted by a third-party property management vendor, for example, might pose a risk if it were to fail during peak times of year.
3. Expand your financial, industry and news monitoring. In today’s always-on media landscape, keeping tabs on what’s being said enables you to keep an eye out for red flags and respond proactively at the first sign of risk.

Are you making changes in your own due-diligence strategy to address fourth-party risk?  Leave a comment below to let us know how you’re doing it.

3 Ways to Apply This Information Now

1. Explore third-party risk further in our blog post on “Why Mapping Out a Due-Diligence Process is Critical for Financial Services Companies.”
2. Check out our solution for conducting due diligence on individuals and organizations.
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts.