Moving from Siloed to Integrated Intelligence

Integrated Intelligence Ecosystem

Intelligence professionals know that winning requires listening to customers, anticipating trends, and besting competitors. The practical fact of separate teams for customer, market, and competitive intelligence does not mean that intelligence needs to be siloed. Here’s a solution.

Don’t Allow Your Customer’s Voice to Fall on Deaf Ears

voice of customer

A recent review of inbound customer leads received during the pandemic validates what many of us at PWW have understood anecdotally for some time. Far and away, the competitive intelligence services garnering the highest demand in our work prioritize Voice of Customer engagements. Getting the inside track on customer expectations, preferences, and dislikes toward increasing customer loyalty and improving satisfaction rates has always been an important part of a robust CI program. Today, however, gaining critical consumer intelligence is currently THE primary bulwark against encroaching competition, giving organizations both quantitative and qualitative control over their own destiny.

What’s really at the heart of VOC work is the need for validation to make better business decisions. Our validation culture, which stems from our normal human need for approval and acceptance, is an incredibly powerful tool when hot consumer trends and consumer spending are at stake, fueled by the global social media behemoths that monetize it, from Facebook and Instagram to Twitter, YouTube, and TikTok, Today’s businesses need to pay close attention. Why is validation, whether positive or negative, so important in business? Because companies can, and do, rise and fall if they don’t heed the signs of today’s mercurial customer base and continue to operate on falsely held customer expectations and beliefs.

“…Any enterprise VOC study that doesn’t also take a hard look at what that enterprise’s own customers think of industry competitors, rival products, or similar services is only getting part of the story.”
– Gary Maag

Where to Begin?

The best VOC research programs are designed to help companies determine what customer metrics, or factors, should be prioritized and validated, or in some cases, disproven, allowing enterprises the freedom to pivot toward better business choices. First, though, ‘change’ has a reputation for being difficult, and leadership as well as internal business stakeholders can be notoriously uncomfortable with it. At the start, particularly when initiating an ongoing VOC program, building consensus and designating senior leadership team sponsors who are responsible for its success and future investment are excellent strategies. Scope definition is also crucial. Voice of Customer projects involve naval-gazing to a certain extent, but any enterprise VOC study that doesn’t also take a hard look at what that enterprise’s own customers think of industry competitors, rival products, or similar services is only getting part of the story.

VOC Tools of the Trade

It can be argued that VOC work is not just a quantitative but also a qualitative exercise. Why? Because it involves human preferences, diverse consumer behaviors, and even competing agendas. That said, the power of today’s advanced data analytics platforms to harness and distill the sheer magnitude of customer data and consumer research is a colossal evolutionary leap forward in terms of improving VOC data collection. Experts like PWW are able to customize these leading-edge software solutions based on the needs of each client. Armed with this competitive intelligence capability to collect virtual mountains of available customer information, we can integrate disparate sets of unstructured and structured data to achieve a conclusive diagnosis of a client’s bill of consumer health.

  • Social listening platforms
  • Focus groups and interviews
  • Blogs and forums
  • One-time surveys as well as ongoing survey programs
  • Email, chat, and call data
  • Customer reviews
  • NPS (net promoter score – promoters, passives, and detractors)

What Specific Customer Insights Will Help Your Organization the Most?

Every company is different, with its own strengths and weaknesses. It is incumbent on enterprises to determine what information they require that both responds to customer sentiments and serves their bottom line. For example, prioritization to improve customer service pain points can steer research toward internal product returns data, integrating it with product quality complaints on social media and product/service reviews from retail websites. In another scenario, researching one’s own customer sentiments toward competitors can lead to identifying potential market disruptors that could negatively impact market share down the road. VOC research using customer surveys can discover enrollment deficiencies in loyalty programs, product pricing, or measure the effectiveness of its sales channels against the competition.

For many organizations, what may not be obvious to the naked eye in terms of customers’ true sentiments is almost always uncovered with VOC research. Defining rules for customer segmentation—prioritizing which customers are the most important to your business—is also key to illuminating areas for improvement. The goal is to help enterprises emphasize successful strategies, follow customer segmentation protocols, get a more accurate read on competitive standing, and discontinue stagnant products or services that waste energy and resources.

Rethinking Competitive Constraints in the 2020 Pandemic

It comes as no surprise that Merriam-Webster and both just announced their 2020 word of the year is “Pandemic.” On its website, Merriam-Webster writes, “Sometimes a single word defines an era, and it’s fitting that in this exceptional—and exceptionally difficult—year, a single word came immediately to the fore as we examined the data that determines what our Word of the Year will be.”

As a natural consequence of the COVID-19 pandemic, the word “constraint” has emerged from relative obscurity, enjoying some notoriety among the many terms the pandemic has ushered into our daily vernacular. The negative connotation of being constrained, limited, or restricted, particularly for organizations that depend on market and competitive intelligence to drive their business, is certainly cause for concern. However, during this time when constraints have closed many doors, these same limitations on our mobility (and daily existence) have also opened windows of opportunity for progressive enterprises that are receptive to new ways of thinking, working, and competing in a changing world.

Constraint #1 — Prohibition on Conferences and Trade Exhibitions

Spanning decades, annual in-person conferences have been standard practice for a large swath of industries, and with good reason. For professionals in finance, pharmaceuticals/healthcare, advanced software/technology, and an entire spectrum of consumer products, these gatherings present ideal opportunities for attendees to gain critical business insights, including but not limited to:

  • Hands-on experience with competitors’/exhibitors’ prototypes or new offerings;
  • Networking opportunities with competitors, customers, and vendors;
  • Meaningful interactions with potential customers;
  • Straightforward intelligence into industry market conditions.

According to the non-profit Strategic and Competitive Intelligence Professionals (SCIP) group, “The amount of information you can get from a show continues to grow and, with it, the opportunity for developing valuable intelligence. At the same time, there is continual development in the software that can help us at the trade shows.” The good news is that the pandemic’s constraints on in-person attendance are propelling new efficiencies in obtaining conference-related insights through virtual means. Rapid abstract management (RAM), for instance, is emerging as a highly potent and efficient tracking/monitoring/integration software platform. The point is that these new virtual monitoring approaches—which actually offer a more comprehensive, integrated information portal for data analytics—are giving industries a lot of food for thought. Companies are giving themselves permission to forego the more traditional, yet costly, travel and attendance fees in favor of virtual conference technology and virtual conference monitoring services to gain crucial competitive intelligence.

Constraint #2 — Maintaining Your Competitive Edge with a Remote Workforce

In our field, we stress to our clients that an effective competitive strategy constantly grows and evolves to meet industry standards. Before the pandemic, it was typical for cross-functional teams of decision-makers to convene in one location/time zone to explore relevant market research, game out risks and opportunities, and develop a competitive strategy that optimized a return on their investment. The 2020 pandemic has turned this scenario completely on its head—the emergence of a global remote workforce for the foreseeable future is unable to meet in the same building, much less in the same city, state, or even country.

For those organizations concerned about losing ground in competitive effectiveness due to team members working remotely, virtual wargaming workshops are proving to be a highly effective, lower-cost alternative.

  • Within a training and education workshop setting, virtual facilitators guide corporate decision makers in developing and implementing forward-thinking, high impact moves and countermoves
  • Virtual workshops help decision-makers become better prepared to face the future of their industry. Enterprises with global corporate stakeholders are coming around to the idea that different locations and time zones should no longer be perceived as an obstacle when virtual business wargaming offers so many benefits.

Through this innovation, today’s remote leadership teams gain the capability to test existing strategies or even create new strategies, and significantly improve their own understanding of and insight into competitors, their capabilities, and their potential actions.

Constraint #3 — Ongoing Disruptions Impacting Commerce and Consumer Behaviors

In a white paper outlining potential strategies to tackle COVID-19 in May 2020, international think tank with 37 member countries, Organisation for Economic Cooperation and Development, suggested, “In the extraordinary circumstances of the COVID-19 crisis, there are a number of reasons that may push competing companies to collaborate with one another and a number of ways in which consumers and the economy may benefit from these collaborations.” Our research confirms that this ‘lift-all-boats’ approach has been gaining in popularity because it has proven invaluable in enabling sustainable solutions for competing businesses in hard-hit industries:

  • Neighborhood dining/entertainment establishments are combining forces to stay open and viable during bans on indoor dining. Together, these community coalitions are promoting practical calls to action within their sphere of influence, for example, “Spend $25 per week on take-out or curbside service at participating restaurants in our town…”
  • “Buy Local” campaigns in communities with smaller populations are flourishing, marketed through social media by local chambers of commerce on behalf of independent bricks-and-mortar retail shops.
  • Like-minded retail businesses are upping their online game, while banding together for social causes to improve market share and build a consortium of independent sellers. The City of Chicago’s recent “Black Shop Friday” campaign is a good example. Several well-known online retailers have followed suit with virtual Black Fridays that focus on independent businesses.
  • Delivery providers for retail, pharmaceutical, and restaurant industries, to name a few, are expanding into less populated areas to sustain market share, while improving logistics for better alignment of supply with demand.

There are also lessons for municipal and government aid agencies when it comes to using expertise to 1) boost the competitive private sector; and 2) solve systemic, supply-and-demand challenges in our society. Hunger, for example, is a consistent and growing problem in the U.S In an Op-Ed for the Washington Post on December 7, 2020, “What the Pandemic Can Teach Us about Treating Hunger,” World Central Kitchen founder Jose Andrés writes, “Lawmakers don’t have to choose between helping restaurants and feeding the hungry: Restaurants can feed the hungry, with federal support. There’s also no need to choose between paying farmers to destroy crops or supporting food banks: Farmers can be paid to supply the food banks.”

Reconsidering the pandemic’s constraints and working to develop and scale up solutions has real potential to create lasting, positive gains in both consumer engagement, business success, and the economy at large. Safety in numbers is, in many ways, becoming good policy. There is a growing realization that by coming together, an industry, sector, or community has a much better chance of surviving than if those individual businesses attempt to go it alone, only to fail separately. Credible competitive intelligence is an essential asset in overcoming these challenges.

What Business Intelligence Will Look Like in 2019

Episode Summary

Key Trends

  1. Seek External Perspectives
  2. Use Artificial Intelligence to Support Human Analysis
  3. Apply Subject Matter Expertise
  4. Watch Regulatory Shifts
  5. Utilize Technology Tools
  6. Engage in Primary Research
  7. Implement War Gaming
  8. Track Indicators to Provide Early Warning

Seek External Perspectives

Perspective is often limited to inside an organization but forward-thinking organizations will seek an external perspective and a holistic view of what’s going on in their space. David provides good examples of why that’s important.

Use Artificial Intelligence to Support Human Analysis

Machine learning and artificial intelligence in CI is a growing consideration but David doesn’t see these tools replacing humans any time soon. He explains how these tools will augment research while the deep analytical thinking on behaviors, beliefs and feelings will still require the power of the human mind.

Insights, implications and recommendations are still well beyond computer-based systems and truly where the value is found in a top-of-the-line CI professional.

David also talks about his friend Matthew Kelly and his new book “The Culture Solution” and the need to humanize work again.

Apply Subject Matter Expertise

Collecting and analyzing information is a critical requirement of an intelligence firm but where the really unique insights are found are from those with experience in a particular field. David explains how critical it is to engage with intelligence experts who understand your industry and can explain the impact of the information gathered.

Watch Regulatory Shifts

All industries are or will face regulatory changes of some sort in 2019. David gives the example of pharmaceuticals and how drug forecasting is becoming more challenging to do and how important it is to understand the changing landscape of the FDA.

Larger than that, however is the impending shift with social media and how privacy laws will be shaping how we gather and use information this year.

Utilize Technology Tools

David shares insights in how technology tools – in particular, in the gathering of secondary information, will save researchers 40%-50% of their time. Aggregation tools will help automate the processes that many still manually use thereby allowing for more analytical time. Visualization tools will also help tell the story through pictures and improve the delivery of an analysis.

Engage in Primary Research

Primary research or original research differs from secondary research in that secondary research is published and accessible to most everyone. It doesn’t provide any unique advantage. It’s a good foundation but it’s the tools, techniques and hard work of getting the primary research – collecting original information, conducting interviews, visiting trade shows – that fosters the real intelligence work. David shares some ways in which primary research is different and the nuances with which an extremely skilled intelligence practitioner goes about getting primary research.

Implement War Gaming

War gaming or the practice of role playing your competition is a trend David sees set to take off as a powerful competitive advantage where many have largely ignored.

David explains the ongoing concern of linking intelligence to strategic decision making and how war gaming bridges that gap so effectively. He explains how the really forward-thinking executives will come to realize that beta testing a strategy will be as critical as beta testing software before wide release.

Track Indicators to Provide Early Warning

More companies will start tracking indicators and connecting them to future scenarios to understand what’s more plausible to happen.

Identifying and monitoring observable events will help determine which scenarios are more likely to come true enabling better decision making – which hopefully this episode has done a little for you in thinking about how best to proceed this year in your intelligence efforts.

Managing Expectations in Business and Competitive Intelligence Endeavors


Whether you’re new to the field or you’re an industry veteran, you have to keep in check those end deliverables and what people are expecting to get versus what you plan to provide. In our industry in particular, our stakeholders always want things “yesterday.” They don’t want to wait. They want it NOW, and our information age and our digital world fosters that environment, People often believe you can punch a couple of buttons and poof, this information just shows up.

You have to manage those expectations right from the beginning.


The demands on intelligence practitioners on a day-to-day basis are really high, and they can’t do it all. They don’t have unlimited resources, whether it’s people or dollars or time, to be able to deliver against the work. When stakeholders across different functional areas believe their issue is the most urgent and important, this is where that belief stems from.

People are looking for guidance on how to decide which issues to work on and how to educate clients that you can’t answer a laundry list of of questions and you can’t deliver it tomorrow, without coming across as telling everybody “no.” This is about understanding how to better manage this type of work load.

I always tell people, you own the CI function. Part of owning it is you get to decide what you can deliver, when, and how it’s done.


You can never say, “I can’t.”

But you CAN say, here’s what we can do. Here’s what we can get done by this date, unless it’s that important and you can give me some resources to really get it done.

Resource allocation is typically the biggest issue and whether what they want will actually be obtainable.

Sometimes clients will ask for something and you can ask how do they track that in their own company? And they may respond, I don’t even know if we do. I don’t know if we look at the market that way or I don’t know who in our own company has that information. Asking how the same information would be found from their own organization puts it in perspective on how difficult that request can be if they don’t even know how it’s handled in their own organization.

Another way is to use a company’s values. If they’re committed to continuous improvement or integrity and all these various types of values, you can appeal that to produce the highest quality of an output, to best inform your decision, we need more time. But sometimes they don’t have more time if the information loses value after a certain date. That’s when you can address “good, cheap, and fast”: You want it fast, you want it cheap, then it’s probably not going to be very good. Are you okay with that?

What about increasing the budget?

Sometimes, depending on the ask, like trying to uncover the revenues or profit statement of a privately held company, a bigger budget is not going to provide that. However, there are certain building blocks you can get, a sense of their top line sales, a sense of their gross margin, something comparable to what a typical operating income might be, and then do some assumptions and modeling to get to the answers in between. Sometimes time and money will help you to get those answers. Other times, the doability factor becomes an issue.


1. Profile the Client

The first way, which, almost nobody does, is to profile your client. Profile those stakeholders from the beginning. As you start to work with certain internal folks, understand who they are, what they’re measured on, what are their objectives, what are they trying to accomplish in their role? What key decisions are they looking to make? What are their success metrics?

Anything and everything you deliver, should relate back to those metrics. Try to understand their personality. Are they a driver? Are they amiable, expressive, do they like to have information in the morning, in the afternoon, in the evening, in PowerPoint, in Excel, in a conversation? How do they want it delivered? All those things matter. So profiling your client, getting a little more understanding about who they are and how they operate becomes an important way to manage expectations, right from the beginning.

2. Determine the Scope

A second way to manage expectations is around determining the scope of the project, and it might sound obvious. Most people, however don’t take enough time to consistently document the scope clearly. What is it that’s within the boundaries of what we’re agreeing to, and what’s not inside the boundaries? What are the tasks involved? What are the key objectives we’re trying to accomplish? What are the must-knows versus the nice-to-knows? What are the resources necessary and then of course, timeline and dollars. If you don’t spell that out very clearly, then there’s ambiguity. Saying, ‘we’ll get that to you in the next couple of weeks’ – is that two or is that seven? What does that mean?

Many times in determining the scope, the client may not be asking you the right questions. You have to think about the next logical question to properly determine what they want? Do they want the dissertation version, or do they want the thumbnail look at a landscape issue? How involved do they want and what does their time and money allow? It’s like buying a car. What features and benefits and little extra options do you want, what can you afford, and how long will it take for them to insert that into the vehicle as it’s going down the line? Same thing here, you have to get the scope down.

To make sure they’re asking the right questions you need to understand the key objective. What are you going to do with the raw intelligence, and what decision will it inform? And if your client doesn’t understand their key objective then they not ready to start the project.

Sometimes you’ll get three pages of questions and you look at them and two thirds of them might be good questions but when answered, they’re not going to address the objective of the engagement or give them the insights that they’re looking for to enable a really informed decision. Honing in on why they want this and what decision they’re making is critical, but enough people don’t always probe deep enough. They might ask the question and get an answer but didn’t listen intently enough to see, was that just words in response to a question or did they really tell you what they’re trying to accomplish?

When that happens, they’re not ready to start the project because you’ll come back with a truckload of information and then they’ll either say, I already knew all that or what am I supposed to do with all that? Don’t ever start a project with that as a scope. It’s really critical to know what they don’t understand already about the market and what they’re trying to accomplish.

What do you do when they’re not defining the scope adequately?

Then you have to make some assumptions. You have to think about the bigger priority that they’re trying to address and come back to them with some suggested questions or topics. That will stimulate something in their mind of, yeah, that’s what I’m trying to get across. Usually, if they don’t know and you say, okay, then I’m going to go after these four things, If it’s not the right four things, they’ll tell you.

You have to reflect back what they’re asking for: this is what I understand the scope to be or what your objective is and these are the key … four or fivetopics or questions that you’re seeking. Did I hear that correctly? Not only does it show them you were listening but you’re adding a consultative element to what you’re doing to reflect back and make sure before you go down the wrong path, that you’re aligned on what they want to accomplish.

Often times you’ll have a gatekeeper or intermediary who’s actually making the request on behalf of the true end stakeholder. The challenge is there’s often something lost in translation. This is where your project kick-off call is another way to manage expectations.

The kick off call makes sure you’re aligned before you really get moving. However, oftentimes that call is when you start to hear the real scope, what the real questions might be or you get new or different questions that arise because maybe something changed in the market or now the stakeholder is just thinking through it differently.

3. Communicate Regularly

Communicating regularly is a third way to manage expectations. Having very strong written and oral skills and being able to summarize very concisely what those needs are, verus the wants. We can have a list of 10 different questions to go after, but if the most important ones are questions 1 to 3 and you deliver questions 4 through 10 but you don’t do 1 to 3, they’re not going to be very impressed.

You might think, hey, I got 70% of the scope done. No, not really. If they say the must gets are these top 3, if you don’t get those, the project has no value. When you get those three and then if you get the other ones, now all of a sudden that adds incremental value. It’s the nice-to-know questions versus the need-to-know questions. Make sure you can communicate that back clearly and demonstrate you’re an active listener.

As an active listener, you’re not just listening and going through the motions. Youre really taking notes, writing down what you’re saying, and really reflecting back and asking questions about what they are raising.

4. Seek Perspective versus Precision

In the intelligence world, it’s about gaining perspective. It’s about getting different perspectives from different sources, some more credible than others, some have more knowledge than others, versus precise information. For example, if you’re trying to find out the revenues of a particular product line at a company, does it really matter if I tell you those revenues are between $100 and $110 million or it’s$ 102.7? It doesn’t change the decision you have to make.

It’s all about providing perspective on the issue rather than worrying about drilling down to the specific answer. They have 60 to 65 sales reps. Does it matter if I tell you 62? It’ll probably be 63 tomorrow. They’ll hire somebody. They can fire 2 people. The precision part is always changing. As soon as you hear that word, detail, it’s always an alert. It doesn’t mean you can’t provide details, and it doesn’t mean you won’t get a precise answer on something but you won’t strive for that. You want to strive for perspective because very few people at any given target company who know the precise number on something, and that’s not typically necessary to make a decision.

How do you express that to the stakeholder? Be direct. You don’t sugar coat it, you don’t try to be soft about it. You hit them head on with, “we can get you a narrow range,” if it’s a quantitative assessment.

Just like when you’re doing strategic early warning, you’re not going to get a precise date 18 months out of when a company is going to launch a new product. You’ll start by getting, “it’s going to be next year.” Then you’ll get, “we think it’s going to be third or fourth quarter.” Then “it’s going to be, November or December.” Then you might get to, as it gets closer, the second week in November. It’s not worrying, early on in particular, about the preciseness to inform the decision.

The amount of detail needed depends on how much support they need to feel confident in your answer. So the detail, sometimes, is a need to explain the rationale or justify how you got to your conclusion. But even the detail might not be available. Some executives just want the end conclusion, period. They want the bottom line results. Others, if they’re dealing with somebody who’s more analytical, they’re going to want to understand all those details because they’ll read all of the details. Some executives say, “give me a one page summary.” Some will say, “give me the whole report. I want to read it all.” So again, you’re going back to profiling your client. Are they detail oriented or are they top line, bottom line thinkers?

5. Determine Doability

Can you actually do the engagement? Sometimes something’s asked and you wonder, is it even obtainable information? Can you capture it legally and ethically? Can you actually connect with the individuals who have the insight you seek? Do you have access to those individuals? I like to give a doability percentage. We think we can capture 50% of what you’re looking for. I think you could get 80% of what you’re looking for. You set that expectation from the very beginning. You want this in three weeks. Here’s what I think we can get in three weeks. To get the balance, we need two more weeks. Are you okay with the staged or phased approach to getting this?

Being really candid about, can we even do what you want to have done? All this sounds fundamental and obvious, but as a CI practitioner you want to say, yes, okay, yeah, we’ll go get it and later you go, what did I just agree to? And how am I going to possibly get that and you start figuring out the resources needed and the time requirements and you’ve got these other deliverables. So you have to, at that moment, be able to pause and say, now that I understand your scope, let me get back to you in an hour or two hours, a day, whatever it is, and say, let me do a feasibility assessment, make sure we can deliver. Make sure we reflect back what you want, what it’s going to take to get it done and get alignment on that.

A good book that has nothing to do with CI is called, SPIN Selling. SPIN Selling talks about four things: S is situation; P is problem-based questions; I is implications; N is needs payoff. While this book is designed for sales people, that same type of technique works as well in a consultative scoping of a project for a CI practitioner What’s your situation? What are the problems you’re facing? What are the implications if we don’t answer these questions that you have? And what’s the payoff when we do?

Final Thoughts

You want to be able to have a very well organized intelligence capability. One of the ways to make sure that you’re perceived as professional and credible and consultative is to, from the very beginning, outline those expectations. If you start marching down a path that none of you were aligned on exactly, then nobody is going to be happy. You’re going to bust your butt to deliver something that won’t hit the mark — and it won’t hit the mark because you weren’t very clear on the specifics.

Business War Gaming – Typical Timing, Prep, and Investment


When heading into the first stages of a war game, be mindful to not offend anyone who has worked hard developing an existing strategy for the company. It’s likely that a lot of time and effort have been invested in these strategies; some may even be fairly successful.

Nobody likes to hear what they’ve done is wrong, but that’s what it can sound like to a person whose current strategies are being challenged. Try to establish an environment where the goal is not about right or wrong, but about evolution and continuing to build on momentum – your business war game will start off with much greater acceptance. Many people, across functional areas, never get asked for their input. But the war game approach brings cross-functional people together to collaborate in a respectful way and recognizes that everyone is an important piece of the puzzle.


There’s a big difference between the Japanese and U.S. cultures of decision making. In the Japanese environment, an idea, strategy or launch will get shared with each functional area, which adds its contribution and stamp of approval. Then it goes to the next phase. Imagine a jagged line.

Finally, all of a sudden, everyone along the way who’s involved in executing agrees with the plan. The jagged line straightens and proceeds to final approval and execution.

In the U.S., the process typically starts with an approval by an executive and then the jagged line begins. You’ll hear Marketing say “We need more time to develop the marketing piece” and Sales say “that price is too high. I can’t sell it at that level.” Regulatory jumps in with “Did you consider this upcoming pending legislation?” All these things delay or even derail the launch. In other cultures, like the Japanese, these considerations are made before the decision to execute. In a business war game, we discuss strategy before you hit the “enter” button.


If you’re a big fast-food chain planning to roll out a new hamburger, usually you’ll test market it in a few stores. If you receive positive feedback and see sales success, you roll it out on a larger scale. If not, you change the formula, the flavor or some other product factor to get it right. It’s prudent to pilot a product first.

Why aren’t we doing that with our strategies? Many companies are not pressure testing strategies before roll-out. It’s only after rolling out that they tinker with it and change things. But it’s smarter to figure all of this out beforehand.

If you’re creating a software launch, you have multiple versions and iterations, beta groups, feedback, and plenty of tinkering before it fully rolls out. You get the bugs out. It’s not always perfect, but there’s a process that resolves as many issues as possible before a full release.

Unfortunately, you don’t often see the same rigorous testing of strategies to see if it’s the right strategy. In fact, sometimes there may not be any strategy at all. Companies may be winging some things, and that’s where war gaming and simulations can help create a more straight-line strategy.


The time investment for your organization’s point person – the person coordinating with our firm – is typically 10 or 12 hours, spread over the first couple of weeks, to help map out clear objectives for the game.

The participants themselves – typically five to eight per team, cross-functionally – spend 60-90 minutes reading the briefing book before the war game. This is the only preparation they’ll need.

Then there’s the day itself and any post-work activity, which is established at the end of the war game when we define who’s going to do what by when, based on the prioritized actions we just determined. Finally, these groups will meet over the following weeks to put all of this into action. Overall, the majority of people who participate have a minimal time commitment.


Preparing for a war game takes about eight to ten weeks. The first couple of weeks will be planning the overall engagement, clarifying the objectives, and deciding who’s going to participate and where the event is held. Will it be onsite or offsite? What information already exists that can be collected and incorporated into the plan? After that, it usually takes four or five weeks to prepare a draft of the briefing book and make adjustments where needed.

Expect some communication and dialogue around these briefing books. Also expect to spend time reviewing participants, in the early stages, to help place people in their ideal roles. This helps avoid personality conflicts and unproductive game exercises.

It’s beneficial to interview and have conversations with key stakeholders during the planning phase, to makes sure the game exercises are designed to achieve the outcomes you want from the event.

That first part takes about seven weeks. Then you have the event. During the week after that, we assemble all the findings, summarize the content, take pictures of all the exercises that will be up on a wall, and provide a report that captures the day.


Cost varies depending on the scope of the engagement. Is it a global war game? Are you scrimmaging against one company or three companies? A smaller scrimmage is normally $25,000 to $50,000. A traditional competitive war game that involves four teams, four different briefing books, and all the required prep and post time is usually between $75,000 and $100,000 (excluding out of pocket expenses, e.g. travel).

It’s important to understand this is not $50,000 for one day. A successful war game requires months to bring that single day together. And while $50K, $75K or even $100K for multi-day war games is an important investment to consider, it’s equally important to understand that the decisions and strategy that result from this investment can affect hundreds of millions of dollars inside your organization.

The briefing book is a big part of the fee structure. If you have four playbooks, for example, those often are extremely valuable to the participants because many may have never seen that information before.

A lot of companies have in-house intelligence or research facilities that do competitive profiles. So some people may have seen bits and pieces of this information,, but not compiled in a comprehensive document that can be shared with others who didn’t participate in the war game. It gives everyone in the company an overview of the competition.


Bringing everything together is where the magic happens. Assembling the briefing books with the proper topics. Gathering the right people who understand the market or the competitors and those perspectives. Team configuration is important, as is having a master facilitator who can lead the exercise and double as leader of a breakout team. You typically have a facilitator at each breakout exercise to ensure the teams don’t spend too much time on one part of the exercise or go off on tangents. Facilitators also make sure that the outputs needed to inform the insights that help elicit good decisions get produced.


The first element is expert facilitation. The second is having clear objectives aligned with the most senior sponsors of the engagement. Third is team member selection, so you get the right mix of personalities and knowledge. Fourth is high-quality briefing books. Fifth is the exercise selection. The sixth key element is capturing the prioritized action steps and making sure this follow-up activity is implemented.

The worst thing you can do is have a tremendous game, where everybody walks away excited with new learnings, and then everyone slowly falls back into their normal routines and nothing ever happens.

We make sure that, at the end of that day, it’s very clear who will be responsible for driving these next action steps forward.

We also believe it’s important to educate senior leaders on how to use the learnings, how to report the findings clearly, and how to get senior executives to listen.

Even a simple discussion with senior executives about the war game outcomes, and then implementing only one of them, can be really motivating for participants who were involved. They realize they were heard, and saw that action was taken versus feeling “we did all this great stuff and now it’s been eight months and nothing’s changed.”


Beyond influencing strategy, the leadership discussion evolves in these events and helps with business modeling. It goes beyond determining moves and counter moves. It answers questions such as, What are our customer segments? What is our unique value proposition? Who should we develop strategic partnerships with? Where are we going to get our next wave of revenue, and what’s the cost structure against this?

War gaming can help innovation labs and teams better understand areas that can evolve and leapfrog ahead of the competition. It can help you create your company’s next vision by thinking way outside the box, being creative and capturing bold steps and initiatives that can advance your organization.


You can ready your organization for a war game before engaging a firm like Proactive Worldwide by understanding your current strategies and the assumptions of your business units. We are surprised how often organizations that think they’re ready to run a war game don’t know their strategies, or if any are already in place. You can prep by starting a process of monitoring and tracking indicators that help you learn which future scenarios are most plausible and likely to happen.

Deeper Into Business War Gaming and How It Transforms Strategies.


Organizations can stage their own war games, but they must build that capability first in order to eliminate the risk of first-try failures. One lackluster game can sour a company’s belief in the power of the exercise.

A big challenge is designating enough time and staff resources to successfully run a full event, from start to finish. This includes exercises that elicit productive war games, like Four Corners Analyses, Strategic SWOTs and Business Model Canvases. A facilitator with strong communication skills is essential to success, too. Someone with a solid grasp of the topic and the ability to control the room and confidently manage participants.

Organizations that have someone walk them through the war game process at least one time tend to master it much quicker because they don’t have to figure everything out themselves.

Staging a war game is a learned skill, so you likely won’t be good at it the first time. With coaching and guidance you can observe and do it alongside an expert first, gaining feedback and corrective understanding, before staging your own. The ultimate goal is getting your first war game off the ground successfully. War games that produce valuable experiences will generate a positive buzz and increase people’s desire to participate in future games.


The best way to avoid challenges in a war game is during pre-game planning. Look at the personalities involved and focus on those that might be troublesome. For example, a brand leader who is resistant to the war game concept: “I’ve been in the industry 30 years; there’s nothing new I’m gonna learn in this thing.” That’s an opportunity to put them on the competitive team. That forces them to look at their own company through a different lens and way of thinking for half a day. Probably something they’ve never done before. How often do you get to sit in someone else’s skin for a day and think like a competitor?

Think about the game questions in your pre-planning phase. Anticipate potential roadblocks and seek those folks who will challenge and push, because that’s actually a benefit in a war game when leveraged correctly.


Four Corners Analysis, by Michael Porter, is a war game exercise many have heard about but few have done. A Four Corner Analysis assesses a company’s drivers, strategies, management assumptions and capabilities.

For example, in a war game done with a trucking organization, questions included: What’s the main driver for this company? Why are they doing what they’re doing? Do they want to be number one? Do they want to be more profitable? It’s important to know what’s driving their behavior, because what’s driving one company is different from what’s driving your company. Knowing drivers changes the whole outlook on why they behave the way they do. Then you start looking at strategies and applying Michael’s mindset about strategy.

Michael Porter asks, What is your unique positioning? How are you going to gain an advantage, and how are you going to sustain that advantage over time? By understanding strategy you start to understand competitive intent, and what management is assuming about the market—competition, growth, new entrants and capabilities. So, in this trucking war game exercise they finally hit on something: “I don’t understand how this trucking company has this unique strategy while we’re clobbering them.” Then they realized, “Wait a second. This is a Japanese-based organization so they don’t have a three-year plan or a five-year plan. They have a 20- or 25-year plan. The culture is very different.” And so they realized the competitor was willing to do things now that might not be winning the market share, because it was more concerned about years 8, 10 and 12.

In the Four Corner Analysis, the trucking organization started looking at what their competitor was saying its strategy was, along with its capabilities. They discovered, “They don’t even have the capability to deliver on what they say they’re gonna do.” That leads to considerations of “are they going to buy, partner or build the capability that they need?” That helped set the indicators of what to watch for to see if the competitor was moving in a particular direction.

Another tool is Strategic SWOT – strengths, weakness, opportunities and threats. Rather than a traditional SWOT, this looks at the intersections between the strategies that leverage an organization’s strength to increase a particular opportunity and those used to blunt a threat. It’s a new conversation that can lead to different types of scenario exercises, moves and counter moves, force field analyses, and use of business model canvases to understand how to create, deliver and capture value inside of an organization.


An organization is introducing a new snack food in a unique way, where it can be sold in two different isles of a grocery store. The new product fell outside of their normal product categories, which meant a new set of competitors, and the organization wanted to understand the mindset of these new competitors.

Through the war game exercises, not only did they come to anticipate the backlash they were going to face after they entered the market. They also thought about how to prepare the best moves and counter moves. They then changed some of their marketing efforts and even reevaluated their pricing. They went back and revisited some of the strategy, made some shifts and since then had an incredibly successful launch.


A very large retail organization became concerned with its digital strategy. They are a brick and mortar, facing a lot of pain, and needed to better understand what’s going on in their space. Many times, you’ll have old school thinkers where an exercise like this helps wake up their perspective – a little shock and awe. It became clear they didn’t have a strong digital strategy. They lacked the resources and expertise necessary to win market share. Even though business was okay, there was no growth. In fact, they were getting ready to pull the plug unless something changed monumentally. Their war game helped identify blind spots, map out new strategies, and create a timeline and approach that rolled up to executive leadership and involved a lot of shifts and changes. They achieved buy-in, started moving forward and are now a stabile organization.


A multibillion-dollar company in the chemicals market space is facing challenges with the production of a specialty chemical and whether or not it will be produced in China. A scenario planning session ultimately got them to understand that if the Chinese government, or another entity, start owning companies that produce this rare chemical or ingredient, that would have an impact on them. “What would a cheaper, globally distributed version of our product from that region of the world do to us?” A war game helped them think about what they needed to do to secure and maintain their lead in the market.


It happens all the time. Organizations believe a particular competitor is their main thorn. But when analyzed through a war game, it’s revealed that other non-traditional competitors have capabilities that could disrupt the market space independently or by partnering with another organization.

It’s focusing on competitor A, then realizing that competitor B could easily become a new threat if they wanted to because they have the resources, global footprint and established customers. Attention can quickly shift. Events in the market can signal these changes. Competitor A can turn out to be less threatening than we thought. “Maybe we should start watching this other organization since they just acquired a company in our space. Is that the first sign that they’re coming after us?”

There’s often a wake-up call during war games that would never have happened without running the event. Sure, there may be some private water cooler discussions, but decision makers aren’t in the room to hear it.


For many companies, developing a culture of truthful dialog is not easy. Things don’t get said. People withhold information unless a safe forum with ground rules is established. Forward-thinking senior leaders will come into war games and say, “We want you to be incredibly candid. That’s why I won’t be in the room. If you think things could be better, say it. If we’re missing the mark, say it. Because this is all going to be discussed in two months at our next board strategy meeting.”

That’s how a war game encourages and gives permission to people to express ideas, thoughts, comments and objections that they may otherwise not know how or where to introduce.

Organizations can find it difficult to look at themselves. A business war game can cut to the truth faster and more efficiently than traditional internal processes. You can be fighting years and years of tradition when trying to get something to surface. A war game can typically accomplish this in a single day.

A professional war game facilitator is an independent, objective event leader. No bias or reason to have a decision go one way or another. They just want whatever is best for the organization, and that’s found through asking the tough questions.


In our next episode we go even further up the food chain, in ways most companies never even think of.

What Is Business War Gaming?


Basically, it’s role playing for business. War gaming helps you better understand competitors’ mindsets, so you can pressure test your own strategies and create new ones. It helps you anticipate moves and develop countermoves. War game workshops create a framework where you assess the beliefs and assumptions of an overall business environment. This can include government regulation, supplier issues, customer profiles, industry trends and other influencing factors. War gaming helps identify blind spots in your organization, and generates ideas on how to outmaneuver your competition.


War games can be called scrimmages when they’re on a smaller scale, take less than a full day, or focus on a single competitor or issue.

Scenario planning is another name used, though there are some differences in approach between the two methods.


War gaming is not a detailed analysis or a quantitative assessment. It’s a qualitative, strategic level of interaction. Quantitative data is used as part of the exercise, but data is not the focus. War gaming is also not a boring computer simulation. When done right, war games engage and energize participants, and produce actionable outcomes.


There are two types of applications: strategic and tactical.

Strategic situations can involve market disruption, regulatory changes, competitor business model shifts, new entrants in your market, or your launch into a new space. Strategic situations may also involve merger and acquisition, value proposition creation, customer experience and digital strategy. Playing out a war game for any of these scenarios will help you make more informed investment decisions.

Tactical situations could apply to a specific product launch you’re planning for a new market, region or category, when you want to predict how competitors will respond. War game results reveal indicators and blind spots. These can lead to better tactics like sales adjustments and reevaluation of your usual go-to market strategies, to find ways to improve.

Channel modification and user experience are two more tactical situations. Are you targeting customers through the right channel? Do you truly know what customers go through to find you, buy your products and use your services? These are things you need to know. Finally, there’s market defense. A lot of what you learn in a war game are the specific actions you can take to blunt the competition.


There are four primary benefits. War gaming aligns leadership across departments to develop and test strategies. It also increases the probability of success by letting you explore potential uncertainties, uncontrollable events, and ways to prepare for them. Third, war gaming helps identify risks and threats to your company, and ways to neutralize them. And it reveals existing or hidden opportunities that your company can leverage.

A secondary benefit comes from the cross-functional format of war gaming. People from marketing, operations, distribution, finance, legal and other departments work with each other to explore and develop ideas. Having everyone participating and knowledgeable of a strategy makes it much easier to implement later.


We call that appetite. Do people have the appetite to engage in a war game exercise? If not, it’s likely they don’t understand what it is. Why would anyone not want to better understand how competitors might respond to their new product launch? Or get a deeper understanding of a strategy before they invest millions, or billions, of dollars in executing it?

Our ultimate goal is to help organizations build this tactical capability themselves. It’s not just about hiring us to facilitate this event. Whether you’re in strategy, intelligence or brand leadership, we want you to be able to do this on your own.

We call our approach OCD—Observe Cooperate Do. First, you observe the entire event process start to finish. Next, we do it together cooperatively. For some portions, you’ll do the heavy lifting. Others, we’ll do the heavy lifting. Finally, you go and facilitate one yourself. We help our clients incorporate this capability-building investment into their planning process.


Some companies perform up to 40 war games a year, but those are half-day scrimmage workshops. They typically focus on smaller goals and don’t dig as deep. For the big issues, decisions, and transformational business model changes, an intense war game workshop will produce more actionable results.

Doing this at least a couple times a year should be part of your company culture.


You need the right mix of personnel, personalities and knowledge in the room to make your war game successful. You want folks who are comfortable saying bold abrasive things, in a professional way, that shake things up and challenge the status quo. You also want to reflect the character and culture of your competition, in order to see the world through their lens.

War games are not affirmatory exercises. If you end up saying, “We don’t have to change anything,” then it was done wrong.


It usually takes eight to ten weeks. The first phase is pregame planning. Do you fully understand the objectives, who will participate, where will it be held, and which exercises will achieve your goals? Part of this planning phase is the briefing book development. Briefing books are documents that give your participants a baseline knowledge of facts, insights, perspectives on your market and company culture. We suggest you limit them to 20 pages or less, to encourage participants to read them before the game.

Briefing books may include market figures, an overview of the company’s current strategy, brand platform, marketing, sales, pipeline development, financials, and future outlook. Reading this brief is the only prep work people need to participate in a war game.

The briefing book information is largely drawn from secondary or published content. Occasionally, a war game may require primary research if written or published data cannot be found. In this case, we work in collaboration with the the client’s research team to make sure we don’t duplicate research efforts.


Four teams participate in a typical war game – the home team and two or three competitor teams, with five to eight players per team. Each player is chosen to contribute various dynamics and views of the market. In addition to the home and competitor teams, you can also include a distribution team or a regulatory team. A war game doesn’t have to be limited to competition.

Then there’s the facilitator – the heart of the event. A strong facilitator keeps the workshop on time and asks tough questions that others may not be asking. These questions guide the exercises and ensure you get the data and content you need. A good facilitator sets the ground rules, manages the dynamics in the room and makes sure no one is filibustering the conversation. They can feel and manage any rising tensions, which helps maintain a productive game.

Introducing David Kalinowski

Proactive Worldwide is celebrating 25 years as one of the largest business intelligence firms in the world. In the years since its president and co-founder, David Kalinowski, started Proactive with Gary Maag, things have changed a lot. Even so, David still believes success lies within the fundamentals.


David and Gary worked together at a smaller boutique consulting firm for about five years when they discussed the idea of striking out on their own. David was hesitant – he’d just had his first child. Gary was ready to take the leap. Not even an hour after that initial discussion, Gary returned home to a voicemail message from David saying, “Let’s do it!”

That was October of 1995. They worked out of their respective homes for the first three years and in 1998 hired their first employee. Fast-forward 25 years to a staff of 40 full-time team members in their organization, and they’re now one of the largest companies in the world at business intelligence.


A growing, wide variety of individuals and companies dabble in the intelligence arena. Traditional market intelligence organizations or advertising agencies perform market research on behaviors, attitudes, and beliefs of customers. Now they’re dipping a toe in competitive intelligence (CI). Or, at times, management consulting firms might try to position what they do as intelligence gathering.

Displaced workers, especially in the wake of COVID, might feel there’s a low barrier to entry in the intelligence field. They have a phone and computer, but they don’t necessarily have the experience or the resources to deliver on some engagements, which can be quite complex and global at times.

So how does someone figure out who the best company is to hire?

Look for subject-matter expertise. Does the intelligence firm have individuals on staff who are part of a team that understands your industry and can combine that understanding with the knowledge of how to collect and analyze intelligence, and make strategic connections?

In addition to evaluating leadership, stability, and experience, look at the firm’s overall approach. Be sure it offers proven, solutions-oriented methodologies.

Consider project management agility. You want a firm that delivers projects on time, on target, and on budget, and can pivot as necessary while still a managing complex engagement. Some intelligence projects are brief, or ad hoc, but many involve multiple companies and varying scopes in different regions of the world. An experienced staff, strong networks and external relationships are often needed to pull together the multitude of fragments an engagement can require.

Like with everything, you get what you pay for. You can hire individuals who have a bit of experience, but if you want experts who live and breathe around being able to capture and analyze actionable market competitive and customer intelligence and to support decisions, then Proactive is one that specializes in that area.


David got into the intelligence field when it was just emerging. That was 1990, although the concept itself has been around forever. Imagine one caveman watching another make fire and thinking, “Hey, I’m going to copy that, and I’m going to make my fire better.” Observation and benchmarking.

David was studying political science and had every intention to pursue law school but fell in love with the idea of trying to understand competitive strategy and how some companies succeed and others don’t in particular markets. He started out doing secondary research, however, there wasn’t much published information at the time.

Those were the days of requesting annual reports from publicly held companies, waiting for two weeks for it to arrive in the mail, and determining the right executives to call. No LinkedIn or Google; you went to a library to and read microfilm.

David conducted his primary research by getting on the phone, going to conferences, talking to people and building a network using different types of conversational techniques to coax individuals into opening up.

He and Gary started working in the field about a month apart from each other, both doing research and analysis, then project management, and then ultimately consultative sales before deciding to start Proactive.

Today, nearly every Fortune 500 company has some type of an intelligence capability. Some may call it business insights. Regardless of how they define it, companies find it difficult to survive these days without understanding their market, customers and competition.


When a pharmaceutical company hears a brand product rumor, it’s not uncommon to want more information. When will the brand go off patent? Which generic will emerge to compete against it, and when will it actually reach the marketplace?

A few years back, a Proactive client heard a rumor from a distributor that the day after a brand product was going off patent, the company would launch its generic. The client was hesitant about making a $40-50,000 investment to uncover and discover whether or not there was any merit to this rumor. The client felt it had a reliable source in this distributor and decided not to make the investment to learn more. The client decided to launch its own generic preemptively, right before its own branded product was going off patent.

As the client waited and watched for the competitor’s generic launch, it never quite emerged, and in fact eight months passed before that competitor launched its generic product. At the time, the client was making around $7 million a month on the product and had cannibalized approximately $56 million by not investing $40-50,000 to uncover the truth.

That’s the power of possessing competitive intelligence to inform a new strategy or a new distribution or business model, or to better understand a new, emerging non-traditional competitor coming into a space. Gaining insights might influence or even derail a plan, or change the mix of on offensive and defensive strategy. Receiving input in advance of things actually happening can provide likely future scenarios and reveal which scenario is more plausible based on certain indicators. That’s the real value of how intelligence can impact strategic thinking.

As Gary has often said, what we do is bridge the gap between guessing and knowing.


One of the most dominant methodologies a skilled intelligence organization can apply comes from professor Paul Kinsinger, who used to teach at Thunderbird’s graduate school in the field of intelligence: Find it out versus figure it out.

There’s a lot of information on the market and customers, on suppliers, on regulatory bodies, on the economy, and certainly on competitors that you can find out. There’s other information, either not well-published or a little more sensitive that may form from building blocks, and you have to figure it out.

In that light, a lot of intelligence is about putting together pieces of a puzzle. Being able to tell the story and figure out the answer. If you wanted to figure out the P & L on a privately held company, you’re probably not going to get an income statement. But you can get a sense of its sales volume or operating income. You can begin to understand how the company might compare to the typical average net income in that industry and piece together some key components through assumptions and modeling to figure out the answer.

You can’t always achieve 100 percent accuracy. That would be better known as fact, and we’re not talking about fact. We’re talking about intelligence. We look at prospective versus precision, a concept learned many years ago from Kirk Tyson. Prospective always exists, not precision. When considering the challenges, think in context of finding a company’s revenues for a particular line of business. Does it really matter if I tell you it’s between $100-110 million or precisely $102.7 million? Does it change your decision? You could get a prospective number and still make a highly informed decision.


Proactive Worldwide consults in three core categories:

  • Strategic Planning: Better understanding transformational business model
  • Scenario Planning: Exploring best case/worst case futures and better preparing for which might come true and what to do about it.
  • War Gaming: Pressure-testing existing strategy or creating new strategies to be able to better prepare by role playing the competition.
  • Training: Proactive partners with SCIP, Strategic and Competitive Intelligence Professionals, providers of SCIP’s CI-100 certification class in North America.

Proactive also provides private training for corporate clients who want a more customized approach.

Proactive also has software partnerships to help provide an aggregator tool that allows for a central repository of intelligence.

Proactive’s focus on customer intelligence includes everything from customer experience or user experience, to voice of customer and digital strategy.


David and Gary are Chicago crosstown baseball fans. When they attended the White Sox World Series together in 2005, a grand slam by Sox’s Paul Konerko crystalized for David a tenet of business intelligence.

In the far left-field stands, a big steel sign contained the word “Fundamentals.”

Seeing that sign while enjoying a once-in-a-lifetime moment with his friend and co-founder was a moving moment for David because he realized it as the source of their success: doing the fundamentals well matters.

High-quality outcomes, exceptional client service, and being responsive.

Following the fundamentals of respect and professionalism and some common sense is the key driver. As David says “If you and your client embrace fundamentals, you usually both come away as winners.”

The Essential Guide to State Marijuana Legislation

essential guide to state marijuana legislation

While cannabis legalization gains momentum nationwide, its major reforms continue to occur on a state-by-state level — not federally.

This increasing cannabis legalization mirrors the wider opinions of the American population, 67% of whom believe the purchase and use of cannabis should be legal for adults. This figure represents a distinct shift in consumer consciousness. In 2000, only 31% said medical and recreational marijuana should be legalized.

How can businesses respond to the undeniable opportunities in today’s emerging consumer cannabis market while navigating state-by-state differences in laws, licenses, usage parameters, product restrictions and more?

This report traces how state legislative trends affect marijuana- or cannabis-related businesses (MRB or CRB), both plant-touching and ancillary. It reviews:

  • Prevailing cannabis laws across legalized states.
  • Major differences in marijuana-related state legislation.
  • Medical, recreational and ancillary cannabis products experiencing the largest data-backed market demand.
  • Upcoming bills and forecasted legislative trends regarding medical and recreational cannabis.
  • Future trends in cannabis reform, plus its direct business impact.

The State of Cannabis Laws Across the United States

Cannabis remains a Schedule I drug under the Drug Enforcement Agency’s classification system. States, however, possess the authority to ignore DEA enforcement and spearhead major policy reform regarding cannabis usage, both recreationally and medically. Over 30 states, as well as Washington, D.C., have legalized medical marijuana, with 11 of these states and Washington also permitting recreational cannabis usage.

To understand the tapestry of marijuana laws by state, we must first review the six categories, or stages, of legalization currently quilting contemporary cannabis policy. Every state in the nation currently sits in one of these six stages.

  1. No legalized cannabis usage. States in Stage One do not permit medical or recreational cannabis legalization. Many maintain jail sentencing for even minor possession of cannabis.
  2. Legalized medical marijuana use only. The most pervasive and widespread legalization of cannabis, Stage Two laws legalize cannabis usage for prescription medication, patient treatments and pharmaceutical or medical research.
  3. Elimination of jail sentencing for cannabis possession. States in Stage Three have eliminated criminal prosecution and jail sentencing for possessing small amounts of cannabis.
  4. Medical marijuana and cannabis criminal reform. States in Stage Four cannabis reform have legalized medical marijuana as well as passed criminal-justice measures to decriminalize possession and, in some cases, expunge possession from criminal records.
  5. Legalized recreational and medical cannabis use. Stage Five cannabis legalization permits adult recreational and medical consumption of marijuana and marijuana-derived products.
  6. Legalized recreational and medical cannabis use across purchased and home-grown cannabis. Currently, Vermont, as well as Washington, D.C., permit home-grown cannabis consumption but have caps on the number of marijuana plants that can be cultivated residentially.

Tracking the legalization stages in your home state is pivotal to noting regulatory trends and its potential business impact, from developing business opportunities to changes in business tax rates, filings, banking options and industry-governing agencies.

1. Common Cannabis Laws by State

States beginning a cannabis legalization reform process must address several legal questions directing the activities of MRBs and CRBs.

who can grow, cultivate, test, retail and use cannabis and cannabis derivates

In particular, states must answer who can grow, cultivate, test, retail and use cannabis and cannabis derivates. Tackling this involves each state setting the following common cannabis regulatory frameworks:

  • Age restrictions: Cannabis users must be 21 or older in all 11 states and the District of Columbia, where recreational use is permitted. Some states impose civil or criminal penalties for minors caught using cannabis.
  • Purchase and possession limits: Most states impose purchase and possession limits around an ounce (around 30 grams) for cannabis, though amounts and discrepancies exist. For example, Michigan allows up to 10 ounces to be kept at home, so long as amounts over 2.5 ounces remain in a secure, locked location away from minors.
  • Tax rates: States set various taxes on marijuana flowers, trims, leaves and cannabis-infused products affecting nearly every MRB in the cannabis supply chain. Some states add a specific marijuana sales tax to regular state and local sales taxes.
  • Business licenses: Businesses looking to enter the cannabis market must apply for specific licenses with their state’s appropriate regulatory agency. MRB/CRB-related business licenses span cultivators and growers, manufacturers, trimmers, testers, distributors and wholesale and traditional retailers.
  • Licensing timeline: Each state implements a review process that organizations undergo when applying for a legal cannabis business license. Application criteria, standards, qualifications, fees and exemptions vary by state, as does the expected licensing timeline.
  • Seed-to-sale tracking: The majority of states regulating marijuana like alcohol utilize a commercial database that tracks every cannabis product cultivated and sold in its borders. This is done through seed-to-sale software, which direct and ancillary MRBs and government agencies alike use to track marijuana cultivation locations, batch numbers, transit and distribution, product security, product testing, labeling and the final sales of cannabis and cannabis-derived products.
  • Consumption locations: Most states allow cannabis and cannabis derivatives to be consumed only in private residences, while others permit consumption in designated public spaces and venues as well as on-site retail consumption.
  • Delivery: California, Colorado, Michigan, Nevada and Oregon currently allow some variation of direct medical as well as adult consumer deliveries.
  • Overseeing agency: States appoint a designated agency to oversee the legal frameworks for its cannabis industry, such as Massachusett’s Cannabis Control Commission, or fold cannabis regulation into an existing regulatory body, as with Nevada’s Department of Taxation.

2. State and Regional Discrepancies in State Cannabis Laws

While sensible cannabis regulations overlap more than they differ, states still maintain some key variations. These legal discrepancies are just as important to note, particularly for ancillary MRBs or business owners looking to enter the ancillary cannabis commercial space.

  • Distribution: Legal distribution channels for cannabis vary significantly by state. Who’s allowed to transport marijuana flowers, trims, leaves and derivatives, as well as where they can deliver and store these products, continues to cause serious business confusion amongst growers and retailers alike attempting to connect their operations along a streamlined supply chain.
  • Mandatory vertical integration or deintegration: Some states currently require CRBs/MRBs to hold multiple types of business licenses to operate legally. This mandated vertical integration has been complicated by a recent trend to deintegrate state cannabis supply chain, spearheaded by states like Washington. Furthermore, other states, such as Colorado, give business owners free rein to apply for as many business licenses as desired to control as many aspects of its supply chain deemed relevant and profitable.
  • Home cultivation: States also continue reinforcing a hodge-podge mix of laws pertaining to growing marijuana at home. These conflicting laws cover whether home-cultivated cannabis can be for recreational or only medicinal use, the number of plants that can be grown at home, plant maturity, the security of plants away from minors as well as if residential flowering plants need to be identified in the state’s seed-to-sale registry.

Legal Product Trends in the CRB-MRB Industry

Legal Product Trends in the CRB/MRB Industry

Even within today’s patchwork of cannabis laws, entrepreneurs are finding highly profitable product niches in the wider cannabis industry. These cannabis-related products below are particularly valuable pieces in today’s “green rush” puzzle — and forecasted only to grow more so.

  1. Seed-to-sale software: Seed-to-sale software is at the center of each state’s regulated cannabis retail sales. Advancements in software would make it easier for startups along the marijuana supply chain to legally and profitably operate in their state’s industry, identify their products and stay in-tune with ever-changing legislation.
  2. Cannabis-derived products: Products made from non-psychoactive components of the cannabis plant, such as cannabidiol (CBD) products, represent a burgeoning market legal in all 50 states. These include CBD extractions, tinctures, oils, edibles, vaporizers, concentrates and hemp, the latter of which constitutes its own web of commercial goods.
  3. Closed-loop hydroponic systems: Hydroponic systems and similar greenhouse equipment unlock commercial-scale cannabis cultivation year-round. These eco-friendly closed-loop systems are a must for cultivators operating in many regions of the United States.
  4. CRB fintech solutions: Federal laws currently prohibit FDIC-insured banks from working with MRBs. As a result, MRBs are a predominantly — and precariously — cash-dominated industry whose only real alternatives are non-bank money-management tools in the form of apps and cryptocurrencies.

Major Upcoming Cannabis Legislation

These laws in the works at the state level represent major policy shifts that will help stabilize — and standardize — legal commercial cannabis operations in the United States. For business owners, these are particularly important pieces of legislation to track as state legislators return to normal sessions.

1. The STATES Act

The Strengthening the Tenth Amendment Through Entrusting States, or simply the STATES Act, would officially end federal obstruction over states regulating medical and recreational marijuana use. At its core, the STATES Act permits all states to create exemptions from the Controlled Substances Act (CSA), which classifies cannabis as a Schedule I drug.

What’s more, the STATES Act augments protections for banks serving CRBs/MRBs, which was passed under the SAFE (Secure and Fair Enforcement) Banking Act in September 2019. The SAFE Act seeks to eliminate federal prosecution of banks providing services to legally registered cannabis businesses. At present, banking hurdles represent one of the largest pain points in the legal commercial cannabis industry, since FDIC-insured institutions are barred from conducting any business with cannabis organizations.

The STATES Act currently maintains bipartisan support in its twin House and Senate Bills, holding 206 cosponsors in the former and 33 cosponsors in the latter.

2. Cannabis Legalization and Regulation Bills

Currently, 22 states, as well as the U.S. Virgin Islands, have bills in session to legalize cannabis for medical and/or recreational purposes as well as bills related to regulated medical or recreational cannabis.

Bills of note include:

  • Vermont: An extensive modification to Vermont’s current cannabis legalization legislation, S. 54, seeks to harmonize disparate sales and consumption laws. Specifically, the measure will also propose a standardized statewide sales policy, broadening Vermont’s current legalization of cannabis possession beyond home cultivation.
  • Minnesota, Delaware, Hawaii and Maryland: Each has hallmark bills awaiting session widening medical and/or recreational usage for adults.
  • Iowa and Wisconsin: Iowa has reintroduced comprehensive medical marijuana legislative acts through two bills of note, SF 469 and HF 2208, while Wisconsin’s SB377, AB 220 and AB 930 would also move the state toward medical marijuana legalization. If passed when sessions resume, these bills represent a turning point for two the most historically stubborn Midwest states to join the contemporary cannabis industry.

3. Bills to Decriminalize Cannabis Possession

Thirteen states have decriminalization and cannabis judicial reform bills up for a vote

Thirteen states have decriminalization and cannabis judicial reform bills up for a vote. These 13 join the 26 other states and Washington, D.C., to legalize cannabis possession for commercial and/or consumption uses.

Decriminalization bills of note include:

  • Tennessee: Tennessee has four bills in the running to legalize possession of cannabis under one ounce. However, the state has yet to pass bills legalizing the regulated sales or commercial cultivation of cannabis statewide — a major hiccup for its commercial cannabis industry growth.
  • New Jersey: New Jersey lawmakers will be voting remotely on bills S 2101, S 312, and A 1897, which — if passed — would remove jail sentence for cannabis possession and instead impose civil fines.
  • Kentucky, Virginia and South Carolina: This trio of southern states continues the region’s progression towards cannabis reform, with bills specifically removing jail sentencing for first-time possession as well as possible records expungement or resentencing for misdemeanors.

4. Bills to Expand Medical Marijuana Uses, Research

Comprehensive medical cannabis legislation seeks to validate the medical applications of cannabis. In addition, this type of bill can widen qualifying patient access to cannabis and cannabis derivatives by setting up realistic dispensary and home cultivation regulations or rectifying contradictory state laws.

Twelve states currently have such comprehensive medical cannabis bills up for a vote, joining the 33 other states as well as Washington, D.C., with legalized medical marijuana. Those bills of note include:

  • Nebraska: The state legislature’s Judiciary Committee removed jail sentencing for possession and passed LB 110 to adopt a statewide medical cannabis act.
  • Iowa, Wisconsin and Kansas: Multiple bills with votes currently postponed would permit medical marijuana adult usage amongst patients registered in respective statewide systems, with Kansas’ and Wisconsin’s governors particularly vocal in their support of pro-medical marijuana legislation.

The Future of Marijuana Legalization

What trends can business owners and entrepreneurs reasonably forecast for impending state cannabis laws? Several stand out among industry analysts.

  • FDA reclassification: The FDA’s reclassification of cannabis from a Schedule I to Schedule II, III or IV drug seems inevitable. The looming passage of the STATES Act, along with current FDA efforts to evaluate cannabis’ marketing, intrastate transit and export laws supports this impending reclassification.
  • Federal-level cannabis clarity, reform:According to reports from Politico and PEW, 296 current Congress members — over two-thirds of representatives — come from the 33 states in Stage Two or higher cannabis reform, meaning their states maintain some form of legal medical usage. This represents an inflection point in potential federal-level changes in laws. Congress may begin passing bills that harmonize, or at least clarify, its many convoluted and contradictory marijuana statutes, including the possible transportation of cannabis across state lines.
  • Passage of the SAFE Banking Act: Passing the SAFE Banking Act would unleash tremendous new capital opportunities for existing MRBs and entrepreneurs looking to enter the direct or ancillary MRB space, as well as bring security and transparency to an industry forced to operate mostly by cash. The SAFE Banking Act also provides long-overdue protections to FDIC-insured banks that work with any MRB/CRB, reducing legal risks.
  • Increased demand for CBD: CBD is one of hundreds of natural chemical compounds occurring in cannabis plants. It is also non-psychoactive — unlike THC, its more controversial psychoactive chemical cousin — and is therefore decriminalized in all 50 states. In 2019, CBD product sales increased by over 133%. By 2024, industry analysts calculate CBD retail sales will surpass $10 billion — and that’s for CBD oils alone  no other forms of cannabis-derived products.
  • Cultivation limits: As cannabis usage laws pass in more states, experts foresee increased regulations on the size of cultivation operations. Already, this trend can be seen in states like California, where laws restrict the size of cannabis-growing farms in attempts to create controllable and traceable cannabis seed-to-sale models as well as bolster fair competition amongst registered growers.

Understand How State Marijuana Laws Impact Your Business Prospects

Banking restrictions, alongside an inconsistent regulatory ecosystem differing state by state, have stymied commercial cannabis entrepreneurship.

Understand the full implications of entering the cannabis market, including direct production, distribution, sales or vendor partnerships, with our report “Marijuana Money: Can We Take It to the Bank? The Future Is Hazy.”

This, and other Proactive Worldwide syndicated reports, offer unprecedented levels of information and data into key market questions you won’t find elsewhere. View our syndicated report library for immediately actionable insights across trending industry topics.

Understand the full implications of entering the cannabis market


Proactive Worldwide

icon-angle icon-bars icon-times