Market and Competitive Intel in Governance Intelligence

11/05/2019
Kerie Kerstetter
The last five years have seen directors across the globe succumb to the effects of the information paradox. The amount of information available online offers unprecedented value in guiding organizational strategy. Yet, the more data there is to guide a decision, there more "noise" exists to distract from it. As such, boardrooms have become the quarantine zones of decision-makers plagued with a pandemic of "analysis paralysis". This "information suffocation" has increasingly impeded directors' ability to engage in proactive governance. In many markets, the competitor to come out on top is the one who acts first.
 
Governance intelligence is a methodology aimed at helping board members and their advisers—a general counsel (GC) or corporate secretary (CoSec)—as they cut through the noise to actionable insights. The methodology lays out a structured approach to the collection, curation, and synthesis of market and competitive intelligence. The approach aims to accomplish two objectives:
  1. Empower decision-makers to read less and learn more.
  2. Synthesize insights which are effective in informing a director's decision-making or proposing a course of action.
To achieve the aims of the governance intel methodology, it's important to understand the two forms of intelligence leveraged to guide proactive decisions in the boardroom. Beyond that, it's essential to grasp the distinctions between the two. While competitive intelligence and market intelligence are often used interchangeably, their subtle differences can play an important role in refining the parameters of a search query to include only the most relevant results. Understanding these distinctions also equips board members and advisers with the knowledge to exercise more granular control when applying the best practices of governance intelligence. This article focuses on diving deeper into the distinctions between competitive and market intelligence to leave you with a stronger sense of how they can be applied to drive proactive decisions from the boardroom to the c-suite.

What is Competitive Intelligence?

Competitive intel is business-focused. 96% of businesses list competitive intelligence as being instrumental to their success. 80% report having one or more employees to dedicated to the collection and interpretation of competitive intel. The term is slightly more intuitive in its connotation than market intelligence. This form of intel is widely used to understand a company's market competitors (including their strategies, SWOT, market share, etc.).
In many cases, competitive intelligence targets a single company with which an organization competes. Companies use competitive intelligence to understand the strengths, weaknesses, strategy, and market share of their competitors. This type of intelligence can take many forms, including:
  • Market size, share, and saturation
  • Economic curves (supply, demand, and cost)
  • Public sentiment (social media metrics and chatter)
  • Press releases and media coverage surrounding their products and services
Competitive intelligence is more broadly applied when assessing the competitive landscape in which a company exists (or into which the company is about to enter). The scope of competitive intelligence is flexible. It can be broad enough to include all the companies competing within a given market or market segment. However, the scope can be so narrow as to focus on only a single company with which an organization competes. Competitive intelligence plays a critical role in helping organizations navigate that space, helping decision-makers steer a firm away from risks and towards any opportunities for growth which have yet to be explored.

What is Market Intelligence?

Market intelligence is consumer-focused. In other words, data which falls under the umbrella of market intel focuses on strengthening decision-makers' understanding of a market through via consumer research. This often demands the collection of metrics related to:
  • Population statistics
  • Socioeconomic statistics
  • Consumer demographics
  • Product sales and demand
While competitive intelligence is primarily useful in growing your business in relation to its competitors, market intel plays an important role in ensuring your organization is effectively meeting the needs of the market (i.e. a company relative to competitors versus a company relative to its own market). Market intelligence is particularly useful for guiding innovation, differentiation, and steering a company's entry into a particular market segment.

Applications in Governance Intelligence

The best practices of governance intel leverage insights derived from competitive and market intelligence to inform directors' decision-making or suggest a course of action. There are just as many opportunities to champion proactive governance after a board meets than as there are before. Ahead of board meetings, a general counsel or corporate secretary may choose to construct insights based on the meeting's agenda. Materials can be sent out well in advance to ensure directors are well-informed upon entering into deliberation. The construction of insights ahead of a board meeting typically calls for the active collection of governance intel, meaning insights are constructed using competitive and market intelligence focused on informing specific boardroom decisions or proposing courses of action in response to a specific challenge the organization is facing. The passive collection of insights used in governance intelligence refers to the monitoring of developments at the competitor, market, or industry level for which the organization may need to respond. Competitive intelligence plays a larger role in the passive collection of governance insights, as this form of intel places a stronger emphasis on more immediate shifts and events for which an organization's response will likely depend (in large part) on the responses of in-market competitors.

Passive Collection: The "Pond" Analogy

Imagine your organization and its competitors as leaves floating on a pond. Developments at the industry or competitor level will send a ripple across the pond. The passive collection of competitive intelligence is more effective (than the collection of market intelligence) in informing decision-makers of the size of an incoming ripple and its proximity—relative to both your "leaf" and the "leaves" of your competitors. The effective application of competitive intelligence in the passive collection of governance intel helps decision-makers determine how, if at all, the organization will need to respond well before the "ripple" reaches your "leaf".

Key Takeaways

Competitive intel is useful in understanding the role of an organization relative to in-market competitors, while market intelligence is more frequently able to shed light on the role of an organization relative to the market itself. While both competitive and market intelligence are used in the governance intel methodology, competitive intel plays a larger role in passive collection—the ongoing monitoring efforts necessary for responding to developments at the industry or competitor level. Understanding key differences in competitive and market intelligence can be useful in guiding the construction of actionable insights under the governance intel methodology.