(4.1) Market intelligence... a full time job or not?

I am often asked, by any type of company, whether a strategic market intelligence function requires a full-time employee, or whether it should be part of the responsibilities of an existing function. There is obviously not a clear-cut answer to this question. Much depends on the type of business you are in, the size of your company, the competitiveness of the markets you serve. But, perhaps most of all, much depends on the level of strategic impact you want this function to have. If you want someone who buys reports, read and digest them and present a summary of his findings, you might do with a junior art-time employee. If you want this team to have strategic input, bring ideas for innovation and set the long-term priorities for the company, you will probably need a slightly more sophisticated professional, perhaps even a bigger team.

This chart summarizes the different intelligence practices on their way to strategic relevance:

In fact, any combination of the functions in this chart are possible. In a medium-sized retail business in a company with limited geographic scope you might have one single person incorporating all of these functions (if he manages to perform them all thoroughly is a different matter), while in a global consumer electronics company you might find these functions performed by tens of people, sometimes even spread across different business units.

The true question you need to answer in order to decide how many resources to put on market intelligence, is how many of the activities and intelligence areas here under are genuinely strategic and of vital importance to your business:

This is a –tentative- list of activities that relate to external market views, so it does not take into account Business Intelligence activities, that often fall under the responsibility of the Finance department, although as said my personal conviction is that business intelligence can only fully realize its potential if it is combined with market intelligence. But that is another story.

The point here is that dependent on your specific situation the strategic relevance of the activities in the list will vary. If you are a in the online retail business quite obviously the customer insights activity will be of more vital importance than, say, scenario planning. If you are active in many countries globally it is more important to have someone monitoring the economies of these countries than if you were only active in a specific region. Companies in the energy or health care sector will need to put more emphasis on megatrend analysis and scenario planning in comparison to, for instance, an entertainment business.

Another factor to take into consideration is the amount of market intelligence activities currently performed throughout the organization, but not necessarily under a specific market intelligence denomination. Chances are that your sales and marketing teams already perform some extensive competitive assessments, or that your product managers  are in fact skilled trendwatchers. In some cases, a centralized market intelligence person or team might take a lot of burden away from people who are performing such tasks next to their core responsibility. While it is difficult to measure, the time-savings a central market intelligence person or team will cause with other teams should certainly be part of the equation. After all, you probably prefer your sales teams to work on their relationships with their accounts rather than spend time reading market reports and mess around with spreadsheets.

However difficult it is to put an exact figure on how much market intelligence resources one should have, there is a general rule to be distinguished here: the higher you score on following factors, the more market intelligence resources you would require:

• Number of countries in which you are present;
• Number of competitors (direct or through substitutes);
• Number of products and services you bring to market;
• Diversity of your sales channels;
• The importance of customer loyalty for your business;
• The impact of the economic environment on your turnover;
• Number of clients that generate the majority of you turnover and/or profit;
• The amount of time other teams are spending on market intelligence activities.