Contents:

Building and Sustaining Winning Competitive Intelligence Organizations EXECUTIVE SUMMARY 3 Introduction 3 Research Approach 3 Participating Companies 4 Figure S.1-Benchmark Class 4 Figure S.2-Interviewed Companies 5 Report Structure and Organization 6 Key Findings 6 Definitions 9 Data Segmentation 10 THE COMPETITIVE INTELLIGENCE VALUE CYCLE 11 Figure 1.1-Age of Participating Competitive Intelligence Organizations 11 Figure 1.2-Competitive Intelligence Value Cycle 13 Creating Competitive Intelligence Value 14 Figure 1.3-Competitive Intelligence Pyramid 19 Figure 1.4-Tactical vs. Strategic Competitive Intelligence Focus 19 Figure 1.5-Winning a Seat at the Strategy Discussion Table 20 Communicating Competitive Intelligence Value 20 Figure 1.6-Competitive Intelligence Success Strategies 22 EFFECTIVE CI STRUCTURE AND ALIGNMENT 23 Centralization of Function 23 Figure 2.1-Centralized vs. Decentralized Competitive Intelligence Structure 24 Figure 2.2-Centralization of Competitive Intelligence Function: All Companies 25 Figure 2.3-Centralization of Competitive Intelligence Function: Pharmaceutical Segment 26 Proximity of Function to Senior Leadership 27 Figure 2.4-Organizational Levels between Competitive Intelligence Head and CEO 28 Figure 2.5-Competitive Intelligence Reporting Lines 29 Figure 2.6-Competitive Intelligence Head Reporting Relationship 29 Figure 2.7-Leadership Rank Signals Status 29 Current Departmental Status & Alignment 30 Figure 2.8-Separate Competitive Intelligence Department Reporting Structure: All Companies 30 Figure 2.9-Competitive Intelligence Department Reporting: Pharmaceutical Segment 30 Figure 2.10-Integrated Competitive Intelligence Function Reporting Structure: All Companies 31 Ideal Departmental Home 31 Figure 2.11-Ideal Organizational Alignment for Competitive Intelligence 32 Figure 2.12-Pros and Cons: Reporting to CEO/Senior Leadership Team 33 Figure 2.13-Pros and Cons: Reporting to Business/Corporate Development Team 34 Figure 2.14-Pros and Cons: Reporting to Strategic Planning 35 Figure 2.15-Pros and Cons: Reporting to Market Research 36 Figure 2.16-Pros and Cons: Reporting to Marketing 37 Figure 2.17-Other Effective Reporting Structures 37 RESOURCE LEVELS 38 Operating Budget 38 Figure 3.1-Competitive Intelligence Operating Budget 38 Figure 3.2-Allocation of Competitive Intelligence Operating Budget 39 Figure 3.3-Competitive Intelligence Budgets Over Time 40 Staff Compensation 40 Figure 3.4-Average Base Salary: Competitive Intelligence Head 41 Figure 3.5-Average Base Salary: Senior/Exec Director 41 Figure 3.6-Average Base Salary: Director 42 Figure 3.7-Average Base Salary: Senior Manager 42 Figure 3.8-Average Base Salary: Manager 43 Figure 3.9-Average Base Salary: Analyst/Senior Analyst 43 FTE Numbers 44 Figure 3.10-Number of Competitive Intelligence FTEs 44 Staff Competencies, Skills, and Training 44 Figure 3.11-Key Attributes for Competitive Intelligence Employees 45 Figure 3.12-Competitive Intelligence Professional Characteristics 46 Figure 3.13-Competitive Intelligence Competencies: Benchmark Class 46 Figure 3.14-Competitive Intelligence Competencies: Pharma 47 Figure 3.15-Success Strategies: Leverage Team’s Strengths 50 Figure 3.16-Competitive Intelligence Training Hours 50 Outsourcing Competitive Intelligence Activities 51 Figure 3.17-Activities Outsourcing 52 Figure 3.18-Outsourcing Competitive Intelligence to Vendors 52 Figure 3.19-Offshore Outsourcing 53 Figure 3.20-Additional Activities 54 Competitive Intelligence Leadership 55 Figure 3.21-Competitive Intelligence Head: Years of Experience 56 Figure 3.22-Role of the Competitive Intelligence Head 56 Figure 3.23-Competitive Intelligence Head: Management Authority 57 Figure 3.24-Range of Activities Performed by the Competitive Intelligence Head 57 Figure 3.25-Volume of Activities Performed by the Competitive Intelligence Head 57 Figure 3.26-Job Level of the Competitive Intelligence Head 59 INTELLIGENCE SOURCES 60 Primary Competitive Intelligence Resources 60 Figure 4.1-Primary Information Sources: Benchmark Class 60 Figure 4.2-Primary Information Sources: Pharma Segment 61 Figure 4.3-Primary Information Sources: Non-Pharma 61 Figure 4.4-Spotlight: Tapping into Corporate Employees 62 Figure 4.5-Spotlight: Competitive Intelligence Hotline 65 Figure 4.6-Sales Force as a Source of Competitive Intelligence 66 Secondary Competitive Intelligence Resources 68 Figure 4.7-Secondary Information Sources: All Companies 69 Figure 4.8-Secondary Information Sources: Pharma Segment 70 Figure 4.9-Secondary Information Sources: Non-Pharma 70 HIGH IMPACT COMPETITIVE INTELLIGENCE ACTIVITIES 71 Top Five Activities 71 Figure 5.1-Importance of Competitive Intelligence Activities: All Companies 72 Figure 5.2-Importance of Competitive Intelligence Activities: Pharma Segment 72 Figure 5.3-Importance of Competitive Intelligence Activities: Non-Pharma Segment 73 Figure 5.4-Competitive Intelligence Responsibilities 73 Figure 5.5-Conference/Trade Show Intelligence Gathering Process 75 Figure 5.6-Early Warning Process 77 Productivity 77 Figure 5.7-Number of Company Products Supported by Competitive Intelligence 78 Figure 5.8-Number of Competitor Products Tracked 78 Figure 5.9-Number of Competitor Companies Tracked 79 EFFECTIVE STAKEHOLDER RELATIONSHIPS 80 Internal Competitive Intelligence Customers 80 Figure 6.1-Principal Competitive Intelligence Customers 80 Figure 6.2-Additional Competitive Intelligence Customers 81 Figure 6.3-Customers that Elevate the Role of Competitive Intelligence 82 Figure 6.4-Schedule Time with Key Executives 83 Figure 6.5-Executive Competitive Intelligence Customer Interaction 84 Figure 6.6-Serve All Internal Constituents 85 Figure 6.7-Cross-Functional Competitive Intelligence Input: Case Study 87 Teaming with Collaborators 87 Figure 6.8-Competitive Intelligence Collaborators 87 Figure 6.9-Competitive Intelligence Collaborators (cont’d) 88 Building Trust 92 Effective Communication Practices 95 Figure 6.10-Dissemination of Competitive Intelligence Findings 96 Figure 6.11-Effective Communication to Stakeholders: Summary 97 Figure 6.12-Stakeholder Communication Frequency: Summary 97 Use of Feedback and Evaluation Metrics 98 Figure 6.13-Feedback on Competitive Intelligence Performance 98 Response Matrix: Customer Groups that Elevate Competitive Intelligence Value 100 BEST PRACTICES MATRIX: COMMUNICATING AND SUSTAINING VALUE 102 BEST PRACTICES MATRIX: COMPETITIVE INTELLIGENCE MANAGEMENT 104 APPENDIX 1: STUDY PARTICIPANT DATA 105 Phase I 105 Figure A1.1-Benchmark Class-Study Phase I 105 Figure A1.2-Participant Interviews-Study Phase I 105 Figure A1.3-Participant Industry Profiles-Study Phase I 106 Figure A1.4-Participant Company Revenue-Study Phase I 106 Figure A1.5-Participant Answer Perspective-Study Phase I 107 Phase II 107 Figure A1.6-Benchmark Class-Study Phase II 107 Figure A1.7-Participant Industry Profiles-Study Phase II 108 Figure A1.8-Participant Answer Perspective-Study Phase II 108 Figure A1.9-Participants’ Job Titles-Phase II 109 Figure A1.10-Participant Industry and Competitive Intelligence Experience-Phase II 109 APPENDIX 2: SURVEY QUESTIONS 110 Phase I 110 Phase II 119 APPENDIX 3: FORMAT AND FREQUENCY PREFERENCES FOR CUSTOMER COMMUNICATIONS 124 Figure A3.1-CEO/Leadership Team Communication Methods 124 Figure A3.2-Franchise/Brand Mgmt Communication Methods 124 Figure A3.3-R&D Leadership Communication Methods 125 Figure A3.4-Field Sales Leadership Communication Methods 125 Figure A3.5-Strategic Planning Group Communication Methods 126 Figure A3.6-Managed Care/National Accts. Communication Methods 126 Figure A3.7-Line Staff Communication Methods 127 Figure A3.8-CEO/Leadership Team Communication Frequency 127 Figure A3.9-R&D Leadership Communication Frequency 128 Figure A3.10-Franchise/Brand Mgmt Communication Frequency 128 Figure A3.11-Managed Care/National Accts. Communication Frequency 129 Figure A3.12-Field Sales Leadership Communication Frequency 129

Companies Mentioned

- Amgen - Boehringer-Ingelheim - Boeing - Centocor - Citigroup - EDS - Eli Lilly - Fidelity Investments - IBM - Kraft - Merck - Motorola - Novartis - Procter & Gamble - Raytheon - Roche - Rockwell Collins - Sanofi-Aventis - Shire Pharmaceuticals - Takeda - Trane - Weyerhaeuser - Wyeth