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FULD & COMPANYThe Global Leader in Competitive Intelligence

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A Worldwide Survey of Corporate Intelligence Programs

From Stick Fetchers to World Class™

A Product of the Fuld & Company Global CI Benchmarking Project ©2007

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From Stick Fetchers to World Class Survey & White Paper A Worldwide Survey of Corporate Intelligence Programs

Produced with the support of The Fuld Gilad Herring Academy of Competitive Intelligence

From Stick Fetchers to World Class: Survey & White Paper 2

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TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................ 3 ABOUT THE SURVEY............................................................................................................................... 5 EXECUTIVE SUMMARY .......................................................................................................................... 8 A LOOK AT THE POPULATION – GENERAL FINDINGS............................................................... 10 THE STAGES: FROM “STICK FETCHING” TO “WORLD CLASS”............................................. 14

Stage 1: Who are the “Stick Fetchers”?............................................................................................. 14 Stage 2: Have You Reached the “Pilot” Stage? ................................................................................. 16 Stage 3: Would You Consider Yourself “Proficient”?........................................................................ 18 Stage 4: Have You Made it to the Pinnacle, “World Class”? ............................................................ 19

RECOMMENDATIONS: WHAT DOES IT ALL MEAN? ................................................................... 22 COMMENTS BY BEN GILAD AND JAN HERRING – THE FULD GILAD HERRING ACADEMY OF COMPETITIVE INTELLIGENCE ............................................................................. 24 APPENDIX A: THE SURVEY QUESTIONNAIRE.............................................................................. 26 APPENDIX B: “VANISHING CI UNIT” PRESS RELEASE ............................................................... 30 APPENDIX C: ARTICLE ......................................................................................................................... 32 FULD & COMPANY SERVICES ............................................................................................................ 33 FOR MORE INFORMATION.................................................................................................................. 35


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INTRODUCTION The rise of CI as a corporate discipline

Competitive intelligence (CI) is just over two decades old, but it plays a critical role in corporate decision making around the world. When done right, CI can be the catalyst for superior management, improved competitiveness, and even tangible bottom-line financial benefits.

Competitive intelligence as a corporate touchstone has grown in importance over the last number of years, becoming part of the corporate lexicon around the globe. Evidence of CI’s growing importance abounds: The number of news articles on competitive or competitor intelligence

multiplied from 68 in 1990 to 751 in 1998 to 4,081 in 2006, according to the Factiva information service.

The Society of Competitive Intelligence Professionals, founded in 1986, has a global membership of nearly 3,500 and has members who run the competitive intelligence programs in most of the Fortune 1,000 or FTSE 100.

The Academy of Competitive Intelligence has educated over 8,000 professionals from 28 countries and was the first organization to offer certification in competitive intelligence.

CEOs have begun to appreciate CI’s value. Bob Galvin, former Motorola CEO, began a pioneering CI program in the early 1980s modeled by companies around the world. Today Daniel Vasella of pharmaceutical giant Novartis states that CI is a critical component of his thinking process.

Empirical measurement of CI’s rise

Despite the apparent spike in CI activity, to date no one has truly explored CI’s critical success factors on a large scale. Since the mid-80s, when Fuld & Company first studied corporate intelligence programs, so much of how they succeeded or failed was anecdotal, the fundamentals not truly understood. Even more recently, a number of “best-in-class” reviews have appeared, but none examined more than a handful of firms. Moreover, in these studies, no one had empirically determined that the so-called best-in-class firms were in fact “best”; for the most part, these companies simply stepped forward, claimed they had a CI program that worked, and were willing to talk about it publicly. As admirable and helpful as these interviews appear, they may not offer a true picture of how a world-class operation works and what makes it successful.

Fuld & Company clearly saw a need in the CI marketplace to develop a more scientific and deeper assessment of the state of the CI discipline. In April


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2006, in order to expediently and relatively painlessly capture benchmark data from hundreds of companies across many time zones, we designed a Web-based survey appended to our company’s home page to solicit responses. We received well over 300 completed surveys from companies around the world. Of this number, we ultimately used 141 responses as the basis of our analysis and conclusions. The remaining surveys were eliminated from the data pool if they contained incomplete information, if the responding companies were too small, or if the respondents were students, academicians, or government officials. The final set of data is drawn from firms across the globe. Because of the relatively recent intense interest in competitive intelligence on the part of law firms, we included the legal industry as well and selected equivalent large to super-large law firms for this study. We believe that this self-assessment reflects the true conditions of the marketplace. At the same time, we do not believe in absolute answers. Rather, we ask that you consider the findings as a guide for your intelligence program. The authors would like to thank all those who participated from around the globe. In addition, we would like to thank Jan Herring and Ben Gilad, the other co-founders of the Fuld Gilad Herring Academy of Competitive Intelligence for their contributions over the years in helping us understand and appreciate the dynamics and demands of the corporate intelligence process. Their insights added significantly to our understanding of this important and growing corporate service.

Leonard M. Fuld President

Arjan Singh Vice President, Consulting Practice


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ABOUT THE SURVEY The results are based on self assessments received via a Web survey located on www.fuld.com . Fuld & Company did not interview or audit each respondent subsequent to receiving the survey. Each company’s response stood on its own merit. If multiple respondents from the same company participated, we averaged their answers to present one set of answers for each company. In most instances, multiple submissions from the same firm varied little.

The survey was divided into two parts: demographic questions and self-assessment questions.

Part I: Demographic Questions Industry represented Budget allocated to competitive intelligence Where CI reports Age of the program Region

Part II: Self-assessment Questions The self-assessment contained 11 multiple choice questions, each of which tested a key attribute of the respondent’s intelligence program:

1. Roles and responsibilities

2. Processes

3. Secondary research

4. Primary research

5. Analysis

6. People

7. Organization structure

8. CI awareness

9. Technology

10. Value perception

11. CI professionalism

For each program attribute, respondents were provided four possible answers, each representing a different level of effectiveness and sophistication. The answer that demonstrated the lowest level of sophistication was worth one point, while the answer that showed the highest level of sophistication was worth


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four points.1 Therefore, respondents could receive a minimum score of “11” if they chose the “stick fetching” response to all eleven questions. Similarly, the maximum score was 44 if the respondent selected the “world class” response to all 11 questions.

The full four-point scale was as follows:

Minimum score

Maximum score

11 20 30 40 44

Stick Fetching

Pilot Stage (21-30)

Proficient (31-40)

World Class (41-44)

Minimum score

Maximum score

11 20 30 40 44

Stick Fetching

Pilot Stage (21-30)

Proficient (31-40)

World Class (41-44)

The Four Intelligence Stages

The four stages of intelligence program evolution, as defined by Fuld & Company, are at the heart of this study. Each stage is described below: Stick Fetcher (Score 11-20): Such programs lack infrastructure and buy-in.

Some companies do limp along at this level for many years. They typically find that interest in intelligence waxes and wanes. Continuity and “corporate memory” suffer at this level. Often the person or persons in charge of the CI effort will leave or move to a different position, resulting in the collapse of the CI program. Many of these efforts never develop beyond this stage. The result: management often misses early warning signals, as well as misreading tactical signals in the marketplace.

Pilot (Score 21-30): An organization that has reached the Pilot stage is one whose management has begun to recognize CI programs and perhaps has even allocated budget specifically for CI. These competitive intelligence organizations have likely seen early “wins,” but generally have found their

1 A copy of the full survey, showing all four answers for each of the 11 questions, is included in the Appendix section of the report.

Note to reader: Competitive intelligence is an art and one that is filled with possibilities and few absolutes. In this study, we tried to anchor each of the demarcation points in a corporate intelligence program’s development by scoring and by descriptively labeling the service they provide for their corporation. We want to motivate, rather than discourage your efforts. For those of you who feel you are currently Stick Fetchers, we hope this study will offer you ideas for improving your program over the coming years. Be patient. Building a successful intelligence program takes time, as does most any supporting staff role in a company. The role of competitive intelligence organizations is increasingly important within large corporations. We hope this report helps you set your sights on moving along the CI proficiency continuum so that you and your company can reap CI’s powerful rewards.


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organizations react to market events, rather than use competitive intelligence to stay a step ahead of competitive activity. Such programs generally clear a path to achieve growth and sustainability. Pilot CI efforts are often spearheaded by a strong personality, a group leader, but that leader may have little infrastructure in place to support his/her efforts over the long term. In 1999, Fuld & Company issued a report called “The Vanishing CI Unit,” in which we described several organizations that had reached the Pilot stage, but failed to advance beyond that point despite two or more years of diligent effort.

Proficient (Score 31-40): A proficient CI organization is one in which the concept and value of competitive intelligence has become rooted, some career development has begun, and management has begun to take the CI efforts seriously and to call on the CI group for critical analysis. Yet, the CI efforts may still be spotty. Not all parts of the company that could use CI in fact do. A CI organization that is truly proficient is often more than three to five years into its development but needs structure, training, and process to achieve true success.

World Class (Score 41-44): No more than five percent of CI organizations can claim this level. A truly world class CI organization contains highly trained competitive intelligence professionals, with career planning or tracking in place. Most important, management in these companies believes that CI is critical to the firm’s competitive success.


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EXECUTIVE SUMMARY Companies continue to suffer from “intelligence amnesia”: Corporate

intelligence programs appear to rise and fall within the same companies. Many of the companies responding to the survey stated that they had just begun their intelligence efforts. We noted, however, that a large number of these same respondents were from companies that have at one time or another started at least one intelligence program.2 “The Vanishing CI Unit” (See Appendix A) is somewhat common, despite the fact that competitive intelligence continues to seed itself inside large corporations worldwide. The potential impact of this on again, off again pattern is loss of historical perspective on competitive conditions and the likelihood that vast pools of competitive knowledge will disappear.

The European Union (EU) and Latin American countries appear to have more staying power within their organizations than their counterparts in the United States or Canada. Approximately one-quarter of both EU and Latin American respondents reported that their intelligence programs have existed four years or longer. Such longevity is in sharp contrast to the United States or Canada where only 3% of respondents said their intelligence programs have existed for four or more years. While respondents were not asked the reason for this dramatic difference in the regions, we speculate that the short CI lifespan in US companies could be a function of the quarter-to-quarter pressure on US companies to produce strong shareholder returns, which results in more knee-jerk budget cuts, particularly staffing cuts of non-revenue generating personnel.

“Stick Fetchers” are young and poor: The research showed a clear link between low scores and two key factors: the age of the program and the size of its budget. Respondents whose low scores placed them in the stick fetching category generally had miserly budgets (less than $100,000) and were very young (less than one year old).

Too many companies plateau at pilot stage: Nearly half the respondents scored in the pilot stage and appeared to remain there for four or more years, indicating that they are in some way “stuck” because they may report into the wrong department, have insufficient budgets, or some other reason this survey did not identify. Although this study is a snapshot in time and not a longitudinal assessment, intelligence efforts that are more than four years old and still scoring in the Pilot stage indicate a loss of momentum.

“World Class” is a different species: It appears that world-class intelligence operations actually behave and are treated differently within their

2 Fuld & Company has worked with companies since the mid-1980s in building or enhancing their intelligence programs. In addition, through training programs we run through the Academy of Competitive Intelligence, we noted companies that had formerly established such programs over the past decade.


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companies than less evolved CI programs. This stature allows them to act in a true advisory and early warning role. More of them report directly to C-level executives, have generous budgets and have matured beyond the four-year mark.

Pharmaceutical firms may have climbed the organizational Mt. Everest: A far greater number of respondents from the pharmaceutical and healthcare industries report to senior management than respondents in any other industry. Reporting to “senior management,” as defined by the survey, includes reporting to the division or business unit VP or director, or a C-level executive.


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A LOOK AT THE POPULATION – GENERAL FINDINGS Industry averages show most companies score at the Pilot stage In order to segment the respondents in a meaningful way, we clustered the 141 companies into five major industry groups: 1. Financial and other services; 2. Legal (an industry group just beginning to express interest in CI and we felt

noteworthy enough to highlight in this report);

3. Manufacturing (including all types of products from industrial to consumer);

4. Pharmaceuticals (including biotechnology);

5. Technology (including a range from computer hardware and software, electronic devices of all types, and telecommunications).

The average score for all industries was 24, a Pilot stage score. The average pharmaceutical score was in line with other industries, but was derived from very different data. Rather than being generally clustered around the 27 mark, pharmaceutical respondents fell on either end of the scoring spectrum. Approximately half of these firms had just started their CI programs (they were Stick Fetchers with ratings of 20 or lower), while the other half were older and more advanced (on the World-Class end of the scale). Geography: Where you are located can make a difference For the last two decades, we have heard from many European companies how American companies have managed to jump start their intelligence programs, outshining Western European corporations. This may be a myth, according to the responses to this survey. While the average scores fell into the same range (Pilot stage) for all regions, dramatic regional differences arose with regard to an intelligence program’s budget and longevity. In the EU, 12% of respondents had $1 million-plus budgets, compared to only 6% in the US/Canada. On the low end of the budget spectrum, nearly all regions appear alike. Approximately one-half of respondents from US/Canada, the EU, and Asia/Middle East spend less than $100,000 on their CI budget. Latin America is the exception with only 25% of respondents spending the minimum.

Average Score by Industry

25

22

27

24

24 Financial ServicesLegalPharmaManufacturingTechnology


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A true dichotomy appeared in the Age category (once again, Age is a defining characteristic of World Class programs). All regions reported a high number of programs less than two years old (60% for the US/Canada; 71% for EU; 75% for Latin America; 88% for Asia/Middle East). The split in the regions occurred with those that stated their programs were older than four years. Only 3% of US/Canada programs claimed that distinction, compared with 29% of EU respondents. Reporting relationships: Is location also destiny? Experts in the CI field concur that in order for a CI program to truly impact the organization and survive the inevitable waves of budget cuts, it should report to senior levels of management. In this study, two industries stood out for having achieved this objective: 57% of pharmaceutical respondents and 43% of financial services respondents report to either VP or C-level executives.

Average Budget (in US Dollars) < 100,000 100-250K 250-500K

500K to 1MILL

1MILL to 2 MILL > 2 MILL

Financial Services 50% 18% 14% 18% 0% 0%Legal 64% 18% 9% 9% 0% 0%Pharma 38% 0% 38% 0% 13% 13%Manufacturing 26% 37% 5% 16% 5% 11%Technology 59% 13% 13% 6% 3% 6%

At the other end of the spectrum is the legal industry, where only 16% of

respondents report to VP or C-level executives. This could be in part because law firms are just beginning to explore this function, or possibly because law firm partners, the equivalent of C-level executives, have not yet accepted the function.

Overall, the most common home for a CI program is within the marketing department, reporting to the head of marketing. The next most common structure is for the CI group to report to a divisional/business unit VP. The legal and manufacturing sectors have the highest percentages of respondents

Programs More Than Four Years Old

3%

29%

25%

13%USA & Canada

EU

Latin America

Asia & Middle East


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reporting to marketing. As reported elsewhere in the study, marketing appears to be the first destination for newly established intelligence programs. Budget does make a difference While it is dangerous to assume that the more you spend on intelligence, the more sophisticated your process will become, the opposite may indeed prove true: the more sophisticated you become, the higher your budget allocation.

Over two-thirds (68%) of Stick Fetchers had budgets of less than $100,000, and only 8% in this category have budgets of over $500,000. In contrast, 35% of the Proficient programs and 33% of World Class programs had budgets over $500,000. Again, the industry that stands out for its large budgets is pharmaceuticals, with 26% of respondents spending $1 million or more annually on their competitive intelligence efforts. Manufacturing followed with 16% of respondents spending more than $1 million each year. Financial services and legal are the stingiest of the industries. No respondents from these industries have budgets that exceed $1 million. Those with the lowest budgets (less than $100,000) were legal (64%), technology (59%), and financial services (50%). Age and Intelligence Amnesia: Are intelligence programs reinventing themselves? More than half (65%) of respondents are involved in intelligence programs that are two years old or younger. Less than one-third (30%) worked in

Average Score by Budget (in US Dollars)

01020304050

< 100,

000

100-25

0K

250-50

0K

500K to

1MILL

1MILL

-2 MILL

> 2 MILL

Budget

Scor

e

Financial ServicesLegalPharma

ManufacturingTechnology


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programs four years old or older. At the same time, please note that while 80% of those reporting World Class scores had programs that had been in existence for four or more years; this does not “automatically correlate to a finding that older programs are, by definition, more sophisticated.” While it is true that most World Class programs do take time to mature, some programs that have existed for many years still struggle to succeed. Companies continue to grow their intelligence programs and then forget about or dismiss them at some point. Nearly half of all companies that claimed to have intelligence programs less than one year old in fact had intelligence programs in the past decade. Either Fuld & Company had consulted with them, or they had received training from our organization in order to build their intelligence capability. Current respondents are apparently unaware of such prior programs. This discontinuity among certain companies indicates that corporate

memory and competitive knowledge may be lost along the way, as one intelligence program ends and some time goes by before another manager rebuilds it without knowing what came before him. The “Vanishing CI Unit” study (Fuld & Company, 1999; see Appendix), acknowledged that very often intelligence programs just dissolve and disappear into the night: “The survey, based on the responses of more than 50 Fortune 500 companies, found that approximately 20% of all competitive intelligence units have been closed down.” The same “Vanishing CI Unit” dynamic still exists among many companies participating in the current survey.

Age of Intelligence Program

51%

14%5%

30%

Less than one year old

Less than tw o yearsold

Betw een tw o and fouryears old

More than four yearsold


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THE STAGES: FROM “STICK FETCHING” TO “WORLD CLASS” Stage 1: Who are the “Stick Fetchers”? Findings: Age: They are young

programs; 84% are less than one year old.

Budget: Their budgets are tiny by corporate standards. Most participants represented large, multinational companies, and yet 68% claimed their CI budgets were less than $100,000; another 16% reported budgets between $100,000 and $250,000.

Organization: This group had the largest percentage reporting to the marketing department (38%). Only 8% stated that they reported to a vice president or director, by far the lowest percentage of all groups.

Financial services “wins” the prize of having the highest percentage of Stick Fetchers (34%), followed by the broad category of manufacturing. The pharmaceutical industry category claimed the fewest Stick Fetchers (just 8%).

What the data told us As a whole, Stick Fetchers are a new, poorly understood group within corporations. Historically, many start-up competitive intelligence organizations have been placed under the command of marketing. Right or wrong, this appears to be the default spot for this new function. More advanced groups (the Proficient and World Class organizations discussed below) appear to have achieved a unique position, where CI is separate from but perhaps parallel to marketing. Competitive intelligence organizations positioned many layers beneath the company leadership are often described as “buried,” or too far removed from decision making to be able to deliver critical intelligence in a timely, unadulterated manner. As such, rather than being in a position to influence strategy, such CI programs lack potency and are relegated to gathering interesting but not necessarily impactful information—hence the label “Stick Fetchers.” In many cases, these groups have little or no contact with executive managers, who are ultimately the greatest beneficiaries of good intelligence.

"Stick Fetchers"

51%

14%5%

30%


Less than two years old

Between two and fouryears old



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A budget of less than

$100,000 (found to be the case in 68% of stick-fetcher respondents) barely supports one salary or, alternatively, a number of part-time efforts by a handful of individuals. At the same time, if such a small budget can scarcely cover salaries, little or nothing remains for travel to trade shows (a vital source of industry intelligence), training, purchase of published studies, hiring consultants, or nearly any other resource a company needs for an ongoing intelligence effort. Such organizations will have little opportunity to prove themselves. Many may never rise to any significance within an organization or they may take many years to do so, hampered principally (but not exclusively, as we will see) by a lack of reasonable funding. The fact that financial services organizations (included among this group were banks, credit card organizations, and insurance companies) have by far the largest number of Stick Fetchers is almost ironic. According to conventional wisdom, financial services organizations have outperformed many other industries in running top-notch CI programs. Our findings, however, seem to indicate that although there may be a handful of highly successful and well-known CI practitioners in financial services, these leaders may be the exception, not the rule. Tight budgets and understaffing, along with lack of contact with director-level or senior executives, may have relegated this large plurality of financial services intelligence organizations to the role of Stick Fetcher.

Stick Fetchers are typically subordinated within the corporation

Executive Offices

Division 1

Director Marketing

Assistant Dir. Marketing

Assistant Dir. Market Research

Director Sales

Manager of CI

Executive Offices

Division 1

Director Marketing

Assistant Dir. Marketing

Assistant Dir. Market Research

Director Sales

Manager of CI


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Stage 2: Have You Reached the “Pilot” Stage? Findings: Respondents who

scored at the Pilot stage were more mature, with only 36% of the total pool claiming they were less than one year old, a large drop from the 84% of Stick Fetchers who were less than one year old. The highest number of Pilot-stage respondents (42%) stated that their programs were more than four years old. Such longevity without truly progressing to a higher level of sophistication may reveal that some corporations have pigeon-holed CI as a lower level function (still worthy of continued funding, but not influential at high levels of management).

Pilot programs, like their Stick Fetching counterparts, have relatively small budgets with 55% claiming an operating budget of less than $250,000.

A relatively large percentage of Pilot programs (27%) report to the marketing department (again, similar to the 38% of Stick Fetchers). But the number of groups reporting to director and executive level jumped to 27%, in contrast to the 8% of Pilot respondents.

Technology companies have more programs at the Pilot stage than any other industry with 56% scoring at the Pilot level. The industry with the next highest number of Pilot scores was pharmaceuticals, with 38% of respondents in this range.

What the data told us One might compare an organization that has achieved the Pilot stage in its own self-analysis to a child that has just learned how to walk but cannot run. It has achieved a certain degree of independence, but still lacks complete freedom of movement. Its budget has grown, but not markedly. At the same time, senior executives have taken notice. Likely as not, Pilot-stage programs have quite a number of success stories that have drawn attention and kudos to the CI effort. They are now providing reports, formal or informal, to executives in their division or at headquarters.

Pilot-rated CI Programs Can Get "Stuck"

36%

19%3%

42%


Less than two yearsoldBetween two and fouryears old



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However, what should trouble those groups that have risen to the Pilot stage is the possibility that they can plateau and not move beyond some great success stories. The simple fact that 42% of Pilot stage respondents have had CI programs for four or more years is disturbing. There could be many reasons for this plateau effect. In some cases, it may be that a personality-driven competitive intelligence group is held in place by that single personality. It could be that the intelligence produced is too tactical, and not strategic enough to get the ear of senior decision makers. Possibly, the CI group has little infrastructure or process that can be passed to successors or readily understood by internal customers. If the way in which the CI group produces its intelligence is a mystery, that lack of clarity discourages customer acceptance and inhibits growth within the company. In other words, a customer that doesn’t understand the process will not likely buy the product – especially a product as ephemeral as competitive intelligence.

In our efforts to explain the high number of technology firms that fell into the Pilot stage, we did not find a definitive answer, but can speculate as to why these results occurred. The technology industry moves at a different pace than most others-faster. The well-known Moore’s Law, for example, postulates that computer chip manufacturers will be able to double the memory capacity of their chips literally every 18 months. Dynamics such as these place tremendous pressure on technology companies to experiment and change. Overall, only 29% of technology firms had CI programs that are four years old or older, the lowest percentage among all industry categories. Constant shakeups and restructurings are common and certainly inhibit the maturing of a competitive intelligence organization. Since the success of competitive intelligence organizations is so dependent on building networks of customers and contacts throughout a company and an industry, whipsawing managers, downsizing, moving personnel from one end of the company to another may do wonders for creativity or accountability, but will severely undermine the effectiveness of a company’s competitive intelligence program.

Industry and company shifts may be just one of the problems affecting the tech sector’s ability to build a better competitive intelligence process; the other is money. Nearly three-quarters of tech firms responding to this survey (72%) have budgets of less than $250,000. Considering the often large bets these companies make on new products and potential markets, their investment in competitive intelligence is extremely poor and, we believe, is the second factor playing into the “CI ceiling” it has reached.


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Stage 3: Would You Consider Yourself “Proficient”? Findings: Proficient competitive

intelligence programs exist in all industries. These are organizations that “get it right” most of the time. The one stand-out was the Pharmaceutical industry, where respondents were more polarized on the high and low ends of the scale, and only 3% scored in the Proficient range.

Half of the respondents who scored as Proficient (i.e., 31-40 points out of a possible total of 44) have had intelligence organizations in existence for four or more years.

Proficient CI groups represent the largest plurality of respondents with budgets over $500,000 per year with 30% having budgets between $500,000 and $1,000,000, as well as 5% between $1,000,000 and $2,000,000.

More business unit vice presidents or directors have “Proficient” competitive intelligence groups report to them than any other category.

What the data told us: Competitive intelligence groups with scores between 31 and 40 are on the cusp of achieving company-wide application of their services. They are recognized and valued by management. Financial services appears to present a contradiction here as an industry with the highest percentage of Proficient CI programs, while at the same time standing as the sector (along with Legal) with the lowest budget expenditure in CI. However, as stated in the budget section above, budgets alone do not guarantee a CI program’s success or demise over the long term. While throwing more money against any problem will not necessarily solve that problem, the more sophisticated and successful the intelligence program, the greater the likelihood that is it supported by a sizeable budget.

Proficient Stage by Industry

37%

13%3%27%

20% Financial Services

Legal

Pharma

Manufacturing

Tech


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Stage 4: Have You Made it to the Pinnacle, “World Class”? Findings Just over 5% of the

more than 140 respondents scored World Class.

The results varied widely from industry to industry. For example, not a single respondent in either the legal or manufacturing sectors scored a World Class rating. In financial services, 5% of respondents deemed their own efforts to be World Class, while only 3% of technology respondents made this claim. Pharmaceutical sector respondents ranked number one in this category, with 20% scoring at World Class levels.

Strikingly, 80% of programs that scored World Class had existed for more than four years. In sharp contrast, only 3% of Stick Fetchers were existence for more than four years, while 42% of Pilot programs and 50% of Proficient programs had survived past the four-year mark.

Budget also distinguished World Class CI operations, with 33% of those rating World Class having budgets of more than $2 million.

One-quarter (25%) of World Class respondents reported directly to C-level executives at corporate headquarters or within their division, with another 25% reporting to division or business unit VP (or equivalent director level). None reported to marketing, in contrast to Stick Fetchers where 38% reported to marketing.

What the data told us Although the responses from World Class operations appear markedly different from the other three classes, we hesitate to declare them absolute, mainly because the self-acknowledged group of respondents scoring 41+ points in the survey were relatively small, rendering them not statistically significant. Nevertheless, World Class operations appear to be in a league of their own. They have achieved everything those CI units that vanished were unable to achieve (see Appendix on “The Vanishing CI Unit”). The vast majority either

0% 10% 20% 30% 40% 50%

Financial Services

Legal

Pharma

Manufacturing

Technology

Comparison of Stick Fetchers vs. World Class by Industry

World Class 41-44

Stick Fetching 0-20


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report directly to senior management or are vetted by management. Irrespective of the fact that 25% stated they report to the C-Level and another 25% to VP level, 83% of the entire group of World Class scoring respondents selected the highest level for the “Roles and Responsibilities” attribute, which stated, “I would define my (or our) roles as a firm, agreed-upon service level agreement between the CI team and executive management.” Therefore, whether they report to the CEO or to a VP, in a vast majority of world class programs, senior management directly acknowledges and supports the CI program’s efforts.

This world class group delivers products their customers can use or may not even anticipate. They have achieved longevity that offers them the breathing room to plan, grow, train and mature staff. They can plan for succession and overall careers within the competitive intelligence group. They are an admired and independent organization within a company or a division, not reporting through marketing, for instance. Once again, we see a sharp contrast between the technology and pharmaceuticals industries. Few tech sector respondents (3%) were World Class, as opposed to 20% of pharmaceutical company respondents. This could very well be a reflection of the different mentalities and cultures entrenched within each industry. Tech companies certainly plan, but their horizons appear not to reach beyond a few years. In contrast, a pharmaceuticals company may spend 10 or 15 years developing a particular drug or biotech solution. This long-term R&D mentality does play out throughout everything a pharmaceutical company does and every aspect of research – including competitive intelligence research. Geography and culture may also have a strong impact on a program’s longevity. For instance, in the Demographics section, we noted that far more respondents from the European Union claimed their programs were at least four years old, while only 3% of North American participants could make the same claim. This disparity in CI lifespan may result from factors far removed from CI itself: first, people in Europe have historically been less mobile; second, firings or layoffs are less likely because of both culture and the regulatory systems in place. However, we can no more assert that where you locate an intelligence program will prolong its life than we can assert that eating yogurt will allow you to grow old. At the very beginning of this report we clearly stated the data in this study is indicative of trends in the competitive intelligence market. It is the most comprehensive report of its kind, but its findings are not statistically significant. Nonetheless, through our own experiences working with European companies, management teams there do appear to have a longer attention spans when it comes to investing in process. The longer an intelligence program is allowed to grow and mature, the better chance it will have to achieve World Class status. We must note, once again, that although sophisticated World Class programs do appear to have large budgets, it does not necessarily follow that large budgets automatically spawn World Class programs. It is in this area that pharmaceutical sector companies need to be careful. Pharmaceutical sector budgets tend to be larger than the other sectors (e.g., financial services).


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Sometimes, though, pharmaceutical sector companies do indeed throw lots of money against a problem to the point of overkill. Some of the best, most mature intelligence programs we have seen are also the leanest, particularly with regard to staff, which is the single largest line item in an intelligence budget.


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RECOMMENDATIONS: WHAT DOES IT ALL MEAN?

“What does it all mean?” is the elephant of a question we need to address

in this survey. Certainly, it is important to know what makes a company’s intelligence program proficient or world class. Also important to note is that each company and how it applies the ingredients of an intelligence program – personnel, investment in technology, long-term planning for the function – will differ considerably from other companies. CI programs invariably reflect the culture of the company and of the industry itself. Nevertheless, the survey does suggest a number of directions in which you and your company may want to go:

Look for vetting, not titles, on the way to World Class: As reported, most

World Class programs do not in fact report directly to the very top of the organization, C-level management. Their secret – unintended though it may be – is to gain the attention and approval of senior management for the competitive intelligence delivered. Of the clients we have worked with that have achieved a measure of world class status, they often soft-sell their efforts. They certainly tailor the deliverables to meet management needs. Most often, we have seen top-notch CI programs actually micro-market their CI products to a dozen or fewer senior managers. It is much easier to figure out how to serve a dozen customers than a sales force of hundreds, for example. If the VP of sales likes your intelligence report, its value will most likely trickle down to the troops.

Find ways to unstick your CI program: As mentioned above, Pilot programs appear to plateau, unable to move to the next rung of Proficient or World Class. Be mindful that CI is no different than any other product; you need to sell it. Companies that fail to constantly and aggressively sell their products or services will also find their sales plateau – at best. In this instance, your customer is a key manager inside your organization. Pilot programs may forget that customer needs change. You need constantly to ask yourself a series of marketing questions: Are you staying close to your internal customer, much as an outside sales person would attempt to do with your revenue generating customers? Are you innovating in your products, your deliverables? If my firm sold the same services today that it sold back in 1979, we would have very few buyers indeed. Why should your VP of Strategy, for instance, buy something that in today’s world appears unsophisticated or just a rehash of old material? That customer wants the latest thinking, the best trend or competitive analysis available.

Succession planning is essential to avoid CI program failure: One reason CI programs fail is certainly staff cutbacks, but another reason is the lack of leadership. While you cannot avoid the disruption caused by layoffs and turnover, you can avoid the other major reason, lack of succession planning. Most companies we have worked with do not plan for succession. They are led by a manager with drive, but if that person were to leave, the


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program would suffer or even fold. From the very beginning, your CI leader needs to consider grooming a replacement or seeking other CI leaders elsewhere in the company.

You need the right tools, and budget is one of them: While there is not a direct correlation between budget and success, it is clear that without adequate funding, you cannot run a consistent, productive CI program. As cited above, “Over two-thirds of Stick Fetchers (68%) had budgets of less than $100,000, and only 8% in this category had budgets of over $500,000.” How do you extract more money from the corporate coffers for your purposes? We cannot offer a magic key here, but we can tell you that by collecting success stories and informing your management of these CI-contributed victories, you will go a long way towards winning additional funding. Start by contacting your customers to ask them how your efforts have helped (and don’t send out a survey; talk to them). You may be pleasantly surprised at the answers. More important, if you act on the feedback obtained from your customers, you are much more likely to have satisfied customers willing to pay for your services.

How can Stick Fetchers move up? An internal CI operation contends with many of the same challenges as does an independent consulting firm. For one, how do you advance and grow while at the same time tending to your current customers? Customers keep you in business but they also keep you extremely busy, leaving little time for marketing. Again, we advise that you micro market your services. You will use whatever marketing time you do have more effectively by targeting your message to a small, well-focused customer group. Second, Stick Fetchers will not advance unless they can learn how to do more than just collect and retrieve information. World Class CI operations have learned how to provide sophisticated competitive analyses using the Porter Five-Forces model, value chain analyses, scenario planning, war gaming, and other framework that we have taught our graduates at the Academy for many years. They tell us that these analysis tools definitely help raise them above the level of Stick Fetchers. Even if most days all management needs is a rumor confirmed, there are other moments, critical moments, when management needs much more than that. It is specifically during those moments that you need to step up – and by doing so, move your organization to the next level of CI proficiency.


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COMMENTS BY BEN GILAD AND JAN HERRING – THE FULD GILAD HERRING ACADEMY OF COMPETITIVE INTELLIGENCE WHAT MAKES AN EFFECTIVE CI UNIT? HERE IS A NOVEL IDEA – I DON’T KNOW! By Dr. Ben Gilad Co-founder, Academy of Competitive Intelligence Fuld & Co. should be applauded for embarking on this ambitious and difficult effort to survey a large sample of companies and get a sense of trends in the CI world. From its study, we discover that only 5% of the companies have World Class units, defined by a set of internal measures of CI “sophistication.” Now comes the difficult part – aside from satisfying our natural voyeurism, what can you learn from this survey? Let me start with what you can’t. Are World Class units more successful than Stick Fetchers because of what they do? We don’t really know. Correlations, as Leonard Fuld notes, are not the same as causality. Furthermore, if success itself is conceived as effect on a company’s performance, we may not have a definitive answer. We would like to think that having early warning and using the best analytical tools and collection networks increase profitability by reducing risk. This is common sense but not science. However, not all is bleak. Fuld & Co.’s pioneering study provided me with one clear conclusion: being a World Class function is fun. You are influential, you are omnipresent, and people seek your opinions. That’s good enough for me to declare: you need a clear strategy of how to get to World Class or you will forever fetch sticks. Fetching sticks does not sound like much fun for humans, and that’s a scientific fact.


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WORLD CLASS – THE FEW, SUCCESSFUL AND ADMIRED By Jan P. Herring Co-founder, Academy of Competitive Intelligence After helping some fifty (50) firms to establish completely new intelligence organizations and advising over one hundred more on how to improve their operations effectiveness, I have come to the conclusion that executive leadership and corporate culture are the two dominant factors in creating a World Class intelligence program. Senior management’s understanding of intelligence as a management discipline is critical. Unless they know what it is, and how to use it, the chances of having an effective business or competitive intelligence (BI/CI) program is essentially nil. Corporate culture, the shared beliefs and values that a company’s employees hold, sets the framework for organizing and conducting the new and unique types of activities that CI professionals must perform in order to produce insightful and actionable intelligence. Having the right director/manager of intelligence is also important – but savvy executives will ensure that happens. And, when you have these key ingredients, i.e., an educated user, a professionally trained and experienced director of CI, and the appropriate BI/CI organizational model for the company’s culture and business, the results are truly World Class. And, all their competitors and peers know it!


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APPENDIX A: THE SURVEY QUESTIONNAIRE The survey was divided into two sections: Basic demographics for each respondent, such as program age, budget size, and so on; the second set of questions, eleven in all, represented each of the key attributes in an intelligence program. Part 1: Demographics:

I. Industry II. Budget III. Reporting relationship IV. Age of program V. Region/Location

Part 2: Program attributes

1. Roles and responsibilities: Whether I am a one-person intelligence department or have staff who work together to supply competitive intelligence to the organization, I would define my (or our roles) as:

Relatively undefined, with somewhat arbitrary, unstructured responsibility or focus

Currently evolving, receiving some direction from a senior-level sponsor

Defined with responsibilities understood by me and/or the CI team

A firm, agreed-upon service level agreement between the CI team and executive management

2. Process: Overall, I would describe our level of process that is in place as:

A lot of one-off requests from various managers, often with management just asking for answers without any feedback from me or my CI group

Key Intelligence Topics (KITs) have just been introduced. I have found a fairly steep learning curve for CI stakeholders – with our customers not really knowing what we can supply or the kinds of questions we should be answering

KITs are aligned with management, with all parties agreeing on our overall goals

We have embedded competitive intelligence to such an extent within our company that CI is very much a part of most major decisions


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3. Secondary research: This describes how my organization gathers all forms

of published data

The open Internet is used broadly across the organization and is virtually the only source of any type of available published information

We are beginning to explore other secondary sources, including proprietary databases, specialty publishers – other than what may be available for free on the Web

We have also built our own internal proprietary secondary information repository, which may include memos, special reports and analyses

We have a fully integrated blend of internal and external published information

4. Primary research: How much information do you collect from direct

interviews with experts outside the company or at trade shows or professional conferences, and so on?

If anybody does this collection, such as our sales force, it is for their own purposes and none of it is organized, easily located, or used

Our company recognizes the value of primary collection but may contract with outside consultants for it without doing any of this type of collection ourselves

We are beginning to develop an internal network of experts to collect primary information

We have a fully-integrated network and use of both internal and external experts whom we regularly tap into for information

5. Analysis: This describes a wide variety of qualitative and quantitative tools

and techniques that help to sort through and add value to the raw bits and pieces of information that drive decisions

We do little or no analysis. We just pass along either secondary or primary data

There is occasional use of analytical tools

We have identified and have begun to use certain specific tools to apply to regular ongoing analysis of the data we collect

We are both trained in and use a variety of advanced analytical tools


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6. People: How well trained and prepared are the people who work in or assist in the competitive intelligence function?

We have no formal CI staff. Our CI function consists mainly of volunteers and most of those are untrained in the field.

A sponsor or senior executive has carefully selected and nominated individuals whom he or she believes are very capable in developing competitive intelligence. This individual or individuals may have little or no training in competitive intelligence

We have trained CI practitioners working under known ethical and legal guidelines

We have experienced and trained CI practitioners throughout our company.

7. Organization structure: How well-defined is the competitive intelligence

organization within your company or business unit?

You can’t find CI (or its equivalent phrase) on our organization chart

CI is on our organization chart but somewhat buried, and not recognized by senior management (as far as we know)

The CI department is properly – but perhaps not ideally – placed and recognized within the organization

CI is optimally placed within one or multiple places throughout the organization

8. CI awareness: This describes how aware members of the organization are of

the competitive intelligence function or its services

Limited to a handful of individuals and driven by curiosity

Awareness of competitive intelligence suddenly increased because of a particular crisis or emergency

We have a sustained communications campaign to increase awareness of competitive intelligence

The CI concept has become embedded in job descriptions, performance appraisals and orientation or induction meetings throughout the company

9. Technology: How do you employ or deploy various forms of technology to

help you in your competitive intelligence program?

No special technology is used, other than the traditional intranet and Internet searching – nothing explicitly designed for competitive intelligence


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We recognize that technology is not a substitute for good process and good personnel but we are exploring its role

We have an existing and functioning intelligence process and are currently shopping for a technology vendor to integrate with it

We have a fully-developed technology (either home grown or purchased from an outside vendor) that functions well and is integrated with the rest of our competitive intelligence program

10. Value perception: How important is intelligence to your organization? How

much do your executives truly rely upon it?

CI has limited or no recognition?

Executives generally believe they need competitive intelligence but may not require it on a steady basis

CI is valued throughout the organization and managers ask themselves – even after the fact- whether or not they have used it in their decision making

Decisions cannot be made without actionable intelligence 11. CI professionalism: This particular attribute speaks directly to an

organization’s drive toward professionalism or building a career track in competitive intelligence

No evidence that my firm will aim toward professional recognition of competitive intelligence any time soon.

There is limited evidence based on our sending one or more individuals to professional training and education programs in this field

We have officially recognized an increased need for professional development and are assembling a training or development plan for those seeking a career in CI

There is a management plan in place for career tracking and development in competitive intelligence


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APPENDIX B: “VANISHING CI UNIT” PRESS RELEASE FOR IMMEDIATE RELEASE

Competitive Intelligence Units Vanishing From Fortune 500 Companies Despite Increasing Reliance on Corporate "Reconnaissance" Tactics, Fuld & Co. Survey Finds BOSTON, March 22, 1999—Even as corporate America embraces competitive intelligence (CI) as a strategic business necessity, a Fuld & Co. survey reveals a perplexing contradiction: many CI units have vanished from the boardroom toolbox. The survey, based on the responses of more than fifty Fortune 500 companies, found that approximately 20% of all competitive intelligence units have been closed down. In some instances, these units have later been revived. According to Leonard Fuld, Fuld & Co. president and founder, "These statistics are particularly interesting because competitive intelligence is one of the fastest growing areas of corporate interest today." Some of the Fuld survey findings are as follows:

Almost all of the CI programs that vanished did not draft business plans ahead of time.

Almost all of those that failed did not engage the leadership overall or just involved one champion; in most cases, when the champion left, the program failed.

Two-thirds were located in marketing departments and one-third at the corporate office. Location seemed to have little impact on program longevity. Fuld contends that "CI units can fail for lack of senior management

support, or for failure to curry that support among a broad base of senior executives. They also fail because they do not establish plans or very practical approaches to delivering true value to their companies." Fuld found that in companies where CI units vanished, management did not perceive an ongoing value for the practice. Underestimating the significance of CI, Fuld warns, may cause a company's overall performance in the marketplace to fall short of expectations and lead to a loss of revenue and market share.

The fact that membership in the Society of Competitive Intelligence Professionals (SCIP), now at 6,600, grows 40% per year is testimony to CI's


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importance, but does not offer insight into the issues behind the disappearing CI unit.

"The industries having the most to lose—telecommunications, chemicals and pharmaceuticals, information technology, defense and aerospace, banking, healthcare and insurance—are more likely to be active in CI, Fuld says. But he cautions companies against "deploying CI tactics only when a threat is perceived. Deregulation, shortened product-to-market cycles, shifts in the global economy and the wealth of information available via the Internet have spurred the need for ongoing CI practices for all businesses." "Today, all companies have virtually equal access to market and competitive information. The ones who astutely use this information will ultimately win in their markets. Viable corporate intelligence units collect and analyze data so that management can more accurately predict competitive threats and gain an understanding of how to pinpoint competitors’ strategic vulnerabilities and develop preemptive moves," says Fuld. Based in Cambridge, Mass., Fuld & Company specializes in providing research and analysis to the financial services, utility/energy, manufacturing, high technology, telecommunications, healthcare and consumer product sectors. Leonard Fuld is a worldwide recognized expert and author in the field of competitive intelligence. Additional information can be found at http://www.fuld.com.

22 SCIP 2006 www.scip.org Competitive Intelligence Magazine

Benchmark Your CI Capabilities

Diagnosis Framework

using a Self

By Arjan Singh and Andrew Beurschgens, Fuld & Company

The Self-Diagnostic Framework™ allows competitive intelligence (CI) managers and analysts to quickly build a holistic picture of their CI departments’ capabilities and limitations. It also provides a benchmark to help practitioners understand where their CI department stands with respect to a world-class CI capability. The findings from the framework’s completion, gap analysis, and recommendations help create actions and timetables.

A competitive intelligence function needs to be effective in 11 activity areas essential for world-class capability. Each focus area has four stages: stick fetching, pilot, proficient, and world class. Most CI departments usually focus on less than half of these building blocks.

FOUR DEVELOPMENTAL STAGESStick fetching is the first stage in developing a competitive

intelligence capability. Here, CI teams are often disconnected from the core business processes of their organization. They are consulted when decision-makers, who at that point are often well into the decision-making cycle, request some information. These intelligence requests usually require a quick turn-around and the CI team is usually kept at a distance from the decision to be made. As a result, the CI team has no real understanding as to why the information is needed, and they have very little opportunity to set expectations relative to what is being requested. Their action takes place in a vacuum.

The pilot stage happens when the organization has some commitment to developing the competitive intelligence function at the right level in the business and gives it a mandate to help make decisions. CI teams can then build processes to systematically handle intelligence requests and develop a workload relative to their own comfort level around the evolving process.

At the proficient stage the competitive intelligence teams have most of the required CI capability in place within the organization. A CI team that excels in all the attributes achieves world-class status.

HOW TO USE THE TOOL The Self-Diagnostic Framework is outlined in Figure

1. If you are part of a broader competitive intelligence team or just a lone practitioner, you need to decide which cell per attribute best describes the current stage of your program’s development, if you have one at all. This is the value of the Self-Diagnostic Framework – you read the description of each attribute and check off the one that most closely matches your own organization. The column with the most checks is where your organization is.

Aspiring or established practitioners familiar with their company should have a relatively easy task to check off the description that applies to their organization. However, experience has shown that this exercise can create much

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Stages

Attributes Stick Fetching Pilot Proficient World Class

1. Roles and responsibilities

Undefined role, with arbitrary, unstructured responsibility and focus

Evolving from conflicting roles to focused direction from an executive sponsor

Defined roles and responsibilities that are understood by the CI team

Agreed service level agreement between the CI team and executive management team

2. Processes Top-down, one-way chain of requests

Introduction to KITs, bespoke, piecemeal, steep learning curve for CI stakeholders and contributors

KITs aligned to a wider executive management audience

CI embedded to such an extent that intelligence dialogue drives all major decisions

3. Secondary research

Web as the sole source of intelligence

Exploring and trying additional external sources

Tap into internal secondary sources

Fully integrated use of internal and external electronic and grey literature sources

4. Primary research

Nil Recognitze the value of human sources but issues with obtaining timely intelligence

Use of ‘friendly’ human network to access meaningful targeted intelligence

Fully integrated use of internal and external human sources

5. Analysis Nil Occasional use of basic analytical tools

Use of more analytical tools

Selection and use of advanced analytical tools

6. People No formal CI staff. Volunteering ‘information’ provision

Individuals nominated by sponsor

Trained CI practitioners working to agreed legal and ethical guidelines

Experienced CI practitioners

7. Organizational structure

CI absent from the organizational chart

CI nominees not yet recognized in the corporate hierarchy

Placement of CI team(s) in appropriate part(s) of the organization

Team(s) optimally placed across multiple parts of the organization

8. CI awareness

Limited to a handful of individuals and driven by curiosity

Increased awareness is triggered by a ‘Pearl Harbor’ in the competitive environment

Increased awareness by a sustained communications campaign

CI embedded in job description, performance appraisals, induction programs and meetings

9. Technology Overreliant on desktop Internet searching

Recognition that technology is not a substitute for to actionable intelligence; determining its role

Trying appropriate technology and integration with existing platforms

Fully developed technology complements human systems

10. Value perception

Limited or no recognition

Driven by a recognition that CI is necessary

Formal justification of the value of the CI capability. Formalized evaluation process

Conviction that decisions cannot be made without actionable intelligence

11. CI professionalism

Nil Nil/limited Increased need for professional development

Management plan for CI team’s career progression

FIGURE 1: THE SELF-DIAGNOSTIC FRAMEWORK

benchmark CI capabilities

24 SCIP 2006 www.scip.org Competitive Intelligence Magazine


discussion, depending on the number of people attempting to define the organization’s position for each attribute, and whether they can agree at all on each attribute.

This tool is a starting point to begin the analysis of your CI capabilities. The first stage is determining where you are. Once you’ve completed the model, distribute it internally to validate it and solicit feedback from your program’s internal stakeholders. This will help refine the work that you have done and will ensure that everyone within the CI team is aligned in their thinking.

The second stage is defining how you can improve. Compare your CI function’s position with its mandate to identify areas of focus and priority. This will help you draw up a roadmap for the improvement of your department and you can measure your progress against this roadmap. One of the main values of this framework is its ability to accelerate CI improvement as an individual or as a team.

Here are two practical examples of how this framework was used within two European companies.

CASE STUDY 1: IMPROVING CI AT A MAJOR FOOD COMPANY

The competitive intelligence function, located in the R&D department of a major food manufacturer, had existed for over four years and four people worked in it. However the evolution of this CI function had been very slow – it was not progressing as quickly as management would have liked. We were brought in to do the following:

• Help diagnose their issues.• Gain an understanding of their program’s capabilities and

its fit with its stakeholders’ requirements.• Formulate a plan for accelerating the department’s

development.

Working with the CI function’s members, we applied The Self-Diagnostic Framework as the central model to analyze their existing CI capabilities. By understanding the CI function’s answers to the attributes and the relative understanding of the function’s program among its stakeholders, major gaps in the department’s capabilities, and its relative aspirations, we quickly identified areas to improve. The framework identified two major issues:

1. Strategic vs. tactical intelligence. The department’s value perception was at the stick fetching level. This identified a huge disconnect between the team’s deliverables and the internal demand for intelligence. Interviews with the program’s stakeholders identified that they were hungry for actionable strategic intelligence and the CI team was providing tactical intelligence.

2. A very low position for primary intelligence indicated that it was not a component of the intelligence reports being delivered to management.

Based on interviews with the function’s staff, we analyzed the major reasons for these two issues and identified several additional issues:

• Decision-makers provided a limited focus and direction of CI department activities toward strategic issues.

• A lack of clearly defined legal and ethical guidelines for the CI activity severely hampered its expansion.

• Scientists did not recognize the importance of their work in a competitive environment.

• Most in the organization were unaware that an organized CI department existed.

• Current CI resources and skills were not sufficient to produce timely output to support the current needs of decision-makers – “If we double what we are doing, then it would be useful.”

The competitive intelligence department had purchased proprietary patent analysis software from a university in Europe and used this tool to prepare its analysis reports. The project methodology included first conducting a patent search and then using the software to analyze the results. This obviously worked well when they were asked to do patent analysis, but this methodology could not create other deliverables.

The key problem was that the CI department had bought a technology solution and built up a workflow around it. They had a greater capability in working with secondary information and specifically, structured information. However, this emphasis limited the development of other essential building blocks, namely the 11 attributes of the Self-Diagnostic Framework required for a proficient or world-class intelligence capability. The end result was that the CI function was unable to deliver what its clients wanted. The framework helped the project team to systematically identify areas of quick improvement for the CI team and provide an action plan for quickly developing that capability.

CASE 2: SELF-DIAGNOSTIC FRAMEWORK AT A TELECOMMUNICATIONS COMPANY

The company recruited an analyst to strengthen an existing competitive intelligence function that had not incorporated the specific requirements of a corporate new market focus into its work. Applying the Self-Diagnostic Framework helped the analyst understand the new market division’s attitude toward CI. It also helped deliver and execute a structured program that allowed the CI function to

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help the market division reach its short- and medium-term goals. The framework also created an understanding of the relative stage of the whole CI team’s development to the rest of the organization, irrespective of their market focus.

In the new market division, using the Self-Diagnostic Framework structure set the right expectation for the new division’s management team based on the foundation that had been put in place by the existing CI function. By establishing the process as a two-way dialogue as quickly as possible, the CI program developed on the right footing – not stick fetching. They also wanted to gain pilot and proficient levels as quickly as possible, with the goal to move to a world-class function.

During the introductions with the management team, the framework helped develop an understanding of the roles and responsibilities relative to the new division, such as processes, analysis, awareness, and value perception. It was important to demonstrate these features as early as possible through the delivery of initial key intelligence topics: to “walk the talk.”

Of secondary concern to the management team was how the competitive intelligence function applied secondary and primary collection and analysis techniques. But this explanation helped the management team understand the full value of what the CI team and its resources could deliver, as well as set expectations.

Following initial engagement with the management team, the framework helped the analyst to understand the mindset of the CI program’s target audience. The delivery of the key intelligence topics – either on a reactive or increasingly proactive basis – has changed the management team’s view of the CI process.

Within the existing CI function’s structure, considerable attention had been paid to several attributes: people, organizational structure, value perception, CI profession, roles and responsibilities, primary research and analysis. The framework identified where the whole team was in terms of its own development and what recommendations could be made to improve it.

The existing team members applied the Self-Diagnostic Framework, rather than management or the target audience of the market divisions they served. Some scores were a given: roles and responsibilities, organizational structure, people and secondary research. Following the engagement with the analysts, it was easier to establish where the function was on its developmental cycle and what gaps it had to fill to become world class. We presented the findings, gap analysis, and recommendations to both the CI function and its management. Following the discussion we created an action timetable to ensure that the value of the function was developed for the benefit of its own customer’s management.

The framework is applicable to all competitive intelligence programs, whether managed through lone

messengers or larger teams. The key success factor is the discipline to do it and follow through. The framework ensures that consensus on the current situation is established, creating a common and consistent CI agenda for the organization.

[Self-Diagnostic Framework is a Fuld & Company trade-mark.]

Arjan Singh is a director at Fuld & Company. He has more than eight years’ experience in CI and has worked with numerous Fortune 500 companies to help them build world-class CI departments. He can be reached at [email protected].

Andrew Beurschgens is a CI practitioner at one of Europe’s leading wireless operators with more than nine years’ CI experience. He is responsible for the end-to-end CI process and outputs at the company’s business market facing division. In his previous role at Fuld & Company he was responsible for delivering actionable research to clients. He can be reached at [email protected].


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“Leonard Fuld's competitive intelligence firm, Fuld & Co., carries out corporate war games to give clients an edge. "What war games allow you to do is see scenarios in advance. Then as you see changes in the market, you have a strategy in your hip pocket.” – March 5, 2007

FULD & COMPANY SERVICES Fuld & Company offers its clients a unique combination of services, all centered around a common theme of gaining a better understanding of the external competitive environment and directly applying that understanding toward running a business. The integration of these services is especially powerful because it enables you to maximize your own internal strengths, knowledge, and capabilities while also benefiting from world-class external expertise. 1. Research and Analysis At the heart of Fuld & Company's research offering is the rigor of its methodology. Using thorough secondary research as a launching pad, we add unique value through intensive primary research with all relevant industry participants. Interviews with direct competitors, their clients, their suppliers, and numerous other experts are joined together to provide a well- rounded, corroborated view of the salient competitive issues. This approach ensures both depth of understanding of critical topics and timeliness of the findings. In a fast-moving competitive environment, stale information produces stale ideas. Fuld & Company provides the most up-to-date intelligence available so that your ideas and decisions can keep you a step ahead of the competition. Our intelligence assignments and capabilities cover a wide range of topics and objectives, but can generally be grouped into the following broad categories:

• Strategic Analysis & Benchmarking • Retainer/Ongoing Monitoring • Business Development Support • Strategic Consultation

“Fuld & Company is the grand dame of the industry, and can help with all aspects of competitive intelligence.”

“Students from Harvard Business School and MIT's Sloan School of Management were recently invited to play a "war game" between the big four internet portals-Yahoo!, Google, Time Warner's AOL, and Microsoft's MSN. The organiser, Fuld & Company, a consultancy….In the real world, the stakes are far higher, but the basic analysis may prove correct…” - Yahoo!’s personality crisis, August 13, 2005


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2. Strategic Consulting & Competitive Simulation Executives need to make decisions expediently, based on real-world events, based on accurate intelligence. Too often an organization tends to filter and delay critical intelligence. Over the past quarter century, Fuld & Company has used its strategic intelligence and industry expertise to help executives improve their company’s ability to • Apply competitive simulations to introduce new products, determine a effect

of a rival’s merger, anticipate long-term changes on a market, etc. • Build an early warning process and intelligence program • Train managers how to use and develop intelligence Through its unrivaled expertise, Fuld & Company helps clients bring the external picture into focus and develop strategies that anticipate external change instead of reacting to it. Our model of a world-class competitive intelligence function marries strategy with intelligence by promoting a seamless execution of systematic risk identification, organizational awareness and acceptance, intelligence monitoring, and management action. 3. Education and Training

Fuld & Company was a pioneer in the field competitive intelligence education, offering the industry's first seminars in 1982. Continuing this tradition of leadership in 1999 the firm co-founded The Fuld-Gilad-Herring Academy of Competitive Intelligence, along with Ben Gilad and Jan Herring.

(www.academyci.com). The Fuld-Gilad-Herring Academy of Competitive Intelligence (ACI) is an educational institution dedicated to training managers and companies in better managing risks and anticipating new market opportunities though the use of superior competitive intelligence. It is the only institution to offer an accredited Competitive Intelligence Professional (CIP™) certificate program - a complete intelligence program - from basics to advanced analysis - developed and led by the leading thinkers and educators in the field - Leonard Fuld, Ben Gilad and Jan Herring. They have been recognized for their expertise in competitive intelligence by: Business Week, CNBC, The Economist, Fast Company, Forbes, Fortune, FNN, The New York Times, United Nations and The Wall Street Journal. The Academy program brings over 20 years of unmatched expertise in CI theory and practice to CI professionals, managers and senior executives at all levels. To learn more about ACI, its faculty and program, explore the Academy’s website at www.academyci.com, or contact the Academy at (888) 732-6812 (U.S.) or International (630) 983-5530.


Copyright © 2007

FOR MORE INFORMATION The Global CI Benchmarking Study is designed to provoke thought and indicate ways you can improve your intelligence process. We hope you have found it helpful. If you have a specific request for information about how to improve your intelligence process, please contact our offices at the following locations:

US Europe 126 Charles Street 20 Conduit Street

Cambridge, Massachusetts 02141 London, England W1S 2XW

Phone +1 (617) 492-5900 +44 20 7659-6999

Fax +1 (617) 492-7108 +44 20 7659-6998

www.fuld.com [email protected]

www.fuld.comU.S.: +1 617.492.5900Europe: +44 207.659.6999

FULD & COMPANYThe Global Leader in Competitive Intelligence

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