Just Because The Pharmaceutical Industry is the most frequent user of competitive intelligence (CI), it doesn't mean it is the most effective. In fact, a survey of senior executives at large US corporations, across industries, shows that despite the millions of dollars pharma spends, only one company—Johnson & Johnson—ranks among the top-10 companies that make the best use of CI.
In many ways, that has to do with the way pharma thinks about collecting intelligence. Most executives use CI to compile competitor newsletters, profiles, and other static deliverables to understand what actions their competitors have recently taken. But there's no strategic advantage in that. To succeed, pharma execs need to anticipate threats and opportunities before they occur. At their very core, CI functions need to be designed to deliver predictive, actionable intelligence that minimizes surprise—not just reports recent competitor actions. Indeed, when establishing Lilly's CI function, former Lilly CEO Randall Tobias called it the "department of surprise avoidance."
Lilly established its CI team in 1998 to serve the highest levels of the organization and to advise top executives about longer-term threats and opportunities. Company executives were very supportive of the unit because the need for better intelligence was apparent: The industry was changing rapidly and the level of competition had increased dramatically. These executives—some of whom had been intelligence users in the US government—understood the benefits that top decision-makers gain from knowing about emerging threats as soon as possible. In fact, running a large pharmaceutical corporation without an effective CI capability, says Lilly's head of competitive intelligence, Jerry Hoffmann, is tantamount to "making your key decisions with one eye closed."
As Lilly's intelligence effort developed, its focus broadened beyond the top executive suite. Today, the company's CI team provides more support at the business-unit level, delivering intelligence to the leaders of those groups and others, while acting as advisors and training referents to teams within the organization. This is a trend not only at Lilly, but also at other companies with well-developed intelligence efforts, within and outside of the pharmaceutical industry.
According to Hoffmann, Lilly's CI effort has contributed significantly to a company-wide initiative to become more externally aware. CI teams are often called upon to facilitate initiatives that require their unique perspective, from scenario-planning projects to war-gaming exercises and competitor-response modeling.
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