January 27, 2015
In my previous blog on this, I noted a relationship between reducing “trivial” filings and decreasing public access to competitively useful data.
Now there is another example of a similar, conflicting relationship: that between increasing governmental transparency and decreasing personal privacy.
Consider a recent development in my home state of Pennsylvania. As a part of the movement toward (Internet) transparency of government operations (a “good” thing), the Commonwealth Foundation is now posting data on our local schools, including performance, spending, taxes and payrolls.
The site tells users that the site and its data can be used to
“Identify the highest paid employees in each county or district, or by job category…..Find a specific employee, and search by name, school district….Find out which school districts and job categories have the highest average salaries….Compare salaries for men and women with a district and job category….Choose a school district and see a PDF of their union and superintendent contracts….Do your own analysis of the data by creating a downloadable table from a combination of district, role, and job.”
Sounds great, doesn’t it? It will enable school boards and local taxpayers to compare what they are paying with what they are getting. It will also enable private and parochial schools to benchmark themselves against the public schools. And staff can compare salaries and even, possibly, spot sexual discrimination. But there is also a major cost in terms of personal privacy.
Consider this shot of the output of “employee search” tab:
Now, how about seeing your name up there with your position, school district, school, and total salary? Privacy lost in the name of transparency?
The Association for Strategic Planning is open for applications competing for the prestigious Richard Goodman Award for innovation in strategic planning. Details on this annual competition, unique in the fact that ASP does not have to make any awards, are found on ASP’s website. ASP will also host a webinar on February 10, 2015, featuring two recent Goodman winners. Details will be posted on the ASP website by the beginning of February.
CFO Magazine has previously reported that so-called “disclosure overload” is prompting a major regulatory review of the way financial reports are to be drafted. The article reports that, over the past 20 years, the
“average number of pages in 10-Ks devoted to footnotes and the Management’s Discussion and Analysis…has quadrupled….At that rate, in 20 years companies will be devoting more than 500 pages of their annual reports to footnotes and the MD&A.”
The regulatory concern is that companies are putting in “an avalanche of trivial information” to make sure that they are in complete compliance with all disclosure rules. The goal of the interested regulators is to remove most of this and to present to investors, the nominal audience for these filings, easily read information, but only on significant matters.
Whether or not this is a good idea from the point of view of compliance with the securities and other financial statutes is not something I want to get into. But remember, others, such as those of us involved with competitive intelligence, are also users of these reports.
So keep this in mind: what a corporation may consider to be “trivial information” in the grand context of, say, $6.3 billion of revenues, may be absolutely critical to those of us attempting to do a deep dig on that same business, that is, to its competitors. It is one thing to provide forward-looking information dealing with the impact of currency trading (which should probably be there), and another to pick up the thread of changes in the way research & development or capital investment is now being made and will be made in the future which is included among what regulators consider just “overload”.
Someone’s “trivial information” is someone else’s competitively critical data.
 US Securities and Exchange Commission, International Accounting Standards Board, and the Financial Accounting Standards Board
I just finished reading an older book about Ultra. Ultra, of course, was the code name for a British effort to defeat the German World War II cipher machine known as Enigma The author was heavily involved in the Ultra project, actually communicating intelligence from Ultra directly to Winston Churchill and other senior US and British government and military officials.
The book offers a few lessons about intelligence that still apply today, particularly to CI:
- While the Enigma machine was largely used to transmit information to and from senior German war officials, including Hitler, that is, at the very highest (strategic) levels, a large portion of its transmissions were filled with very tactical information, such as troop locations, planned movements, supply situations, etc. According to the author, these intelligence findings were also the most useful provided by Ultra to the Allied war efforts. Thus, one might argue that the strategic intelligence which was most actionable was actually tactical intelligence. Think about it.
- While decrypted messages were given to Churchill frequently, often daily, officers involved with Ultra did not transmit mere raw data. They always inserted an observation or comment to provide context. In other words, they told an individual already familiar with virtually all of the past intelligence, what the new individual message being read actually meant. To those of us in CI, there is a lesson there: if you are running an internal newsletter (and I’m not a big fan of this) make sure that you always provide context and analysis, and never just raw data, i.e. news clips. If you must send news clips, at least rewrite the headlines by using one of the words from SWOT: strength, weakness, opportunity, and threat.
- One of the problems that the Ultra program had occurred when it could not provide any new intelligence. Some of its end-users came to rely upon it so much that they were, to put not to fine point on it, helpless without it. Enough said.
 F. W. Winterbotham, The Ultra Secret, Harper & Row, New York, 1974.
 See, e.g., pages 106, 116.
 “… [W]hen the Battle of Britain was starting to warm up, [Prime Minister Churchill] … now requested that any important signals we had been able to break should be sent over to Downing Street and that each message should bear a note as to its significance and why.” page 38.
 During the period when Great Britain was bracing for possible invasion by Germany, Operation Sea Lion, Ultra decrypted “a signal from the German General staff to say that Hitler had authorized the dismantling of the air-loading equipment at the Dutch aerodromes.… It was obviously a signal which required some explanation if Churchill was to be able to grasp its meaning. I, therefore, indicated its full significance on my cover headline. If the loading equipment was being dismantled, the [German] invasion [of Great Britain] could not take place….” page 58.
 “There is no doubt in my mind that [the users of Ultra for 2 ½-4 ½ years] had the enemy’s intentions handed to them on a plate, [and] had perhaps come to rely on Ultra to such an extent that when [Ultra] gave no positive indication of the coming counterattack [the Battle of the Bulge], all the other [intelligence] indications of the coming [German] counter-attack were not taken seriously enough.” pages 178 – 79.
January 6, 2015
A recent state court case in Pennsylvania brings into focus the issue of “public”. As you know, or should know, one of the key elements of competitive intelligence is the use of public resources to develop intelligence. As I’ve said many times, public is broader than published, but this case adds a new twist.
The case involves an FBI affidavit of probable cause to search an individual’s home. The state case itself is but one element in a very complicated story, one of whose key elements is that the federal affidavit in question was supposed to be confidential, sealed by order of a federal court in 2006. With a series of twists that are interesting to read, but difficult to summarize, the affidavit in question was later filed by a law firm in a civil case against its former client, the subject of the search warrant (I told you it was complicated).
The state court found that this affidavit, even though sealed by order of a federal court, was a “public record”. As it turns out, the affidavit was erroneously attached to a publicly accessible section of the federal court’s docket, which was in the online docketing system. That meant that the affidavit was “left unsealed on that docket for years”. The state court determined that this made the federal affidavit a “public record”.
The lesson? Just because a document should be confidential, or even a trade secret, doesn’t mean that it cannot be used in your competitive intelligence analysis if, and I stress if, it has been made “public” in some way, even accidentally. Therein also lies a warning – to keep information and data confidential is an ongoing task where even one misstep can destroy the legal protections against its disclosure or use.
 For more details on the case, see Gina Passarella, “Pepper Hamilton Can’t Be Sued for Using Public Documents”, The Legal Intelligencer, January 6, 2015.