Company Policies on Collecting Competitive Intelligence (part 3)Posted: February 2, 2016
February 2, 2016
In my prior two blogs on this, I discussed written policies dealing with competitive intelligence. But, the unwritten rules at your business can be the most important to you. What underlies most of them is one word – embarrassment. To summarize the concept, do not do anything that could cause concern to your employer or bring unwanted attention to it. Whether or not there is a written policy that actually says this, the cold facts are that taking any such action puts your job at immediate risk. In that regard, let me relate a short story:
- Several years ago one of the largest consumer goods firms in the US, which had a well-regarded competitive intelligence unit, authorized a research project against a global competitor. The details are not precisely clear, but it appears that the first CI firm with which the company contracted then brought in a second group of firms as subcontractors, and some of these CI subcontractors in turn subcontracted some of their work to other CI firms. That meant that some individuals working directly on the assignment were three levels away from the client’s supervision (or perhaps even knowledge). The results were predictably catastrophic: One of the subcontractors was accused, by the target company, of attempting to steal its garbage in order to go through it later (“dumpster dumping”)
- Events then moved rather quickly. The CEO of the client firm flew across the world to meet with the CEO of the target firm. The end result was that
- the client firm paid the target a substantial settlement, believed to be over US$10 million;
- the client firm also agreed with the target that it would not enter a certain market niche for a period of years, the very niche that was the focus of the competitive intelligence task;
- on the client firm’s CEO’s return to headquarters, three or four competitive intelligence personnel at the company were terminated;
- a senior CI manager at that firm “retired” rather quickly; and
- the client firm purged its approved contractor list, removing every firm that was involved in this case, even the CI firm that claimed it blew the whistle on the misdeeds of others.
The client firm paid a rather substantial price a failure of its management and a failure by others to exercise common sense. Keep in mind the words of a CI pioneer, Professor Stevan Dedijer:
“Intelligence today is about using the collective knowledge of the organization to reach an advantageous position in industry. Spying is dying – only idiots resort to these kinds of shady activities. Only companies with an inadequate intelligence capability and with inferior knowledge-acquisition strategies seek to obtain information by illegal or unethical means”.