Forced Transparency

March 23, 2017

Time magazine recently published an interesting piece titled “The real costs of ‘forced transparency’”[1]. The focus of that was on the impact of WikiLeaks’ “disclosures” of US intelligence agencies’ ability to access data in private and government hands, the impact on national governments, and their possible reactions and responses.

I would add to that good analysis two more potential impacts:

  1. These same revelations, on the ease of generating “forced transparency”, may feed the slowly growing trend of the US Government to resist providing online access (and offline access as well) to Freedom Of Information Act (FOIA) documents and data. The rationale offered, valid or not, would probably be along the lines that such access can only assist hacking efforts by opening ‘back doors’.
  2. These same revelations will, I suspect, also cause businesses providing many of the filings that those of us in competitive intelligence are interested in to (a) resist making certain filings citing a fear that their confidential data and documents can no longer be protected, and (b) press for changes to the FOIA (and other laws and regulations) to reduce such sensitive filings.

Of course, if the federal government moves in that direction, I expect that the states will follow – not necessarily quickly but inevitably.

[1] By Ian Bremmer, http://time.com/4703326/wikileaks-vault-7-forced-transparency/ (accessed March 23, 2017).


The Shape of Things to Come (Part 2)

February 27, 2017

Last week, I posted my take on the future of FOIA (Freedom of Information Act) requests on the US government. What I neglected to do was to discuss the possible impact of relatively recent changes made in the US law by the FOIA Improvement Act of 2016 offered as improving transparency and access. From here, it gets a little technical.

Two of the relevant 2016 changes, as summarized by the US Department of Justice, are as follows:

  1. “Agencies ‘shall withhold information’ under the FOIA ‘only if the agency reasonably foresees that disclosure would harm an interest protected by an exemption’ or ‘disclosure is prohibited by law.’
  2. “Agencies shall ‘consider whether partial disclosure of information is possible whenever the agency determines that a full disclosure of a requested record is not possible.’”[1]

Now, to be fair, these changes would appear to undercut my negative view of the future use of the US FOIA in CI. However, they do not.

As for #1, this does not change the current underlying interpretation of the FOIA that its Exemption 4 of the FOIA still covers

“two distinct categories of information in federal agency records, (1) trade secrets, and (2) information that is (a) commercial or financial, and (b) obtained from a person, and (c) privileged or confidential.”[2]

In other words, anything falling into either category of Exemption 4 cannot be released.

The current interpretations of the scope of Exemption 4 are very broad. With a few exceptions, the federal courts have held that “trade secrets” here have a meaning broader than the usual meaning. That is, it covers “virtually any information that provides a competitive advantage” [3]. That means more is kept from release than is covered by what most of us understand a trade secret to be.

As #2’s “privileged or confidential”, the current standard is not merely whether the “information would customarily [not] be disclosed to the public by the person from whom it was obtained” [4], but rather

“commercial or financial matter is ‘confidential’ for purposes of the exemption if disclosure of the information is likely to have either of the following effects: (1) to impair the Government’s ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained” [5].

In other words, what the FOIA protects from disclosure in the context of CI is, in practice, even broader than the plain language of Exemption 4. So, adding language which directs an agency to “foresee” this or “consider” that will not change the overly protective standards now in place.

[1] https://www.justice.gov/oip/oip-summary-foia-improvement-act-2016, numbers added.

[2] https://www.justice.gov/sites/default/files/oip/legacy/2014/07/23/exemption4_0.pdf.

[3] https://www.justice.gov/oip/oip-summary-foia-improvement-act-2016.

[4] https://www.justice.gov/oip/oip-summary-foia-improvement-act-2016.

[5] https://www.justice.gov/oip/oip-summary-foia-improvement-act-2016.


The Shape of Things to Come

February 24, 2017

I have written a lot about accessing government records because that process has, historically, been a very good way to access some competitively useful data on businesses. But that access at the federal level has gradually tightened with each new President.

As we all know, following 9/11, access to government records, particularly federal ones, changed under that relatively new Presidential administration. A lot of data about a lot of facilities, ranging from nuclear energy facilities to dairy farms, was taken off line and otherwise made inaccessible. The stated reason: foiling potential terrorist assaults on “soft” civilian targets by denying them information on the facilities.

Another change occurred starting in 2009, again with a new Presidential administration. At the federal level, some aggregated data became more accessible, but access to other data became more difficult. Let me give just two examples:

  • First, we saw a pattern of federal officials using non-governmental emails, evidently to foil civilian access to their working emails via FOIA (Freedom Of Information Act) requests.
  • Second, the response time to FOIA requests at many federal agencies drifted from being measured in weeks to being measured in months – or longer. The reasons included an avalanche of broad, politically-oriented requests, plus apparent diminutions in both resources allocated to FOIA requests as well as in willingness to release any data to the public.

So, what may happen how? Well, when the new President’s complete cabinet is approved, we will have a very pro-business administration. While that is good for business, it may not be as good for those seeking business information from federal filings and records. I can foresee a greater willingness to grant business requests to withhold business data from FOIA demands on the basis that the data is “competitively sensitive”.

On the other hand, the new administration seems to exhibit a different attitude towards the federal bureaucracy. I suspect that could translate into a willingness to be more approving of FOIA requests dealing with lower level and regional agency decision-making, which could involve also releasing involve business data.

The result? Probably faster responses to non-political FOIA requests, but a greater reluctance to release business data. But, in any case, with a new Presidential administration will come some change in FOIA and how it works (or does not work).


Tag – You’re It!

February 16, 2017

I was reading the most recent issue of Successful Meetings. Why, you ask? Because if I am going to work – or protect – a meeting, conference or trade show with respect to CI, I should how they are being run and how they are changing.

Anyway, it had an interesting article for people who are being told that they are now doing meeting planning in addition to everything else they do[1]. Taking it as inspiration, here are a couple of tips for DIYers who are (suddenly) told “Well, you know all about competitive intelligence, so why don’t you provide us with some in addition to everything else you are doing”:

  1. Be prepared to get going; While this may not have happened to you yet, the operative word here is “yet”. While it is not always true for CI teams that “If you build it, they will come”, when you are doing your own CI, eventually others will (a) figure out that you are doing this, and (b) some will realize that the CI is adding value. Then, it is but one step to being drafted, so prepare for it. Look at the next 8 tips and see where you stand now with respect to each one.
  2. Take advantage of training and education:: Take a hard look at any groups of which you are a member. Then check on groups that your organization or other employees are members of. Have their newsletters and magazines dealt with CI? If so, start checking the latest issues. Have they offered sessions on CI or related areas (strategic intelligence, war gaming, scenario development, long-range scanning)? If so, see if you can take a webinar of a past session. Also, check the agendas of their forth-coming meetings for sessions on CI that you can attend. There are also a variety of groups that run formal training programs and even annual sessions on CI. Among them are the Institute for Competitive Intelligence[2] and the Fuld-Gilad-Herring Academy of Competitive Intelligence. Check them and others out.
  3. Stay current: There are numerous websites and blogs – such as this one – that you should tap into for current developments and discussions about CI. Staying current on CI is now a part of your job – it should have been at least a small part already.
  4. Identify internal and external partners: Here is where your networking is key. If you already have an internal network, use it. If not, start developing one now. Look around for potential external partners for your future research: think trade associations, affiliates and subsidiaries, academic research centers, suppliers, customers, and government agencies.
  5. Find out the reasons for the assignments: To do your best CI research and analysis, you must know not only what they (whoever they are) want, but, more importantly, what they intend to do with it. Knowing that, you may often be able to suggest an alternative line of research or research target that is faster or cheaper or more reliable.
  6. Show ROI: It helps to try to show the return on your investments (ROI) in CI. For example, if your analysis shows that a planned new venture is very, very risky, casually note that the15 hours of work you did will save the organization $6.2 million it would have spent on going forward with a failing venture.
  7. Be smart about non-ROI statistics: ROI is not all that your CI can provide and not the only thing to point to. How about time? If your CI doubles the time that your organization now has to respond to a competitor’s forthcoming new pricing regime, when compared with the last time this happened, tell people.[3]
  8. Improve your existing skills and add new ones: You already are doing some CI so you have some basic knowledge – I hope. So first, work on improving your existing third-party skills, such as working with others, managing meetings, and communication, both written and oral. Good CI that is not properly communicated is not useful or likely to be used. Then work on adding new skills such as interviewing third parties, team management, improved technical expertise on what your firm does, and working meetings and conventions.
  9. Promote your value and CI’s value: Do not be shy about what you are doing and what value the (new) CI is bringing to your team/organization. Diplomatically use phrases such as “Our blind spots were…”, “Filling in the following gaps…”, “Providing us with an opportunity we were not fully aware of…”, and “Avoiding a previously unexpected threat…”.

[1] Andrea Doyle, “Planning for Double Duty”, Successful Meetings, February 2017, pp. 12-15.

[2] In the interest of full disclosure, I am on the faculty of ICI.

[3] For more on this, see John J. McGonagle and Carolyn M. Vella, Bottom Line Competitive Intelligence, Praeger 2002.


Circular Economy?

There is a lot of talk in business and educational circles about the concept of the “circular economy”. As befits such a description, there are a variety of overlapping definitions. Here is one:

“A circular economy is one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.”[1]

Why am I mentioning this in a blog on CI? Because there is a key lesson to be found in the debate about a process which tries to more fully integrate corporate operations and to enable management to see what is going on, both in the supply chain and in the distribution chain, while incorporating the management of critical environmental issues. And all of this is to be seamless.

What is the lesson? The lesson is that none of the debates on this concept (or related concepts) has, at least according to my personal research, ever mentioned competitive (or business or competitor or strategic) intelligence. Think about it. CI is missing from this debate. Why?

Probably because CI is still just bolted onto businesses. In general, it is not incorporated into overall business processes. Look at the classic CI process for evidence of this: someone must affirmatively decide that he/she/they need intelligence and then formally assign the task elsewhere. The recipient then produces an answer or answers on a specific schedule. Of course, if any question is not spot on, then the research and analysis is probably not either. If the research and intelligence is too late, or is rejected or ignored by the internal client for her/his own reasons then the CI is useless – or more accurately not used.

This is not the case with the DIYers of CI or with those few CI programs where the CI person or team has the ability – and incentives – to define the intelligence needs and to generate the necessary research and analysis on their own initiative. In those cases, the end-user/customer and analyst are, at least initially, the same. And, in the case of the DIYer, there is no “fatal disconnect” between the decision-maker and the analyst.

To me, that seems to mean that at least one future of CI lies in that direction, joining in the circular economy process. How do we do that? Your thoughts?

[1] Ellen MacArthur Foundation, https://www.ellenmacarthurfoundation.org/circular-economy, accessed 2/8/17.


How versus Why

January 12, 2017

As most of you know by now, I am a big advocate of improving your CI skills by broadening your knowledge and experience. To that end, I am a voracious reader. For the Holidays, my significantly better, Carolyn Vella, founding partner of Helicon, gave me a “strange” book, something she does every year. This year’s gift book, Sapiens: A Brief History of Humankind[1], sheds some light on a current US intelligence story.

The relevant details (as of now) are that the US Intelligence Community recently reported that (a) Russia tried to interfere in the US election for President through hacking, disinformation, and other means and (b) Russia’s “goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential president”, and further that “Putin and the Russian Government developed a clear preference for President-elect Trump.”[2]

Note that this intelligence assessment has two parts, one the “how” and the other the “why”. There is a significant difference between them, in intelligence terms, and in how they have been received in the political arena.

Professor Harari writes that

“What is the difference between describing ‘how’ and explaining ‘why’? To describe ’how’ means to reconstruct the series of specific event that led from one point to another. To explain ‘why’ means to find casual connections that account for the occurrence of this particular series events to the exclusion of all others.”[3]

In the case of this intelligence assessment, this difference explains why there is less dispute about part (a), the “how” of the assessment, since it involves a narrative detailing specific events. However, part (b), the ‘why’, is more controversial because the non-classified assessment provided no evidence about the “casual connections” underlying that assessment leading to these conclusions to the exclusion of all others.”[4]. In other words, just laying out the “how” is not enough to support your determination of the “why”. You must always do more.

Keep this in mind when doing your own CI analysis.

[1] Yuval Noah Harari, Harper, 2015.

[2] “Intelligence Community Assessment: Assessing Russian Activities and Intentions in Assessing Russian Activities and Intentions in Recent US Elections”, ICA 2017-01D, 6 January 2017.

[3] Sapiens, 238.

[4] To be fair, there may be good reasons why this supporting detail could not be released. However, protecting sources and methods is not an issue in CI.


Insider Trading and CI

December 8, 2016

One of the issues that (erroneously) arises when those unfamiliar with competitive intelligence hear about it is that it might be “insider trading”. The existence of this concept has caused unnecessary confusion, about which I have previously written.[1] Insider trading in fact refers to people trading in the stock of public companies using so-called insider information, which is illegal under federal law. CI is not the same thing. But there is significant confusion which is best exemplified by the erroneous assertion that developing CI on public companies sometime violates the US securities laws.

A recent US Supreme Court decision may help non-CI practitioners make a clear distinction between CI, developing intelligence on competitors, using legal and ethical methods, and insider trading, using non-public “material” information to trade in the stock of a public company.

First, the unanimous decision[2], written by Justice Alito, succinctly defined insider trading:

“Section 10(b) of the Securities Exchange Act of 1934 and the Securities and Exchange Commission’s Rule 10b–5 prohibit undisclosed trading on inside corporate information by individuals who are under a duty of trust and confidence that prohibits them from secretly using such information for their personal advantage.”

Second, the Court pointed out that this duty extends beyond a person who has a “duty of trust”, that is an employee or third party who knows that the information is “inside corporate information” and must be kept confidential. It must be used for trading stock in that company:

“Individuals under this duty may face criminal and civil liability for trading on inside information (unless they make appropriate disclosures ahead of time). These persons also may not tip inside information to others for trading. The tippee acquires the tipper’s duty to disclose or abstain from trading if the tippee knows the information was disclosed in breach of the tipper’s duty, and the tippee may commit securities fraud by trading in disregard of that knowledge. In Dirks v. SEC, 463 U. S. 646 (1983), this Court explained that a tippee’s liability for trading on inside information hinges on whether the tipper breached a fiduciary duty by disclosing the information. A tipper breaches such a fiduciary duty, we held, when the tipper discloses the inside information for a personal benefit. And, we went on to say, a jury can infer a personal benefit—and thus a breach of the tipper’s duty—where the tipper receives something of value in exchange for the tip or ‘makes a gift of confidential information to a trading relative or friend.’”

What does all of this mean to those of us in CI?

  • First, data obtained from public sources is not insider information, as it was not acquired from a person with “a duty of trust”.
  • Second, any data you obtain in developing CI from someone employed by a public company is not insider information unless, I repeat unless, that information was transmitted for trading purposes. Also, the person providing the insider information must receive something of value in exchange for that data. Or as the Court put it, “the disclosure of confidential information without personal benefit is not enough.”
  • Third, if the person receiving such data does not trade on it, there is no insider trading.
  • Fourth, any analysis you develop from this kind of data is not insider information, even if it produces a conclusion equivalent to some piece of insider information.

So, aggressive and insightful CI, legally and ethically developed, cannot be a violation of the US securities laws.

[1] https://diy-ci.com/2012/06/21/insider-information-and-competitive-intelligence-2/; https://diy-ci.com/2015/08/18/competitively-sensitive-data/; https://diy-ci.com/2014/04/23/talk-to-listen-in-on-and-watch-your-competitors/.

[2] Bassam v. United States, https://www.supremecourt.gov/opinions/16pdf/15-628_m6ho.pdf.