Real-world ethical boundaries & CI

A lot of companies are discovering competitive intelligence. As the new CI person, how do you deal with pressure to step on or cross ethical boundaries?

When I started doing CI it was a totally new position in my company, but not a new function. My company manufactures industrial capital equipment, and our industry is filled with small private companies. The best information we get is obtained from people, particularly at trade shows. In the past many employees made efforts to gather competitive info, and when I stepped into this new position most of these people offered advice. Much of it was good, but there was one family of suggestions that troubled me.

I was asked whether I would wear a name tag at shows, or go “incognito”. Some revealed the trick was to register for trade shows under a false name, so my badge wouldn’t blow my “cover”. People offered to hook me up with folks from other companies to trade badges. Even folks from above hinted that “Business is war” and we can’t be too squeamish about doing unto others before they do unto us.

Then I learned SCIP’s ethical code while becoming a member. At first I wondered if it was real, or just some window dressing to legitimize the whole idea of competitive intelligence. After a short while I realized (with no small relief) that the code was real, and it was adhered to. But this left me with a problem – the same problem one always has with advice you don’t heed, and that is the advisor wants to know why their advice wasn’t taken. A person’s ethics, much like their height, can be difficult to change, so I decided to take a practical approach. Where folks won’t respond to “preaching”, a practical business sense will prevail. For the benefit of anyone else who is new to CI and in the same boat, perhaps this will help you defend an ethical approach.

War is war, business is business

First, business isn’t war. In war, the loser is effectively removed from the battlefield. In business, the loser just moves to a different battlefield, a different army on the same battlefield, or perhaps even your army. Sadam Hussein isn’t going to become the Prime Minister of Britain. In business you have no way of knowing where the person you just screwed will end up. You don’t know who will listen when they explain how you screwed them, and you don’t know what effect that will have on your future. Second, let’s look at the practical aspects of some common tactics:

Going badgeless

At some shows a badge is required and at some it isn’t, but you can always take it off once you’re in. However, any booth staff with even minimal training will ask you to identify yourself, and unless you are ready to be an actor (see “Create a new identity” below) you’re stuck. This brief anonymity may allow for a quick brochure snatch, but it’s not going to survive any conversation. If you aren’t going to act, hiding your identity is an adversarial move and will set the tone for whatever conversation you have.

Trading identities

Trading badges with someone from a different firm seems innocent enough, and it does indeed work in the short term, but not without a few downsides:

Do you know the other company well enough to pass muster? Playing ignorant will work on those equally ignorant, but those aren’t the people you seek.

Does the person wearing your badge know your company well enough to keep from causing you or your company trouble? Many a rumor was started with an innocent misstatement.

Do you understand how your competitors view the other company? Will unknown motives drive them to give you misinformation?

If you have questions later, how do you follow up with someone who believes you are someone else?

If you get caught, will the competitor tell you, or just play along and save the story for everyone else in the world including your customers and your boss?

Create a new identity

I remember someone once pulled me into a conference room, to tell me what they thought a really effective approach would be: I should start a fake company. I should get a cash cell phone, business cards, the whole 9 yards.

The idea of creating a fake “front” company seems attractive, however, the amount and quality of information you get is proportional to the extent the fake company is actually real. You can start with a trade show registration and some business cards, but it quickly gets complicated:

Business cards have addresses, phone numbers, email addresses, and web URLs. All have to be created in some way that isn’t traceable to your company. If they are bogus, the attempt will be very short lived. Businesses have hierarchies, bosses, procedures – these too have to be created.

Sales people tend not to tell all in one conversation. Who’s going to answer the phone when they follow-up?

Customers have issues, concerns, problems and many other things they want to discuss. How do you create the story and keep it straight when the salesman calls to follow up?

Again, if you get caught are you likely to know, or just suffer hidden damage at a later date?

If you misrepresent yourself over the phone or via email, and entice the competitor to do anything he would not have done without your misrepresentation, you are exposed to wire fraud laws. Would your competitor pass up such a chance to damage your company in a legitimate way?

Until you are validated as a real customer you’re going to get the standard pricing, specs and terms, if that much. Not what real customers are getting, and probably not what you really need. The bottom line is that creating a fake company real enough to be truly successful can be almost as much less work as creating a real company.

Last but not least these games are inherently shortsighted. In small, competitive industries the key players tend to stay in the industry, moving from company to company. The resulting relationships can transcend current positions, and connecting with someone from one competitor can reveal things about them and many others. By playing games you separate yourself from this network instead of integrating yourself into it. You deny yourself any hope of long term access to these people and what they know.

Now, considering all of the risks and downsides, is there any piece of information that you need to know so badly, that you would learn so reliably, that it is worth the risk? I have found that asking this question, and specifically asking what that piece of information was, really had an effect on people. The time may come when there really is some critical nugget of info that might be worth the risk, and that’s when you hire a consultant.

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