Getting Ahead: The Role of Competitive Intelligence
February 2007
IN THIS ISSUE
— Digging up the Dirt: How to Gather Competitive Intelligence
— Rules of the Road: What Not to do in Gathering Intelligence
— In the next issue
GREETINGS!
Welcome to the February edition of our newsletter. In this issue, we’ll look at the role competitive intelligence can play in giving your clients a strategic advantage versus peers of all sizes, which will translate into increased market share and revenues for them — and for you as well.
Knowing why your competitors succeed — especially in areas where you may not — can be crucial to long- term strategic planning. Since your competition likely won’t turn over their playbook, you need someone who can effectively — and legally — gather information about their operations to give you the edge. In this issue, we’ll show you how we can make that happen.
DIGGING UP THE DIRT: HOW TO GATHER COMPETITIVE INTELLIGENCE
Running a successful business can seldom be done without leaving some kind of footprint in the public domain. A public company’s growth strategies can be seen, on some level, through the progress they report in material event filings, quarterly and annual statements, and proxy filings. Private companies are somewhat more shrouded in secrecy, yet even they will usually report to third parties such as Dun & Bradstreet, and often they are also the darlings of their industry’s trade publications as well. Details about their growth via mergers and acquisitions is often recorded with the secretary of state where they do business, giving a glimpse of how their acquisitions could affect their long-term outlook.
Yet the real substance of competitive intelligence lies not with paper, but with people. Knowledgeable people. Sometimes, these are also irritated people. These people, the competitor’s former employees, possess a fountain of knowledge, from the recently booted chief financial officer with an axe to grind to the call center employee who left when their company was acquired. Each, once they are found, has a tale to tell, and will often eagerly tell their story to someone who knows how to make them comfortable and open to talking about their experiences.
RULES OF THE ROAD: WHAT NOT TO DO IN GATHERING INTELLIGENCE
The ethics of conducting competitive intelligence, as in many other fields, reside in an area where the predominant color is not black or white, but gray. Yet there are some basic notions, particularly inspired by recent events, that can guide us to successful intelligence gathering without violation of applicable privacy laws. The first guiding principle is that, most often, only former employees are most willing to be interviewed. Aside from the fact that many companies make new hires sign non-disclosure agreements meant to protect their treasured trade secrets, current employees know how thin their office walls are and are keenly aware of the trouble which they can get into if their boss learns that they were sharing company information — from personnel gossip to earnings expectations, what happens in house is meant to stay in house, so typically it is best to talk with former employees who no longer have an allegiance to the company.
The other major principle to remember is that the interviewer must represent himself honestly and fairly. Certain companies have come under fire recently for allowing their investigators to solicit information under the pretext of being someone else, such as Hewlett – Packard’s external investigator obtaining phone records by claiming to be either board directors or journalists in an attempt to identify the source of media leaks. We have performed several competitive intelligence assignments by simply identifying ourselves as consultants to an interested party — no pretext needed. Follow the rules and you can gain a decided advantage without risking costly litigation and bad press later on.
IN THE NEXT ISSUE
In the March issue, we’ll look at the importance of electronic records, from telephone logs to electronic mail and computer hard drive evidence, in ferreting out fraud and abuse at companies.