Intelligence Quotient

Intelligence Quotient

The ins and outs of competitive intelligence: How companies can work to protect their own interests while getting an edge on the competition.

There are few places where the notion that “knowledge is power” is more evident than in the high-stakes world of big business.

Organizations of all sizes routinely must make their most important decisions based on information they gather about their competitors.

That information, and the conclusions reached when that information is analyzed, is commonly referred to as competitive intelligence. This encompasses virtually anything and everything about a company’s customers, its competitors and its competitors’ products, from new-product timing and technical detail to big-picture business strategies.

The stakes are so high – and the value of timely and accurate information about competitors and their professional strategies so significant – that many companies have entire departments focused solely on gathering and analyzing competitive intelligence.

Understanding how that intelligence is gathered, how it is used and what you can do to protect your own information while keeping tabs on your competitors has become an essential part of doing business in today’s global marketplace.

Cat and Mouse

Regardless of whether a company is concerned about competitors stealing a new product design or an innovative idea, conducting research prior to a merger or acquisition or simply doing due diligence to stay informed about the competition, engaging in responsible competitive intelligence practices literally can pay dividends.

The range of resources that can be mined and monitored to gather competitive intelligence includes everything from publications, website registrations/trademarks and patents to websites such as eBay and Amazon, where new-product parts and prototypes might be available for sale. Sometimes gathering valuable information can be as simple as engaging in conversation with employees at retail stores.

Brands and businesses can be extremely creative and resourceful when it comes to gathering competitive intelligence. For example, several years ago, a large technology firm famously discovered, during the course of a review of a market-leading competitor, that a publicly available database of import/export records revealed patterns of data that made it possible to predict the timing of that competitor’s new-product launches. Having this information in hand could allow an organization to strategically time a product launch ahead of its competitor.

Understandably, companies are willing to go to extraordinary lengths to protect proprietary data. Automotive manufacturers are renowned for the extreme privacy measures they put in place to ensure that new vehicle testing is conducted in secrecy. These measures include private test-driving facilities in remote locations and road testing vehicles without logos or other identifiable markings.

One effective strategy that some companies use with third-party vendors (a common source of vulnerability) is to distribute slightly different language or design documentation to each vendor, making it easier to identify the source of a leak.

You might think most corporations basically are ethical, but when millions, and even billions, of dollars are at stake, it is surprising how far people will go.

One particular source of trouble is the Dark Web – the hidden back alleys of the Internet that are not indexed by search engines and require special software or protocols to access. The Dark Web has become a hotspot for this illicit activity, and the shadowy trade in proprietary information and product development secrets is flourishing.

Proactive Protection and Competitive Action

One of the complicating factors that impacts the strategies companies use both to gather competitive intelligence and to protect their own information is that the laws on this topic vary significantly between states. For instance, GPS tracking may be permissible in one state and illegal in another. Intellectual property laws also vary internationally. Legislation such as the Economic Espionage Act tries to provide a certain degree of protection and regulatory consistency, but vulnerabilities remain. While that can present challenges, it also opens up opportunities: Companies may elect to manufacture or assemble sensitive components of a product in a country where the regulatory climate makes it easier to ensure security.

Because of these global, regulatory and marketplace realities, partnering with a security/consulting resource with an established international presence is perhaps more important than ever. Ideally, your security partner needs to be able to monitor and react to threats in real time, and to make that happen on a global scale requires a security partner that has proven connections with industry and government resources around the world.

Security consultants with competitive intelligence expertise can help a business understand the varying legal landscape and which states and countries provide the most favorable environment for secure and productive manufacturing. A “state of the art” global security consultant can help with details a business might otherwise miss, such as the importance of filing for trademark or patent protection in the country in which you are working, as well as in the U.S.

The right security partner also can help assess a company’s screening practices, performing efficient and effective background screenings, and facilitate third-party background screening audits and cybersecurity reviews.

Establishing the right to audit subcontractors and third-party partners is incredibly important. It’s not unheard of to visit a supposedly secure third-party facility and discover that not only promised security protocols are being ignored, but sensitive materials or information also is simply sitting on a table. There have even been instances where subcontractors were quietly working for competitors, creating obvious conflicts of interests and the potential for additional exposures.

Other competitive-intelligence practices and policies that an experienced security consultant or provider can assist with include robust cybersecurity assessments to ensure networks are protected and sensitive data cannot easily be hacked, and designing policies and practices to ensure proprietary data is retrieved from employees who no longer are with the company.

From an intelligence-gathering standpoint, experienced security professionals have the resources to engage in comprehensive monitoring of Internet “chatter” and competitor activity prior to product launches and during other sensitive periods. They can monitor website activity and trademark/patent registrations, paying special attention to cyber-squatters and trademark squatters who preemptively claim certain domain names, potentially revealing patents and trademarks.

The ultimate goal with any effective and comprehensive corporate-security program is to be more proactive and less reactionary, ensuring the complex give-and-take of competitive intelligence gathering is a not a financial liability, but a professional asset.

Steve Ward is vice president-Global Intellectual Property Protection Div. at Pinkerton, a global provider of corporate risk-management services, including security consulting, investigations, executive protection, employment screening, protective intelligence and more. 

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