Five misconceptions we can all learn from

Competitive intelligence (CI) is good for business, plain and simple.

Competition is a fact of life in the business world. As such, the practice of competitive intelligence has become a commonly accepted and essential part of running a successful company. No one in business questions the need to monitor the moves and strategies of rivals, to takes steps to anticipate and mitigate market threats, and to identify and seize opportunities that may come from this activity. It is only when abuses occur--Hewlett-Packard’s alleged illicit spying on its board, McLaren’s alleged theft of Ferrari’s race car technical secrets, P&G’s dumpster diving for Unilever’s secrets--that the words “intelligence,” “spying,” “privacy,” and “secrets” become jumbled indiscriminately.

Competitive intelligence is not about spying. Spying is spying and implies something deceptive, perhaps even something illegal (See our CNBC interview on the Patriots spy scandal). Competitive intelligence is about the legal, ethical pursuit of information and the analysis of that information in order to better understand today’s competitors or tomorrow’s business disruptions.

These notorious corporate spying cases highlight a number of misconceptions about competitive intelligence. At the same time, they help to illustrate the distinct difference between “spying” and the legitimate practice of competitive intelligence as it occurs in most corporations today.

• Misconception 1: Distrust your employees first
  Yes, companies leak information all the time, most of it through the very act of doing business. Paranoia is not the answer to learning about a rival. Our cardinal intelligence rule, “Wherever money is exchanged, so is information,” tells you that every time a business transaction takes place—whether leasing new office space, purchasing equipment, or bringing in temporary workers-- intelligence of interest to competitors is invariably created. That’s just how business works. Sure, you can have a malicious employee – or a board member – but more likely the company serves this information to the market on a regular basis anyway.
• Misconception 2: Everyone needs a “deep throat.”
  Maybe it’s a legacy of the Watergate scandal, but many executives believe the only way you can know about a rival’s strategy is by having a “deep throat” informing on that company. In reality, companies through their own business dealings give away enough hints for the astute observer to piece together the puzzle. Our analysts do not seek out some astounding “secret,” They seek many fragments of information, which they can filter and string together to gain a reasonable view of a company, or rational scenarios about pending competitive threats.
• Misconception 3: Dumpster dive first, think second.
  Competitive intelligence is a thinking person’s job. When you go after something in a rival’s trash you’ll likely find just that – trash. Sure, people sometimes toss vital information in the garbage, but most of the time they don’t. Attending a trade show or a conference, listening to speeches and conversations, as well as the banter between customer and supplier is more revealing and more accessible than rummaging through trash cans – even if the trash is technically in the public domain.
• Misconception 4: Intelligence at arm’s length is good for business.
  One of HP’s apparent failings was farming out the leak-search project through various subcontractors. The board chair may have been more than three layers removed from the person collecting the information. The decision maker should be in direct contact with the analyst/information collector. In HP’s case, the board chair appeared to convey a request that was filtered through many levels. Somewhere along the line, the Chair’s intentions and objectives may have been misunderstood or perverted, the goal or objective lost along the way. The main message that appears to have gotten through is that the ends justify the means. In business, arms-length intelligence requests not only run the risk of jumbling of the original message, but also of activities going awry.
• Misconception 5: Cowboys, cowboys everywhere!
  Managers today are encouraged to be entrepreneurial, action oriented. In this environment, you need to establish limits for those collecting information for your company—not squelch talents and initiative, but train and educate. Make sure your employees and others working for your firm know the limits. This is critical. Multinational companies employ staff from all around the world, likely with different views of what it takes to stay competitive – including how aggressively to gather competitive information. You need to instill a common sense of ethical information-gathering values across your corporation. DO NOT assume that because everyone collects his or her paycheck from the same corporation that they intuitively know the ethical and legal limits. You need to have guidelines. Fuld & Company’s Just the Facts™ is one example of such guidelines.

For information on our views of competitive intelligence, we recommend you review the resources on this page, as well as other details in our CI Tools section of the website.