Protect Your Company From Industrial Espionage

I’m guessing that shortly after the first wheel was invented by someone, someone else came along and stole it. Or at least the idea of it.

Industrial espionage is not James Bond stuff. It’s just not that sexy. It’s more like Marc Barry stuff most of the time. If you’ve seen the movie The Corporation, then you know that Marc Barry is what’s called a Competitive Intelligence Professional. A corporate spy. What he does is very simple; On behalf of his clients he interviews employees of their competitors. Under the guise of wanting to hire them he conducts lengthy interviews and extracts information about what their company is doing.

Sometimes industrial espionage even has a humorous edge to it. What I want to talk about is how everyday espionage is conducted so you know what to look for. Then you can put together policies and procedures to limit it’s impact on your business.

The ABCs Of Industrial Espionage

Corporate espionage is all about getting information. To get that information a spy has to get access to it. Sure, there are some shady operators but most of the time the target company simply hands the information over to the spy.

Just hands it over. “Here you go”.

The reason this happens is that most spying looks like nothing more than legitimate business. Here are three ways that corporate spies get into your business:

1. They walk in and say they want to buy something. They actually don’t plan on buying anything. All they want is information so they can compete with you. What they want is pricing, information about your suppliers, your procedures, the special services you provide. They want to learn how you do what you do. They also want to find your weak spots so they can badmouth you and show customers what a mess your company is compared to theirs.
2. Someone you know brings them in. The easiest way to get into a manufacturing facility is to know a little bit about the equipment they have. A spy will then contact the appropriate equipment seller and get them to schedule a little tour to see the equipment in action. Most manufacturers have good relationships with their equipment dealers and some even have agreements to showcase the equipment in exchange for a discounted price. The spy is not looking at this equipment as much as he’s looking at everything about your operations that he can get his eyes on during the tour.
3. The due diligence scam. This is like number 1 but the spy takes the ruse a lot further. What they do is start serious negotiations to give you their business. In the course of these negotiations they require a lot of documentation from you in the name of quality control. They have to be sure that every aspect of what you do is done properly for the benefit of their customers. What they really want is a complete manual and list of resources for doing what you do.

How To Protect Yourself From Espionage

As you can see, these spying techniques are almost indistinguishable from normal business practices. That’s what makes them so effective. If you get paranoid you could easily turn away legitimate business so you have to be careful about how you handle this.

Here are a few things you can do:

• Use your connections. Check people out when they approach you. If they’ve been approaching a lot of companies for quite some time in the same manner without producing any business for these companies, chances are they won’t give you any business whether they’re spying on you or not.
• Be stingy with the documentation you hand over. I’ll give out a Table Of Contents of my quality control procedures or operations procedures. I might even give them a few select documents. I’m not going to hand over the whole How-To manual to anyone.
• Create policies that forbid large tours and photo-taking of your operations.
• Check your gut. If it feels wrong, stall until you can get more information about who these people you’re meeting with are.
• Don’t sweat the small stuff. There’s very little that any company does that can’t be found out somewhere if someone really wants to find it out. As long as you keep the amount of access that outsiders have limited and controlled, there usually isn’t much potential for harmful leakage of your proprietary data to occur.

How Big A Problem Is Industrial Espionage?

Unless you’re a $10,000,000+ company, it’s not that big of a problem. The main things that companies have to protect are proprietary technologies or processes. You also have to protect your documentation if you have extensive technical or quality control procedures.

Just in case you’re wondering, no, I’m not a corporate spy. But every once in a while I do feel the need to get ethical.