Competitive Intelligence 101
Is it OK to look at competitors? And if so, why is it important?
The words “Competitive Intelligence” (CI for short) probably conjure mental images of a spy — James Bond, or at least of a CIA control room full of analysts looking at computer screens.
But if you’re hoping for X-Ray glasses or an Aston Martin with rocket launchers and an ejector seat, you’re probably going to be disappointed.
The truth about corporate CI is that it shares very little in common with the type of intelligence collection done by spy agencies like the CIA. If a hallmark of government spying is working in the dark, corporate CI is done in broad daylight.
What is competitive intelligence?
So, what is competitive intelligence? Competitive Intelligence largely involves gathering and analyzing information about business competitors with the goal of making better management decisions. CI is about turning information into action, gathering information on your competitors to provide a link between that information and the business, allowing you to make decisions about business strategy.
Intelligence — on both competitors and the industry — is the backbone of corporate strategy. Knowing the playing field and the positions of competitors is critical to successfully planning your company’s strategy and making course corrections on your own strategy.
However, as critical as it is, it’s not worth risking jail time. You’ll notice that I’ve mentioned nothing about spying, stealing information, or any kind of remotely questionable activity.
The Competitive Intelligence Code of Ethics
While you may be thinking of secret spies who trade on their ability to lie about who they are, risk death, and steal information (either by lying or bribing their victims), corporate CI stridently avoids even the appearance of any kind of wrongdoing to acquire information.
That may be news to most people. Many corporate lawyers frown upon conducting competitive intelligence as they immediately consider the legal risks associated with spying. However, SCIP — the professional organization for Strategy and Competitive Intelligence Professionals — encourages members to strictly adhere to the following code of ethics:
As a not-for-profit organization, SCIP conducts workshops, provides certifications, and holds annual summits to develop skills and promote the ethical practice of competitive intelligence.
Not only does the Code of Ethics encourage obeying the law, it also encourages practitioners to avoid conflicts of interest, abide by their own company policy, and “accurately disclose all relevant information, including one’s identity and organization.” All of these statements are really just ways to obey the law. This Code of Ethics directly addresses one of the main reasons corporate lawyers discourage competitive intelligence — the natural inclination of people to be sneaky, to NOT disclose who they are when conducting competitive research, or to get information through inappropriate means.
Are people naturally sneaky?
I’m not saying wanting to be sneaky doesn’t make sense. Most people don’t like getting caught doing something wrong or embarrassing. So naturally, we’d prefer if competitors didn’t know what we were doing.
It’s deeply ingrained in the human psyche — just think back to high school. How many times did you cruise by the house of someone you were interested in, ask one of YOUR friends to get some info from one of THEIR friends, or the more modern equivalent — Facebook stalking?
We see this behavior reinforced in the movies. Getting caught usually results in a new pair of cement boots — or worse!
But let’s talk about this whole idea of getting caught.
In the first place, we really need to shake this whole “spying” idea. You may feel like you “shouldn’t get caught” when conducting competitive intelligence. But this is the real world — there’s no Dr. No, Dr. Evil, or Dr. Doofenshmirtz.
Who cares if you “get caught?”
Learning about competitors isn’t spying. There’s nothing wrong or embarrassing about it. Moreover, who cares if you get caught? This is the internet! You already share pictures of your kitten, your lunch, your kitten eating your lunch, and details on your last breakup on your social media poison of choice. If you’re willing to post all that information about yourself — under your real name — why hide who you are when conducting competitive research?
So what if it “tips them off” that you’re looking at them? Who cares if they know — what are they going to do with that info? You’re in a related space — maybe you’re job hunting? Maybe you want to try their product to see if there are opportunities to work together? Competitors form partnerships routinely, so that’s not really a far-fetched idea either.
And maybe they think you’re conducting competitive intelligence.
So what? People learn about the competition all the time, so all this tells them is that you and your company are not asleep at the wheel.
More importantly, misrepresenting your identity doesn’t protect you or your company. It does the opposite. It exposes you and your company to legal liability.
So what should you do?
It isn’t always self-evident, and sometimes even well-meaning — but untrained — managers perpetuate these mistakes. This “Tips & Best Practices” slide (from an anonymous, internal competitive benchmarking template) contains exactly this type of well-intentioned — but terrible — advice.
Not telling them who you really are seems safer, right? Why is this wrong?
It’s wrong because of that pesky “applicable laws” phrase in the SCIP Code of Ethics — as well as your company’s lawyers (yes, those guys again).
Congress passed the Industrial Espionage Act in 1996 in response to an explosion in commercial spying and information theft in the 1980s and early 90s. The Act explicitly allows ethical CI activity, placing the onus on companies to take “reasonable measures” to protect their secrets. Publicly available information is fair game, but “confidential” information is defined as not “readily ascertainable through proper means.”
A “reasonable measure” would be a web form for a competitor trial that asks for your information — the kind of identifying information that would allow them to deny your request. Lying about your identity is certainly improper. Outside of undercover work, most people (and especially judges) consider lying to get something that isn’t yours to be wrong (we even have a name for it — it’s called stealing), so lying about who you are creates a real legal risk. This is the beauty of using your own name and company email address. There’s no liability, and nothing to feel bad about if you “get caught” doing competitive research. By acting ethically, you transfer responsibility to your competitor — it’s their job to deny your request.
So being honest is actually the safe course of action here. If they rubber stamp your request, they’re not screening access to their information, which means they’re not taking measures to protect the information. It’s publicly available to anyone willing to hand over some basic contact info.
If they do deny your request, then you are still safe — they really were taking measures to protect their information, and you didn’t use improper means to acquire it. I once had a competitor CEO politely email me to refuse my request for a trial of their product, compliment my effort, and then proceed to offer me a position doing competitive intelligence for them!
A little bit of training goes a long way.
It is sometimes hard to know the right thing to do. There is also a lot of misinformation out there — as we saw in the example above. This is an official template from the company — why would anyone doubt the advice offered?
In this case, one of the best — and easiest — tests of whether what you’re doing is good or bad is called the “red face test.” Simply ask yourself: how would you feel if you “got caught?” More importantly, how would your company feel if this behavior was attributed to it in the Wall Street Journal?
Contrary to the view that being honest about your identity could harm the company’s competitiveness or reputation, this practice actually earns respect — it demonstrates that you (and by extension, your company) are honest, respectful, and guided by ethical principles.
The basics of competitive intelligence really come down to being honest and safe.
· SCIP has a Code of Ethics for a reason — follow it and you’ll stay out of trouble
· Being honest actually protects you and the company, and is a good guide to obeying the law and following your company’s code of ethics
· If you’re still unsure, think about how your company would feel if your actions were published in the Wall Street Journal.
Knowing these basics can relieve stress for you — and your legal team. Competitive Intelligence is vital to modern corporate strategy and product development, and knowing you’re practicing properly will yield intelligence your co-workers and managers can trust.