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    Posted August 1, 2012 by
    ChristianJ01
    Location
    Indiana

    From competitive intelligence to espionage

     
    There is not a single modern CEO who does not understand the depth of the changes which have impacted the economic environment since the early 90s. Managers who have not integrated the consequences of both hyper-globalization and the immediacy of exchanges might be forced to close down shortly.

    Believe it or not, the world is going through one of those great economic revolutions which have marked its path since antiquity. You’d better know it and prepare your company to face upcoming new challenges. In order to do so, competitive intelligence must become a daily management instrument, necessary to maintain and improve competitiveness. It should not be restricted to so-called crisis times. When the threat is about to hit you hard, it is unfortunately often too late.

    As a result, the market of competitive intelligence constantly grows. According to a Robert Morris University study, it has reached more than two billion dollars a year worldwide.

    Two activities stand out, economic watch and intelligence strategy.

    Economic watch enables a company to be immediately aware of changes in its environment, so that it can adapt its behavior and assess risks and opportunities in a new situation. For a company, it is a surveillance tool, used to gather information, knowledge and data.

    Strategic intelligence is a management instrument which allows a company to optimize the use of information in order to operate offensively in the market. As a consequence, such companies will improve their capacity to act while reducing that of their competitors’.

    The practice of competitive intelligence reveals the national level of a company. While 60% of major world companies claim to use competitive intelligence, Anglo-Saxon companies are much more advanced than European companies, which still have difficulties making competitive intelligence a power asset. As proof, leading companies such as Fuld & Company or Richard Combs Associates are American. Moreover, most American companies have understood the interest of spending part of their budget in strategic processing of information. Microsoft, IBM, Motorola, Coca-Cola, General Electric, Hewlett Packard and Intel are among those companies which have understood that in spite of its cost, competitive intelligence can sometimes spare them great losses and help them obtain a market.

    In the 90s, competitive intelligence essentially served analysis purposes – i.e. competitive watch, benchmarking. With the reign of the internet, methods to gather and process intelligence have been totally rebooted. While information is becoming more and more accessible, the increasing international competition and the opening of economically aggressive national markets have given birth to new threats of penetration for information systems and companies alike.

    Those threats have also contributed to the development of borderline activities by certain groups which have discredited the entire business. Confusing information with manipulation, they don’t hesitate to use illegal means to obtain highly classified data or to forge counterfeits in order to destabilize their competitors. So, the border between research and the processing of strategic information on the one hand, and espionage on the other hand, was crossed… even more easily as some of the competitive intelligence agencies are now managed by former spies, thus making up for the “James Bond” myth.

    In 2009, EDF, the French electric company, was sent to criminal court. It was charged with having used Kargus Consultants to spy on the computer of Yannick Jadot, Greenpeace campaign director. For its defense, EDF claimed it had called upon Kargus Consultants to obtain “operational support for organizations’ action modes strategic watch”. As for Kargus Consultants, they claim they acted “on orders”. A similar example occurred in 2009 as well with Hilton, when the hotel chain was accused of having bought two Starwood employees for industrial purposes. In fact, the latter had left Starwood with 100,000 digital files and a hotel chain business project.

    Industrial espionage is now vested with an international and indeed political dimension. By the end of 2011, the giant Nucleaire Areva claimed it had been under computer attacks from China. Clearly, the Central Kingdom is no beginner in this field, its copycat culture being widespread. As Chinese general Sun Tzu wrote as early as the 5th century BC in his Art of War treaty, “have spies everywhere, be aware of everything, and don’t neglect anything from what you will learn.”

    A final recent example is the Oberthur case. This French maker of bank notes and secured documents is a dynamic family business essentially expanding through exportation. Obviously, this “French success story” has turned irritating to some, as the company seems to be currently the victim of a destabilization operation conducted without the slightest respect for the basic rules of either morals or ethics. By chance, or not, just a few months after it had attempted a bid to take over an Anglo Saxon competitor, the French company has been a victim of both computer and physical intrusions, says a source close to the case. Some employees have even declared that they were approached by malevolent “friends” through their LinkedIn or Facebook pages.

    A fundamental element differentiates competitive intelligence from espionage. The essential difference is whether information is obtained legally or illegally. Not only is legal intelligence possible, as 90% of sought information is available, but it must be the norm. It is the duty of companies and consultants to respect deontological charters such as the one issued by the Society of Competitive Intelligence Professionals, which clearly establishes the proper ethical standards. This type of initiative is necessary for at least two reasons. Firstly, espionage discredits competitive intelligence. Secondly, it always ends up with its authors answering for their actions. As Montesquieu once wrote, “espionage might be acceptable if it was performed by honest people.”

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