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Are you watching your competitors? They're probably watching you.

Secret Business

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Keeping a secret in the business world often can mean the difference between big revenues and dismal bottom lines.

With millions of dollars at stake, companies are out to uncover the secrets of their competitors. Sometimes they do it illegally. In 1999, for example, Fortune 1000 companies lost more than $45 billion from thefts of proprietary information, says Martha P. Clampitt, an energy-market analyst with Richmond-based Dominion Energy Inc.

But there are a lot of ways to pry loose information in legal and ethical ways. Those ways are supported by such groups as the Richmond/Central Virginia Chapter of the Society of Competitive Intelligence Professionals. Style Weekly recently spoke with Clampitt, the group's chapter coordinator.



Style: How difficult is it for companies to keep secrets?

Clampitt: It is a constant battle for companies to be able to keep secrets these days. The less organized they are with regard to the protection of information, the easier it will be for a competitor to obtain information from within the company. For example, employers that do not take the time to emphasize the importance of keeping discreet information secret could find that their employees are victims of telephone elicitation.



Style: What's elicitation?

Clampitt: Elicitation is the process of obtaining information — the information you want — from people without asking them direct questions. In order to be a valuable information tool, your conversations should be well-planned. In planning to use elicitation techniques to collect information, companies must realize that their competitors are using the same techniques. As a general rule, elicitors are persistent. Determined to uncover the information they are trying to locate, they will continue to call different people in different departments of a company. Using a conversational style they attempt to extract information. Employees must be trained to recognize these calls and know how to appropriately deal with them.



Style: How do companies protect their secrets from other companies?

Clampitt: Many companies focus only on information collection and competitive analysis and do not focus on the protection side of the equation by taking active measures that are necessary to safeguard proprietary or sensitive business information. Companies should actively work to protect proprietary information instead of having to be reactive when this information becomes public.

The company should conduct a self-evaluation to determine [its] vulnerability and then implement processes for the protection of sensitive business information. Just as a company can use competitive intelligence techniques to gather information on a competitor, a competitor can use the same techniques to gather information quickly, legally and ethically.

There should be a proactive effort in educating employees as to which types of information are sensitive and could have a severe impact on the company if lost.



Style: How do companies uncover secrets from other companies without breaking the law?

Clampitt: So much information is publicly available. You just need to know where to look and how to obtain it. The Internet provides a wealth of opportunities for locating information. Freedom of Information Act requests can be filed to get information. Trade shows, where you can find the people with the company knowledge, are a particularly good source for information. Elicitation, which uses a conversational style and avoids direct questions, can be used to obtain information about a company or its products, processes, etc. All of these techniques are legal.



Style: What is a secret you learned about a competitor? And how did you get it?

Clampitt: While working at another company, I was analyzing a major competitor. One of the divisions was interested in finding out extensive information about the competitor's plant. I filed a Freedom of Information Act request, and then visited the local [Environmental Protection Agency] office to review the documents. In reviewing this information, an internal facilities map was located. When the competitor filed the information with the EPA, they not only mapped out their current facility, but [also] an additional production line that would become operational within the year. This is an example of how company secrets are uncovered.

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