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BUSINESS PLANS

Loose Lips Sink You
 

Even casual public chit-chat among employees can give competitors confidential information about your business. Here's what you need to know to keep your company's secrets under wraps.
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In these days of intensive business travel, the walls have ears. An indiscreet comment could be all it takes to make a competitor's day

The shuttle-bus ride from the airport to downtown Tokyo promised to be boring but blessedly short. Frank Calhoun (a pseudonym), a consultant with the management-consulting firm of Fuld & Co., in Cambridge, Mass., pulled out his notepad to outline his itinerary for the day and settled into his seat.

"I'm telling you, we need to refine our distribution strategy," said the man occupying the seat directly in front of Calhoun's.

There was a pause. "OK. And what do you suggest?" asked the man's seatmate.

Calhoun's ears perked up. He abandoned his itinerary and, for the next 20 minutes, jotted down every word of the conversation that ensued. He learned that the two men were executives in a Silicon Valley company and that they were in charge of positioning a major product. "They were apparently discussing confidential marketing plans and distribution strategies in explicit detail," says Leonard Fuld, president of Fuld & Co. and Calhoun's boss. "And when my consultant introduced himself and showed them all he'd been able to learn about their company just from being within earshot, they were obviously pretty embarrassed."

Embarrassment should be the least of it. What if it had been a marketing honcho from a rival company who'd been scribbling notes in that shuttle seat? Like many other businesspeople on the road today, the Silicon Valley road warriors weren't being nearly as mindful as they should have been about protecting sensitive company information in public. And though they'd never knowingly let such material out of the bag, they simply didn't stop to think that, in this age of intensive business travel and electronic-communications systems, the walls have ears--and that an indiscreet comment here or a misplaced fax there might be all it takes to make a rival's day.

Not that it's entirely their fault. When most executives fret over company security, they tend to fixate on dire visions of technological skulduggery: hackers breaking into networks, intelligence agents cruising the Web, thieves filching laptops. Yet experience suggests that companies often have less to fear from nefarious operatives than from their own well-meaning employees, especially those racking up frequent-flier miles. What many companies are slow to recognize is that a great deal of proprietary business information gets out into the world in the most mundane ways--well-lubricated chitchat among colleagues on a crowded flight or at a convention mixer; stray memos left behind in a lobby or a rest room; company files called up on a laptop screen in blaring 20-point type.

Just ask Fuld, a leading authority on business-intelligence gathering. One reason that leaks persist, he maintains, is that it's common for companies to overlook the human factor. "Employees, in their workday world, consider most pieces of information they handle harmless," he writes in his book The New Competitor Intelligence ( John Wiley, 1995). "They do not worry about what they consider harmless information, especially since they have enough serious, obviously damaging information to protect. What they don't worry about, they don't watch."

That is particularly true, by most accounts, when those employees head off on business trips. They are harried. They are on the run. And they are in public places. So what they're not watching has the potential to be picked up not just by scores of other businesspeople but also by the more than 50,000 full-time competitive-intelligence professionals currently employed in the United States.

To be sure, protecting trade secrets has been a concern for businesses going back to the days of the stagecoach. But at a time when business travel is on the rise (the total number of business travelers reached nearly 44 million in 1998, a 14% jump from the 1994 total, according to the 1998/1999 Official Airline Guide's Survey of Business Travelers) and business travelers have immediate access to vast amounts of sensitive data, the need to be vigilant is particularly great. "The difference now is that with today's technology, information is more valuable, and it can be whipped through the world much faster," says James Pooley, a California intellectual-property lawyer and the author of the book Trade Secrets (Law Journal Seminars, 1997). "That increases the security risks."

"People are just very, very careless," agrees William DeGenaro, of DeGenaro & Associates, a consulting firm in Sarasota, Fla., that specializes in competitive intelligence. "Sometimes it's gross navetÉ or a total lack of knowledge and sensitivity about what business intelligence is." Although DeGenaro stresses that in the normal course of business it's not possible to protect everything, he does believe that companies need to do a better job of alerting their staffers to the pitfalls of lax behavior. "Another common problem is that people take too much data or paperwork with them when they're traveling--stuff that isn't essential to their trip but that might compromise security if it's left behind somewhere. I know of instances where company documents have been left in the trunks of rental cars, and briefcases have gotten snatched while someone was using the phone in a terminal or a hotel. It happens all the time."

Last updated: Jun 1, 1999




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