Stalk Your Prey (Virtually and Actually)
It's not as romantic as speeding along the Amalfi coast in an Aston Martin, but the first thing you probably should do is jump online and take a close, nuanced look at what is available publicly. A rival company may release a lot of useful information on its website. Press releases announcing new hires, for example, can indicate what type of talent the company is hiring. Web services, such as one called Versionista, let you track all the changes anyone makes on a company's website, giving you an indication of which areas it is thinking about and where it might be headed.
There are many free and subscription-based databases with information about private and public companies that can provide even more data. Leonard Fuld, co-founder of the Academy of Competitive Intelligence, keeps a list of more than 600 such sources in his Internet Intelligence Index on his website, at fuld.com. If the target of your inquiries has government contracts, you can obtain related documents by filing a Freedom of Information Act request, which mandates the disclosure of unclassified government paperwork.
You can learn a lot by profiling the competitor's top executives. Private investigator DeGenaro works with a psychologist to develop profiles of the people he investigates. He will examine the decisions they have made, for instance, to determine how decisive or methodical they are. This can help you gauge how likely they are to make a particular move.
If public sources of data do not yield enough, the next step is to approach a target directly—either yourself or through a proxy. J.J. Gradoni, a private investigator in Houston, often performs this role on behalf of clients. "I will pose as a potential customer and ask questions about a company's pricing structure, how fast they ship, turnaround time, number of employees, and so forth," says Gradoni. "Then I ask for references. I call those people as well."
In one case, Gradoni posed as a customer to help a client, a Houston storage facility called Space Place, figure out why business precipitously dropped off the month the owner left for surgery. Space Place's owner suspected the manager of malfeasance but couldn't prove she was up to anything. Gradoni called Space Place and began asking about storage rates. Rather than answering this question, the manager suggested that he try another facility instead. It turned out that the owner of the rival firm was paying the manager to send customers his way. Indeed, Space Place's owner checked the fax machine's log—and learned that the manager had sent along customer lists as well.
The Deep Analysis
You have set your agents loose, and now you have lots of scraps of data but no clear answer to the operation's central question. That is to be expected. It's not as if people's strategic plans come gift wrapped. So think of the operation as a science experiment.
Garrison, of Strategic and Competitive Intelligence Professionals, recommends comparative analysis. Here's how it works: Hypothesize several possible outcomes to the original question. List the various data points you have collected underneath the hypothesis each one supports. Continue doing this as the operation continues. After a while, the data should start stacking up under one hypothesis, pointing toward the answer.
It also helps to ask someone who hasn't been involved with the data collection to look at the assembled information to check against your own biases. The nightmare scenarios that you started with, all those unknown dangers and questions, can be turned into a few realistic threats for which you can prepare. "The last thing you want to do is be surprised by something," says Helen Rothberg, a professor specializing in competitive intelligence at Marist College's School of Management in Poughkeepsie, New York.
Consider the Consequences of Getting Caught
Nothing we have suggested is illegal. But that doesn't mean that intelligence gathering doesn't include important risks to keep in mind.
Here is a cautionary tale about a Toledo-based importer named Gary Marck. Marck allegedly got his hands on a competitor's trade secrets via a time-honored but somewhat unsavory method: searching through the trash. (For a look at what goes into such an operation, see "Garbology 101.") According to court documents, Marck's plan worked well at first. His private investigator, David Richter, allegedly paid a garbage collector in West Chester, Pennsylvania, where CDI International, a beverageware reseller, had its offices. After each trash pickup, the garbage collector handed over the bags to Richter, who would sort through the refuse in search of internal memos and ledgers.
But something happened that neither Marck nor Richter had prepared for: The garbage collector decided he couldn't handle the dirty work. Racked with guilt, he marched into CDI's office and confessed.
CDI's chief executive, Fred Edelstein, says he was shocked, but after some reflection he figured Marck, his biggest competitor, was the prime suspect. (Marck didn't respond to requests for comment. Richter declined to comment.) To confirm the garbage collector's charge, Edelstein asked him to make one last pickup. But this time, Edelstein hired his own detective to tail the collector. Edelstein's detective spotted the opposing PI's car, then traced his license plates to Richter's detective agency.
Edelstein filed a suit for misappropriation of trade secrets against Marck and his company. In an early discovery meeting, according to Edelstein, Marck arrived with three large cardboard boxes filled with CDI's discarded files, including pricing information, vendor invoices, and customer lists—a trove of competitive information crumpled and ripped and covered in coffee and food stains.
Marck hadn't done anything illegal in obtaining the garbage, because it was already off CDI's property, so Edelstein didn't have much of a legal case. (Marck protested his innocence in his own suit against Edelstein; both suits were eventually dropped.) But Edelstein still got revenge—at lunches with customers. In the beverageware community, Marck's covert trash pickups made for delicious gossip. "I'd say, 'Gary went through our trash!' " says Edelstein. "It was a great story." Edelstein continues to wonder whether the information Marck got was worth the embarrassment of being exposed.
Of course, that doesn't mean that Edelstein doesn't do some competitive intelligence himself. Chats with those same customers—the ones with whom he had casually joked about Marck—yielded all sorts of useful information. "It never hurts to find out who your competition is," he says. "It's how you gather the information."
