Is Competitive Intelligence an ethical process?

The practice of Competitive Intelligence or Technology Watch is NOT espionage, and should always be conducted not only within the law but under a code of ethics.

We have read a lot about the use of privileged information in business and unethical intelligence among companies, and it is understandable that doubts arise as to whether the Intelligence Function in the company is governed by ethics. Of course, one of the questions in the Cadena SER broadcast special on Competitive Intelligence (in Spanish) was whether Intelligence and Technology Watch is an ethical process.

An image from years ago has stayed with me: young men in suits sifting through recycling paper in front of an office building. Were they desperately looking for an important document of their own, or hoping to find key information from another company? It wouldn't be hard to find: at a client meeting I asked for some paper to write on and was given used paper, printed on one side, on which there was such critical information that I had to return it and draw their attention to the problem.

A client of a client, related to the defence industry, had his briefcase exchanged for another one exactly like it at the airport, stealing very detailed and critical product information. Nowadays, industrial espionage is a digital sphere. In Spain alone, the third most attacked country in the EU, there was an average of 40,000 cyber attacks per day in 2020, an increase of 125% over the previous year. In the business environment, we should not only be concerned about threats of blackmail or data theft, which are often mentioned in the media, but companies must care especially about industrial espionage.

Penetrating another company's systems to obtain technical data, blueprints, or other confidential information is NOT corporate intelligence. It is espionage.

But in the field of the ethics of Competitive Intelligence and Technology Watch, there are shades of grey. Let's imagine some cases in this grey area.

We want to conduct market research, and we hire a high-level talent recruitment firm (headhunters) to interview competitor managers, obtaining valuable first-hand data on salaries, market expectations, etc. Is this an ethical method to obtain Competitive Intelligence information?

We are all familiar with the practice of mystery shopping. Is it ethical to pose as a customer without revealing your identity and true intentions? Maybe yes, if it is about checking the processes of the corner shop. But is it ethical when we are interviewing in the field of enterprise intelligence?

Would we preferentially hire a candidate who has previously gone through a competitor's company? Would it be morally acceptable even if we do not put "too much" pressure on them to reveal information? What if the advantage we are seeking is not based on the disclosure of secret information?

Let's move from the physical world to the digital world, where almost all information relevant to the Intelligence Function moves. Let's discard the hacker's world: Competitive Intelligence or Technology Watch do not contemplate hacking into the systems of other organisations. Nor does buying data on the Dark Web.

But what if a competitor or a supplier has made its customer files accessible, what it bills them for, or who it buys imports from and at what price? The company has made a mistake. That information is not visible to a human reader of your website, but it is public to any software. Is it ethical to capture and use that information?

Let's take it a step further: what happens if a company's employees talk too much on their social networks? Should we avoid using this information to our advantage?

Another area of concern about the ethics of Competitive Intelligence, Technology Watch or Technology Scouting involves consultants and their potential conflicts of interest in the performance of their work. A problem we discussed in In & Out: The dilemma of Competitive Intelligence outsourcing, solved. Many consultants specialise in a particular sector. This makes sense but increases the chances of working for competing companies. The consultant's approach of "developing a vertical" will force him or her to establish strict measures that contradict business logic, such as never sharing the same consultant's employees with different clients, or redoing work that has already been developed previously.

The Competitive Intelligence professional must always keep his or her professional performance within ethics.

To try to discern what is ethical and what is unethical, organisations such as the SCIP devote effort to advising practitioners. In particular, there are several actions that are internationally considered to be unethical for the Intelligence Function:

• Misrepresentation of identity and/or intent. Whether presenting oneself as a student, job interviewer, market research company, supplier or potential partner.
• Bribery.
• Covert surveillance.
• Information theft.

Competitive Intelligence practitioners can come under pressure from within the organisation, and doubts grow when we move into the grey areas of the Function's performance. It is therefore advisable not to give ultimate responsibility for the Intelligence Function to a junior member of the team, but to a senior position in the company.

The head of Competitive Intelligence must have internalised the culture of the organisation and transfer that culture to the team by resolving these trade-offs.  

The Intelligence Function is another business function where the culture of the organisation is also useful. That culture is reflected in what people do when the boss is away.

Credits:  Photo by Nathan Dumlao on Unsplash

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The opinions of the authors reflect their own views and not those of the company.