When does intelligence become spying? Lessons from the NFL.
Yes, business spying really does happen. This may be old news, but it’s a timely reminder for those companies wanting to stay out of the courtroom.
We all relearned this lesson a couple of weeks ago when the New England Patriots’ coaching staff video taped the rival New York Jets’ defensive signals. Knowing those signals would clearly help the Patriots in future games this season, the coaching staff broke a league rule. In short, they spied.
People in my home state of Massachusetts were shaking their heads. The Patriots overtly broke an important National Football League (NFL) rule. They spied, plain and simple. So blatant was the violation that coach Bill Belichick knew he was defenseless against the charges. I fact, he knew that any words on the subject would only serve to further incriminate him and his staff.
What most surprised fans was that the three-time Super Bowl champs did not need to spy. They have lots of well–conditioned talent, excellent coaching, and are generally viewed as a great team. Indeed, many sports pundits picked the Patriots as a favorite to go to the post-season and ultimately win another Super Bowl.
When it comes to spying, major corporations sometimes succumb to the same temptation as the Patriots did, with the same embarrassing results. Big names like Oracle, Procter + Gamble, Hitachi, and Hewlett Packard are among the more notable firms that have been accused of spying in recent years. Each incident received embarrassing front-page treatment. The press has a heyday with these corporate moral pratfalls. But are they breaches of the law or just severe ethical lapses? Mike Sandman, Fuld & Company Senior Vice President, was interviewed by CNBC on September 12, about how companies can avoid crossing over the line and still watch their competition.
Spying is all about deception; it is about breaching accepted industry norms. Sometimes, the law specifically identifies which type of deceit is illegal, such as occurred in the Patriots’ video taping incident, or Oracle’s trespassing on Microsoft property to rifle through garbage. These are easy, black-and-white cases. Deceit is not always black and white, but it is certainly a slippery slope that often leads directly to the courtroom.
What is normal and acceptable for one industry may be unacceptable for another. For example, a hotel can send its employees to evaluate a rival’s sleeping rooms. A retailer can walk through and observe the merchandising and layout in a competitor’s store. These are perfectly normal activities, in part because the business locations are open to the public. In fact, a retailer would be considered off its game if it did not peek into a rival’s shop.
In contrast, a manager of an aerospace company can’t just stroll into a rival’s offices unless invited. Anything less is trespassing and may even be considered spying.
The measuring stick I use to test these norms has four markers: (1) Is the behavior NORMAL for the industry? (2) Is the behavior AGGRESSIVE? (3) Is the action UNETHICAL? (2) Finally, is the action ILLEGAL? Each marker blends into the other, no fine lines. Therefore, if you are an aggressive manager of a retail franchise, you can send teams of people to explore a rival’s retail store (even though it may look strange and just beg the competitor to invite you out of the store post haste). If you push your team members a bit harder and ask them to sneak inside the storage facility in back of the store to check on inventory levels, that would be moving into the unethical, and very likely prosecutable, zone – even if it’s not obviously illegal.
I don’t want to preach. Watching your competitors is a healthy and necessary part of business. Yet, there are limits, as the Patriots, Oracle and others have discovered. I recommend that you start by reviewing some of our competitive intelligence guidelines. Know the law, and most important, know your industry, its norms and where you need to draw the line. Compete to succeed. Compete to see your company’s good actions on the front page of the paper, not actions that spring out of courtroom dramas.
