By Dr. Avner Barnea
Summary
Recently, I led a workshop on Competitive Intelligence (CI) and Innovation and I came across many questions about the ethics of CI together with queries about the management of ethics in the business world. I have decided to share some of the points that I discussed in class that I believe will be useful to the readers.
About the Internet and competitive intelligence
The Internet era changed the world starting from the beginning of the 21st century and brought on a change that no one expected and certainly not at such a speed. Suddenly, in a relatively fast process, the information on the Internet became available to everyone and the quality of this information has improved greatly. One of the results is that we live in a “transparent” era where it is very difficult to hide secrets since the Internet gives access to almost every piece of information, and hiding secrets has become nearly impossible.
Since the early beginning of the “information revolution”, the business world understood that the new era provided great opportunities unlike before. The information became available and everyone can get to it easily, quickly and usually for free, and most important – it can help companies to gain a business advantage.
Competition in the business world requires companies to gain an advantage over their competitors and maintain it. This cannot be done without gathering information about what is happening in the markets, what the competitors are doing, and even what they intend to do. This information is found on the Internet, and search engines have been developed for retrieval. The first search engines from the beginning of the 21st century and even before that were not sophisticated enough. It took them a long time to search through the information, and the results were not good enough. This changed when two young entrepreneurs named Sergey Brin and Larry Page developed the Google search engine which was launched in 1998 and immediately gained a substantial market share and advantage over competing search engines, most of which disappeared within a few years.
Parallel to the development of the Internet and the enormous speed with which information was received from the network, including from social media, a field called CI began to develop.[1] This is a business area where information is collected mainly from the Internet which is used as a basis for studying the competitors’ moves and market changes to better understand the external environment where the competition takes place.
CI began to develop mainly in the USA in the late 80s of the last century, but the main difficulty it faced was how to get at the sources of information. Until the age of the Internet, the information could usually be found in the press and other publications and books, but it was very difficult to get the information, while access to it was laborious and the information was not immediate. At that time, the ability of CI was very limited, so it was not used frequently.
Over the last 15 years, CI became a vital tool to support decision-makers in business.[2]
Aspect of Ethics
Already in the era before the Internet, ethical and legal questions arose regarding the collection of business information. Like, what is allowed and not allowed while collecting the information? Is it permissible to listen to a conversation between two managers of a competing company who are having lunch? Or is it permissible to enter the competitors’ office under pretense or impersonation and take information from there? Beyond the question of what is legal, ethical questions also arose. For example, is it appropriate for a company to collect information about a competitor and to what extent? Another example – if an employee who worked for a competitor joins your company, is it permissible to ask him to talk about his former employer when it may be against the confidentiality statement he signed in his former workplace?
The Internet era brought about a significant change in the field of CI. By using search engines, it was possible to gather almost any information on the market, competitors and other business players. The collection of visible information is known as OSINT – (Open-Source Intelligence) which is information that is in the public domain. From almost the very beginning of the Internet, we face an era of information overload (overload of information), as there is a lot of interesting and important information from a business point of view, but there is also important information that is not in the public domain and therefore, companies cannot access it. For example, internal information of companies that is accessible only to the company’s employees. There is also information that is kept in closed databases (for example, information of research companies) that are usually protected. This information can only be obtained after payment or meet other conditions. The general trend is that quality information on the Internet is not free anymore.
In different countries, including Israel, some laws protect business information held by companies[3]. For example, laws dealing with trade secrets. Therefore, for example, an employee who leaves his workplace must not take with him the customer list of the company he is leaving or take with him internal commercial information which can give an unfair business advantage. As the Internet progressed and the capabilities of the search engines developed, it became possible to reach more information and more significant information that is online and available to everyone, but there are still closed “corners” that are kept confidential.
Various organizations around the world have established capabilities that enable professional teaching and guidance for those involved in CI or others who wish to expand their knowledge of how to better understand competition and markets (executives in marketing, sales, strategy, business development, and other fields). The graduates in these courses receive various certificates attesting to their training. CI professionals are often asked to present certificates of completing these courses. Those organizations invest in efforts to inform their members also about ethical rules that allow them to gather information only from the public domain. For example, the code of ethics by: Strategic and Competitive Intelligence Professionals – SCIP[4]. The matter of ethical rules that bind SCIP’s members is presented prominently on SCIP’s website.[5]
As we can see in the link above, SCIP has a code of ethics in which seven main sections explain the rules of conduct expected from CI professionals. Although it is obvious that everyone who acts in this field goes by the law, nevertheless, the second section of the ethical code is about the need for experts within the field: “Always in Compliance – To comply with all applicable laws, domestic and international.” For example, a person dealing in this field will not try to break into the database of the competing company, which in most countries, including Israel is a criminal offense. The first topic indicated in SCIP’s code of ethics is: “Elevate the Profession – To continually strive to increase the recognition and respect for the profession,” which means that everyone who deals with CI is obliged to act professionally and behave accordingly.
The last section of SCIP’s code of ethics is as follows: “Strategically Aligned – To faithfully adhere to and abide by one’s company policies, objectives and guidelines.” The meaning of this section is that those who act in the field of CI must ensure that they act according to company policy. The reason for mentioning this matter is that over the years, it became clear that some engaged in CI chose to act independently and often illegally and contrary to ethical rules out of a desire, not to mention an obsession, to bring unique intelligence to their managers without considering the implications that an illegal and certainly unethical move might have. The starting premise is that in a business, there is a clear policy on how to behave in legal and ethical matters and so is expected of those whose area of responsibility is CI.
It is very important to note that the word “intelligence” often has the connotation of a mysterious world where intelligence organizations make clandestine moves to obtain information. But these behaviors are allowed only for the intelligence that countries usually gather by using secret tools and methods. In the business field, the approach is completely different and even the opposite. It is allowed to collect only information that is visible and in the public domain. The business world does not have any privilege to be above the law and practitioners in this field (as well as others!), are forbidden to act except according to the law and in many cases according to clear ethical rules.
Since, as mentioned, we are in the heart of the “information explosion” era, there is a great deal of open information that one just needs to know how to “get your hands on” and there is no need for dishonest ways to obtain it. For CI professionals, it is made clear from the beginning that it is unthinkable to act with James Bond methods but only in straight ways. To collect information from the Internet, there are various advanced software solutions for companies to use. These are tools that know how to collect information almost automatically,[6] often relying on AI (Artificial Intelligence) tools that know how to collect information according to keywords and tags and present the information to those who requested the information.[7] While, as mentioned, there are tools for the automatic collection of information, there are still not good enough tools that know how to analyze the information. A suitable replacement for the human brain in this sense has not yet been developed.
Conclusion
Practitioners within the field of CI and others in business occasionally have dilemmas as to what is allowed and what is not. It is self-evident that what is stated under the law is the main guideline. Sometimes some issues are in the gray area of the law, but these are usually exceptional cases. For example – an employee of a competitor is interviewing with a new company where he may work and talks about what is happening at his company even though he has signed a confidentiality agreement – is it possible to receive the information or not? And in cases of doubt, is it right to turn to legal advisors to get their advice and act accordingly?
Regarding the ethical matter – beyond the ethical code mentioned above, large companies often have ethical codes on various topics and there can often be a section that can be attributed to the field of gathering information and using it. For example, the employee is expected to act in such a way as not to embarrass the company with unacceptable activity, and this is of course also relevant to an employee in the field of CI as well as to others.
There were occasions when CI practitioners were asked to initiate or take part in spreading disinformation and false news, often through social media, to mislead competitors. It is essential to state that this kind of activity is wrong and it is not in the action plans of the CI professionals and it must be defined under the category of unethical activity.
[1] For a definition of Competitive Intelligence see: https://www.scip.org/page/CI-MI-Basics-Topic-Hub
[2] See discussion on this issue in the book by Avner Barnea: We never expected that, a comparative Study of Failures in National and Business Intelligence, Lexington Books, 2021, pp. 21-28. https://www.amazon.com/Never-Expected-That-Comparative-Intelligence-ebook/dp/B09CKMHF9K
[3] Regarding the relevant laws in Israel, there is a separate paper in Hebrew that cover this issue. See also: https://www.scip.org/store/viewproduct.aspx?id=5129427&hhSearchTerms=%22legal%22
[4] Link to the website of SCIP – www.scip.org
[5] Ethical Intelligence – Competitive & Market Intelligence Ethics (scip.org)
[6] For example https://www.digimind.com/?hsLang=en
[7] See Christophe Bisson and Avner Barnea- “Competitive intelligence: from being the eyes and ears to becoming the brain of companies.” Competitive Intelligence Magazine, Vol. 23, No. 4 2018.