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Spying on competitors can be road to ruin

Sean Dodds, president of Spy Depot International, with one of the cameras available in 2001.

Fred Lum

In business, there are some dirty jobs. Carrying out competitive intelligence is one of them.

There are a number of good reasons to engage in CI. To a certain degree, every business has to do it on a daily basis to understand basic fundamentals, such as a competitor's prices and changes to its products or services.

CI is particularly relevant when a company is entering a new market, or making a strategic change, since all good business decisions are made in the full context of the options to customers. But conducting CI is usually not much fun.

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I often get asked how to conduct competitive intelligence. There are a number of good online resources, such as the Society of Competitive Intelligence Professionals, and some firms that specialize in this area – Flud & Co. – which have excellent and thorough points of view.

The main points of confusion over CI stem from trying to understand what is acceptable and unacceptable in terms of approaches and behaviour. Here are some straightforward guidelines.

First, avoid it if at all possible

Ask yourself why your client or your boss wants the information. What is the end goal? What will the data be used for? What is the underlying need or problem being addressed?

If you don't understand the context, it should be an automatic red light until you do. If the information will be used for any purpose you know or suspect is illegal, such as price collusion or industrial espionage, you must outright refuse the assignment. (This is very rare – I've never encountered it.)

I've seen two things more frequently.

1. The information sought is often interesting but makes no material difference to the outcome of a project or to the organization seeking it. Take, for example, a small manufacturer seeking to know how competitors will deploy their sales forces. It would be interesting to uncover, but it does not change where customers are located or how they purchase.

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2. Different approaches yield the same answer. For example, industry governing bodies such as Professional Engineers Ontario, and aggregator organizations such as the Canadian Marketing Association, keep all kinds of industry stats on everything from pricing to salaries and points in between.

Understand the rules of engagement

This is where I start with new consultants I'm training.

If you feel bad about what you're planning to do to uncover information, it's probably wrong and you should stop and re-think things. Let's get more specific: what is clearly and blatantly over the line and therefore unacceptable is to misrepresent who you are or to lie to obtain the information you are seeking.

For example, posing as a reporter or saying you are calling from a research organization when you work for an IT services company, while creative, is completely off-side. You have to live with, and your firm's reputation depends on, the decisions you make, and dishonesty is the quick road to ruin.

APRIL 5: Four competitive-intelligence techniques that are widely accepted as above board. Look for it on the Your Business website.

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