Who is Looking Out for Corporate Spies?

“There is a lot of information available out there…the key is to match a client who understands the value of information and an intelligence firm that has the wherewithal to go out and get it.” – Mike Baker

Societies have always played catch-up to sophisticated criminal enterprises. This has been the norm from the industrial to the information revolutions. From the days when Allan Pinkerton revolutionized the detective role in business, as he became the first practitioner to help major companies protect their assets and information through an extensive civil intelligence network. Today the protection of information is crucial to all companies participating in the global economy. The effective application of information in its many variations can increase or destroy value for a company.  Sophisticated criminal networks are in a constant prowl for information that can be effectively applied in schemes from counterfeiting to stock manipulation. A whole industry has also sprouted around the acquisition and protection of business critical information. A high stakes game is played around the world as teams of spy attempt to steal information that would give then an advantage on the market while the adversaries attempt to keep it from falling in their hands.  The lines are so blurred that even criminal actions are difficult to decipher. It is quite easy, however to see the impact the theft of proprietary have on the market valuation for many companies at the loosing end on this trend.  That is the reason why many internal and contract intelligence units have taken afoot inside many of the most recognized names in global business.

The risk of being targeted by espionage campaigns is very real for companies leveraging market dynamics by outsourcing critical business operations around the world. They are not only the targets of government sponsored intelligence collection campaigns, but  also by private intelligence operators who are also busy at work with operations of their own. There are countermeasures to espionage and information theft. Companies can start by evaluating how vulnerable the physical protection to their information sources really is. Start by limiting access to your facilities and information networks. Also recognizing and classifying proprietary information and placing vulnerable data in protected areas are good practices to implement.  The more mature organizations also conduct information theft exercises to test their readiness and information theft prevention plans.  If you suspect your company may be the target of espionage, I urge you to adapt some of these strategies; your shareholders would be grateful.


How a Crisis Management Team Works

By Francisco Mateo

The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger – but recognize the opportunity 

-John F. Kennedy

All efficient crisis management requires an effective, multi-disciplinary team of professionals to deal with such abnormal business conditions.  No other business discipline has become more strategic for both global and local (Or a combination of the two Glocal) businesses today. For proof just look at the headlines; Toyota, the largest car manufacturer in the world is dealing with massive global recalls of its best selling car models.  Even Honda has joined the act with an ongoing global recall of some popular models.  And who can dismiss the magnitude of the Port-au-Prince, Haiti Earthquake which destroyed the entire city and has dominated the headlines since last month.  Tackling such large scale crisis requires extensive planning before the fact, as well as dexterity in the crisis team’s execution.  I will attempt to synthesize in a few paragraphs the make-up and essence of an effective crisis management team as I’ve seen it in real life scenarios.

I’ll start by basing my hypothesis of the ideal crisis management team on key crisis cornerstones (basically the before, during and after scenarios):

  • Crisis Preparedness
  • Crisis Management
  • Post Crisis & Post Mortem

From here I’ll build the different moving parts that would culminate in the efficient and effective execution by a crisis team.  The first order of business is to formulate a clear and distinct strategy to act, as foundation and execution model. Remember that despite recruiting and training a team and making plans to deal with a real crisis, the guiding star for the organization should be crisis prevention.

The old adage “know your business from top to bottom…and side to side” is indeed practical when tackling a corporate crisis. This holistic approach should start from the R&D to the tail end of your supply chain. Yes, that applies to your suppliers as well. I few months ago I posted about this very topic and it is still relevant at this time. In a nutshell it states that if we took an all-hazards scenario planning approach to natural or man-made disasters; etc., we wouldn’t need to focus on crisis management. The fact of the matter is that we are mostly reluctant to accept these deviations from the norm; therefore, we must come to grips with the fact that crisis preparedness is everyone’s responsibility; even more so for the men and women tasked with dealing with the crisis.  Once you have your team assembled, do your organization a favor and draw a list of possible risk scenarios. The process calls for collecting and screening information; understanding and evaluating those risk scenarios the team drew up prior; agreeing on a decision matrix to facilitate the execution and finally, developing control methods to audit the throughput.

Next step is your communication strategy. Remember that to regulate the crisis flow you must wrap your arms around the message.  Handled correctly your communication plan would help you defuse situational pressure and buy yourself time to execute the rest of your plan. The first order of business for the team is to gain influence over the message communicated to the general public regarding the event, as well as external decisions made to guarantee public safety.  For that matter the crisis team has to ensure good relations with the media and local authorities. Another important fact as evidence in the Toyota crisis is that nurturing a presence in new media (social media, blogs, etc.) is a worthy investment.

Once the crisis team has established the crisis scenarios; identified the stakeholders and defined internal/external lines of communication, it’s now time to rehearse.  It is the crisis leader’s responsibility to set up table-top exercises and other crises simulations. Since crisis are very rare events the stakeholders need to refresh their recollection in order to keep the skills top of mind.  At the same time participation in drills helps to maintain contact data and other aging information relevant.

As in the Toyota case where cultural barriers and corporate practices have crippled companies with a lack of crisis management focus, a team must labor extra hard at the planning stages to ensure senior management buy in and commitment from the entire organization.

It’s tough enough you must manage flaw-less execution under pressure chamber like conditions during a crisis, but if all else fails remember this, you must have faith, be confident in your abilities and research past experiences; it has all been done before.  Jim Collins said it best “No. 1, in times of great duress, tumult, and uncertainty, you have to have moorings.” If your team needs a mantra Mr. Collins offers a good one “If there’s a storm on the mountain, more important than the plan are the people you have with you.”  When you find yourself in the eye of the storm is not the time to build a crack team of crisis ninjas. Much aforethought, in the way of scenario planning should’ve been given for optimal protection of your consumers and reputation.

But now is time to grab the bull by horn or the bullhorn for that matter.  Remember that a sustainable crisis management position calls for swiftly establishing and communicating the situation; fast and efficient communication flow is paramount; globally consistent crisis system and clearly defined procedures and role are all logical steps the team should take. The crisis management team should consider some aspects of how the organization markets its services or products in order to replicate its information campaign through the same marketing channels; this would not only be a coherent approach, but would also send the message to the right target market, those customers that bought into your company’s product. 

How a crisis unfolds depends on countless factors which make the outcome unpredictable.  But if things go south and there are SNAFUs, as Marshall Goldsmith wrote in a recent article, remember to keep the finger-pointing to a minimum.  His 7 Steps process is a good guide to ensure your team becomes more cohesive and stronger.  They are important lessons to be learned from every crisis; with proper documentation you’ll preserve the actions taken (Good and bad) for posterity. One thing the team should never lose site of is the enormous opportunities that a crisis brings.  At no other time is the world more engaged with your company and its brands than during a crisis, it’s human nature, we’re wired that way for the most part. It is still an opportunity for the organization to show its innovation prowess by learning on the fly; its nimbleness at adapting its message as new information becomes available and drawing from the responses to fix the problems that gave way to the crisis, so that it doesn’t happen again. Adapting to the new reality starts with deep reflection on what went wrong and what the organization did right to solve it.

In conclusion, recruiting and training a crisis management team is one of the most strategically important decisions an organization should make. How the team performs during a crisis event is commensurate to the quality of training done prior to any crisis; foreseeable or not. We should all learn the lessons from past and present corporate crisis, issues that may seem small can quickly snowball sweeping away customer confidence and your reputation. Crisis prevention and preparedness could be a cheaper option against those odds.

Hunting Down Fakes

This is a significant and insidious global problem.  Consumers’ lives are put on the line for dirty profits from these merchants of death.  Sadly many consumers lack the ability to differentiate authenticate drugs from fakes.  Worst of all corruption officials are paid enough to look away and act like the problem does not exist.  My hat is off to the Interpol and Customs Enforcement task force working to attack this death supply chain.

Crackdown Targets Counterfeit Drugs
Washington Post (11/20/09) Mui, Ylan Q.

Law enforcement agents from around the world have cracked down on counterfeit pharmaceutical products as part of a new global effort to prevent these medications from reaching patients. The operation, known as Pangea, has already uncovered nearly 800 alleged packages of counterfeit or suspicious medications in the United States, including imitation Viagra, Vicodin, and Claritin. Officials say these counterfeit medications pose a serious patient safety risk, as some have been found to have as much as three times more of the active ingredient than is usually prescribed. Other medications may be placebos and some have been found to contain potentially toxic substances including drywall material, antifreeze, and yellow highway paint. In addition to seizing these medications, officials also shutdown 68 online pharmacies believed to be trafficking in fake pharmaceuticals. The National Association of Boards of Pharmacy maintains a list of approximately 4,000 Internet-based pharmacies that it says are questionable. It also certifies legitimate sellers through its Verified Internet Pharmacy Practice program. Thus far, 17 Web-based pharmacies have met the requirements for certification through the program. In an effort to further prevent the sale of counterfeit drugs, Rep. Steve Israel (D-N.Y.) recently proposed a bill that would increase penalties for counterfeiters and enhance the Food and Drug Administration’s ability to track them. However, the bill is currently stalled in committee.



Organized Crime and Counterfeiting

Film Piracy, Organized Crime, and Terrorism

Publisher: RAND Corporation | ISBN: 0833045652 | edition 2008 | PDF | 182 pages | 2,75 mb
This report presents the findings of research into the involvement of organized crime and terrorist groups in counterfeiting products ranging from watches to automobile parts, from pharmaceuticals to computer software. It presents detailed case studies from around the globe in one area of counterfeiting, film piracy, to illustrate the broader problem of criminal groups finding a new and not-much-discussed way of funding their activities.


Industrial Espionage Prevention

The following article from The NYT highlights Apple’s hyper-vigilant approach to R&D information protection.  Besides using effective protection strategy and even the old cloak-and-dagger operation, security awareness appears to be ingrained in the fabric of Apple’s culture.

Apple Obsessed With Secrecy on Products and Top Executives
New York Times (06/23/09) P. B1; Stone, Brad; Vance, Ashlee

Apple has implemented a number of security measures in an effort to tightly control information about its products. For example, the company requires employees who work on top-secret projects to pass through a number of security doors and enter a numeric code to get into their offices. In addition, Apple has installed security cameras in areas where employees are working on important projects. According to an employee who worked in such an area, workers in some product-testing rooms must cover up devices in black cloaks when they are working on them and turn on red warning lights when removing the cloaks. The red lights were installed to alert workers in the area to be more careful than they otherwise would be, the employee said. Another step Apple has taken to prevent the release of information about its products involves providing employees with incorrect details about a product in order to track down the source of news reports that contain the false information. Employees are sometimes fired for leaking information. According to Regis McKenna, a Silicon Valley marketing veteran who used to advise Apple on its media strategy, the culture of secrecy began to take shape in the wake of Apple’s launch of the first Macintosh. Apple was concerned because competitors knew about the Mac before it was introduced.