According to estimates of ‘The American Society for Industrial Security’, U.S. Corporates spent a sum of about $100 Billion last year in defending against corporate espionage. Much of the growth in expenditure was on account of seeking specialized expertise to deal with undercover espionage activities.
300 out of “Fortune 500” Companies engaged one leading Corporate investigative firm or the other. High-tech surveillance, scientific gadgets, moles, dummies and plants were widely used.
The corporate world in India has taken to spies, bugs and moles with a vengeance. It helps them reach for competitors’ jugular and, in money and market wars little else counts.
PLANTS: - The practice of planting dummy employees in the competitor’s Company is becoming increasingly popular, particularly in Mumbai. Detective agencies are hired to place plants, as they are adept at this. Dummies are planted after preliminary investigations. Vacancy position, level and recruitment rules of the competitor are ascertained. Then the prospective employee is sent, armed with impeccable references.
Not many corporates bother to go too deep into the background of those whom they hire. These plants from detective agencies fit in like glove, usually in the lower and middle level of the organization. There is nothing peculiar about them to distinguish them from genuine employees. In fact, to detect dummies or to smoke them out from within a Company, one has again to employ detectives. Corporates usually wake up only after the damage has been done.
METHODOLOGY: - Sometimes dummies are planted within an organization to keep a tab on one’s own employees too. Today even market leaders cannot afford to be complacent. Some squirm at the word ‘espionage’ and prefer to call it “competitive intelligence”. According to some, getting information is espionage and acting thereon is operations. Wholesale dealers, stockists, vendors can always give you a constant feed on rival’s plans. It is an open secret. Market surveys before launch are other forms of tactics to gather intelligence. Rivals also tap the same sources. The flip side of humouring dealers, vendors and wholesalers is that your competitor gets dope on you, too. The dealers like to ingratiate themselves with big companies for money returns and incentives. Hence, the need for independent investigators or detectives to be hired and controlled by professionals in the organization.
But inside information is always at a premium. Too big a consideration paid also tends to scare off the informants as he gets to feel that he is involving himself into something criminal. Senior mangers of a competitor are wined and dined by sleuths. Even girls are thrown into operations. Nothing is far-fetched in corporate espionage because the stakes are high. Well-laid plans of an expert detective leave no chance for the competitor to defend. Bribing, arm-twisting and blackmail are some of the tools in methodology. Wooing secretaries of senior executives is again usually done by experts in the trade.
It takes more time but the results are very good. Vital information comes through. There seem to be no qualms-when it comes to adopting a methodology. Target selection is very important and involves expertise of trained detectives. Cultivated persons are generally not allowed to even become aware that they are leaking crucial data. It is very important that the penetrated out-fit remains unaware. Otherwise sources become dry. Smear campaigns are difficult to contend with. Subotage is also resorted to.
Corporate espionage sometimes passes off as market strategy. But by and large corporates are only too aware how vulnerable they are when it comes to protecting themselves against professionally master-mined onslaught of detectives. Business in India, is indeed turning into war. It is the need of the hour to be cognizant of all the risks involved.
To thwart corporate espionage operations from without, Managers must understand functions of the security establishment available within the Company. More than ever before, a Company needs considerable initiative and ingenuity to cope with the potential aggression against its best business interests. The threats which warrant special concern are: -
a. Public opinion – a Company must be more concerned with damage to its reputation or good name.
b. Surreptitious gain of proprietary information through industrial espionage is increasing.
c. There is a great deal of hiring away, or ‘pirating’, of key employees and much increased job mobility of personnel, particularly among young employees.
d. There is an increase in theft and defalcation which no longer seems to have the criminal stigma that was attached to them in the past.
e. Sabotage and violence today are committed not only by traditional enemies but by local citizens who take offense against an industry purely on the basis of their own moral convictions.
f. Countrywide tensions and rationalistic trends create special problems for some companies run by ‘stamped’ outsiders.
g. Organized crime is competing for economic power by investing money in legitimate businesses.
h. There are new demands on business to assume more social responsibility.
All of these special changes or threats or intrusions lead to added security problems in one form or the other, and these problems must be solved.
DEFENCE MECHANISM: - In the context of our Company, the game is far from over as anyone could take the jackpot with enough determination, guts and will to win. Abstract justice does not count for any thing when a corporates life is on the line and ethics are only down to jungle rules.
Personnel are the primary targets of corporate espionage. Key employees of a Company are cultivated regularly for vital information. A few of the safeguards could be summarized in the form of Do’s & Don’ts: -
1. Get done a complete background investigation on key employees. Pre- recruitment verification should be the order of the day in our context.
2. Keep an eye to check that lifestyles of employees is in keeping with their income.
3. Control access to company offices by logging all visitors and checking their bonafides.
4. Senior Executives should be imparted training in basic security requirements. Even circular letters from MD to various unit – heads would serve our purpose.
5. Sensitize employees towards security consciousness, as ignorant persons are more likely to leak sensitive information through cultivation by inimical forces.
6. Get sweeps done regularly to detect bugs placed in office premises and phones.
7. Encourage employees to report suspicious activity of any sort by creating anonymous channels of reporting so that they feel free to let the Management know about covert moves.
8. Due diligence investigation of potential partner, business adversaries and associates is a large part of the preventive exercise.
9. Trusted employees who have access to sensitive information have the potential to wreak havoc as a lot of kickback is involved.
10. Balance security concerns of the management with respect for the rights of employees but security must overweight privacy because such tactics are an unfortunate necessity.
11. Have investigators strike up acquaintance with company’s traders, tellers, vendors or procurement officers to ascertain whether subtle offers of bribe get reported back to seniors or the employees fall prey to temptation.
12. Unionized drives are suspiciously well financed with paid and planted office bearers. Even assistants, associates, friends of an expelled or outgoing employee need to be told to exercise caution so that Company secrets don’t get pumped – out through them.
13. Those Companies which are losing market share to our company’s advantage need special attention and ex-employees of our Company, working with such competitors are the most likely persons to be deployed for espionage activities.
14. Don’t assume that every thing bad that happens to our Company is mere coincidence. Treat the Company as a deliberate target of a “whitetail” campaign, an effort to disseminate damaging information about our Company. Check to see who benefits and if they have hidden active role to play. Negative Comments about our Company through media, yellow journalism or concocted motivated court cases and uncalled for coverage and publicity is an indication of affiliation of persons who are undermining your efforts.
15. Share your findings with Governmental agencies as it could be a lot less expensive for our Company to get the malafides curbed through law-enforcement agencies.
16. Our Company could be attacked by very knowledgeable hackers who try to steal customer lists, formula, other sensitive data bank information, and software code. And intruders know exactly what to get and where to find it. Many companies do not even know that they have been robbed. Passwords are not to be shared or left lying about. Key data should be encrypted, with access given only to authenticated employees.
17. Beef up security by hiring executives with law enforcement backgrounds. Hire technical experts to ensure that our offices are clean. Electronic snooping gear is continually evolving.
18. Don’t automatically assume that a former Police officer or CBI agent constitutes a good private investigator. Many are experts in criminal matters but novices in corporate or civil cases. Examine their capabilities through proven track records. Assign this job to the top gun of your security mechanism.
19. Communicate with the investigator. Tell him every thing you know so that he can get to the heart of the assignment without wasting time searching for information you have readily available. He is a part of our team and shares our good intentions. If you don’t trust him don’t hire him. If you trust him, give him elbow space to operate.
20. Get a written investigative plan and a budget from he investigator. Any activity that could lead to a cost over-run should be specifically cleared in advance. Ask the investigator to proceed in a legal and ethical manner. That would prevent cost from ballooning.
21. A single individual should serve as a liaison between the Company and the investigator. The said individual should be familiar with all facets of investigation and duly empowered to react quickly if necessary. He also has to act as a cutout for the management in the eventuality of an exposure.
22. Like it or not, investigators are becoming as important to doing business as marketing and finance professionals. Learn to love them, or at least learn to live with them.
The concept of security has undergone a sea-change from its origin. We must grow up and away from the old school of thought which saw ‘security’ as enforcement. It no more operates through applied power or the fear of power. Security function is now essentially
protective, preventive and precautionary. It is not punitive in nature. It no longer operates through rigid and burden-some controls. It flows from principles of intelligence and understanding. The need of the hour is effective communication from the top of the management. Unfortunately, not all employees are likely to respond in a desired manner.
And quite a few employees know or care little about loyalty, integrity or even honesty. Since we all are not perfect, today’s business climate demands liberal blending of the pragmatic with the idealistic.
It would be worthwhile to examine these basic security concepts with a view to incorporate them in our system of functioning.
V.M.Pandit
MMCInvestigators
(CEO)
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