The vagueness of ethics in competitive intelligence

Vineet Vashishta recently wrote about ethics in competitive intelligence. It is a good read and has some practical suggestions, for example running a regular course on competitive intelligence law yourself as a way of staying up to date.

Particularly interestinging are the parts about the vagueness of ethics in competitive intelligence - it is up to the invidual to decide what is ethical:

  • Start any competitive intelligence campaign and you’re bound to do something a competitor considers unethical.
  • I can’t tell you how your business should react to an employee bringing in a prototype of a competitor’s product they found left at a restaurant. I think using it is unethical but another would say it’s fair game. I can’t tell you how to react if your competitor leaves you in a room at an inter-op lab with that same prototype. I’d spend some time getting to know how it worked but another would call that unethical.

Vashishta's overarching principle is equally personal - "don’t do anything contrary to your core values". That makes it impossible to impossible to answer objectively whether doing this or that is ethical. Larry Ellison described dumpster diving, something most people would see as wrong, as "a public service"

Recently, Bonnie Hohhof (who is not new to the subject of ethicsposted a question on LinkedIn that received a surprising amount of vitriol: Is mystery shopping ethical? This is a pertinent question (that has been raised before) - just about the only practical principle in the SCIP code of ethics is "To accurately disclose all relevant information, including one's identity and organization, prior to all interviews". Disclosing one's identity is a key ethical delineator in competitive intelligence. The questions that you want to ask a competitor are always the same (how much do you charge, what's your product roadmap, who are your customers) but you will get different answers if you declare yourself as a potential customer, an intelligence analyst or a student.  But somehow in consumer mystery shopping, it's fine not to disclose your identity. What's the difference? Bonnie was criticized for raising a "stupid" and "inane" question. But no one had a solid answer - replies suggest following your gut instinct, doing what's expected and personal judgments of what is right and wrong. In this useful analysis of mystery shopping ethics, the conclusion is the same - decide your own ethical limits.

It may not be surprising that there is no clear, objective definition of ethics. Ethics is the determination of what is morally right and wrong, and the debate about that is much wider than anyone in competitive intelligence would engage in. 

The SCIP code of ethics mandates the following:

  1. To continually strive to increase the recognition and respect of the profession.
  2. To comply with all applicable laws, domestic and international.
  3. To accurately disclose all relevant information, including one's identity and organization, prior to all interviews.
  4. To avoid conflicts of interest in fulfilling one's duties.
  5. To provide honest and realistic recommendations and conclusions in the execution of one's duties.
  6. To promote this code of ethics within one's company, with third-party contractors and within the entire profession.
  7. To faithfully adhere to and abide by one's company policies, objectives and guidelines.

But how many of these are practically useful to an analyst in the field?

  1. To continually strive to increase the recognition and respect of the profession. On a minor point, it seems odd to start a code of ethics with a call for self-promotion. It is not clear what one must do to increase recognition and respect. The Mossad's activities increase their recognition and respect, would they do the same for competitive intelligence? A scandal involving searching through bins would increase the recognition of competitive intelligence too. And am I really being unethical if I do not promote recognition of the profession?
  2. To comply with all applicable laws, domestic and international. This is a redundant statement - it is just general life advice. I assume it is here because of the historical concerns that competitive intelligence analysts have about their profession being associated with corporate espionage (SCIP's inclusion of the word 'ethical' in the definition of competitive intelligence, which is not the case for market research or consulting for example, is suggestive).
  3. To accurately disclose all relevant information, including one's identity and organization, prior to all interviews. This is the most concrete and most interesting recommendation. 
  4. To avoid conflicts of interest in fulfilling one's duties. Also a redundant statement - it is valid but just general life advice. 
  5. To provide honest and realistic recommendations and conclusions in the execution of one's duties. Another redundant statement that is general life advice - you are being asked not to lie. 
  6. To promote this code of ethics within one's company, with third-party contractors and within the entire profession. This is similar to the first point - it's a good objective if it helps wider adoption of ethics, but not an ethical goal in itself. Not promoting the code does not make me an unethical analyst.
  7. To faithfully adhere to and abide by one's company policies, objectives and guidelines. This is another redundant statement. I am bound to my company's policies by the legal contract of employment I signed with them. Also, without knowing what my company's policies are, it seems a little risky to recommend them.

Of the seven principles, two (1, 6) are about promotion of the profession and four (2, 4, 5, 7) are part of normal business/human behaviour. Only the third point is practical guidance to a competitive intelligence analyst. Perhaps it is too much to expect this code, which aims to be succinct and broadly applicable, to define many specific situations. In fact, Richard Horowitz, who wrote SCIP's response to the Espionage Actbelieves SCIP should stay out of defining individual scenarios and reinforces the idea that every company can come up with their own ethics:

SCIP's Code of Ethics should not take a position on whether it is ethical to call a competitor directly, speak to competitors at trade shows, or to ask a third party to do this for you. These are issues for companies themselves to decide as their policy. SCIP's Code of Ethics sets general guidelines under which compnanies can choose their own ethical standards.

He, like Vineet Vashishta, is right. Anyone can define their own ethics, but that does not seem very helpful.

Perhaps also, the misrepresentation clause is the only practical part of the SCIP code because, as some of the external literature suggests, misrepresentation is the only significant issue to address, as all the others are covered by law. According to Trevino and Weaver (a very good read): 

A review of the competitive intelligence literature led Paine (1993) to propose that questionable intelligence gathering falls into four categories:

1. Misrepresentation.

2. Attempts to influence the judgments of those entrusted with confidential information 

(e.g., bribery).

3. Covert surveillance.

4. Theft.

...of which the last three are just legal compliance; and: 

Paine (1993) included the following practices under misrepresentation:

1. Posing as a student. 

2. Posing as a private research firm. 

3. Phony job interviews. 

4. Posing as a potential joint venturer, supplier, or customer. 

Outside the code, there is more in-depth SCIP material on ethics, although many competitive intelligence practitioners will not be familiar with it. This further material examine the codes of several companies, including competitive intelligence companies. Fuld & Co's code of ethics, for example, includes 'ten commandments' of ethical competitive intelligence:

  1. Thou shalt not lie when representing thyself.
  2. Thou shalt observe thy company’s legal guidelines as set forth by the legal department.
  3. Thou shalt not tape-record a conversation.
  4. Thou shalt not bribe.
  5. Thou shalt not plant eavesdropping devices.
  6. Thou shalt not deliberately mislead anyone in an interview.
  7. Thou shalt neither obtain from nor give price information to thy competitor.
  8. Thou shalt not swap misinformation.
  9. Thou shalt not steal a trade secret (or steal employees away in hopes of learning a trade secret).
  10. Thou shalt not knowingly press someone for information if it may jeopardize that person’s job or reputation.

These seem more useful to working in the field than the SCIP code although, again, many are just restatements of law and some are debatable (how does 'not obtain price information' tally with mystery shopping). Nonetheless, they are a clear attempt at helping the analyst facing specific situations. Aurora WDC's paper on ethics is also worth reading. It is particularly useful for understanding the context of SCIP's guidelines and some of the difficulties of creating such a code.

One of the more specific guides to ethical behaviour in competitive intelligence comes from Egideria, an agency that no longer exists:

competitive intelligence ethics.jpg

It would be interesting to have a definitive list of fieldwork scenarios and which are considered ethical. It could be based on a survey similar to Fuld's 2011 survey of attitudes in different industries. Or it could be created by one company and then refined/whittled through open debate on the internet. A project for another day...