Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, June 8, 1995 TAG: 9506090039
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: The Arizona Republic
DATELINE: PHOENIX LENGTH: Medium
Doug House is in the business of snooping on companies.
And business is booming these days for House and thousands of others who gather what is politely known as competitive intelligence.
Want to know if a rival company plans to build a plant in Mexico? If a competitor is going to launch a new product or hire more salespeople? If now is the time to deliver a knockout punch to a pesky upstart?
For a price, House's Washington Information Group, a business intelligence research and consulting firm in Washington, D.C., will pursue those kinds of questions. But don't confuse what House does with corporate espionage. His work is legal - and ethical to boot.
As House told a national gathering of business executives in Phoenix recently:
``I'm basically in the business of helping companies acquire your secrets, and then giving them to your competitors so they can beat up on you in the marketplace.''
With global trade barriers falling and competition growing ever more fierce, companies big and small are turning to competitive intelligence to get an edge on rival firms. Washington Information Group has seen its revenues climb 80 percent in a year. Membership in the Society of Competitive Intelligence Professionals has grown to nearly 3,000, up 1,000 from last year.
Many of the 50 exhibitors, up from 35 a year ago, demonstrated online databases and research systems for rooting out information. A dozen companies staffed booths touting their expertise in tracking industry trends, technological changes, political/economic issues and compiling profiles of the heads of companies.
Although a project sometimes can be handled with a few phone calls to well-placed sources, a project typically takes four to eight weeks and can require hundreds of interviews. Most studies cost $5,000 to $50,000, but the price can reach $100,000, according to practitioners.
Competitive intelligence conjures images of spies and cloak-and-dagger work, of skulking figures trying to steal the long-secret formula for Coca-Cola.
But those in the business say you can forget about tapping telephones, diving in Dumpsters and cracking computer codes to get a jump on your rivals.
Practitioners, many of whom belong to the professional society, say they adhere to a strict code of ethics.
``Virtually everything a company needs to know about its competition is readily available in the open sector,'' says Paul Kinsinger, an ex-CIA analyst who teaches a course on intelligence in diplomacy and commerce at the American Graduate School of International Management, also called Thunderbird, in Glendale, Ariz.
``It may take some digging and an ability to deduce and extrapolate, but information doesn't have to be stolen or obtained by some surreptitious means.''
Don't believe it?
A few years back, House was trying to dig up the financial secrets of a privately held manufacturing company in Florida. His researchers had scoured databases, reviewed public documents and talked to 150 people, including suppliers, customers and others familiar with the company.
Still, House didn't have enough to put together a good financial picture of the company for his client.
As a last resort, his firm began calling every business in the industrial park where the manufacturing company was situated.
Pay dirt!
The head of a small distribution company knew all about the manufacturer and began spilling all kinds of confidential financial information.
``How is it that you know so much about this company?'' the researcher making the call finally asked.
``For the last five years I've been carpooling with the company's controller,'' the all too helpful business owner said.
``So why are you telling me so much?''
``Because they fired the controller a week ago.''
by CNB