Intellectual property theft and business continuity: a case study
The story you are about to read is true. It is about intrigue, betrayal and cunning and it begins innocently enough one Friday afternoon. We (Scenaris consulting) were undertaking a fairly mundane and uninspiring risk management project on behalf of a London-based value-added reseller of telecommunication switch technologies. As the working week petered out we noticed there was some unusual activity of several senior managers acting with urgent gestures. Huddles behind closed doors gave no further clues until Monday. We breezed in to find the CEO, let’s call him TC, with whom we have a very good relationship, incandescent with rage. The story began to take shape. The previous Friday afternoon, eight out of the ten salesmen in the regional northern office resigned at the same time, including the regional sales manager leaving the HR manager dizzy with processing the paperwork and registering all eight as being on ‘gardening leave’; standard practice for an exiting sales person. This accounted, in part, for the urgent and odd behaviour of London-based senior managers on Friday. However, it did not explain why the CEO, was so upset. Essentially there were two main reasons. The first was it appeared that these salesmen stole company confidential information and the second was that TC felt genuinely betrayed. These salesmen returned to their office on the Saturday and left four hours later with significantly more than that with which they arrived. TC explained, “The (expletive) duty security guards knew them by sight and since nobody had decided to tell them, those (expletive) went in and filched our (expletive) secrets”. They had taken company-specific intelligence and it became apparent that they had defected to the principal competition. This was serious because the company was on the brink of launching a sales and marketing initiative, into which they had invested over £½m. The initiative was predicted to capture a greater market share and this investment strategy was now unprotected and likely in enemy hands. Red-faced TC blurted, “They came to my house, sat at my table, ate my food and drank my wine. I counted them as friends and I find they’re Judas to a man”. The story took wings and the rumour tree was laden with fruit. The story was consuming too much time and it was metamorphosing at speed. This was going from bad to worse in record time. Without reference to any other manager, general manager, SD, organised a video conference call to all staff in the northern office to convey the support from senior management upon which employees could depend. Marketing director, MF decided it was important to contact northern customers to allay any fears that they may have, as and when the story hit the streets. Sales director, RH, decided this was a sales matter and began the drive up to the northern office, in his own words, “to sort things out”. TC was smarting on many counts and we decided to approach him. “TC, we are risk managers and this is a massive risk. You’re all trying to do the best but it’s uncoordinated and you’re all shooting in different directions. Stop now and organize your thinking into an objective plan and execute it”, I said. He listened. On Wednesday we sat down with him and marketeer, MF, and devised two strategies, the first being a communications strategy, in order to manage the greater immediate risk of inflicting further damage through misinformation and disinformation. The second I will call a ‘revenge strategy’; because TC was of a mind to personally confront these salesmen and, “Beat the (expletive) out of ‘em!” Our challenge was to convert the emotionally charged intent into intellectual commitment and thereby deal with this matter professionally. Messages were generated for all staff in each office, for customers, for their competitors and for the press; and a timetable for release was agreed and implemented. With military precision at 9 o’clock the next morning, a director stood in each office and gave the full story and the company line to all staff. At the same time, the PR agency was briefed and press statements finalized. A programme for customer calls was implemented. And the effect of this strategy being implemented quickly and successfully was to re-rail the derailed communications train. To our client we also recommended a lawyer whose specialization is employment law. The purpose was to pursue the 'traitors' through proper legal process and, in the fullness of time. Then, by pure chance, we stumbled upon something we had never even considered. Later that day, my business partner, Peter Viner, and I needed somewhere to discuss matters out of public earshot and TC’s P.A. directed us to a meeting room which was free. On entering, we saw a young woman using the telephone. Nothing unusual about this you may think, but from her body language it was as if we had caught her doing something for which she was undoubtedly guilty; but what? Wide-eyed and blushed, she hurriedly killed the call and slipped out of the room with quiet apology, no eye contact. Peter moved to the phone and picking up the receiver, hit the redial button; and bingo! The defecting sales manager answered. As part of his strategy to steal the family jewels and defect to the enemy, he had left behind a mole. Her job was to tell him our every move. TC wanted her blood, as he put it, “To set an example”. Our view was that we could use her to scent trails that led to no where of consequence. Which way would he jump? From the outset, it was obvious that there was a crisis management battle to be fought and won and we were losing by a distance. Various questions emerged: 1. How to deal with the traitors? Part two of this case study draws us into the shadowy world of spies, of further betrayal and cunning. Allen Johnson is director, Scenaris Ltd
•Date: 30th June 2006 • Region: UK/World • Type: Article •Topic: Crisis management |
