This article is Part 2 of a 3-part series. The purpose of the series is to familiarize the reader with the most common indicators of corporate espionage and advice on how to combat it. This advice is a compilation of our experience at while investigating these types of cases. For a description of the differences between corporate espionage, economic espionage and competitive intelligence, click here for Part I: WHAT IS CORPORATE ESPIONAGE?
For this article, we are concentrating on low-tech tactics commonly used in corporate espionage. Computer hacking, surveillance equipment, and eavesdropping devices are probably found far more in economic espionage cases; but in our experience, low-tech spying is used with a high degree of success in corporate espionage. It’s cheap, hard to spot and even more difficult to trace back to the culprit.
So what are the five red flags you’re a victim of corporate espionage?
- Employees aren’t trained in spotting corporate espionage
- Employees’ benefits and pay are not in line with competitors’ offerings.
- There is a lack of real communication between management and staff.
- You didn’t carefully vet your employees or third-party employees such as cleaning staff.
- You don’t have a concrete plan/Standard Operating Procedure to deal with corporate espionage.
So maybe you thought we were going to say the red flags were things like: sudden brain drain from your company or your company’s stock price suddenly drops, or your competitor always seems to be one step ahead of you. Those are just symptoms. Once you notice the symptoms, it’s already too late. The important point is to stop corporate espionage before it starts; that means recognizing and tackling root problems that make the corporate spy’s job easier.
Employees aren’t trained in spotting corporate espionage tactics
Not only are employees untrained in recognizing common corporate spy strategies, they are unaware just how often they are used; particularly the use of pretext calling. Pretext calling is easy and doesn’t require someone on the inside snooping through records and risking discovery. One long-term corporate spy told us a common practice he used was to call the office of a VIP, to whom he didn’t actually want to talk. When the VIP wasn’t available, he would then ask to talk to another person he knew was working on the target project. Once the secretary transferred his call and the unsuspecting victim saw a call coming in straight from the VIP’s office, he or she would assume it was okay to talk.
Employee’s benefits and pay are not in line with competitors’ offerings
In an attempt to keep costs down, some companies underpay their employees, especially when the economy isn’t doing well; the thought being that employees are lucky to have a job. This is a mistake of which others will quickly take advantage. Through corporate espionage, Company B knows how much Company A’s skilled and most valuable employees make and will offer them slightly more to come to their company, resulting in the brain drain from Company A. Sometimes Company B will offer money or other compensations to disaffected employees to report back information. The employees don’t feel loyalty when they believe Company A was taking advantage of them all along.
There is a lack of real communication between management and staff
While it’s important to stick to a need-to-know basis to protect sensitive information, some managers go too far and give too little information to their staff. Employees are the first-line of defense against corporate espionage. When employees don’t feel like an integral part of the company, they become easy targets. One corporate spy showed up to a worksite and told employees he was hired by their company to conduct a survey. Because his “survey” was brazen and employees were accustomed to a low-information environment, they believed his story and thought management just didn’t inform them of the survey first. An open line of communication between management and staff is essential to combat corporate espionage.
You didn’t carefully vet your employees or third-party employees such as cleaning staff
This is a big one. Conducting a proper due diligence investigation can assist in preventing a prospective new hire coming into your company for an ulterior motive. A background investigation should always be conducted on employees, security guards and cleaning staff; however, just because someone doesn’t have a criminal record doesn’t mean they aren’t a corporate spy. A criminal background check should also be conducted periodically throughout employment or contractual employment. Gambling, drug and alcohol addictions and financial problems are indicators an employee may be susceptible to bribery.
You don’t have a concrete plan/Standard Operating Procedure to deal with corporate espionage
Corporate espionage is far more common than people realize and most of the time, the victim is never aware of it. Chances are, your company has been a victim in some form. While completely eliminating corporate espionage isn’t always possible, most of the above root problems can be solved by having a Standard Operating Procedure (SOP) in place. The next article in this series deals with some basic components of a successful SOP designed to stop corporate espionage.
-Brenda McGinley, CEO, All in Investigations ~
