Success without Secrets

Is secrecy important to your business’s success? I can say with some certainty, probably not, even if your business tries very hard to keep things secret. And the reason is because outside of possibly some very high-level discussions and very early plans, “business secret” is practically an oxymoron.

If your competitors don’t know what you’re planning, it’s simply because they decided that it wasn’t worth the money and time to find out. It’s not because you could reasonably prevent them from knowing. Not anymore.

Some of the ways that information flows out of your building are nothing new. Your employees do leave, and they do go to work for the competition, and they do carefully (or not so carefully) use their knowledge of your plans against you. Nondisclosure agreements don’t protect you from much. Consider a sales rep who, while working for your company, had (and was encouraged to have) all kinds of conversations with potential clients about how your product is the best, how it beats the competition and what features future versions of the product will have (selling the roadmap, as they say). If, while working for you, they were free to have these conversations with people external to your company, without having those people sign an NDA, then this information is now public and they can continue to talk about it when they no longer work for you.

What does this look like in practice? Consider the story of Arista Networks. There are 570 people working for Arista with LinkedIn profiles – but LinkedIn does this wonderful thing and shows you “Insights” about a company. One of those insights is that 139 Arista employees formerly worked at Cisco. Cisco has no secrets when it comes to Arista.

Then there’s the World Wide Interwebs. Just do a search for “battlecard confidential filetype:pdf”. Is this information confidential, proprietary, DO NOT DISTRIBUTE? Not if you put it on the Web. And this Google search is strictly amateur-hour stuff. Competitive intelligence professionals are very adept at crafting a search that will get some great nugget of information off of Page 47 of the Google search results, and right on the first page.

Finally, there’s real espionage. Now US-based competitive intelligence firms like ours keep our white hats on tightly and steer very clear of espionage, but much of the world doesn’t. When it comes to cybersecurity, by all accounts, we’re losing. And cyberattacks are penetrating companies large and small. And while China is the scapegoat in these articles, cybersecurity chiefs in Fortune 500 companies will tell you, “Not all the attacks are coming from the East.” And while the planet is collectively deciding whether it should freak out over Google glasses, the technology to embed covert cameras and microphones into a satchel have been here for quite some time.

Even if some business secrets can be kept today, ask yourself, “Where is this headed? Is it becoming easier to keep secrets? Will competitors have to spend much more money and effort in the future to find things out?” Clearly not. Whatever the cost and effort required to get information on your plans is today, it will be cheaper and faster in one year, and again in five years, and again in ten.

So if business secrets are increasingly an illusion, where does that leave us? It leaves us with strategy – the way Michael Porter defined it long ago – a set of activities that gives you a sustained competitive advantage. It means developing products or services that your competitors can’t or won’t copy or thwart – even if they know exactly what you’re planning. It’s about choosing a position that requires trade-offs that your competitors will not make (as examples, consider Southwest Airlines and IKEA).

Already, some pushback to NDAs is forming and equity crowd funding (open to the public) is on the near horizon. It’s hard to crowd-fund a stealth startup. The secret sauce is no longer secret. Is your strategy ready?