By JONATHAN D. GLATER
Published: September 12, 2001
When Stephen J. Wade goes to a social gathering of fellow oil-industry executives, he is not there just to schmooze. He is there to snoop.
Mr. Wade is a ”competitive intelligence analyst” — management-speak for corporate America’s equivalent of a spy — at Shell International Exploration and Production, a Royal Dutch/Shell Group business. And some of the most useful places to troll for leads on what competitors are up to, and for the likes and dislikes of their customers, are dinner parties, lunches, conventions and conferences.
Mr. Wade zeros in on company employees and uses every trick in the book to coax information out of them. He flatters them, asks leading questions, drops names — he may even dish out erroneous information in the hope that somebody will correct him.
Though he does not even try to hide his professional identity, people often tell him what he wants to know.
”I will approach you and I will introduce myself to you, and we’ll exchange cards,” Mr. Wade said. ”My card will say ‘competitive intelligence,’ and it will have a corporate logo on it, so it will all be aboveboard.”
Then, the British-born Mr. Wade said, he will ask a lot of questions about business strategy — aided by an English accent that seems to mesmerize many Americans — and amazingly enough, people will answer.
His job is simply to listen.
”You don’t really need to be too subtle, because people like to talk,” he said. ”It isn’t James Bond.” Still, like any good spy, Mr. Wade declined to give detailed examples of information gleaned this way.
Ferreting out information about rivals that they would rather you did not know sometimes skirts ethical bounds, as illustrated by a brouhaha that broke out last month after people hired by Procter & Gamble employees retrieved documents from trash bins outside Unilever’s Chicago offices. (The two companies announced last week that they had settled the dispute.)
Corporate spies say such shenanigans are rare. Mostly, the operatives rely on information available to the public, often searching the Internet to get it. That kind of grunt work can pay big dividends, they say.
Sleuthing for a company is an increasingly popular career choice. While exact numbers are difficult to pin down, the Society of Competitive Intelligence Professionals, based in Alexandria, Va., says its membership has more than doubled in just six years, to around 7,000 from about 3,000 in 1995.
”This has really begun to take off,” said Herbert E. Meyer, a former Central Intelligence Agency analyst and now chairman of Real-World Intelligence Inc., a company based in Friday Harbor, Wash., that trains people to collect and analyze business information.
While Dumpsters and the Internet can both be valuable sources of information, said John A. Nolan, a 22-year veteran of the C.I.A. who runs the Phoenix Consulting Group in Huntsville, Ala., people are, too.
And, he said, an extra bit of artistry is required to shake company secrets out of a human being.
”There are about 40 different elicitation techniques,” he said, and they have to be chosen carefully to match the personality of the person being approached. For example, he said, an accountant might be expected to be attentive to detail and to loathe inaccuracies.
”After giving that person who might be an accountant what you already know to be incorrect numbers, he’s going to want to correct you, because he can’t live his life without correcting you,” Mr. Nolan said. ”We would probably use considerably different techniques with other people.”
Corporate spies also indulge in educated guesswork about how competing companies might act under shifting market circumstances.
Most of the programs that train people to take advantage of publicly available information include a segment on ethics. Fuld & Company, a Cambridge, Mass., consulting concern that caters to corporate executives seeking to develop their spy skills, tells students to abide by the ethical rules of the Society of Competitive Intelligence Professionals. Those rules prohibit hiding one’s identity to obtain information, for example.
”We’re not here to train choirboys,” said Leonard Fuld, the company’s president. ”But you want to be able to sleep well at night.”
Others in the profession are less squeamish. Reliance on public information excludes a good deal of other valuable data, said William P. Callahan, president of United Intelligence Group Inc., a company based in New York. ”Trash is legal,” he said.
”I don’t understand all this hand-wringing,” continued Mr. Callahan, who says his company has engaged in Dumpster-diving as well as conducting interviews under fictitious names and surreptitiously recording phone conversations where it is legal to do so.
More information than ever may be public, he said, but in cases involving private companies or well-kept secrets, trolling databases is not enough. Companies that say otherwise ”believe in gathering information through osmosis and stuff,” he said contemptuously, adding that rooting through trash is not necessarily illegal.
While cloak-and-dagger escapades make for better headlines, most intelligence analysts rely on old-fashioned legwork.
Mr. Meyer’s company focuses on analysis of information collected by a powerful Internet search engine. Searches are designed after thorough interviews with a client’s senior management so that they can incorporate the products, customers, suppliers, competitors, industries and any other information important to the company.
James E. Schrager, president of Great Lakes Consulting Group Inc. of South Bend, Ind., and a professor at the University of Chicago Graduate School of Business, recalled how such nuts-and-bolts research saved one client a lot of money. The client was thinking about buying a maker of cast-iron pulleys and wanted to know whether the acquisition would make sense.
By scouring the Internet and asking people in the industry, Mr. Schrager and his colleagues determined that the answer was no. Plastic pulleys were going to pose a significant threat, they concluded, because they were cheaper.
As a result of his company’s findings, he said, the buyer walked away from the deal.
”It’s old-fashioned investigative reporting,” Mr. Schrager said, ”because we’re not driven by stories or news as much as we’re driven to find things below the surface.”