Marketing: Know your enemy

In the cut-throat Nineties, the only way to keep ahead of the competition is good 'intelligence'. Sound tactics? Or dirty tricks? Nick Walker investigates

"We have turned up to meetings in the City and clients have been surprised that we weren't carrying tommy guns. We are trying to professionalise what has always been seen as a gumshoe trade," explains Timothy Hewitt.

Mention industrial espionage and most of us conjure up images of dirty raincoats, dark alleys and rummaging through rubbish bins. We wouldn't think of besuited graduates in their late twenties. We wouldn't think of Hewitt and Calum Forest, joint directors of the London-based firm Ticari International.

If you want to find out what your competitors are doing, these guys will find out. Legally. Industrial espionage, they point out, is illegal. They operate in the upright world of "competitive intelligence": market research Nineties-style with just a touch of 007. And it's coming to an MBA near you.

Competitive intelligence is an American import. The Society of Competitive Intelligence Professionals (SCIPs) is based in Alexandria, Virginia. About 43 per cent of the society's 2,900 members across the globe, who work both as in-house agents and independent consultants, come from business planning backgrounds, 23 per cent from market research, the rest from a mixed bag of business development, research and development, sales and marketing, operations and executive ranks. Telecommunications is the best- represented industry, but still claims only 14 per cent of members: competitive intelligence reaches right across industries from pharmaceutical and aerospace giants to health care and insurance.

Mike Maurisse is a board member of SCIPs Europe, which has some 200 members, ranging from insurance companies and banks to larger blue-chip companies. Maurisse has worked in competitive intelligence for American company 3Ms.

"Competitive intelligence has its roots in market research," he explains. "But unlike market research, we are concerned with future trends."

"Intelligence and espionage are one and the same in the public eye. Yes, you could tap telephones, but that's not us. We don't break any laws. That's the point."

Competitive intelligence, say its practitioners, doesn't just define itself by abiding by the laws of the land, something that more traditional private investigators won't necessarily do. Oh no. Competitive intelligence is not just legal. It's ethical, too.

"Competitive intelligence involves the application of principles and practices from military and national intelligence to the domain of global business. It is where the art and disciplines of both intelligence and strategic management converge. Competitive intelligence is the flip side of the strategy coin," stresses Douglas Bernhardt, author of Perfectly Legal Competitor Intelligence.

Bernhardt is quick to distance the work of his company, the Geneva-based Business Information Group, from the rifling-through-the-rubbish perceptions of spying, but is hesitant to divulge his working methods. "The world of competitive intelligence," he explains, somewhat enigmatically, "revolves around contacts. It's knowing who to talk to."

Ticari is more direct. The company works for a fixed fee in advance, on an hourly basis. A simple inquiry will cost in the region of pounds 2,000, with a premium depending on the nature of the work and level of contacts involved. To acquire competitor information, Hewitt and Forest will first conduct a computer search. "Another method," explains Hewitt, "is to find out who has left the company recently and to talk to them."

Technology has fuelled the growth of competitive intelligence. Maurisse says: "Competitive intelligence is concerned with the public domain, and with new computer technology the public domain is now vast."

Faye Brill is manager of competitive intelligence for a Miami transport company and president of SCIPs. "I might get a call from one of our regional managers saying that a competitor is moving into his market. First, I would check internally whether anybody knew anything about them before I started asking outside. I would want to find out what their pricing structure was - whether they were pricing on a value-added basis or whatever."

The tight-lipped Brill recalls a competitive intelligence project for her previous employer that required not only information, but psychology - understanding the enemy. "We heard that another company was moving into our market. It was baffling, as this company had no previous interest. We were asked to find out if they knew anything we didn't. After talking to many people, we discovered that this was one of the rival director's pet projects. Once we understood the personality of the director, we understood the motivation. We were one step ahead."

But is it not a slippery slope from competitive intelligence to espionage? Doesn't competitive intelligence nudge corporate thinking closer to an invisible line beyond which we would no longer wish to condone the practices it employs?

Members of SCIPs are required to subscribe to a code of ethics that demands the rigours of (gosh!) working "ethically" or (even) "professionally". Members are not allowed to conceal their identity, one of the classic methods of retrieving information and one of the methods recommended by a (subsequently withdrawn) DTI- endorsed pamphlet thought to have been followed in the BA/Virgin dirty tricks case.

"We do deal with a handful of complaints about members' practices every year," explains Brill. "Perhaps one of those results in action or dismissal each year."

Still, according to Hewitt, business ethics in the Nineties have moved on. "The days are long past where it is no longer regarded as fair play to tread on your competitors' patch," says Hewitt. "Business has to be more aggressive. Forewarned is forearmed."

Maurisse, unsurprisingly, concurs. The BA dirty tricks case was a PR disaster for competitive intelligence. But he adds: "It is a legitimate business practice ... and it's one that we are going to have to embrace to survive."