Keeping quiet about various things is a part of normal business, but is it a behavior that one can build a strategy on? Can you expect a secret to remain a secret? Should you bet company resources on it?
In my experience, doing so is extremely risky. Just like the old chestnut says, "a secret shared by more than one person is not a secret for long."
But the idea of secret strategies and plans shouldn't just be discarded. After all, surprising competitors and other opponents can lead to huge advantages. Do you simply walk away from such ideas hoping, developing only plans and strategies that simply don't utilize secrecy? I don't think so.
Strategies that are completely dependent on secrecy to succeed, you should avoid. Strategies that are enhanced by secrecy, but should succeed even if the "cat gets out of the bag," however, are well worth investigating.
For example, I once developed a strategy to partner with a Chinese company to manufacture a very low cost version of a complimentary product (not our main product line) for the market. The strategy would have disrupted all the current suppliers, forcing them to spend significant resources restructuring their businesses or face severe price compression. I believed the strategy was solid because the Chinese manufacturer was significantly lower in cost than the present companies dominating the market segment.
You can imagine, however, how the strategy would be enhanced by keeping it secret for as long as possible -- more time to get marketing and distribution systems worked out, less opportunity for preemptive moves by competitors, and a longer lead time for them to respond.
Unfortunately, I was never able to test this particular project, as it was shot down for other reasons. But I'm sure we would have succeeded without secrecy, and succeeded bigger with it.
If you are going to weave secret actions into your strategies, here are some guidelines you might want to consider:
- Keep the circle of employees "in the know" to an absolute minimum. I've learned about more of my competitor's secret moves from their employees than any other source. Common ways leaks occur are hire/fire actions, trade show blabbing, and premature sales channel "selling."
- Watch what you tell suppliers. Many suppliers work with more than one company in a given industry. Don't assume they'll keep your secrets. Give them only what they need to know, and make sure it isn't enough to figure out your strategy themselves.
- Watch who you meet with at public events -- trade shows, sales meetings, symposiums, etc.. People watch who you spend time with, and are always looking for clues about what you might be up to.
- Fly commercially. I can think of one big secret that fell apart when someone recognized a private airplane's unusual destination and put two and two together.
- Use code names. Sure, they seem silly, but at least it's a speed bump to someone casually discovering what you're doing.
- Don't build successfully keeping the project a secret into your projections. It's okay to mention it as part of an "upside" scenario, but don't count on it in your financial forecast.
Hoping for secrecy in your strategies is not necessarily a bad thing, but counting on it is. If the entire idea will be spoiled by the secret coming out -- as it inevitably will -- you'd be well advised to change your strategy. 21.3/4
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