Exploiting Change

One of the things that I’ve noticed lately is just how vulnerable many companies (and other organizations) are to non-competitive threats.

I’m not talking about the traditional corporate bogeymen of big government and big labour. I’m talking about environmentalist groups, political action groups, and even lone bloggers launching verbal rockets from the comfort of their homes. Some of these external groups have good points, but many don’t. Their positions are often non-sensical or ill informed, especially when it comes to science-based facts. The ability to propagate disinformation quickly through blogs, online petitions, Twitter, and Facebook contributes greatly to the capabilities of anyone with a message or a cause.

Organizations need to be aware of this phenomenon and to take measures to protect their operations. Here are four cases in point:

•    A meat processing and packing company in the US called BPI came under attack last year by a lone woman in Texas when she started an online petition against using the company’s product in school cafeterias. BPI’s product, a kind of highly processed meat, apparently excites revulsion among some consumers, even though there have never been any cases of contamination or any other form of associated danger. It just appears to be ‘icky,’ to use a thoroughly scientific term. The consequences on BPI have been disastrous. It’s had to close 4 of its 5 production facilities because its clients—the Walmarts, Taco Bells, McDonalds, and others—have abandoned or put severe restrictions on it as a supplier.

•    Hydro-Quebec, the massive electric monopoly in Quebec, is planning on installing what they call ‘smart’ meters in homes across the province. These will enable more detailed data gathering and information transmission about consumption patterns so that the utility will be able to increase its efficiency. There are some 15 or 16 applications for this technique at the present time, and probably many more in the future. But some people find the fact that the meters emit radio waves to be a harmful side effect. Never mind that the emissions are so weak that they can only be measured in a lab similar to an anechoic chamber, Hydro-Quebec has to fight off ignorant opponents who don’t know the first thing about basic physics. Let’s hope the project goes through nonetheless.

•    TransCanada Pipelines has to fight against opposition to the Keystone XL pipeline from environmental groups in the US. The purpose of the pipeline is to ship oil down from the Alberta oil sands. I’m sure these groups have a lot good points, but the alternative to a new pipeline from Canada is to ship the oil from Venezuela and the Middle East by oil tanker which, once it’s on US soil, still has to travel in a pipeline. Unless the US starts consuming radically less oil—something I don’t think will happen anytime soon—I don’t see how shipping oil from another continent in a combination of oil tankers and old pipelines is safer than in a single brand new pipeline. It’s a question of balancing risks, not eliminating them altogether.

•    Stratfor bills itself as a ‘strategic forecasting’ consultancy, providing geopolitical and military-strategic assessments of the world and regional situations for paying clients around the world. It’s safe to assume that some of these clients are corporations trying to work in dangerous environments and governments seeking independent sources of information. Stratfor’s website and computer servers were hacked late last year, with the theft of competitive and client information such as credit card data and repeated illegitimate email blasts to the company’s client lists. The hacking had all the makings of a deliberate attack to discredit and disrupt Stratfor’s operations and credibility. The company has spent millions getting its operations back on a secure footing.
I’m sure readers have their own experiences or know of other companies and organizations that have had to react to these types of threats. I could have included SNC Lavalin’s dubious connections in Libya, or Talisman Energy’s difficulties in Darfur ten years ago, or even Apple’s Chinese sub-contracting practices.
I write about this phenomenon in my forthcoming book, Brilliant Manoeuvres. It is my contention that many companies need to worry as much, if not more, about nebulous threats from non-commercial entities as they do from traditional business rivals. As we’ve seen from the examples above, the threats can be costly and, in some cases, disastrous.

These types of threats can come from anywhere. Here are some questions to ask in identifying potential threats:

•    Do any of our activities or products, though legal and approved, nonetheless elicit opposition in some way?

•    Has anyone ‘threatened’ to take us down or harm our operations in any way?

•    Is there anything we do that we feel uneasy about making public, even though that activity may be perfectly legal?

•    Can what we do be interpreted in a highly negative light from the standpoint of the environment, politics, or labour practices, whether in North America, Europe, or anywhere else in the world? (Think of the opposition to Apple’s sub-contracting practices with Chinese companies with abusive labour practices.)

There are many other questions that can be asked. The point is that someone somewhere may not like what a company is doing, and can take action quickly to sully the company’s reputation, sometimes with massive effect on its business. I will blog more about this topic in coming weeks, specifically on what to do about it.

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