Trade secrets

The biggest threat to a company's trade secrets comes from current and former employees rather than spying competitors.

by MIT Sloan Management Review
Last Updated: 23 Jul 2013

The misappropriation of trade secrets, which research suggests affects 40% of firms and costs many billions a year, is therefore largely a management issue.

Mistakes include simply disseminating policies on trade secrets with the rest of new-employee documentation (so giving employees information overload and lessening the impact) and not regularly recommunicating policies - including about the ownership of employee ideas.

Employees also respond better to policies designed to help them do their jobs effectively, rather than those that signal that they aren't trusted. Companies should consider having an annual review to declassify information that no longer needs protecting; they should also make clear to employees that negative information is also of advantage to competitors.

Finally, employees leaving the company should be reminded of their legal responsibility to protect the organisation's trade secrets.

Keeping trade secrets secret
MIT Sloan Management Review, spring 2006, Vol 47 No 3
David R Hannah
Review by Steve Lodge.

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