Security as a Barrier to Knowledge Creation

As the sharing of information has become more sophisticated the ways in which information can leak have become more subtle and insidious. Unguarded moments of committing thoughts to social networking sites have caused embarrassment to many and so has accidentally putting the wrong name in an email address field. On another level, the actions of hackers and serious cyber criminals have become an everyday hazard. We have a culture of paranoia where security is seen to be an intrinsically good thing and yet this is not always so.

Organisations have always been anxious about their secrets. As a business lecturer I have often come across resistance when it comes to work based assignments, for example. I have had students who have been told that they cannot say anything at all about their work because they might release sensitive information of use to competitors. In my experience, the employer has always relented when they have realised that this kind of information will not make it into the student’s assignment. Nevertheless, it demonstrates a general anxiety that organisations have about confidentiality.

The thinking goes like this. We have a process which goes from x to y to z. This process is the basis of our profits and if anyone were to copy it, they would be able to steal market share. Of course, this line of reasoning is full of misconceptions and half-truths. It is as misconceived as to think that the window cleaner looking in at the office window would then be in a position to steal the business.

I suggest that information that organisations consider to be confidential falls into three categories. Let me illustrate with the example of a manufacturer of widgets. The first type of information is information like the details of the manufacturing process. The widgets are manufactured using a well-established process that has been used for more than a decade. There are a number of companies in the same geographical area which have from time to time lost employees to each other. Though you could not find a description of the process on the internet, you could say that the process is part of a community of practice (Wenger 1998) which is not the property of any one company. This is the sort of information that companies try to keep secret but fail in due course.

The second type of information is information about a new development. Let us say that our company has discovered that they can manufacture the widgets to higher tolerances by carrying out part of the process in refrigerated conditions. This will give them a competitive advantage and the other companies would be able to copy it if they found out. The news will get out because of informal networks in the industry and because personnel will move from one company to another over a period of time. This kind of advantage can only ever be temporary and, probably, short-lived.

The third type of information is very specific to the business. It would include things like the bid price on a tender and is unequivocally useful to a competitor in a way that would almost certainly damage the business. This kind of information is usually kept confidential even within the company and only revealed on a need-to-know basis.

Bearing in mind these three types of confidential information let us compare them with the junior employee of the company who attends college on day release to learn some general principles that will make him or her more useful as an employee. No one feels uncomfortable because of that kind of information. All the present and potential future employers would say that this kind of knowledge transfer is a good thing. And yet, where is the boundary between that and the first kind of confidential information that I have described? And where is the boundary between the first kind and the second kind? Are the first two categories of information that companies commonly see as confidential properly confidential at all?

The manufacturers of widgets might give consideration to the basis on which they compete. Since it is not the details of the process which differentiates them, perhaps they would be better off to collaborate on research and development. If the whole industry could become more efficient, all the competing companies would be in a better position to resist competition from substitutes. While each company barricades itself in a bunker of confidentiality it may be damaging its future competitiveness.

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