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The Secrets of Corporate Espionage

Corporate espionage is effective, but not as sophisticated as you might think.

Corporate espionage is alive and well, and not nearly as sophisticated as you might think. Competitors are hiring corporate spies to find out information and poach the best employees. In order to prevent it, you have to know how it happens.

See Corporate Spying with Robert Kerbeck for a complete transcript of the Easy Prey podcast episode.

Robert Kerbeck is the founder of Malibu Writer’s Circle, and his essays have been published in various papers and magazines, including the Los Angeles Times and the San Francisco Chronicle. One of his stories was adapted into the film Reconnected. His recent memoir Ruse: Lying the American Dream from Hollywood to Wall Street looks at corporate espionage and his career as a corporate spy.

Stumbling Into Corporate Espionage

Robert never imagined he would become a corporate spy, let alone an infamous one. He grew up in Philadelphia, where his family had owned a car dealership for generations. Robert was expected to one day take over the family dealership.

However, Robert’s passions lay elsewhere. While attending the University of Pennsylvania, he discovered acting. His goal was to move to New York City and work as an actor. After he graduated, though, that seemed risky, and he went to work selling cars. There was too much trickery in selling cars for his taste, and eventually he got up the courage to move to New York for acting.

He stumbled into corporate espionage by accident. A friend was showing him around New York while talking about a new job he’d just gotten. Robert needed a way to earn money between acting gigs, and the job his friend was describing sounded sort of like sales. He asked if they were still hiring.

The woman who interviewed him never asked about his skills and never looked at his resume. Robert left assuming he hadn’t gotten the job. But he was surprised a day later when he got a call with a job offer.

At one point he and his friend hired an attorney to make sure what they were doing was legal. The attorney looked into it and called it a “gray zone” – he couldn’t say it was illegal, but he couldn’t say it was legal either. Robert is glad he never had to find out if he would have been convicted. The legal aspect might have been in doubt, but it definitely wasn’t an ethical job.

My spying is in the past … but I’m here to tell you corporate spying is alive and well in America.

Robert Kerbeck

Robert’s Corporate Espionage Process

Robert did corporate espionage almost entirely over the phone. He started out by just calling companies and asking for information. It wasn’t a very effective method. Employees would only give out so much information over the phone, and he wanted more.

Eventually, the ploys grew more sophisticated. Robert would pretend to be an employee of the company, or even well-known executives. Being on the phone made this easier. He was an actor, so he learned to mimic executives from their TV appearances. People would be amazed that they had the CEO on the phone and give him any information he wanted.

Much of corporate espionage was convincing someone they had someone important on the phone.

As corporations grew bigger, swallowed up smaller corporations, and began to digitize their information, corporate espionage got even easier. An employee could be in any satellite office in the world and have access to all the company’s information. If Robert could convince someone he had a legitimate need for some information, he didn’t need to worry about reaching the right person. Anybody he reached could look up anything.

The Information Corporate Spies Want

Back then, the information Robert collected most was employment information. Now we have LinkedIn, and lots of employment information is available with a quick search. Many of us don’t realize how valuable that information is. Before the internet and LinkedIn especially, there was no way for competitors to know who worked at a particular company, what their organization structure was, or who were the best people.

I was LinkedIn before LinkedIn was invented.

Robert Kerbeck

Robert’s job was to collect the information about who worked there, what they did, and who were the best. Almost every corporation has internet metrics that they use to rank their employees. Robert found those metrics and told clients which people were the best. Then his clients could try to poach those people.

Much of our data that used to be private is now public. Your age, education, salary, and more can probably be found on the internet. But there is some information that is still private and still a valuable target for corporate espionage. Many rock star employees aren’t on LinkedIn or haven’t updated their profile. Company information, like plans for expansion or acquisition, staffing, and project timelines, are also valuable.

Every project that Robert discusses in his book Ruse was a bespoke project. Clients hiring him for corporate espionage would tell him what information they wanted, and he would find it. Defense was a major industry at the time, so Robert targeted a lot of defense companies. He got names, budgets, timelines, and more for top secret projects over the phone. It was the kind of stuff he would have gone to prison for if he’d been selling it to the Chinese – and he was making $8 an hour to supplement his acting income.

Gaining the Mark’s Confidence

Robert’s biggest tool for corporate espionage over the phone was to gain the confidence of whoever he was talking to. Sometimes he would gain so much confidence that salacious information would come out. He would get lots of information from company gossip.

He used many tools to gain people’s confidence and get them to give him information. One tool that the savvy person will recognize from phishing and other scams is urgency. He would claim to be an executive in the middle of an important meeting and he needed the information now. He also capitalized on people wanting to be a team player. When someone gets a call from an executive in Germany who is in a meeting with a European Union regulatory board and needs some information, they don’t assume it’s corporate espionage. They assume they should help out this company executive.

One of the things about these ruses, the more outlandish they were … the more believable, in a strange way, it becomes.

Robert Kerbeck

Robert’s biggest tool, though, was researching in advance. If he tried picking up the phone without researching, it was easy to get “busted.” Then his target would send out an email and it would be even harder to get information from that company in the future. Research helped him target the best approach for that particular company. He took into account what was happening with the world, with the company, with stock prices, even with the sports teams in the city of the company headquarters. All of that would help him build rapport with whoever answered his phone call. Once he had that rapport and relationship, the corporate espionage part was easy.

Knowing Who to Target

Part of successfully getting information is knowing who to ask for the information. Sales and marketing departments tended to be helpful to Robert. The people in those departments usually like to talk. Human Resources, on the other hand, won’t give you anything. Robert has asked other people within the company to call HR for him, but he never calls HR because they won’t tell you anything.

Corporate espionage is most successful when people aren’t following protocol. A company may have the best security protocol set up, but if there is a department that isn’t following it, a corporate spy will be able to access private information.

The weakest part of the security system is almost always the human being.

Robert Kerbeck

How to Prevent Corporate Espionage

Nobody in a company wants to stick out in a bad way. People follow the corporate culture. Young people and junior people especially don’t want to make waves. The people at the top of the organization need to demonstrate that security is a priority, or corporate espionage will keep being successful.

If someone calls claiming to be an executive or the head of a department, most employees don’t want to take a stand against that and risk making an enemy. An employee should be able to say, “With all due respect – and I’m sure with your role at our company you understand – you’re asking for private information, so I need to verify your identity.” There should be a policy at the corporate level for that kind of situation. If the employee doesn’t know the caller personally, they should know to do these verifying steps before giving out information.

Prevent corporate espionage by never giving information to anyone whose identity hasn't been verified.

I can count on one hand the number of firms in a pretty long career as a corporate spy that I had difficulty extracting information from.

Robert Kerbeck

In all Robert’s years of corporate espionage, he’s found very few companies that he couldn’t eventually crack. Those few that he couldn’t are ones that were drumming security into people from the top down. They had protocols, they knew what those protocols were, and following them was part of the company culture. This wasn’t industry-specific. These were just companies that had strong security practices.

Leaving the World of Corporate Espionage

Robert isn’t proud of his career. He knew it wasn’t ethical. He justified it by never taking his ruse into his personal life, and knowing he never took anyone’s money or credit card information. What he was really doing, he told himself, was helping people get better jobs. For better or for worse, corporate espionage was just part of the capitalist establishment.

Then the crash of 2008 hit, and all business stopped – including corporate espionage. All the sudden, Robert had to find a different job. He took a job at an executive recruiting firm, where he met with CEOs of the world’s largest companies to present data. CEOs of large corporations are aware of corporate espionage – they just get it from third parties so they have plausible deniability.

While working there, Robert discovered that the lying done face-to-face on Wall Street was worse than any lying he ever did over the phone. Someone would lie to him, he would know they were lying, they would know he knew, and nobody cared. In the end, he got repeatedly screwed over by lies and back-room politics. It made a fitting ending to his book Ruse: The professional liar falling victim to more lies.

Learn more about Robert Kerbeck and his book Ruse: Lying the American Dream from Hollywood to Wall Street on his website, robertkerbeck.com. The book is available wherever books are sold (but Robert recommends your local bookstore – if we don’t support them, they won’t be there anymore). You can also find him on Instagram @robertkerbeck, on Twitter @robertkerbeck, on LinkedIn, and on Facebook. He loves to talk to people, so please reach out with questions or comments.