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Special Challenges |
The Secrecy Mandate |
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Any firm operating in a competitive marketplace
maintains a certain amount of secrecy. Here
are some typical areas where secrecy is
advantageous:
- Product design details
- Production cycle plans
- Internal cash flow projections
- Marketing strategies
- Pending mergers and acquisitions
(M&A's)
- Other forms of intellectual property
NPI has some additional challenges, however,
involving the key, intimate relationship
between Santa and the very young, in which
Santa himself and Santa's reindeer team
personally deliver gifts to the youngster.
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NPI management, including its CEO,
feels strongly that this special relationship
must be preserved--that if young children
were to discover that "Santa and his
reindeer" were really "santa subs
and some other reindeer," this would
damage credibility and, ultimately, depress
sales--with unknown effect on long-term market
share.
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What
Would Happen If...
Santa decided secrecy was
no longer necessary for the Christmas operations?
How would children react? How would parents?
Competitors? The media?
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likely to follow the disclosure might create
a loss of focus just when an "eyes
on the prize" perspective is most needed
Given the secrecy mandate, there are
several areas where this becomes a significant
challenge:
- Local governments. The book
opens with Santa complaining about the
Argentine government's reaction to reindeer
dung on their ranches. This is
just one example of a government protesting
over something NPI has or hasn't done.
However, the secrecy mandate creates
a risk that a displeased government
might "blow NPI's cover" if
its demands weren't met. This
need for secrecy, and its price tag,
is one of the first things revealed
about Santa's character:
He studied
glass cabinets that housed Hummels,
Waterford, rare crystals from Africa,
a carved jade elephant from India--all
presented by emissaries sworn to
secrecy, governments asking favors.
Though the book never states whether
Santa grants these favors, the fact
that they are requested at all brings
the question of CEO integrity into sharp
relief. How much is secrecy really
worth? Where do you draw the line
on paying the price to preserve it,
especially in parts of the world where
"greasing the palm" carries
less of a stigma?
- Security and National
Defense. Imagine if no agreements
were in place, and as military air traffic
controller you encounter unusual blips
on your radar screen that turn out to
be something not in any training manual.
How would you react? Who
in their right mind would scramble jets
against reindeer? But mistakes
on both sides happen:
"Back
when we started splitting up the
santas, we had all kinds of problems,
crash landings, UFO reports, duck
hunters, American navy planes. One
of them even hit a weather balloon.
Talk about being off course."
Mistakes like these can be disastrous
when they're coupled with high-tech
toys. So the military needs to
know. Fortunately, you can rely
on the military's discipline around
secrecy to work in your favor…or can
you? What about nations undergoing
regime change? Or nations that
might see Santa as a western imperialist
symbol?
- Suppliers
and Distributors. Non-Disclosure Agreements
are the vehicle of choice for keeping your
suppliers and distributors in line. But
to be effective, a business must continually
review its policies and its approach to
its supply base.
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Supplier quality
is usually not as visible in the general
marketplace as is end-stage integrator quality.
But if, as a purchasing manager, you
decide that a certain supplier's relationship
to NPI should be terminated, how do you
ensure that secrecy is maintained-- particularly
if the termination is an ugly one?
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Points to Ponder
What are the nondisclosure challenges
associated with worldwide reindeer ranching?
What are the nondisclosure challenges associated with toy company
partnerships?
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- Department
Stores. How would you
set things up so that the temporary
workforce didn't blab once their
stint was over? After all,
Santa himself concedes these may
not be the most reliable employees:
“…I
know they’re mostly good people,
but when you hire--how many of
‘em we got, Oiler?”
“One
point two million.”
“--one
point two million, for three
weeks, you get some bad apples.”
It's safe to say these folks
have very little loyalty to the
firm. How do you manage their
departure so as to protect your
secrecy?
- The Media.
No business can function properly
in a media vacuum. For NPI,
the media pose a special challenge:
How do you strike the proper
balance between the need to maintain
secrecy and the need to report critical
events as a publicly-traded corporation?
If you refer to the novel
in your class assignment, how do
you think Gardner and Mats had to
shape their news conference toward
the end of the story? In today's
scoop-driven world, can you ever
disclose to a reporter what you
disclose to a trusted supplier?
How do you handle leaks? Again,
for those who have read the book,
how would you handle a "North
Pole Newsday?" Here are
Gardner and Router discussing the
challenge:
Her
eyes widened. “Not another
North Pole Newsday.”
He
shrugged. “It’s possible.”
“Oh,
Lord, those things are disasters
every time. Remember three
years ago, when they tried it?
Extra booze for the reporters,
disclaimers, production reports,
view the herds. What an
effort. And then in the
middle of it, the Australian
reporter slaps a reindeer’s
butt. What a mess, blood
everywhere.”
“Well,
the deer told him what’s what,”
Router said.
- The Internet.
When "Santa" was
first drafted, the Web was the sleeping
e-commerce giant just being teased
to wakefulness at the insistence
of early-adopter businesses. These
days, how you manage your web presence--and
with it, internet and computer security--have
risen to occupy ongoing positions
on corporate governance agendas.
In any business, your most
significant challenges here include:
- How do you want
to present your brand(s)?
- To what extent
will you shape your business
strategy around e-business?
- What are your competitors
up to?
- How do you want
to leverage the latest technology?
Or should you?
- With whom do you
link, and why?
There are many more challenges,
and even enumerating them here would
extend the scope of this companion
volume. For NPI, each decision
is also bounded by security considerations.
What might some of these be?
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Protection from intrusion and
identity theft are two of the hottest
security topics which, while perhaps
not new, have recently landed in
the laps of everyone from the worker
bee to the CEO.
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What
Would Happen If...
Santa was the
victim of identity theft?
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Hacker attacks, web site defacements,
stealing confidential information,
viruses and worms comprise the daily
grist of the business technology
pages. For any business, this
is a significant issue. For
NPI, with its security mandate,
the issues become even more crucial.
How do you think these should
be addressed?
- Your Own Workforce.
Businesses spend a tremendous
amount of time, human and physical
capital protecting their perimeters
from intrusions--yet it is a well-known
fact that the majority of security
breaches, whether via the inter-/intranet
or via "briefcase theft"
originate from within.
NPI's workforce is in flux. Workers
who previously felt they had lifetime
employment are being faced with
programs such as TOW (Transition
to Outside Work). In the novel,
Santa argues with the Board over
the TOW Program:
"Let
me remind you you what the elves
think about TOW.” He glared
at them all. “Seven hundred
TOW-ROPE cartoons. Remember?
With nooses?"
Disgruntled employees are present
within any workforce. Ignore
them, and you risk discontent spreading
like a cancer. Placate them
with false promises, and you risk
cynicism and disaffection at best.
If, on top of this, you layer
a program that shakes the foundations
of the unspoken, unwritten (and
thus all the more powerful) contract
between the employees and the organization,
you have the solid beginnings of
a recipe for disaster.
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In these situations, the temptation
to go to the outside and "tell
it like it really is" can be
a way of lashing back against what
are perceived to be programs enacted
by indifferent management, or a
way of preserving one's own self-interest.
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What
Would Happen If...
Someone high
up spilled all the beans about NPI?
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Has NPI truly thought through
the implications of elves transitioning
to work on the outside?
These are just a few of the areas
affected by the secrecy mandate. Viewed
from the outside, preserving secrecy
might seem like it's not worth all the
time and energy. The firm has
already gone public. Why not complete
what's been started by opening up its
inner operations as well?
Unfortunately, it's not that simple.
What's defined as proprietary,
confidential and secret in one organization
might be defined differently in another.
The information--data, documents,
illustrations--placed in each bucket
will also vary from organization to
organization, based on complex factors
such as the competitive map, the firm's
appetite for risk, security policy,
and so forth. What gets protected,
and by whom, and to what extent, are
therefore very much bound up within
the corporate culture of the enterprise.
As we know, corporate culture
is a lot like the atmosphere:
- You can't see it
- It's damnably hard to change
the composition
- Too much change, and you might
not survive
Secrecy and Santa's NPI operations
have grown over the centuries and are
bound up with each other. When
Santa's admin, Roxy, contemplates the
changes over time to NPI's distribution
methods, secrecy overarches the decisions:
“You
won’t find Christmas on any map,”
her mother had told her when she
was a kid, before NPI had either
name or shareholder base. “We’re
a one-way mirror,” her mother said,
describing special southbound tunnels.
“We present a shadow face
to the world. We have touchpoints
where our wagons deliver the toys.
But they see only a few of
us. They don’t know the real
story.”
How
things had changed. Wagons
replaced by trains. Trains
complemented first by propeller
and then by jet planes. And
now, herds everywhere, a new elf
outreach program, landholdings,
countless human santas, layer upon
layer of operations.
She
studied his face, features once
so disposed to laughter but now
frowning, speed-reading something
either disturbing or simply too
detailed, given the stacks of information
requiring instant absorption--and
action: how he had had to
grow into a job both massive and
delicate, obvious while intricate
and hidden. How had he contained
all of this, convincing children
and hoodwinking adults, all the
while hiding these wide-ranging
operations?
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Not only is secrecy bound up with
the firm, it's bound up with the CEO.
And if the CEO is tightly bound
to the firm, the challenge now becomes
how to slice this Gordian knot without
delivering a fatal slash to the organization.
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What
Do You Think?
If you were running
NPI, would you conclude that secrecy concerning
Christmas delivery must be maintained? Why
or why not?
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© 2004 David Soubly |
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