Defend Your Property (by Tom McKaskill) Knowing your weak spots is the first step in preventing your business assets from walking out the door. Few companies like the disruption that happens when a key executive or employee leaves, but they really get upset when that person undermines the business by using company knowledge to compete against them. It is not just knowledge that can walk out the door; staff, business ideas and prospective customers often follow. Most companies fail to take adequate steps to protect their intellectual capital or intellectual property. The value in your business is not simply tied up in things you can touch or that are listed in the balance sheet. For most companies, the business capability is tied up in the knowledge that staff have. Your competitive advantage is more likely to be found in your business processes than in your equipment, and the long-term sustainability of the business is most often in your relationships with your best customers and your main suppliers. Just think how sensitive your business might be to the loss of some important individuals, customers or suppliers. Could your business survive the disruption of the loss of your main customer or supplier? Understanding where your vulnerability lies is the first step in developing a plan to protect the value in your business. Few employees understand the legal relationship between employer and employee, and have no appreciation of their legal standing if they were to leave with customer lists, process manuals or knowledge of partly developed business initiatives. As an employer, you have the legal right to protect confidential information and seek damages if it has been used in a way that disrupts or harms your business. Your first line of protection should be to ensure that employees fully understand these rights and obligations and the actions you could take if there is a clear violation. A written assignment of intellectual property for all employees also ensures that you retain the right to exploit innovations that you have paid for. It also informs them of their obligation to disclose to you relevant business ideas and inventions. You then need to protect your customers from being enticed away. If the only value you offer to your customers is the lowest price, any competitor that recruits your staff can simply undermine your future revenue by offering a lower price. Only by adding value to the customer relationship beyond the product or service can you hope to keep the customer. That relationship cannot rely on just one person. Entangling the customer in your business through multiple relationships and multiple points of contact is the best protection from encroachment. Is your customer involved in your strategic planning? Do you get your customers together with your staff to share ideas or to support community interests? Do your customers feel they are important to your business on a personal and a business level? Long-term preferred-customer agreements, long-term contracts and loyalty programmes can also be a buffer against encroachment. Protecting your business knowledge is more difficult. Where possible, you need to protect intellectual property by having it registered as patents, trademarks or copyright. Ensuring that processes are documented, that succession planning and cross-training is undertaken, and that the business is not overly dependent on a few people, is critical to sustaining the business when important staff leave. Securing important documents and controlling access to confidential company information is also needed to protect the value in proprietary information. Quite often, good staff will follow a key executive to their next employer. This suggests that their loyalty is more to that person than to your business. Staff who enjoy their work, have multiple friendships within the business, work in a supportive team and are supported and encouraged to achieve their personal and career goals through the business are less likely to be enticed away. Paying a proper market salary, providing opportunities for personal and career development and ensuring that each person has multiple points of involvement within the organisation for business and social interaction is fundamental to keeping staff. Are you as an owner personally involved with your most important customers, suppliers and staff? You need to ensure that they all feel that they are important to your business and that their role is recognised in the way you treat them and deal with them on a personal and business level. If you leave the important relationships in your business to others, you may find that they walk out the door with the next person who leaves.