Although I don’t handle customer complaints directly, one day I received a call through our operator from a disgruntled customer who complained that our company should not allow counterfeit products carrying our brand name to be sold so boldly. She went on to describe what seemed to be an unbelievable story about a counterfeit ring that was selling hundreds of thousands of dollars worth of counterfeit goods in Middle America. Curious, I seized this unusual opportunity and assigned the claim to our investigations team, which usually focuses on theft and policy violations.
It turned out that the customer’s story — although it had seemed unbelievable — was also, to a large extent, true. Within weeks, our investigations team, working closely with law enforcement, had completed a sting operation that led to the arrests of numerous individuals, the seizure of thousands of pieces of counterfeit goods and the discovery of a supply network that stretched outside the United States.
Protect our brand? You bet we did.
In today’s business environment, business unit owners need to continually drive incremental value to their organizations. This is particularly true of operational business units that do not directly or tangibly generate material growth in revenue — areas such as security. In anticounterfeiting, I realized there was an opportunity to add value to the organization. So I jumped.
After my team’s success with this anticounterfeiting operation, I was able to convince our senior management to move anticounterfeiting operations out of the legal department and into the security realm. It wasn’t an easy sell, but it wasn’t that hard of a sell, either. In fact, once I started looking at the issue, it became obvious why my team could be successful fighting counterfeiting, and why the organizational move is a logical step for any brand-conscious organization.
Security Skills for Anticounterfeiting
Our security department’s mission always has centered on the concept of protection, so it seemed logical to expand the mission to encompass protecting the brand from the illegal and unethical pirating of our products, which could erode customer confidence and trust in our brand. But bringing real value to the company centered on playing to and leveraging some of the strengths of our security team. Here’s how I made my case.
First, many aspects of anticounterfeiting operations rely on solid and creative investigations — something that played directly into the strengths of our investigation team. The team is adept at conducting comprehensive, fact-finding interviews, mining intelligence for additional leads, conducting surveillance, performing undercover operations and maintaining documentation and records for purposes of litigation. To take on anticounterfeiting responsibility, we had only to expand these skills outside of the traditional security responsibilities and apply them to efforts focused on the crime of trademark infringement.
Second, due to the nature of our business, the security team is represented throughout every business channel around the world. This level of organizational penetration has served us well and lets us drive consistent and collaborative support of traditional security themes and best business practices. The mentality that all of us in security strive for — to make sure “security is everyone’s job” — has been maintained by the rallying cry and constant reinforcement of our local security agents with their business-channel partners.
In addition, this presence at our locations around the globe enhances the company’s ability to respond nimbly to reports of counterfeiting to protect its business globally. If a report about counterfeiting comes in almost anywhere in the world, security has someone onsite who is prepared to investigate possible illegal activity. By leveraging security’s global organization, the company can maintain effective focus and commitment to brand protection. In a sense, brand protection is everyone’s job, too.
Third, a standard operating procedure for security has been to maintain a commitment to process improvement. By expanding into anticounterfeiting operations, the company has embraced process improvement into this area traditionally served by counterfeit product seizures, prosecution and litigation. Now, new aspects of business are scrutinized through the window of process improvement to focus on protecting the brand. For example, we are reviewing internal operations to identify ways to ensure that counterfeit items do not enter the supply chain, and all customer touch-points are under scrutiny to see how our well our employees are trained to identify counterfeit products. Along these lines, security also is looking for opportunities to employ a covert product security tool that will improve the ability of any company representative to distinguish between a genuine item and a counterfeit one on the spot. Improving our methods of identifying counterfeits also improves productivity, because suspected fake goods don’t have to be sent back to a central location staffed by quality assurance specialists.
The decision to move anticounterfeiting operations also leverages security’s vendor network and other relationships. Many security and risk-management companies that specialize in areas such as background check investigations, competitive intelligence and compliance also specialize in brand integrity and intellectual-property services. Rather than having another department form an alliance with vendors that my department already deals with, security can simply modify its contracts or service expectations with our vendors to include anticounterfeiting functions.
Anticounterfeiting’s Benefits to the Organization
This has already paid off. One day, management expressed concerns that certain gray-market organizations were selling our products and causing confusion in the local market, but they didn’t know if the items were counterfeit products or authentic ones that somehow came from one of our distributors. My team was able to respond rapidly by having one of our existing security vendors investigate. That vendor conducted site visits, product buys and quality documentation for litigation purposes, and the information was then hand-wrapped and delivered to our legal department.
In another case, a newly forged relationship between one of our security agents and local law enforcement allowed us to identify the movement of counterfeit goods. One of our security team’s normal business practices has always been to develop strong relationships with law enforcement organizations at the local and national levels; now, we’re leveraging these relationships to establish new ones with customs and trade-enforcement organizations. Recently, a case in the United Kingdom resulted from a relationship our London-based executive had developed with members of the Trading Standards Service. A Trading Standards Service officer called our security agent with a tip and asked if we wanted to pursue the case. This resulted in the identification of a counterfeiting ring that was importing counterfeits from China and distributing in select cities in the United Kingdom.
By leveraging some of security’s core competencies, the company has realigned responsibilities and improved the productivity of at least two departments. Security is supporting anticounterfeiting operations as a value-add to its traditional mission. Meanwhile, the company’s legal department has been able to shift its resources to priorities that require counsel — areas such as real estate, labor law and copyright and trademark registration.
In addition, leveraging security’s infrastructure has assured the company a greater degree of expense control in anticounterfeiting initiatives that involve the use of third parties. That’s because security is able to manage the operations and deliverables of the vendors more closely than the legal department was realistically able to do. In the world of brand protection, dollars can easily funnel into a black hole, but a nonrevenue-producing operations team like our security organization can apply its aggressive fiduciary responsibilities across all its disciplines. It’s what we do.
Also, there’s been a fundamental shift in the company’s anticounterfeiting philosophy. Without sacrificing the benefits of litigation, the company is now embracing a focus on results. While our anticounterfeiting operations are not a solution — the counterfeiting problem is not going away for any trademark holder — our emphasis on results is bringing to light the level of exposure the company has to counterfeits in the marketplace while also demonstrating significant improvements in the number of counterfeit items that are being seized and removed from the public’s eye. This is great for our business and our customers and a nice “protecting our brand” message our company can share proudly.
Last but not least, extending anticounterfeiting to become part of the security mission has resulted in unanticipated benefits for security. Counterfeits strike at the heart of our customers, our employees and our stakeholders, engendering a passion to take action to eliminate or at least contain the effects of counterfeits. As a security group, we can harness that passion. The security department has been able to enhance its image as a positive and valuable discipline within the broader company. The security department’s employees can be seen as more valuable members of the company. Now, local security agents are able to use the enthusiasm for our anticounterfeiting efforts to gain a greater acceptance of overall security across the entire business channel. Maybe now our mantra should be, “Asset protection is everyone’s job!”
Undercover is written by an anonymous CSO.
