How to Keep Your Business Secrets Confidential

Business secrets are some of the most valuable possessions in the world. They vary from customer lists and operational methods to secret recipes and business plans. Companies go the extra mile to keep such information to themselves. Losing them might give their competitors an upper hand and ultimately harm the business.

KFC and Coca Cola are multinational corporations that are known to have trade secrets. KFC’s original fried chicken recipe and Coca Cola’s formula are not protected by any patents. Both of these corporations have always kept their recipes and formulas trade secrets. It has enabled them to keep their products unique compared to any other product out there.

What’s a Business Secret?

A business secret is generally any sensitive information that is valuable and unique to a company. Such secret is often kept from outsiders and sometimes even too many within the business. All trade secrets are ultimately given special recognition under the eyes for the law and are protected from state and federal laws.

Many firms claim that their skilled employees, customer information, operation methods, and business plans to be their most significant business secrets and assets. Most information is in digital form nowadays so it only takes seconds to transfer such high-value data on to a portable hard disk or uploaded to a different location. Keeping business secrets have become more challenging as a reason. Here are some ways that a company can keep its trade secrets confidential.

Know the Laws that Protect Trade Secrets    

As mentioned above, there are state and federal laws in place to help businesses protect their trade secrets. You must first understand these laws and what applies to your business as well as the state bodies. Various governing bodies also enable the owner of the information to take legal action against the source of a leak in if the information was leaked purposely and seeking personal gain.

These state laws apply to any individuals or parties who engage in cyber crimes such as hacking. It’s true that companies take measures to ensure there IT security but breaches do take place. State or federal bodies can impose stiff criminal penalties on such parties if they are caught.

Classification of Sensitive Information

Any business must build a clear hierarchy around their confidential information. It can be achieved by cataloging sensitive information in a secure database. Access must only be granted key individuals depending on the overall value of the information.

The IT team must ensure that access is not granted to anyone who’s not authorized within or outside of the organization. Access can be restricted and monitored using unique keys or passwords that can change regularly. The business can track each individual who accesses such confidential information and their activities such as login times, log out times, accessed files, time spent accessing each file, number of copies made, etc.

The digital form that a company holds on to sensitive is also important when it comes to protecting business secrets. Find out the best digital format to securely store key pieces of information. The use of various software for managing such information is a good solution given that such software is secure. The use of deal management software to restrict and monitor access as well as storing key information and due diligence checklists is a good example.

Disclose Information Responsibly

Higher the number of people who know about your sensitive information, higher the likelihood of losing that information. Many companies have conducted studies into disclosing information amongst existing employees and the results were surprising.

These studies concluded that disclosing every little information amongst even upper-level management such as senior managers and even board members can be disastrous. Therefore, it’s a good idea to keep sensitive information broken down to smaller operational objectives and only give access to a few highly trustworthy employees.

It’s also advisable to get each individual to sign an NDA (Non-Disclosure Agreement) before disclosing such sensitive and business-defining data. It makes the confidentiality of such information a personal liability that prevents employees from being irresponsible with said data.

Awareness & Education

Businesses often lose trade secrets by accident or due to the irresponsible actions of individuals who have access to that information. Such events put such employees in a lot of trouble as well as the company. Raising awareness and providing education on protecting sensitive information can help a company avoid such a nightmare.

Employees are likelier to safeguard sensitive information if the organization hosts training programs and awareness sessions. Each employee must be aware of the importance of maintaining business secrets as well as the consequences of leaking such information. This allows companies to build trustworthy corporate cultures.

Periodical Reviewing of Key Information

Trade secrets may change over time. Therefore, it’s important to review any information that is classified and update their status. The individuals who are granted access and important details such as non-disclosure agreements and contract statuses must also be taken into consideration during these reviews.

These periodic reviews help companies understand the key pieces of information that they need to protect. They also help them identify any loopholes that outside parties may try to use to their advantage. An employee who has given access to sensitive information but hasn’t signed an NDA is a simple example.

Know Your Enemies!

This may sound a little too extreme but protecting trade secrets is a war. Businesses must keep an eye out on their top competitors who can benefit from their business secrets. It’s important to follow their activities such as trade shows, product launches, and market growth as it will indicate if they might have access to your sensitive data.

Keep track of where your previous employees end up. It’s safe to raise a red flag if a competitor is frequently hiring your skilled and experienced employees. It’s often a sign of a competitor trying to peek into your trade secrets.

The Importance of Exit Interviews

Exit interviews are a great way to address a company’s labor turnover issues. However, that’s not the only benefit. Businesses can use exit interviews to keep their trade secrets secure. An unhappy ex-employee can do a lot of harm, therefore, having a friendly exit interview sure helps.

It can be in the form of a very friendly interview where someone higher up the ranks listens to the particular employee’s reasons for leaving. Such exit interviews relay the impression that the company is listening to them even though they are leaving and is trying to address those issues. A mild walkthrough over any non-disclosure agreements the said employee has signed is also a must during an exit interview.

Conclusion

Losing trade secrets can harm a business in many ways and even push it to bankruptcy. However, there are many measures that can be taken in order to prevent a company’s sensitive information falling into the wrong hands. As highlighted in this article, there are laws that protect businesses and their trade secrets. Therefore, it comes down to understanding those laws and coming up with ways to protect your business with their help.

Having an effective sensitive information policy and enforcing it on a daily basis can protect can keep sensitive information safe in the hands of your company. Restricting access to such information and monitoring access also goes a long way.

As discussed in this article, there are many precautions that a company can take to protect their sensitive information and take legal action if something goes wrong. Therefore, if a business loses its trade secrets and if they find themselves in a position where they can’t take legal actions, it’s more likely that they only have themselves to blame.