X

How to Prevent Employees From Stealing Your Secret Sauce

Young woman working in clothing store takes a phone enquiry

In 1996, Jay Bush, brand spokesman and great-grandson of founder A.J. Bush, was about to get his moment in the spotlight. Advertising executives urged Jay Bush to be the pitchman for his family’s brand of baked beans. Camera-shy, Bush leaned on his golden retriever, Duke, for support. When Bush whispered the family recipe into his trusted pup’s ear, an advertising campaign was born.

Although the real Duke wasn’t ready for prime time, a professional stand-in fronted the brand. Long-running jokes centered on the fear that Duke was about to…wait for it…spill the beans on the Bush’s Baked Beans secret recipe. Reliable Duke became the Fort Knox of the business, gabbing into the camera while keeping tight-lipped on the brand’s ingredient mix.

When your pet is the sole guardian of your trade secrets, you know preserving them is a business priority.

What does this mean for your small business? You’ve probably built a company off of your special something — whether that’s a new or unique technology, process, or proprietary “secret sauce” that sets your product or service apart from the pack — so naturally you’re protective of your competitive difference. However, as your business grows beyond your team of one, you find yourself talking about your products with prospective customers, suppliers, and employees. Saying too much puts you at risk for idea theft, while saying too little might be too vague to attract your tribe and demonstrate your unique vision.

While it’s pretty rare that someone will actually steal your idea or way of doing business (most people create businesses based on their individual passions and skill sets instead of riding the coattails of their former employers), it has been done, and employees routinely swipe files and important resources when they leave a company.

So how do you get everyone excited about your business, while protecting what’s at the heart of it? How do you prevent potential idea thieves and, even worse, your competitors, from basking in the glow that is your genius?

Rest assured that there are five steps you can take as a small business owner to help prevent idea theft as you begin to share your greatness with the world.

Step 1: Lock your idea down with a contract

Depending on your business and idea, you may want to serve your vendors and employees with a confidentiality agreement before they start working with your company. An NDA, or nondisclosure agreement, is a legally binding document between two contracted parties that has become a standard operating procedure for businesses.

Nondisclosure agreements detail what people can and can’t do with the information they receive from you while in your employ, and it serves to keep your secret sauce under wraps. You can either have your attorney draft a template for your business or your can have them amend an affordable version from a reputable online service provider, such as LegalZoom.

Step 2: Operate on a need-to-know basis

Determine what information employees and vendors need to do their jobs effectively. Do all employees need the same level of information? Say you own a bakery and you’ve become famous on Instagram for creating a hybrid pastry (think of the “cronut”). You have lines snaking around the block and you realize how important it is to keep your recipe a secret.

While the bakers might need to know your ingredients in order to make the product, the front-line staff doesn’t. Get in the habit of sharing only the parts of your business that are relevant to your employees’ and providers’ contributions to your business.

Step 3: Deploy role/access-based controls

Access-based controls can take your “need to know” strategy to the next level by employing technical controls around who has access to information. Not everyone needs or should have access to all of your systems.

Create an audit and accountability trail of who has access to information and how that information is used and protected. It can be as simple as providing store managers with special codes to make refunds or void transactions, or making files available to certain employees while keeping them password-protected from others.

Step 4: Create an effective on- and off-boarding process

You can manage steps 1-3 through a tight on- and off-boarding process. Define what happens when an employee is hired and how they gain access to business information, and then, later, how their exit is managed. Process examples include:

  • Issuing NDAs to employees when they join your company
  • Scanning and reviewing all employee or company-owned devices
  • Resetting passwords or limiting access to accounts the employee has access to and revoking all access when an employee leaves the company
  • Keeping a record of all the data access given to an employee during the job

Step 5: Guard your business with a patent or trademark

When in doubt, put it in writing. Map out your designs, ideas, recipes, and proprietary trade secrets, and document any and all conversations you’ve had with people who have come into contact with your secret sauce. Creating an audit trail serves to protect your intellectual property, and you can even take it a step further by filing for a patent or trademark.

While patents and trademarks both serve to protect your information, there are distinct differences between the two:

  • Patents ensure that no one else can make, sell, or profit from your secret sauce after you’ve publicly shared your invention. For example, you couldn’t develop a phone that looks exactly like the iPhone because its design and functionality are protected under patent law.
  • Trademarks, on the other hand, focus less on your secret sauce and more on others who try to profit by mimicking your brand or messaging by creating deliberate confusion. For example, say you manufacture sneakers and you decide to name the brand “Nike” after a famous Greek sculpture that has wings. Your take is that your shoes are so lightweight you’ll feel like you’re flying. You might even develop a logo with the word “Nike” surrounded by wings, and, while your intentions might be good, you’ve just violated the original Nike trademark. If there’s a chance that consumers will mistake your brand for an established brand (or trademark), you’re in violation.

Your small business is rooted in your unique business idea or proposition, and that should be guarded at all costs. While it’s rare that people will steal your idea outright, you can take certain smart steps to protect your business against even minor instances of theft. Creating processes and procedures for anyone who has intimidate knowledge of your business and operations helps ensure you have guardrails set up to identify and hold accountable anyone who tries to run off with your secret sauce.

Tell Us: Have you ever had an empoyee steal your ideas? How did you handle it?

Author:
Related Post