How a company should organize against counterfeiting

Much has been said and much has been written on methods, strategies and tools against counterfeiting. Much free and much costly advice comes across from consultants, attorneys and self-made strategists. All this however is for naught if the corporate structure doesn’t allow for this advice to be implemented.

In my travels to corporate clients I had the opportunity to observe various organizational structures. Here a brief overview:

 

Usually the responsibility for anti-counterfeiting is given to someone at the mid-management level as a second, third or fourth responsibility. Meaning, only if everything else is done, will the assigned manager be able to cope with this added task. Even worst, usually the assignment does not carry with it the necessary authority to, for instance,  request and channel information from the field such as reduction of sales, increased problems with quality and the like.

Most companies are themselves very unsure, even helpless how to handle and organize their anti-counterfeiting responsibilities.

It begins with the decision to acknowledge that there even is a problem. Some companies prefer not to admit that they even have a counterfeiting problem. Lower tier managers know very well that there is one, the upper tier sometimes refuses to look the problem square into the eyes. If this is the case, usually nothing happens, everything goes back to status quo and the counterfeiters produce and live happily there after.

I have seen anti-counterfeiting responsibilities being put into the hands of the legal department, marketing, controlling, public relations, packaging and engineering, sales, quality control and even the production unit. This may be a well intentioned and certainly leaves an impression of streamlining and slim management, it fails however to make the necessary impact on the company as a whole. Other parts of the firm will not be sold on the idea, if they have no participation in the decision making process. An attorney from the legal or patent department will look at the problem through his eyes and of course in an altogether different way than lets say the PR-department or marketing and sales, not to mention quality control. All these people will, under this structure feel left out and their cooperation, will be questionable, when needed. Top management will not be behind the effort because the lobbying power will not be big enough, given that it is presented by mid-management. Last but certainly not least, anti-counterfeiting efforts require a budget; when the point arises and decisions have to be made concerning the disbursement of funds for lets say the deployment of private detectives or the addition of certain technological anti-counterfeiting measures department managers will certainly not approve such funds to be spent out of their budgets if they haven’t been part of the effort from the beginning.

 

Anti-Counterfeiting efforts need to be assigned at the higher reaches of management.

They need to be managed by someone who has budgetary as well as human resource authority. The manager assigned should form a permanent task force consisting of all other departments like sales, QC, production and so on. This task force should meet at regular intervals to discuss ongoing activities as well as suggest actions to be taken in the future. For instance, reports from the field should be analysed together. What action should be taken. Does the packaging have to be re-designed. Are reported quality problems really our quality problems or are they counterfeit products. Are lacking sales due to bad advertising, new entries into the market, loss of image due to faulty goods or are there counterfeits in circulation? Which measures should be introduced? Raids, assisted by government? Has the customs office been informed of fake product imports? Should anti-counterfeiting  technology be introduced? 

After certain measures were introduced, the task force should analyse if they have helped. Have sales stabilised? Has the image improved? Should the public be tied into the firm’s anti-counterfeiting activities? How?

Since all departments have been involved in the decision-making process it will be easier to gain their trust cooperation and agreement to certain courses of action. The burden will be shared,-- so will the success! Every member of the task force can approach decisions based on the same information as his or her colleagues. Communication is improved and helps to flush out actions which everybody can sign responsible for.

 

The permanent task force is in deed a better way to handle anti-counterfeiting activities.

Comments

[Damien Del Porto]

I think your post is spot-on in recommending a holistic approach to counterfeiting. It is not the responsibility of a single unit, but should be a topic that is talked about at virtually all levels of the firm. I think it goes without saying that actually having a budget is a solid first step. I would add only that you need to link that budget to actual measures of success. With some continuous counterfeiting market research you can start seeing which activities are bearing fruit.

This is definately an issue where context matters, so I would argue against most global-based campaigns (though certainly someone at the global level can organize and track progress throughout the subsidiary organizations). I think the appropriate role of the HQ here (for global organizations) is the lobbying/public affairs/government relations side. Management there will have the titles to enlist the aid of parties that would otherwise ignore smaller, non-local players.

[karen]

wow. that was really informative!