The secret to protecting trade secrets: How to create positive secrecy climates in organizations

Many companies derive their competitive advantage from the use and protection of trade secrets. This means that if these companies’ trade secrets are misappropriated, it can be extremely costly and even jeopardize their survival. In order to try to prevent employees from inappropriately divulging trade secrets, companies will often implement rules and procedures such as non-disclosure agreements that limit what employees are allowed to do with trade secrets. In spite of the prevalence of these procedures, billions of dollars in trade secrets are leaked and stolen every year, most often by companies’ own employees. We argue that a key to the effective protection of trade secrets lies in the creation of positive secrecy climates, wherein keeping organizational secrets is strongly valued by employees and seen as a part of their formal role responsibilities. We explain how managers can develop positive secrecy climates in their organizations, and outline the risks and potential rewards of these climates.