Although the protection of secrets is often vital to the survival of organizations, at other times organizations can benefit by deliberately leaking secrets to outsiders. We explore how and why this is the case. We identify two dimensions of leaks: (1) whether the information in the leak is factual or concocted, and (2) whether leaks are conducted overtly or covertly. Using these two dimensions, we identify four types of leaks, which we term informing, dissembling, misdirecting, and provoking. We also provide a framework to help managers decide whether or not they should leak secrets.

1. We’re Leaking, and
Everything’s Fine
How&WhyCompanies DeliberatelyLeakSecrets.
David R. Hannah
Ian P. McCarthy
Jan Kietzmann
Beedie School of Business at Simon Fraser University
As featured in

2. Organizations are open systems:
they continuously interact with their
external environments and share
information across their boundaries
(Scott, 1981).

3. One critically important type of
information sharing is the sharing of
secrets (Hannah et al., 2015).

4. It appears that some of the most prolific
and careful leakers are also among the
most profitable companies in the world
(Hannah et al., 2015).

5. The benefits of keeping secrets
Coca-Cola Company has preserved
the value inherent in being the only
manufacturer of Coke and has
benefited accordingly.

6. The benefits of leaking secrets
John Martellaro, a former senior
marketing manager at Apple,
acknowledged that the firm has
engaged in controlled leaks.

7. The benefits of leaking secrets
“A senior exec will come in and say- We need to release
this specific information. John, do you have a trusted
friend at a major outlet? If so, call him/her and have a
conversation. Idly mention this information and suggest
that if it were [to be] published, that would be nice. No e-
mails!’”
John Martellaro (2010)

8. Ultimately, a firm’s choice
regarding whether or not
to leak secrets involves
weighing the risks of a
leak against the potential
returns (Hannah et al., 2015).

9. The Two
Dimensions of
Leaks

10. Truthfulness of the information in
the leaked secret
the degree to which it contains
factual or concocted secrets.
1

11. The signaled intentionality of a
deliberate leak
overt
the company freely admits it purposely
leaked the secret
covert
the company falsely claims the leak was a
mistake or pretends not to know it has
occurred
2

12. The Four
Types of
Leaks

13. Dissembling Misdirecting
Informing Provoking
Truthfulness of
the information in
the leaked secret
Factual
Conocted
Overt Covert
The signaled intentionality
of a deliberate leakHannah et al., 2015

14. Misdirecting
Overt Covert
Factual
Conocted
Leaking secrets to
send others down
the wrong path or
course of action

15. Misdirecting
Overt Covert
Factual
Conocted
In the 1980s, pet food
manufacturer Ralston leaked
a conocted strategy to bait
competitors into engaging in a
price war for low margin
products, thus allowing
Rolston to consolidate market
share in the high-margin,
premium market.

16. Dissembling
Overt Covert
Factual
Conocted
Leaking secrets
to misrepresent
and deceive

17. Dissembling
Overt Covert
Factual
Conocted
Lululemon was forced to
recant claims of the
health benefits of its
seaweed-based clothing.
Consequently the
company’s stock price
and reputation suffered.

18. Informing
Overt Covert
Factual
Conocted
Leaking secrets to
be transparent,
compliant and
collaborative

19. Informing
Overt Covert
Factual
Conocted
These leaks can have
marketing value by
getting customers
excited about upcoming
product offerings, such
as the new Star Wars
film.

20. Provoking
Overt Covert
Factual
Conocted
Leaking secrets
to stimulate and
test reactions

21. Provoking
Overt Covert
Factual
Conocted
Prior to launching the
iPad, Apple reportedly
was considering a price
point of $1000 and
leaked the information to
gauge public reaction.

22. A Framework
for Decision
Making

23. To leak or not to leak?
Are there transparency
requirements or benefits?
Do you perceive other
value in leaking?
Do you wish to covertly
learn from others?
Inform
Y
N
= Do not leak
Y
Y
If found out, will the
consequences be
prohibitive?
Y
N Provoke
N
N
Do you wish to covertly
lead others astray?
Do you wish to
covertly deceive
others?
If found out, will the
consequences be
prohibitive?
If found out, will the
consequences be
prohibitive?
N Y
Misdirect
YN
Y
N
Dissemble
Y
N
Hannah et al., 2015

24. Firms should recognize that
deliberate leaks can sometimes
create value.
The evidence suggests that firms that leak secrets
may be doing very well; it appears that some of the
most prolific and careful leakers are also among
the most profitable companies in the world
(Hannah et al., 2015).

25. Read the full paper here
We’re Leaking, and Everything’s Fine
HOW&WHYCOMPANIESDELIBERATELYLEAKSECRETS.
David R. Hannah, Ian P. McCarthy & Jan Kietzmann ꘡ 2015
Beedie School of Business at Simon Fraser University

26. Dr. Ian
McCarthy
Media
Enquiries
anilp@sfu.ca
@toffeemen68
Professor, Technology and
Operations Management
Beedie School of Business
Simon Fraser University
Ian McCarthy