It could happen to your company: embarrassing Wal-Mart videos on sale

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Nothing is private these days.

That's all well and good if you're an open book and don't mind people knowing intricate details about your lives. Some writers -- I'm one -- are apparently genetically disposed to being an open book -- and certainly millions of people have a yearning to tell everyone's what's on their minds on blogs, Facebook profiles and the like.

But what if you don't want people to know what's going on?

The business community is starting to get a taste of that. As you may have read -- there was a great story about it a few weeks ago in the Wall Street Journal -- Wal-Mart Stores, Inc found that a treasure trove of their corporate secrets are no longer secret. In fact, they're on sale. For almost 30 years, whenever Wal-Mart had a high-level corporate meeting, they employed Flagler Productions, Inc., to film their meetings where while being filmed, everyone nevertheless felt free to speak freely.

When I first read this, I thought, "Good idea. Tape those meetings. Stave off the brain drain that happens to so many companies when older executives leave, and later their replacements are left thinking, 'Surely, our company has dealt with this crisis before?'" But Wal-Mart had suggested to Flagler that to save money, they reuse the videotapes, and so for whatever reasons they decided to videotape everything, it apparently wasn't for posterity.
In any case, Mike Flagler, of Flagler Productions, waved off the suggestion to tape over tapes. He decided to keep them.

And then two years ago, Wal-Mart decided that they no longer needed Flagler Productions' services. Certainly, Wal-Mart was more than entitled to do that -- but I guess the folks at the Kansas-based company weren't too happy, since 90% of Flagler's income came from the superstore, and I'm betting that they didn't have much of a warning. On the other hand, business isn't black and white. Plenty of critics might point out that Flagler Productions shouldn't have relied so much on one customer. In any case, Flagler had to take out a quick loan at the bank and dismiss 16 employees.

Flagler offered to sell the footage back to Wal-Mart for several million dollars, and the superstore, famous for bargains and low prices, said that they were willing to pony up $500,000. They argued that nobody else other than them would have interest in these tapes.

Flagler declined, and that was that.

That is, until Flagler decided to make his 15,000 tapes available for sale. Now business historians, attorneys involved in lawsuits against the company, business reporters and who knows who have been contacting Flagler Productions. As for suing Flagler, Wal-Mart reportedly is looking at its options, but there is no contract between the companies: the deal was made with a handshake back in the 1970s.

But one company's migraine (that would be Wal-Mart) and another company's gold mine (Flagler) may turn out to be a business opportunity for yet another firm (Blue Horse Digital). The founders of Blue Horse Digital immediately saw the potential in raising their profile after news broke on Wal-Mart's predicament. Blue Horse, you see, is a small company in Croton, New York, that helps large corporations manage their company's videos and DVDs and make sure that they are virtually impossible to steal.

Which is all news to me. Not that I didn't know corporations made videos -- but it's something I never gave much thought. Apparently, not many CEOs or managers do either.

"Most company executives are oblivious to the damage potential of these videos," says John Upshall, one of the founders of Blue Horse. "Everyone knows that documents, email, voice mail and computer data are considered business records. However, videotapes are business records, too. In legal and regulatory realms, videotapes, film and other visual media have the same status as conventional business records, yet rarely receive the same level of attention."

There is that brain drain issue, too, though. As Betsy Rich told me, "Videotapes are in a state of constant deterioration. Over time, valuable historical images stored on videotape will literally disappear. Unfortunately, this lost information is irretrievable. Once gone, it's lost forever."

While Wal-Mart's probably wishing that had been the case with their videos, Upshall says that the real risk is having your videotapes getting out in the public arena without your knowledge: "When a video is needed for any regulatory or legal action, no company wants to subject itself to the penalties or tarnished image that goes with noncompliance. Companies must know exactly what videos they own, what information those videos contain and where they're located."

I'm betting Wal-Mart would agree.

Geoff Williams is a business journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
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