What is the goal of intelligence? There are two possible schools of thought in response to this question. The one familiar to every military or government analyst is that intelligence should tell truth to power regardless of consequences. This aloof philosophy regards the objectivity of intelligence as paramount given the professional duty to the national security of the nation it serves.
In business, though, a different school of thought is much more pervasive. This approach regards strategic intelligence as an analytical product in the service of decision-makers for their quest to achieve a competitive advantage in the market. While at times the professional analyst may disagree with a strategy aimed at besting the competition, it is not up to the analyst to offer an alternative strategy. Instead, the analyst’s role is to make sure, to the extent possible, that opportunities to shape the market according to the top echelon’s vision are presented early enough to make a difference. That does not mean ignoring risks: options for overcoming hurdles to implementing the strategy should be suggested, but these are limited to those dedicated to the executive’s agenda. In other words, intelligence analysis is there to serve the executive’s agenda.
This article is bound to provoke strong reactions from some readers, many of whom may be instinctively uncomfortable with its underlying premise. Still, this article argues from a perspective that should be heard by military and government members of the intelligence community to garner discernment in how their work could be perceived by their ultimate customer. If we can agree that one of the core elements of the analytical part of the intelligence profession is to understand different perspectives, then this is one perspective that deserves consideration.
Truth-to-Power versus Agenda-Compliant
While the above two intelligence philosophies are not necessarily mutually exclusive, as ideal types they pose a great potential for conflict if not managed carefully. In business, reality is never detached from executive action, nor independent of the executive’s assumptions. In other words, business leaders do not take the market as a given. Executives, instead, often believe it is up to them to shape reality by affecting how other high impact players—competitors, customers, regulators, suppliers, and so on—act and react. Successful corporate executives are adept at doing this: Steve Jobs created the iPod, supported by iTunes library software, long before consumers knew they wanted individually downloaded songs over buying whole albums.[1] Toyota Motors changed the supply chain reality in the 1970s by introducing just-in-time inventory, which involved ordering and receiving inventory for production and customer sales only as it is needed to produce goods and not before.[2] Pharmaceutical companies facing a lengthy approval process for new drugs by the regulator and the rise of generic competition started using a strategy during the 2000s of developing orphan drugs, treating rare diseases that allowed them to fast track approval by the Food and Drug Administration, the fastest growing category of new drugs today.[3] Leaders of successful commercial enterprises try actively to shape their own reality.
Why is this important to the government or intelligence community analyst? If top policymakers come mainly from a business background, this mindset of intelligence in the service of decision makers’ agenda should be well understood if the community wants to have an impact with said policymakers.
Impact as a Measure of Value
If the prime role of intelligence is taken to include impact on the executive, then the nature of the interaction between the analyst and the decisionmaker becomes crucial to the evaluation of the performance of the intelligence community.
This is neither obvious nor trivial—to include the executive’s actual use of intelligence in the metric of evaluating the quality of analysis is probably quite contrary to government intelligence analysts’ training. Using the Intelligence Community’s Directive 203 as the standard, first loyalty is to the facts, rigor of judgement, and objective unbiased analysis, and the client comes second.[4] The Directive specifically states analysts should ignore the audience and its policy viewpoint or preference.[5]
This view, while admirable in its integrity, does not coalesce with the mindset of policy makers who spend their lives as business leaders. The intelligence community may decide to ignore the different mindset, but then it compromises its ability to affect policy. The question to captains of the intelligence community is then: without impact, what is your value?
Three Most Important Factors Behind Impact of Intelligence in Business
Because in business impact on decisions is the foremost—if not the sole—measure of value in competitive or market intelligence, would it be helpful for the professional military or intelligence community to at least understand the factors affecting impact on business executives’ decisions? As decision-makers move between the business and the political arenas the two philosophies—truth to power or in service of an agenda—may need to be reconciled.
In a survey of 236 certified competitive intelligence professionals in large companies by the Academy of Competitive Intelligence, corporate market analysts were asked to self-assess their impact on their companies’ executive decisions.[6] The perceived impact was then compared using a series of variables related to the nature of their work and communication with their corporate leaders. Three factors emerged as most (statistically) significant for impact on decisions from 179 usable responses: management openness to different perspectives, management interest in the big picture, and the level of feedback provided to the analysts.[7]
The most influential variable was whether or not management was open to a different perspective. In other words, if management believed its perspective was the correct one, and other perspectives just miss the boat, no amount of contrary evidence will make much of a difference. What intelligence community analysts should understand is, in business, the chief executive assumes significant power in determining the right perspective and quite often rejects other perspectives. As Rakesh Khurana, a Harvard Business School professor, showed in his studies of business leaders, charismatic chief executives often create a culture of yes men, rejecting limits to their authority.[8]
The second crucial variable found to significantly impact executive judgment was whether management asked for big picture context of the specific information. Intelligence can be tactical and factual yet miss the bigger context to decisions such as structural changes in the industry. Context in business is often subjective, and the policymaker may have a very different context than the intelligence professional.[9] Thus, managers inside General Electric warned Jeff Immelt, its former chief executive, that acquiring Alstom’s power business—a financially troubled French company—was a recipe for disaster. However, for Immelt, the context was trying to shift General Electric away from its dependence on financial assets and back to its industrial roots. Ignoring the warning, the acquisition proved his downfall.[10] Context can be king, but the ability of professional analysts to understand the top decision maker’s context or the decision maker’s interest in a broader context can often be very limited.
The last crucial variable was whether the competitive intelligence analysts received feedback from senior or chief executives. Customer feedback is an important tool in fine-tuning the offerings of retail marketers, for example, and the omnipresence of satisfaction surveys reflects that best practice in business.[11] But feedback on intelligence in a typical large company can be hard to get; worse, it can be both ambiguous and irrelevant. Analysts would like feedback touching on specific elements of their work, but if management is not open to a perspective different than its own, or if the decision maker’s own agenda provides the context, how likely is the user to provide feedback? In other words, feedback may be tied more closely with use, not necessarily with the quality or rigor of the intelligence product itself.
In another of the Academy’s surveys, only a quarter of the respondents had continuous dialogue with top management who provided them with feedback.[12] The most direct evidence that feedback is most likely tied to a management agenda can be seen in response to a question about competitive intelligence analysts’ source of frustration. More than a quarter of the respondents claimed that management didn’t want to hear what it didn’t ask for, and more than a third lamented that their recommendations were not taken seriously.[13] This makes the understanding of the decision-maker’s agenda paramount before intelligence is communicated to them. Competitive intelligence analysts understand this; it is not obvious that government intelligence analysts do.
Tying Intelligence to Business Strategy
Strategy in business means everything: it either results in profit or in loss, and it is measured quarterly by equity analysts. The effect of change in business strategy on the company’s performance might take some time to be seen, but it is hardly measured in decades. Understanding strategy in business is therefore different from understanding national security strategy in the context of a geopolitical order with almost immutable external forces and limited effect of individual policymakers on the evolution of that order. Intelligence community analysts should understand that business leaders will tend to be impatient, more focused on immediate results, more confident in their own strategic judgment, and more attached to their perception of reality. They will easily ignore intelligence that doesn’t fit their needs.
In addition, the loyalty of employees to the chief executive is considered a given, unquestioned, and unchallenged. In large companies subordinates are not typically encouraged to question the executive’s views. It is especially obvious in private companies, where what is good for the owner is good for the company. The nature of running a successful business empire points to a potential fault regarding better feedback as a model for improving the quality of intelligence. What our research above suggests is that feedback can work as long as the user and producer share the same agenda but not otherwise.[14] For example, a chief executive of an industrial giant worried about consolidation in his industry was open to information about potential hurdles in the merger of two of his largest competitors. He actively probed his analysts for suggestions of how his company could exploit those difficulties, for example by recruiting talent and pitching better service response time to potential customers. On the other hand, his own vision eschewed acquisitions and he rejected analysis along these lines out of hand.
The implicit philosophy of government intelligence agencies seems to be “if we build a superior product, consumers will come.” Some evidence of this implicit attitude can be seen in measuring demand for the intelligence product as a sign of its value to policymakers. In business, however, demand for competitive information is divided into nice-to-know and must-know categories. In our survey of competitive intelligence managers, the percent of the intelligence executives deemed crucial was just 24 percent. The rest was mostly check the box.[15] Intelligence community analysts should know that superior product is not a guarantee of impact in the agenda-compliant framework, and demand for intelligence is not always a good measure of its value.
Recent Failures Regarding Intelligence Impact
Examples of recent national intelligence failures to impact decisions can be found across administrations. A Senate Intelligence Committee report from 2008 cited multiple Central Intelligence Agency reports contradicting the claim by the Bush administration that Iraq and al-Qaeda were cooperating partners and highlights the fact that there was no intelligence information that supported administration statements that Iraq would provide weapons of mass destruction to al-Qaeda.[16] Similarly, the Obama administration ignored warnings about the Islamic State.[17] The Trump administration has publicly disagreed with intelligence analysis of the goal of Russian interference in the election.[18] In each case, the facts or analysis didn’t fit the policy maker’s agenda or interpretation of the same facts and it was subsequently ignored. So the question of what is the purpose of intelligence and how its value is evaluated are not merely theoretical questions, but have acquired urgency during the past two decades.
Is There a Better Way Ahead?
In the tension between intelligence as truth to power and intelligence in the service of the executive’s agenda, government agencies fall squarely on the side of reporting “this is what’s happening out there, like it or not.” The result, observed in several recent administrations, is that intelligence analysis all too often fails to have the desired impact.
Though uncomfortable and antithetical to intelligence training, perhaps analysts should try instead to align with the mindset of its ultimate consumer as competitive intelligence analysts in business must do? What can help the ultimate consumer achieve their agenda? What are their hot buttons? What are their blinders and how can the community overcome them with smart delivery? What are their fundamental assumptions about the world out there—known in management literature as hub beliefs?[19] High quality intelligence analysis itself is not enough. A genuine desire to help and support the consumer is needed. Can the intelligence community adjust to such a framework?
The U.S. national intelligence community is at a crossroads: to serve truth or the executive agenda? Each of these philosophies raises ethical dilemmas that are outside the scope of this article but if truth alone fails to move the needle, perhaps a broader perspective combining both is the better option. In other words, isn’t it preferred to try to understand the users’ mindset so the truth helps their agendas?
Benjamin Gilad is the CEO of the Academy of Competitive Intelligence, a former associate professor of management at Rutgers University and a former intelligence officer in law enforcement.
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Header Image: Boardroom (Ivey Business Journal)
Notes:
[1] Maxwell, Steven. "A Look at How the IPod Has Remixed the Music Industry, 10 Years Later." Phys.org - News and Articles on Science and Technology. Last modified September 14, 2011. https://phys.org/news/2011-09-ipod-remixed-music-industry-years.html.
[2] "JIT - Just-In-Time Manufacturing; Kanban System." www.EESemi.com - All About Semiconductor Manufacturing. Accessed March 16, 2020. https://eesemi.com/jit.htm.
[3] Kepplinger, Erin E. "FDA's Expedited Approval Mechanisms for New Drug Products." PubMed Central (PMC). Last modified February 1, 2020. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4326266/.
[4] Adrian Wolfberg addresses this issue in his article, “The President’s Daily Brief,” Political Science Quarterly, volume 132, no. 2, 2017, stating that “Analysts typically do not understand that the policymaker views the knowledge in a [Presidential Daily Briefing] article by whether it does or does not support his or her policy position.”
[5] Intelligence Community Directive 203, “Analytic Standards.” Office of the Director of National Intelligence. Washington D.C., January 2, 2015. https://www.dni.gov/files/documents/ICD/ICD%20203%20Analytic%20Standards.pdf
[6] Gilad, Benjamin and Leonard M. Fuld. “My Whole CI Life Survey Report: An ACI 2015 Alumni Survey,” Academy of Competitive Intelligence. January 2016. https://academyci.com/my-whole-ci-life-survey-report/
[7] Ibid., 10, 14.
[8] Kuhrana, Rakesh. "The Curse of the Superstar CEO." Harvard Business Review. Last modified September 1, 2002. https://hbr.org/2002/09/the-curse-of-the-superstar-ceo.
[9] Gilad and Fuld, “My Whole CI Life Survey Report: An ACI 2015 Alumni Survey,” 34-35.
[10] Colvin, Geoff. "What the Hell Happened at GE?" Fortune. Last modified May 24, 2018. https://fortune.com/longform/ge-decline-what-the-hell-happened/.
[11] As a casual observation, Google search on March 16 at 2:10pm EST for “customer satisfaction surveys” resulted in 191 million hits. https://www.google.com/search?q=customer+satisfaction+surveys&oq=customer+satisfaction+surveys&aqs=chrome..69i57j0l7.5838j0j7&sourceid=chrome&ie=UTF-8
[12] Gilad, Benjamin. “Our 2019 Survey: State of CI,” Academy of Competitive Intelligence. December 31, 2019, 10. https://academyci.com/wp-content/uploads/2020/01/Survey-2019-impact-analysis-1.pdf
[13] Gilad and Fuld, “My Whole CI Life Survey Report: An ACI 2015 Alumni Survey,” 41.
[14] While asking the producers of intelligence about the users’ agenda may be problematic, in addition to the responses reported in footnote 13 and 14, one question in the 2015 survey asked directly about “told you so” moments. “Told you so” represents management ignoring intelligence. Forty-seven percent of the corporate analysts reported that management ignored their input way too often. Gilad and Fuld, “My Whole CI Life Survey Report: An ACI 2015 Alumni Survey,” 46.
[15] Gilad, “Our 2019 Survey: State of CI,” 8.
[16] Kessler, Glenn. "The Iraq War and WMDs: An Intelligence Failure or White House Spin?" Last modified March 22, 2019. https://www.washingtonpost.com/politics/2019/03/22/iraq-war-wmds-an-intelligence-failure-or-white-house-spin/.
[17] "Defense Intelligence Agency Warned Obama About ISIS in 2012." American Enterprise Institute - AEI. Last modified August 28, 2019. https://www.aei.org/foreign-and-defense-policy/intelligence/defense-intelligence-agency-warned-obama-about-isis-in-2012/. See also Tom LoBianco, CNN. "Former Intel Chief: WH Worried over Re-elect 'narrative' Politics." CNN. Last modified December 2, 2015. https://www.cnn.com/2015/12/01/politics/michael-flynn-obama-isis/index.html.
[18] Horsely, Scott, and Miles Parks. "Trump's Refusal To Back U.S. Intel Over Russia At Putin Summit Sparks Bipartisan Ire." NPR.org. Last modified July 16, 2018. https://www.npr.org/2018/07/16/628973563/trump-putin-to-meet-after-new-charges-over-russias-2016-election-interference. See also, Reed Richardson. "Trump Tweet Ignores US Intel on Russian Election Interference." Mediaite. Last modified February 22, 2020. https://www.mediaite.com/news/trump-ignores-us-intel-community-on-russian-election-interference-attacks-democrats-and-media-for-disinformation-hoax-number-7/.
[19] Michael E. Porter, Competitive Strategy. Free Press, 1980 and B. Gilad, Business Blindspots. Probus/Irwin, 1993.