Article for Competitive Intelligence Magazine

1. Intelligence Versus Policy:
Healthy Tension
or Lost Cause?
By Douglas Bernhardt
Quite possibly the most difficult set of questions worse, if it is ignored or rejected altogether by consumers
that competitive intelligence (CI) professionals could ask who simply cannot “abide analysis or reporting that [runs]
themselves reads something like this: counter to their own view” (McLaughlin, 2008). Intelligence
that is not integrated into the mix of factors influencing
• Does CI actually make a difference to our internal the thinking of decision-makers represents little more than
customers? intellectual impotence.
• Do we clearly and consistently answer the “so what”
question as we frame our judgments?
• Do our ‘products’ have a substantive influence on the AN INTELLIGENCE WORKING RELATIONSHIP
decisions – in particular strategic decisions – made As this author has repeatedly argued, “The most
by our organization’s management? Are they, in fact, overwhelming challenge faced by practitioners of competitive
compelling? intelligence has little to do with the development of their
• Do our executives understand the unique role professional skills” (Bernhardt, 1999). Rather, it is the extent
intelligence plays, or can play, in providing them and quality of the working relationship between intelligence
with early warning of threats, unbiased assessments of and policy (i.e., management) that should command the
current problems (e.g., predicting competitor reactions central focus of our attention and energies. Drawing on
to a strategic move), and longer-term estimates of lessons from the US national security experience, Professor
future developments likely to have an impact on the Richard H. Immerman (former US Assistant Deputy
firm’s objectives, strategies, and interests? Director of National Intelligence for Analytical Integrity
• Are our CI managers routinely invited to sit in on and Standards) makes the observation that “when all is said
high-level policy discussions so that our intelligence and done…scholars may conclude that intelligence mattered
team might better understand the core concerns and relatively little to [the] Cold War’s history” (Immerman,
perspectives of our consumers? 2008). This a somewhat disquieting notion given the
complexity and magnitude of the high stakes ‘game’ being
Unless and until such questions are answered in the played at the time, and for which, despite the changed nature
affirmative, no competitive intelligence function anywhere, of today’s geopolitical threats, leaders throughout the civilized
regardless of the size or nature of the company concerned, world remain accountable.
can be expected to be more than yet another black hole in the Now ask yourself, “Is corporate leadership any different?”
universe of the organization’s bureaucracy. In short, even CI Indeed, in the light of so many big US policy failures over
units whose deliverables repeatedly meet the necessary tests the past five decades – Vietnam (the Johnson administration
for accuracy, relevance, and timeliness are simply wasting was not prepared to accept CIA assessments that US and
their time if their output is not sufficiently persuasive – or South Vietnamese military strategies could not succeed);
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2. intelligence versus policy
Iran (President Carter and his national security team were Yet, as the 19th Century French journalist and novelist
unwilling to “think the unthinkable,” that the Ayatollah Jean-Baptiste Karr once suggested, “plus ça change, plus
Khomeini might have sufficient following and power to c’est la même chose.” Today the dynamics of the consumer-
topple the Shah); the profound ‘failure of imagination’ that producer relationship remain no less a priority and just as
The 9/11 Commission Report findings reveal to be “the most complex as they ever were. Surprisingly, the CI community
important failure” of US leadership prior to the terrorist hasn’t yet reached ‘first base’ in terms of its debate over the
attacks on the New York World Trade Center and the issue.
Pentagon; and Iraq (no weapons of mass destruction and no
verifiable links to 9/11) are a few examples – would it not A culture of optimism
be irresponsible, and perhaps dangerous for CI analysts to John McLaughlin, who served as Deputy Director of
assume that those who set and oversee business policy and Intelligence at CIA, as well as Chairman of the National
strategy (and who, for the most part, have no experience Intelligence Council, describes the problem in terms of policy
whatsoever in intelligence operations) will somehow, culture versus intelligence culture. First, he points out:
instinctively perhaps, recognize what intelligence is and how
it can support their agendas and decision-making challenges, The culture of the policy world is marked by
let alone their own roles and responsibilities in the process? elements of realism but is essentially – and necessarily –
Unfortunately, the rhetoric heard at SCIP conferences a culture of optimism (McLaughlin 2008).
about the need to ‘gain management buy in’ or recruit an
‘executive champion’ in order to launch or grow a successful Think. When was the last time you heard a CEO speak
CI program is seldom supported by a deeper examination of the future prospects for his or her company in the language
of the dilemma, and how, realistically, we might go about of gloom and doom? It’s not what they’re paid to do. Even
resolving it. The hard truth is that despite the presumably as firms struggle to survive the so-called ‘financial meltdown’
common goal of advancing the firm’s interests, relations of 2008/9 and the resulting shockwaves of global economic
between consumers and producers of intelligence are not disruption, we continue to hear the desperate clarion calls of
naturally harmonious. At best, this state of affairs leads to business leaders in America, Europe, and elsewhere for their
healthy debate and helps sharpen thinking. At worst, it ‘troops’ – at least what’s left of them – to prepare for still
leads to counterproductive arguments about “what’s right” one more charge onto the competitive battlefield. Too bad
or “who’s right” as the lines between evidence, facts, and the outcome in many cases is destined to be a replay of the
opinions become ever more blurred. disastrous charge of the British Army’s Light Brigade during
So what lies at the root of the intelligence consumer- the battle of Balaclava in 1854 (a powerful example of what
producer disconnect? Or is it, after all, a healthy tension? can go wrong when good intelligence is lacking).
And how do we fix it? Why? Because most executive teams still work harder
at doing what succeeded in the past and what they already
do rather than applying their imagination to strategically
THE INTELLIGENCE – POLICY DIVIDE repositioning their firms to “compete for the future.”
The competitive intelligence literature over the past Until recently, when he was asked to resign by President
twenty years or so has paid scant attention to the dilemma Barack Obama in March of this year, General Motors CEO
of the intelligence-policy divide. Instead, it concentrates on Rick Wagoner, whose corporation lost $82 billion in the
issues such as collection techniques, analytical frameworks, last four years under his stewardship, insisted right up to
various organizational models, and first-person ‘kiss-and- the last day at the helm that GM’s future was bright and
tell’ cases of SCIP members’ experiences. Regardless of how he had yet another “plan” for future success. And is there
important these issues are, they seldom help us advance the anyone who glows with more optimism than a marketing
intelligence discipline in the eyes of our customers. or brand manager? Most of them, certainly insofar as their
The question has, however, been explored at length by world views are concerned, could easily compete with the
academics and other observers in the national intelligence irrepressible optimism of Iraq’s former Information Minister,
community. Indeed, sixty years ago Sherman Kent (regarded Muhammad Saeed al-Sahaf, who, as CNN cameras were
as the father of US intelligence analysis, and from 1952 to broadcasting live pictures of tanks of the US 3rd Infantry
1967 chairman of CIA’s Board of National Estimates) made Division rolling into Baghdad, continued to declare, “We are
clear the following: winning!”
There is no phase of the intelligence business which A culture of skepticism
is more important than the proper relationship between Second, McLaughlin notes, in stark contrast to the
intelligence itself and the people who use its product (Kent, culture of decision-makers, “the culture of the intelligence
1949). world is marked by skepticism.” As he puts it, “the analytical
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3. intelligence versus policy
world always [centers] on what things mean and not – as in speculation, an analysis, probabilities, possibilities,
the policy world – on what to do” (McLaughlin, 2008). estimates. Best guesses. (Office of the Assistant
Remember, it is not the task of intelligence to recommend Secretary of Defense 2002)
policy actions to management. The responsibility of intelligence
is to inform decision-makers and articulate alternative futures,
options, and the likely consequences of each. TWO THEORIES Of BEST PRACTICES
Jack Davis, an expert in analytic methodology, explains: Before competitive intelligence practitioners begin to
tackle the problem of the consumer-producer disconnect
[The] tensions in the relationship between… in their respective working environments, it is instructive
intelligence analysts and…policymakers are a common to revisit the “[t]wo normative theories [that] animate
occurrence—an essentially normal byproduct of the two the debate about best practices in the intelligence-policy
camps’ distinctive professional missions. The analyst’s nexus” (Wirtz, 2007). One emphasizes the classic view that
professional commitment is to assess national security “intelligence must be close enough to policy, plans, and
issues without bias for or against the outcomes sought operations to have the greatest amount of guidance, and
by the…administration; the policymakers professional must not be so close that it loses it objectivity and integrity
commitment is to articulate, advocate, and advance of judgment” (Kent, 1949). The second, albeit related theory
the administration’s national security agenda (Davis, is one which “focuses on providing ‘actionable’ intelligence,
2006). information of immediate and direct use to policymakers”
(Wittz, 2007).
Thus, the challenge for CI practitioners has as much to In practice, the CI analyst will find that these two
do with managing the conflicting cultures and missions of perspectives reflect differing priorities rather than two
decision-making versus intelligence analysis as it does with diametrically opposing philosophies. It is a matter of balance.
fine-tuning the various elements of our craft. In the ever changing environments typical of most large-scale
Intelligence producers must never lose sight of the fact businesses, the weighting given to one or the other approach
that decision-makers, by their very nature, are uncomfortable will vary depending on the specific context or circumstances
trusting a discipline described during a 2002 press briefing of the company and the problems concerned. And while the
by former Defense Secretary Donald Rumsfeld and General independence of intelligence analysis must be protected at all
Richard Myers, Chairman of the Joint Chiefs of Staff in this costs – especially from the pervasive dangers of politicization
way: – it serves no purpose to prepare an analytical product that
the decision-maker is not, for whatever reason, happy to use.
If you think about it, what comes out of intelligence Consider, for a moment, the President’s Daily Brief,
is not fixed, firm conclusions. What comes out are a prepared by the office of the US Director of National
TABLE 1. KEY DISTINCTIONS BETWEEN DECISION-mAKERS AND INTELLIGENCE ANALYSTS
Decision-maker Intelligence Analyst
Enjoys possessing and using power. Tends to distrust power and those who enjoy exercising
it.
When possible, makes hard decisions quickly. Given to extensive research and examination of an issue.
Generally more comfortable with action than Believes the real world is ambiguous and uncertain; tries
with contemplation. to avoid oversimplification; essentially objective.
Regards the world as highly personalized Rewarded for identifying problems, obstacles, or threats.
(Anything that impedes his or her perspectives
and actions amounts to a personal attack.)
Sense of vulnerability; does not like to be Has greater potential to be perceived as wrong without
perceived as wrong. risking self-esteem.
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4. intelligence versus policy
Intelligence, and which the president receives every morning, resources, how far can CI managers and analysts go with
updating him on the country’s most pressing international that? How, in other words, can CI practitioners be expected
threats. It is concise, to the point, and deals exclusively with to properly fulfil their operational responsibilities without
those issues which are of direct and immediate concern to the exploring the topics of concern together, virtually hand-in-
president. Is this – say a “CEO’s Daily Brief ” – what you are hand, with the user?
producing for your chief executive and his closest advisors? Competitive intelligence managers must also be given
If not, why not? Is it because you’ve never been asked to do opportunities to propose intelligence topics about which
so? Are you simply too busy getting on with the research and decision-makers themselves may not even be aware. Likewise,
analysis you’re paid to carry out? Or do your organizational CI managers cannot allow themselves to be constrained, or
silos simply prevent you from enjoying access to your key sidelined, by organizational protocols that require them to ‘go
decision-makers and thus your most important internal through channels’ rather than deal directly with the ultimate
customers? users of their product. Briefings received indirectly are not
sufficient. If an issue is important enough to assign to the CI
unit, it’s important enough to warrant briefing time.
THE CONSUmER – PRODUCER RELATIONSHIP
In my original paper on the subject of the consumer- formal feedback
producer disconnect (Bernhardt, 1999), I attempted to Another deficiency I find in many organizations is the
illustrate some of the key distinctions between decision- lack of formal feedback mechanisms. Following delivery of
makers and intelligence analysts. They’re worth repeating any intelligence report, the user has an obligation – or so the
here (see Table 1). theory goes – to inform the CI director or manager about
What do these distinctions mean for the CI practitioner? what was useful, what wasn’t, and why. How else can CI
Essentially, they mean that he or she must develop a deep analysts know what to improve or refine in terms of future
appreciation for the basic personality differences that exist tasks? Feedback procedures, as part of the ongoing dialogue
between executives and analysts, and take these into account I have argued for, must be institutionalized rather than left to
in every phase of the intelligence process. Just as good chance and good intentions.
salespeople must know their customers before there is any
real prospect of closing the deal, this is the only way to ensure Education
effectiveness. One final tip. If intelligence consumers and producers
are to find common ground, it is the responsibility of CI to
Personal dialogue educate its key customers about what intelligence is, how
Perhaps the most important aspect of strengthening it works, and what it can and cannot be expected to do for
the consumer-producer relationship is dialogue. I am them. How often, for example, are you given a slot (10
constantly surprised by the number of times, whether minutes? 20 minutes?) in executive committee meetings to
during a consulting engagement or in a business school explain the role of intelligence, your recent successes (and
lecture hall with a class of soon-to-be MBAs, that I find a failures) and their impact, and what you require in order
glaring lack of ongoing dialogue between executives and to improve CI’s future performance and contributions to
competitive intelligence. In an age when most of us face competitive success?
electronic communications overload, intelligence consumers To this end, why not give some thought to producing “A
and analysts alike need to take a step back and rediscover Consumer’s Guide to Intelligence” similar in concept, say, to
the value of face-to-face interaction, i.e., good old-fashioned the one published by the CIA in the 1990s (available from
discussion. the National Technical Information Service, US Department
I would argue that it is virtually impossible for of Commerce)? Designed for intelligence users, this 53-
intelligence analysts to earn their keep if they do not know page document covers topics such as the intelligence process,
their users. And how can one know his or her user without major products, and classification systems. A CI department
regular human contact? could hardly ask for a better way to educate its customers,
while at the same time reinforcing its brand and credibility
Propose intelligence topics within the company.
To begin with, most executives, if asked to articulate Jack Davis (Davis, 2006) offers his own suggestions
their explicit intelligence needs are ill-prepared to do so. It’s regarding how he believes analysts should respond to the
not their fault. How many of your senior managers have criticisms of policymakers. A brief summary of his general
worked in the intelligence field or been through a course on recommendations is provided in Sidebar 1.
intelligence? Sure, they’ll be able to provide a shopping list of If CI is to make a difference, it is up to its managers
any number of information wants that might make life easier and analysts to first recognize, then accommodate, the
for them, but given the limitations of budgets and other human differences between themselves and their customers.
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5. intelligence versus policy
SIDEBAR: THE ANALYSTS’ RESPONSE TO POLICYmAKER CRITICISm: BEST PRACTICES
Become an expert on the policymakers’ world. Use estimative terminology carefully. To deter both
Commit to learning as much about your firm’s strategic misunderstanding and manipulation of judgments, analysts
decision-making processes as possible. should avoid vague estimative phrases such as “real
possibility” and “good chance.” While not without risk
Become accomplished at understanding and managing of an exaggerated precision, analysts should aim to set
sustentative uncertainty. Consider approaches boundaries to key judgments (for example, “We judge the
to alternative analysis such as devil’s advocacy, key likelihood of development Z to be low – on the order of
assumptions check, quality of information review, argument 10 to 20 percent“).
mapping, and analysis of competing hypotheses.
Be responsive to criticism, but not at the cost of
Become adept at role playing. Analysts will be well objectivity. As long as an analytic unit believes it has
positioned to prepare a professional response to criticism done its homework in evaluating evidence and considering
by undertaking an open-minded assessment of the policy alternative explanations and projections, it should stand
critic’s paradigm (i.e., mental model) on a contentious issue. by its estimative judgments even if policymaker criticism
persists or intensifies.
Lean forward professionally with action analysis.
Analysts should not hesitate to respond to criticism about Watch out for self-censorship. As a rule, a blending of
unhelpful analysis by changing the question from the one deliverables that indicates an openness toward alternative
they initially believed should be addressed to one called for interpretations with regular affirmation of what analysts
by policy critics – again a possible path to both objectivity believe to be sound, if vulnerable, judgments will protect
and utility. analytic professionalism, maintain credibility with and access
to the policy clients, and best serve the organization’s
Master techniques for evaluating inconclusive interests.
evidence. Careful consideration of alternative meanings of
gaps in information can help build credibility with critics.
Overcoming the disconnect is tough, but not impossible. It’s DC: U.S. Department of Defense. Available at:
hardly a lost cause. It’s a professional imperative. <URL:http://www.defenselink.mil/transcripts/transcript.
aspx?transcriptid=3798>
Wirtz, James J. (2007). “The intelligence-policy nexus.”
REfERENCES In: Johnson, Loch K. (ed.), Strategic Intelligence:
Bernhardt, Douglas C. (1999). “Consumer versus producer: Understanding the Hidden Side of Government, Praeger
Overcoming the disconnect between management and Security International, Westport, CT. p139-150.
competitive intelligence,” Competitive Intelligence Review
v10/3.
Davis, Jack (2006). “Intelligence analysts and policymakers:
benefits and dangers of tensions in the relationship,”
Intelligence and National Security v21/6, December. Douglas Bernhardt is an author, consultant, and lecturer. He
Kent, Sherman (1949). Strategic Intelligence for American teaches Competitive Intelligence as an MBA elective at leading
World Policy. Princeton University Press, Princeton, NJ. European and South African business schools, and provides CI
Immerman, Richard H. (2007). “Intelligence and strategy: consulting and training services for firms in Africa, Europe,
historicizing psychology, policy, and politics,” Diplomatic and the Middle East. Douglas previously served as Managing
History v32/1, January. Director for the Geneva-based consultancy, Business Research
McLaughlin, John (2008). “Serving the national Group SA, and is a former member of the SCIP Board of
policymaker.” In: George, Roger Z. and Bruce, James Directors. His last book, “Competitive Intelligence: Acquiring
B. (eds.), Analyzing Intelligence. Georgetown University and using corporate intelligence and counterintelligence,”
Press, Washington, DC. p71-81. was published in London by FT Prentice-Hall in 2003. An
Office of the Assistant Secretary of Defense (Public American citizen, Douglas is now based in South Africa and
Affairs), 2002. DoD News Briefing - Secretary Rumsfeld can be reached at stratcon1@hotmail.com
and Gen. Myers, 24 October, 2002. Washington,
28 www.scip.org Competitive Intelligence