A Business Metaphor in the Context of National Security

Applying a business metaphor to intelligence processes in the national security context is not only valid, but I would like to argue, also desirable. In reading Allen’s take on the business analogy, it seems that he is rather averse to this proposition. His first contra argument is that, unlike business, the government cannot be responsive to market forces. I disagree. What the market is to business, international relations is to government. Are we to believe that government should not pay attention to and respond accordingly to developments in the international arena?

Secondly, our environment is becoming more rather than less networked through globalization. Where once particular domains were immune to changes outside their immediate environment, and cause-effect analysis had a more linear dimension, the complexity and interconnectedness of elements cutting across disciplines and once clearly defined domains, calls for non-linear cause-effect analysis. If government is not responsive to market forces (which I don’t believe is the case in reality), then it most certainly should be.

Further, Allen goes on to say that since government functions are assigned by statute, should a certain direction/policy/requirement become “unprofitable”, unlike business, it cannot choose to simply abandon it. This may be true due to the bureaucracy inherent in government institutions. However, it is precisely this inflexibility and slow reaction to change that the government should address through reform, and use examples from business as guidance.

Finally, functions are assigned to government, Allen argues, because they have a higher, public welfare purpose that is not economic. Get off your high horses, Mr Allen! Why should economic purposes be necessarily painted in such a negative light?! Economic growth and prosperity through healthy competitive business, not only contributes to the “higher, public welfare”, but also helps bring stability and opportunities for many conflict resolutions by means of soft power rather than the not so noble practices of coercion and military intervention.

There is one area that Allen briefly discusses, where the business metaphor is not likely to be applicable, and that is information/intelligence sharing among the agencies. But even here we need to make a distinction between business vs. competitive intelligence and homeland security agency cooperation vs. agency cooperation in an international context.

By definition, business intelligence is an inward-looking process. It pertains to knowledge derived from analyzing an organization’s information and internal processes to help make better business decisions. Essentially, it falls under the knowledge management domain. Progress has been made here to facilitate internal information/knowledge/intelligence sharing both in the private and public sectors. Various knowledge management practices and technological tools have proliferated in the past decade to facilitate this process.

This is less the case with competitive intelligence and international inter-agency collaboration for obvious reasons. Even when an outsider is perceived to have friendly intentions, he is still an outsider; tables can turn quickly; and trust is always on a tighter leash. For clarification, I refer to competitive intelligence as gathering and analyzing information about your competitor’s activities (and general business trends) to further your own company’s goals.

However, despite intrinsic differences, both business and national security intelligence share the same objectives:

• Avoid surprises
• Identify threats and opportunities
• Gain a competitive advantage by decreasing reaction time
• Improve long and short term planning

With the above in mind, I think the utility of the business metaphor to the national security context is indispensable. What is more, both domains use more or less identical techniques in the way they go about their business. This brings me to the second part of the question: the role of early warning in business and national security.

In business, early warning intelligence provides executives and senior management with timely, valuable information about market and competitors that enables them to make strategic and tactical decisions more quickly. (definition from Society of Competitive Intelligence Professionals)

In the national security context, early warning intelligence is supposed to provide anticipatory assessment of future problems to avoid strategic surprise. As in the business field, the recipients of this information are senior leaders and decision-makers, who are then expected to provide a course of action to address the threat.

It could be argued that one fundamental weakness of early warning systems is that they are better able to provide strategic rather than tactical intelligence. For example, strategic early warning was ample in the case of Pearl Harbor. The U.S. expected a Japanese attack well in advance, but early warning was unable to predict that this attack will happen on U.S. territory. Indicators pointed toward Southeast Asia. In the case of early warning prior to 11 September 2001, again, strategic assessments had correctly predicted bin Laden’s intentions to carry out a terrorist attack against the U.S., but were unable to pinpoint time and location.
In the business context, despite various whistle-blowers’ early warning indications, five weeks prior to Enron declaring the largest bankruptcy in U.S. history, the company’s debt was still rated as investment grade by leading rating agencies. In the case of Grove’s company, Intel, early warning was there, but no one considered it significant enough to allocate time and attention to it before it was too late. After running a probability test to analyze potential effects of the “minor” design error on the chip that was to cost them USD 475 million and eventually result in the complete business re-engineering of the company, Intel’s management underestimated the non-linear consequences of this small probability – high impact event. The failure, as Grove correctly observed, was not technological; it was social. And the forces that prompted the reverberating reaction across the company and the computer industry as whole, were likewise prompted by social dynamics rather than technical design.

This brings me to the next problem, which I think is inherent in early warning, namely, the relationship between the warning analyst and his senior decision-maker in the national security context and the whistle-blower and his senior manager in business.

According to John Kriendler, who writes on NATO Intelligence Warning Systems (NIWS), “no matter how well-structured an early warning system, its success depends, above all, on the judgment and vision of political authorities. Ultimately, the political will to act individually and collectively, and, if necessary, to intervene is more important than any early warning tool.”

From the above, it can be deduced that for early warning to be effective, two elements must be in positive complementation to each other: the development of critical indicators, where analysis is based on a qualitative not quantitative approach and ensuring that “the nature and level of warning that is being provided is understood; feedback is essential.” (ibid.)

Why is leadership so important to the early warning process? As Grove says: “Most analyses of competitive well-being of business are static ones. They describe the relevant forces at any instant in time and help explain how they add up to favorable or unfavorable business positions. But they are of little help when a major change is taking place in the balance of these forces.” (p.27)

Just like peace time and war time require a different type of leadership and a different set of skills to manage either, so in business, a leader who has grown accustomed to a gradual and systematic performance, leading to few unpredictable results, will most likely be unable to react with the agility a surprise transition requires. It is at such times that “intuition” has higher value than structured scientific methodology: “Even those who believe in a scientific approach to management will have to rely on instinct and personal judgment.” (Grove, p.35)
Early warning intelligence is not suited to a 9-5 government routine, bureaucratic processes and quantitative reports. Rather, it resembles the R&D department of a company. Of all other forms of intelligence, it should be the one granted the most freedom in the way it fulfills its function, and the recruitment strategy should aim at finding individuals with highly developed visionary and critical thinking skills.