Clever Tactics Deliver Actionable Data To Companies Eager to Gain Advantage

October 1999
By Maryann Lawlor
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Acquiring the latest plans of an adversary is no longer only the craft of undercover agents.

Intelligence-gathering techniques perfected by the government have made their way from the battlefield to the boardroom and now to corporate war rooms. These distinctively designed facilities are headquarters to a company’s team of specialists who provide decision makers with knowledge that is critical to corporate survival and growth in today’s highly competitive environment.

Increased rivalry in the marketplace has compelled industry leaders to employ methods used by military commanders for centuries. Inundated with data collected from publications, conferences and the Internet, corporate directors are turning to their staffs, who not only sift through publicly available data, but also actively pursue answers to essential questions. The result may be hiring a desired candidate to be a company’s chief executive officer or pre-empting a competitor’s takeover move.

While several firms already exist that offer analyses of trends, the fast pace of change and the global nature of commerce now demand an industry version of special operations. Consequently, people experienced in clandestine maneuvers are bringing their expertise to corporations to help maintain their positions in the marketplace.

Steven M. Shaker, vice president of business intelligence at WarRoom Research, Annapolis, Maryland, defines business intelligence as the systematic and focused collection, analysis and dissemination of information that reveal actionable alternatives. No longer simply data, this information now enables decision makers to choose the best course of action and then implement it.

Shaker believes that, in today’s business environment, business intelligence is more important than ever before. “In a period of stable times, leaders of organizations could rely on what they learned in the past. So to be a good business leader, you would have to have good intuition. However, as the environment changes, you can’t rely on past experience,” he explains. While some organizations will continue to operate on instinct, fewer will succeed using this method. Instead, corporate heads will have to gain an understanding of a business environment in which the rate of change continues to accelerate. “Some leaders believe they need reports, but what they really need to have is an ongoing, systematic feed of intelligence,” Shaker offers.

Competitive intelligence, a term that has given way to business intelligence because some experts believe it is more inclusive, appeared in the marketplace in the early 1980s. It has gained a substantial number of followers during the 1990s. One indication of this growth is the Society of Competitive Intelligence Professionals (SCIP), a leading association for practitioners. The group strongly promotes a code of ethics that includes adhering to company policies and complying with all applicable laws. SCIP’s membership escalation is indicative of current interest in the field. The organization’s 1990 membership numbered 1,500, and that year’s conference drew 200 attendees. By the 1998 conference, SCIP boasted a membership of more than 6,000, with more than 2,000 people in attendance at the conference.

The characteristics of firms that specialize in business intelligence-gathering techniques have also changed, reflecting the evolution of the profession. Shaker categorizes the firms in three groups. The first group comprises older firms that read available information, analyze the data, then provide a report to their clients. Some of these types of organizations still exist and now conduct online research as well as review published material. Some newer firms have built on this foundation by adding data-mining techniques to extract information from available documents and presenting it in a different manner such as in graphic displays. These firms perform elementary analysis.

Shaker calls the next group of business intelligence firms “third wave wannabes.” These companies extensively use the Internet to collect open source information, engage data-mining technologies and provide some level of analysis.

WarRoom Research is a true third wave company because it combines open source information collection and data mining as well as human intelligence, analysis and, according to Shaker, most importantly, it shows corporate leaders how this intelligence fits into the decision-making process. “Intelligence for intelligence sake is stupidity,” he says, adding that unless intelligence feeds into the decision-making process, it is useless. One advantage WarRoom Research offers is that its information is time stamped. This is important, Shaker explains, because it ensures that the intelligence gathered and analysis completed is placed into a time context. Reports that are months or even years old are of little value, he adds.

Several tools are essential to gather and implement this type of functional intelligence, and the company offers training to assist organizations with setting up their own intelligence sector or provides the services using some of its own staff members. WarRoom Research leaders are well equipped to orchestrate operations in this venue. Most have professional backgrounds in the Central Intelligence Agency, National Security Agency and military special operations groups.

Currently, companies engage WarRoom Research to help them set up war rooms within their own organizations either to address a specific challenge the firm is facing or as an ongoing source of intelligence to promote business growth. A war room is an important physical area that is optimized to foster team-based decision making. This design differs from traditional command and control centers that feature a hierarchy where one person sets the agenda and plan, and other team members carry out the decisions, Shaker says.

The facility style that WarRoom Research advocates is designed to encourage brainstorming in a free-flow, yet directed, fashion. “People spend tens of thousands of dollars on hardware and software, but does it help in facilitating a decision? In most cases, the answer is no,” Shaker says. Some organizations have employed groupware in their effort to involve more members in the process; however, he believes that while groupware is a good tool, it can stifle creativity and innovation.

Shaker points out that a war room need not be elaborate; some simply feature a whiteboard or large drawing pad on one wall. “The key is laying out the process, and then people can view the process at the same time and look at the same things. We’re parallel thinkers, so when people can see things at the same time, it’s helpful. It stimulates new ideas,” he says.

Shaker describes a typical war room method. First, the strategy planning process must be laid out. The second step is defining the optimal task, or best case scenario, by asking what should be done to bring about the best possible outcome. Third, participants identify their competitor’s task by attempting to predict what opponents might do to prevent a company from achieving its set goal. Competitors can be other companies in the same field or special interest groups. The fourth phase is identifying critical junctures during the designated timeline to determine when decisions must be made. At this point, responsibility for specific decisions is assigned to individuals so that they are authorized to take action at the appropriate time.

A military agency determining an investment strategy for new weapons systems is one illustration of this technique in action. The war room team would first identify the threats that the new weapons will defend against. Getting down to specifics, the group would then determine the requirements for the weapons and what concepts are available to address those requirements. Again moving into more detail, the team would assess existing weapons that meet the requirements. This step is followed by identifying the necessary additional technologies for fulfilling the established need. Finally, the team would discuss how to acquire these technologies. In this case, two options are available: commercial off-the-shelf or development products.

“Working in a war room, people can see the logical flow. With groupware, it is step by step, and you lose the parallel thinking because you can’t go back and forth between these questions,” Shaker explains.

Facility adaptability is another key component of a war room. While the task might require one design during the planning stages, another configuration may be necessary for the implementation phase of the plan. In addition, WarRoom Research recommends a modular approach, particularly for the technology that is included in the room. This allows for rapid changes to equipment as technology improves. The company may suggest that certain key technologies be purchased, but often a compromise is reached between the client and WarRoom Research based on equipment the company already owns.

Although war rooms can be set up for a variety of purposes, such a facility is especially useful when employing another intelligence-gathering technique that WarRoom Research personnel have developed. For example, the quarterback operation, named after the key player in a football game, involves designating one individual to oversee the systematic planning and execution of an intelligence collection effort at a professional conference. The method allows for a quick reaction to change that a conference event often requires.

“People go to conferences now without planning. In that case, it’s hit or miss. They are going there for information or maybe networking. Imagine if you plan ahead. You could orchestrate it well in advance and say this is what we’re going to do,” Shaker explains.

Planning sessions begin long before the first day of the convention. “First, have people from your organization get actively involved in planning the conference,” Shaker recommends. This allows someone from the intelligence-gathering team to suggest panel participants, including a speaker from their own organization as well as prominent people from a competitor’s company.

As soon as information about speakers and exhibitors is available, the quarterback of the operation would begin to orchestrate the interaction between targets, which are the people who have the information the team wants, and sources, the team members who ask the targets the appropriate questions. Sources are often primed by people within the organization who are knowledgeable about the best way to gain the information from the target or who have special experience in a designated area. WarRoom Research has labeled these specialists collectors.

During the conference, a hotel suite is transformed into the war room for the operation. According to Shaker, a suite is required because of the amount of data that will be collected during the conference that will have to be quickly directed to analysts. This is the briefing and debriefing center. Prior to the opening of the conference, sources receive their instructions about who to talk to and what questions to ask. They return to the suite after the event to report their findings to the appropriate personnel where the information can be disseminated for action.

The quarterback technique is one example of a human intelligence-gathering method. It can also be employed in social situations or at a special event sponsored by an organization that is interested in specific information. A client can enlist WarRoom Research’s help in setting up a seminar or other gathering to which a designated individual would be invited, Mark P. Gembicki, chairman and chief technology officer, WarRoom Research, explains. In this situation, an agenda is set and interactions as well as presentations are arranged. “You have to put people in the right environment to get them to feel free to talk and get specific information. We never break any laws. This can take a lot of time and money. You can’t lie, and you can’t deceive. Remember that perception is king. So you feed the perception and use perception, not deception,” Gembicki offers.

“There is nothing more dangerous than a technophile with a mouth. At meetings and conferences, a technical person starts talking and gives away a lot. More trade secrets are lost just from a person who starts answering questions without thinking about why they are being asked and what this information … will actually provide to the listener,” he adds.

To combat this, WarRoom Research recommends several approaches that are considered counterintelligence measures. Top organization officials who possess substantial information must be alerted to intelligence-gathering techniques so they do not unintentionally disclose information that can be helpful to a competitor. In addition, policies must be put in place at corporations and awareness and training programs provided to ensure that employees understand who they are allowed to discuss certain data with and how much information should be shared with junior staff members. “Too many people in organizations know more than they need to know. This can be dangerous because they could inadvertently give away information or intelligence to competitors,” Gembicki says. If asked a question directly, an employee would have to answer honestly. Because they cannot lie, the less they know, the less they can give out, he adds.

In addition to human intelligence-gathering techniques, the company is developing a technological means to disseminate information. This year, WarRoom Research plans to offer enterprise information portals. Using the Internet as the backdoor and a Windows or personal digital assistant, clients will be able to acquire information and intelligence from WarRoom Research from anywhere in the world. The single gateway would provide users with personalized information needed to make informed business decisions. According to Gembicki, this is a fast-growing market that has become a new addition to what he calls the business ecosystem.

The company also is involved in information security, a key element of business intelligence. Through risk assessment, WarRoom Research identifies threats and vulnerabilities to information networks as well as other critical infrastructure systems that contain sensitive information and intelligence. Intrusion detection and penetration testing, among others, are security services the firms offer.

Technology has become an important component of business intelligence, Gembicki says. In addition to supporting teams collecting information through human intelligence techniques, it allows companies to monitor open sources such as traffic over the World Wide Web. One way to protect against monitoring is to use services offered on the Internet that allow users to visit sites without leaving a trace. These services level the playing field, Gembicki offers.

Shaker and Gembicki are co-authors of “The WarRoom Guide to Competitive Intelligence,” a book that details business intelligence-gathering techniques and offers insight into the importance of these methods in today’s global economy.


What Role Should Government Play in Business Intelligence?

Legislation passed during the last several years has had an impact on the flow of intelligence between the U.S. government and private sector companies. While foreign governments share information that their agencies have gathered with firms in their own nations, this is not the case in the United States. In today’s global economy, some U.S. business leaders are beginning to question the wisdom of this policy and worry that the lack of assistance in this area is having a detrimental impact on U.S. companies’ ability to compete worldwide.

Mark P. Gembicki, chairman and chief technology officer, WarRoom Research, Annapolis, Maryland, compares today’s state of intelligence gathering and distribution in the United States to the plight of U.S. athletes at the Olympic Games in years past. “Foreign governments give help to their athletes. Up until a few years ago, the U.S. government stayed away from helping our athletes. As soon as the government provided help, the U.S. started winning more Olympic events,” Gembicki says.

In many countries, little difference exists between the government and industry because numerous companies are, at least in part, government owned. This arrangement facilitates sharing information between the two entities. For example, if a government agency learns that a company in another nation plans to expand into a new product field, local competitors would be alerted, allowing them to take appropriate action.

The Economic Espionage Act of 1996, which prohibits obtaining trade secrets without authorization,  prevents U.S. intelligence-gathering agencies from sharing this type of information with U.S. firms, often putting them at a disadvantage, Gembicki contends.

Because U.S. companies no longer compete only against other U.S. firms for business, competitive intelligence plays a larger role, Steven M. Shaker, vice president of business intelligence, WarRoom Research, says. “International, that’s the way of the world. And it will become more and more a larger player because large corporations are more international looking. It’s no longer about how big and powerful you are. Now it’s about being small and focused,” he adds.

The U.S. government also is discussing information security issues, another looming topic for companies. Although legislators and U.S. Defense Department officials agree that information protection is critical, they have yet to arrive at a consensus on which government agency ultimately should be responsible for overseeing security measures. Particularly controversial is the introduction of public key infrastructure, or PKI, technology, which has led government and corporate officials to a stalemate in many instances as they discuss which government agency, if any, should hold a copy of a private key.

Gembicki believes that there is no single solution for encryption or security policy. “Look at firms like Amoco or Lockheed Martin. They have to use some kind of encryption like PKI, and they should register the key with some authority. But something like a Dunkin’ Donuts is not a national interest or a risk to the infrastructure of the country. So they need security for trade secrets but not the same as Amoco or Lockheed Martin,” he explains.

“Corporate America’s Competitive Edge,” an extensive study conducted by WarRoom Research, revealed that many corporations are reluctant to work with the U.S. government on matters of information security and business intelligence. In general, company representatives expressed the opinion that they find working with the government on these issues has been a one-way street, with industry sharing their information but the government failing to reciprocate with intelligence information that it has gathered.

According to Gembicki, when asked to identify one government agency that should be in charge in these areas, corporate respondents chose the Commerce Department because they believe it focuses on business. “This is a business issue not a national security issue because business, not the government, owns the infrastructure. The U.S. government is not respecting the day-to-day business operations of U.S. companies. Government needs to do this,” he says.

The burgeoning business intelligence market, however, offers opportunities for government personnel interested in making the move from government to private sector service, Shaker offers. Military or other government intelligence professionals who are interested in the commercial market bring with them training that is beneficial to companies, “whether it is a government contractor or Pillsbury,” he says. By building on methods they have learned while working for a government intelligence agency, personnel “could use the same skill set, with some specific grooming, and be successful in the commercial world,” he adds.

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