FEATURE ARTICLE

The Intelligence Gap:

What the Multinational
Enterprise Can Learn
From Government
andMilitary Intelligence
Organizations
By
Edward Mozley Roche
Michael James Blaine
Over the past several decades, companies have spent literally trillions of dollars acquiring the latest
technologies and building their internal information processing and analysis capabilities. And yet with
all this expenditure of time, money, and effort, large enterprises are still caught off-guard on an almost
daily basis because they fail to anticipate critical developments in their competitive environment.
This shortcoming can be mitigated by adopting an intelligence mind-set. This article provides an
overview of seven specific problems concerning the use of business intelligence in the multinational
enterprise (MNE) and discusses the corresponding best practices found in professional intelligence
organizations. It closes with some suggestions on implementing those best practices in the MNE.
2014Wiley Periodicals, Inc.

Correspondence to: Edward Mozley Roche, Affiliate Researcher, Columbia Institute for Tele-Information, Columbia Business School, Uris Hall, Columbia
University, 2033 Broadway, Suite 1A, New York, NY 10027, +1 212-758-1296 (phone), emr96@columbia.edu

Published online in Wiley Online Library (wileyonlinelibrary.com)

2014 Wiley Periodicals, Inc. DOI: 10.1002/tie.21675

4 FEATURE ARTICLE

Introduction
he role of information and information technology (IT) in decision making and the control of
complex organizations is well known, particularly
among managers of multinational enterprises (MNEs).
Over the past several decades, companies have spent literally trillions of dollars acquiring the latest technologies
and building their internal information processing and
analysis capabilities. And yet with all this expenditure of
time, money, and effort, large enterprises still are caught
off-guard on an almost daily basis because they fail to
anticipate critical developments in their competitive environment. In short, the executives are guilty of what Paul
Kinsinger (2013) has called knowledge negligence and
have failed to turn information into useful intelligence
for strategy formulation and decision making. There are
many reasons for this, but in general, imprecise, hurried,
and wasteful data collection followed by inappropriate
methods of analysis have often led to inadequate decisions that generate suboptimal strategies and eventually
cause a decline in the performance of the enterprise. Further, upper management typically is insulated from the
full cost of their strategic blunders, as clearly seen in the
fallout of the 2008 global financial crisis. Many of these
problems can be mitigated by adopting an intelligence
mind-set and learning lessons from professional intelligence organizations like those found in government and
the military.
The US intelligence community, comprising 16 individual organizations, has gone through a series of dramatic transformations since the Second World War, as
technologies and needs have changed. In particular,
the trauma of 9/11 drove development of revolutionary
approaches to both collection and analysis of intelligence, as the focus shifted from a Cold War orientation to
uncovering hidden social networks of terrorists and criminal cartels. Unfortunately, there were no parallel breakthroughs in business use of intelligence. Even though
these new analytic techniques and software systems could
be used by MNEs to strengthen their strategy and decision-making processes, a troubling gap has opened up in
the capabilities of the MNE. In examining the business
intelligence function of a number of multinationals, it
appears the best practices in place are about five to seven
years behind. We currently know of only a single multinational in the initial stages of adopting some parts of these
analytic techniques and supporting technologies.
Three key differences exist between the way government and the military view intelligence and the way even
the most advanced companies handle information. The

first difference involves the quantity and type of information each collects. Most corporations data-mine their own
internally generated information on production, marketing, finance, and the like, and then supplement it with
targeted commercially available content. Intelligence
organizations, however, collect a vastly greater quantity
of highly heterogeneous public and private information
from a wide variety of legal (and illegal) sources. The
second difference involves the techniques and supporting
software used to analyze this information. Corporations
tend to use a standard set of commercially available analytic tools, developed by companies such as IBM and SAP
and often marketed as decision support and business
intelligence. The intelligence community has developed
proprietary techniques that collect, process, store, and
analyze astounding quantities of real-time heterogeneous
(all-source) information. Intelligence organizations
have been at the vanguard of a revolution in software
and analysis tools that thus far remain unknown in the
business world. The third difference involves the uses of
the data being gathered and processed. Most corporations use historical data to analyze competitors, economic
and financial trends, and customer behavior and make
structured decisions that remain fairly similar over time.
They drive into the future through the rearview mirror.
Conversely, the decisions made by government and the
military often are highly unpredictable or unstructured
and require many different analytic techniques and the
development of new approaches each time. The end
result is that professional intelligence organizations are
much better able to identify critical developments in their
environments, provide advanced warnings for key events,
and develop and implement strategies to cope with these
problems.
Although the adoption of professional intelligence
techniques could clearly benefit MNEs, in most cases,
large enterprises do not employ these techniques or use
intelligence tradecraft to analyze their environment or
make decisions. There are three basic reasons for this.
First, there are organizational issues, particularly the
role of business intelligence in the organization. Second,
there are managerial and human resources issues, specifically, the general lack of knowledge about these practices
among most managers. Finally, there are technological
issues, like the need for more specialized analytical tools
and supporting software. Accordingly, we have identified
seven specific problems concerning the use of business
intelligence in the MNE. The remainder of this article
gives a brief overview of each problem and discusses the
corresponding best practices found in professional intelligence organizations. Based on this review, we suggest

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The Intelligence Gap: What the Multinational Enterprise Can Learn From Government andMilitary Intelligence Organizations

Most Companies Do Not Exploit Classical Intelligence

Tradecraft to Solve Business Problems

Open Source Intelligence

(OSINT) streams 24 hours
a day in multiple languages.
Video, radio, newspapers,
and documents are all
translated in real time and
placed into databases that
are accessed by specialized
software designed for intelligence analysis.
a number of steps that would be required to implement these practices in the multinational enterprise. By
adopting professional intelligence practices, companies
should receive several important advantages. First, they
should be able to anticipate important opportunities
and threats in their environment beforenot afterthey
occur. Second, new techniques make it easier for distributed teams to work together to solve critical problems.
Third, it should be possible to develop more effective
short-term, emergency procedures to address problems
as they arise. Fourth, companies should become more
aware of their environments and better able to respond to
key developments and create and implement appropriate
strategies. Finally, companies will be able to gather, analyze, and use appropriate information more effectively in
order to make better decisions.

Seven Critical Differences

A true business intelligence function is not restricted to

commercial big data mining and decision support. It is
a unit that coordinates the business intelligence cycle,
composed of problem identification, tasking of data
collection, structured analysis, and reporting back to
leadership. Although it is true that departments exist that
have some intelligence capabilities (strategic planning,
IT, marketing), there is no single area that possesses a
complete set of skills, methods, and supporting technologies; as a result, when problems arise or decisions need to
be made, decision makers must rely on information and
analysis pieced together from a variety of organizational
functions on an ad hoc basis. Further, because many firms
lack a basic set of procedures and methods to solve strategic problems, they must create a new approach each
time or, even worse, hire outside consultantswho cannot possibly know the specific details of the business or
problemto do the work. In either case, the enterprise
ends up expending a lot of time and resources and often
gets less-than-optimal results.
The situation is quite different in government and the
military, where the intelligence function is well defined,
autonomous, and plays a key role in the success of operations. For example, the US government has no less than
16 intelligence organizationsincluding the National
Security Agency, the Central Intelligence Agency, and the
Defense Intelligence Agencythat gather and analyze
information and support strategy development and decision making. While most would agree that eliminating
any of these groups would weaken the United States strategic position and defense, few would consider it practical
or economical for an enterprise to have a similar large,
dedicated intelligence organization. However, without
a competent intelligence capability, the MNE is unable
to exploit various techniques of intelligence analysis
that would enable it to anticipate and respond to critical
events more quickly and effectively.

The Intelligence Function Is Not Integrated

withtheTop Levels of Decision Making

We have identified seven key differences between intelligence activities in the MNE and professional intelligence
organizations. These are summarized briefly in Table 1.
The following discussion identifies the gap between professional intelligence organizations and what we see in
the typical MNE and describes best practices found in the
government and military.

The top levels of management do not effectively utilize

their intelligence capabilities. In many enterprises, there
is little if any connection between those who gather and
analyze information and those who use it for decision
making; even in cases where connections exist, they
rarely benefit from embedded standard operating procedures. Instead, intelligence is acquired and utilized only
when needed and is typically sought afternot beforea

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6 FEATURE ARTICLE

TABLE

1 Seven Differences Between the Intelligence Function in MNEs and Professional Intelligence Organizations

Difference

Best Practice

Implementation

Organizational Issues
1. Most companies do not exploit Use of intelligence is built into almost all manageclassical intelligence tradecraft.
ment decision making.

Create a business intelligence organization; redistribute

(repurpose) resources to create a business intelligence
function.

2. The intelligence function is not Intelligence is integrated into strategic decision makintegrated with the top levels of ing. A constant back-and-forth movement of quesdecision making.
tions and intelligence between management and
the intelligence organization is standard operating
procedure.

Persons responsible for strategy formulation within the

enterprise are trained to operate using intelligence analysis
as an input into decision making. Training includes the ability to formulate questions that can be properly answered by
the intelligence organization.

Management and Human Resources Issues

3. Managers lack the skills and
training to use intelligence effectively.

Management understands types of intelligence and

their strengths/weaknesses; able to understand the
meaning of various conventions regarding probability of scenario outcomes.

Start with either technology intelligence or competitor intelligence as an initial training opportunity to synchronize
communication between management and the intelligence
group.

4. There is no established career Intelligence analysis is a specific discipline recogpath for intelligence profession- nized within the enterprise. Intelligence analysts are
als in the MNE.
recognized as professionals.

HR defines a career path for business intelligence personnel and division of authority and functions within the business intelligence organization. Repositioning of some staff.

Analytical Tradecraft
5. Corporations have failed to
keep pace with new analytic
techniques.

Staff is training in multiple structured analytic techniques; specific techniques are matched against
corresponding problem types.

Intelligence analysis training; skills standardization; create

a lingua franca; job promotion linked to structured analytic
methods.

6. Most companies do not colEvery type of intelligence source is utilized, includlect the correct information in the ing nontraditional sources. Extensive training in colmost efficient manner.
lection methodology and procedures.

Collection of a broad range of intelligence including open

source (OSINT) and human intelligence (HUMINT) through
external organizations. Tasking of customer-facing employees with targeted collection campaigns.

7. Most companies are unaware

of the new intelligence software.

Work with intelligence analysis software vendors to transition systems designed for military and political intelligence
into your enterprise domain; train your intelligence team on
use of these advanced technologies.

Software systems used for brainstorming, scenario

formation, alternative competing hypothesis (ACH)
analysis, social network analysis, content analysis,
and other intelligence analysis operations.

problem arises. As a result, advance warnings of critical

events, a key function of intelligence, are the exception.
Further, top decision makers may or may not rely on
intelligence when they make decisions. Whether and how
to use this information is up to the individual, ruled by
their skills, knowledge, and habits. It is not uncommon
for mission-critical decisions to be made by gut feelings or intuition, without the benefit of sound analysis.
Steve Jobs of Apple made many decisions this way, and
although this approach worked well for Apple, for most
companies it is a recipe for disaster. Consequently, integrating intelligence with decision making will require a
change in corporate habits and the development of new
individual and organizational skills.
By contrast, in the government and military, intelligence is a specific discipline, recognized as being an
essential part of these organizations. An intelligence
group is set up and operated specifically to provide support for crucial decisions and the persons who make

them. The decision makers are accustomed to daily intelligence briefings and make important decisions with full
consideration of analysis provided by the intelligence
organization. Intelligence is not a distant or ad hoc department that may be consulted as needed or when convenient. Instead, it is intimately designed to support strategy
creation and implementation. Perhaps out of necessity,
these organizations would never rely on outsiders to assist
in sensitive, strategic decisions; in contrast to the private
sector, it would be anathema to even consider making
important decisions without the benefit of intelligence
input. Finally, since leaders use intelligence on a regular
basis, they have developed the habits necessary to work
effectively with intelligence support.

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Managers Lack the Skills and Training to Use

Intelligence Effectively
The current generation of professional managers has
been educated, for the most part, through traditional

The Intelligence Gap: What the Multinational Enterprise Can Learn From Government andMilitary Intelligence Organizations

MBA programs in business schools, and has been trained

to use a standard set of analytic tools that emerged in the
postwar period and now define the essential managerial
skill set. These include such frameworks as the Porter
model and SWOT (strengths, weaknesses, opportunities,
and threats) analysis for strategy creation, and basic methods of financial analysis such as discounted cash flow,
internal rate of return, and compound annual growth
rate. This standard skill set now provides the basic methods of analysis and decision making in most organizations
and is rarely questioned because it forms the lingua franca
of todays business elite. This body of knowledge also
contains a set of key assumptions regarding the nature of
the firm and its organization around standard functional
areas such as marketing, finance, research and development, and so on. Intelligence, however, is not a required
component of current MBA training and, if covered at
all, is assumed to be part of other established courses,
such as law or strategic planning. Consequently, there is a
general lack of understanding on the part of top management about the potential role of intelligence in the enterprise, its strengths and weaknesses, uses and misuses, and
how managers can work with or benefit from it.
In government, leaders have been trained to use different types of intelligence, and understand the strengths
and weaknesses of each type. As a result, there is a common lingua franca spoken between intelligence personnel and leadership. This means there is less chance for
misunderstanding, and the implications of probabilities
or scenarios studied are well understood by decision makers because all parties possess a common set of tools and
communication techniques. This reduces the communication barrier, speeds up comprehension of intelligence
information, and reduces distortions that might occur
when information is moved from one culture of persons
to another. For government and military leaders, reading
an intelligence report is as basic and natural as studying
a financial report or market analysis is for a business
manager.

One leading European

business school started a
business intelligence
certificate program. Outside
observers were stunned to
learn there was no reference
to professional intelligence
methods, only a reliance on
data mining and executive
support systems technologies
that work off of the corporations own databases.

Because it is a common practice for firms to rely on

external temporary consultants to perform many intelligence functions, there is no professional career path for
intelligence personnel in most companies. Consequently,
it is difficult to attract and retain the best personnel for
this specialized work, and therefore it is unlikely that any
intelligence output will reflect the correct mixture of skills
and analysis required to obtain optimal results. The situation might be quite different if new recruits were offered

a position in an autonomous business intelligence unit

that operates as the clearinghouse for all information
used in strategy formulation and decision making. By
defining a separate business intelligence career path with
an established series of promotions based on recognition
of superior work, over time it should be possible to attract
the best personnel and generate the highest-quality output in this area.
In the military and government, intelligence is a
respected career path, usually reserved for the most
gifted persons or those with unique skills. Pay levels for
intelligence work are comparable with other types of government work, and there is a career path that goes from
the lowest to highest levels. Once a person is recruited
into intelligence, he/she enjoys a lifetime career, provided he/she has the necessary skills and continues to
perform. The key difference between the government
and military and corporate realms is the perception of
the value of intelligence. When something is viewed as
critical to the survival and success of the organization, it
naturally attracts the best and brightest and delivers work

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There Is No Established Career Path for Intelligence

Professionals in the MNE

8 FEATURE ARTICLE

of the highest standard. However, if something is not valued at the highest level, as often is the case with the intelligence function in many corporations, it fails to attract
the best personnel and delivers unsatisfactory output,
which generates suboptimal decisions that can lead to the
decline or marginalization of the organization.

Corporations Have Failed to Keep Pace with New

Analytic Techniques
One of the major failures of many MNEs is that they have
not kept pace with the new techniques of analysis that
have emerged within the intelligence community over
the past decades. These are loosely termed analytical tradecraft and include such basic techniques as open source
intelligence (OSINT) and the alternative competing
hypothesis (ACH) method. Table 2 provides a summary
of a few of the most important of these techniques; it
shows how they currently are being used in the intelligence community and how they can be adapted to analyze business challenges. Additional analytical tools and
supporting software are likely to become commercially
available, as government vendors search for markets in
the private sector. The first companies to take advantage
of these new techniques are likely to gain a significant
competitive advantage. Consequently, managers should

closely monitor new developments in this area. However,

these groundbreaking tools have not been adopted by
corporations and are simply not a part of the lexicon of
todays corporate managers and business strategists.
In the intelligence community, however, these and
other techniques are taught to new personnel in an established and disciplined way that is enforced throughout
the organization. This facilitates deployment of large
numbers of intelligence professionals, all having the same
training and basic skill set. Only by having a standard set
of analytic techniques can such large systems work properly. Further, specific techniques are used for all phases
of the intelligence process, from collecting intelligence
information to analyzing those data, to generating conclusions and reporting recommendations. The lack of
knowledge of these structured analytic techniques is a significant barrier to the rapid adoption of advanced intelligence operations across the multinational enterprise.

Most Companies Do Not Collect the Correct

Information in the Most Efficient Manner
In most multinationals, the collection of intelligence suffers from two principal defects: (1) the methods used to
collect data are fragmented and undisciplined, and (2)
the definition of what constitutes intelligence is much

2 Tool Sets and Techniques Developed Within the Intelligence Community Can Be Used in the Multinational
Enterprise to Improve Decisions and Strategy Formulation

TABLE

Tool Set

Utilization in Intelligence Community

Utilization in Multinational Enterprise

Open source intelligence (OSINT)

Massive data mining of all public media and

online data. Multiple techniques for analysis, primarily using automated computer algorithms

Competitive analysis; market analysis

Alternative competing hypothesis

(ACH) method

Development of indicators; verification of most

probable scenarios

Mergers and acquisitions; anticipation of moves by competitors or governments

Indicators (identification and

validation)

Targeting of collection and monitoring effort so

that critical scenarios are identified in advance,
and with the monitoring of a minimum amount of
intelligence collection

Focusing of information collection efforts for advance warning of important industry events, such as an acquisition or
entry into new product area of competitor; other applications in monitoring of government regulation

Social network analysis (link

analysis)

Data mining of social networks and financial and Use in analysis of customer preferences and activities;
travel records combined with profiling to discover identification of research networks of competitors; analysis
hidden networks of terrorists, criminals, or other of supply chains and industrial network organization
persons of interest

Human intelligence (HUMINT)

Development of handler-source collection networks; collection of secret information

Training of human resources to collect information (legally)

from numerous venues, such as conferences, scientific
meetings, social events

Other sensing of intelligence

information

Collection of atypical intelligence information

such as signals intelligence, emissions, chemical
analysis to determine nature of locations or other
crucial information

Use for analysis of new plant or installations of competitors;

compilation of indicators for targeted scenario analysis.
Example: Monitor the emissions of a new plant in order to
determine the manufacturing process being used.

Machine translation

Scanning of all print media, social media, and

video media; enables importation into databases

Same but with different objectives (e.g., business strategy

instead of hunting terrorists and criminals)

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The Intelligence Gap: What the Multinational Enterprise Can Learn From Government andMilitary Intelligence Organizations

A leading European MNE

recently was stunned to
learn that its well-funded
business intelligence unit was
unaware of the commercial
availability of specialized
software to support structured analytic techniques.

improvements. Little is left to chance, and there is a

premium placed on targeting collection efforts that provide unique information, not information that is easily
obtained or a commodity on the open market. Finally,
incoming information is graded and evaluated according
to its relevance and credibility, and these ratings are done
using a standard system of evaluation.

Most Companies Are Unaware of the New Intelligence

Software

narrower and more restricted than it should be. As a

result, not nearly enough useful intelligence is collected,
and what is collected is more expensive than necessary.
Further, it typically contains too much irrelevant material, while ignoring or missing altogether more crucial
information. Therefore, even if an organization had a
fully functional intelligence unit, it would be unable to
operate effectively because it would be starved for appropriate and useful data. There also is a disturbing tendency
to overrely on externally generated, usually commercial,
information sources. Apart from being expensive, these
sources rarely provide a competitive advantage to the
user, since any competitor can purchase the same information from the same source. This helps explain why
many firms in the same industry follow a similar strategy
and seem to be caught off guard by the same events.
Conversely, intelligence collection in government
and military organizations is a highly organized art. It is
understood that the collection process is costly, and as a
result, the selection of what data to collect is as critical
as the efficiency with which it is collected. For example,
collection resources (both equipment and networks of
personnel) are optimized to collect specific types of information, with concerned personnel receiving extensive
training, sometimes for years, in the art of intelligence
collection. In fact, collection itself is a separate career
path, and persons who exhibit the particular mind-set
required are highly valued. There is also a constant
review of collection efforts in order to identify possible

Corporate IT budgets since Y2K have been dominated

by spending on enterprise systems such as SAP, decision
support systems, and mobility. Among other things, these
systems have greatly improved reporting and analysis of
enterprise data, made collaboration easier, and enabled
more targeted marketing to customers. However, they
have done little to enhance the capabilities of corporate
leadership to act when faced with major strategic challenges. Even the most sophisticated decision support
systems merely summarize existing enterprise and commercial data for use in the decision process. They do not
provide the software infrastructure needed to support the
intelligence analysis essential to solving critical business
problems. These new platforms would allow the decision maker to extend the scale or scope of their analysis,
and consider many more possibilities and scenarios than
traditional methods. As hard as it is to believe, corporate
leaders are still relying on commercially available software packages such as Microsoft Office, PowerPoint, and
Excel to support their strategic planning. As a result, top
executives are unable to fully utilize the information they
collect and analyze it effectively.
In the professional intelligence community, software
advances have completely changed the nature of data
analysis and made it possible to derive useful intelligence
from massive amounts of incoming data. Advanced intelligence analysis software has become a compulsory and
essential part of all intelligence work, and without it,
little of value could be done. Table 3 identifies a few of
the leading software suites and shows how they can be
adapted to the business environment. Examples of this
software include tools for social network link analysis, 3-D
simulation of environments and areas of interest, compilation of evidence and hypotheses for analysis, writing
and memorandum tools such as scaffolds, machine translation, and geospatial information systems. An important
characteristic of these new tools is their ability to automatically collect and arrange intelligence information. This
has taken some of the work out of data collection and
provides a useful framework for data analysis. An intelligence professional familiar with these tools would be

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10 FEATURE ARTICLE

TABLE

3 Families of Software Tools Used in Todays Intelligence Analysis

Software

General Capabilities

Utilization in Multinational Enterprise

Kapow

Real-time processing of massive amounts of unstructured data

(including multimedia), particularly from the web or from legacy
applications; multiple languages

i2 Analysts
Notebook

Access multiple types of data real-time visualization; 18 languages; Sentiment analysis, social graphing, viral tracking; comtargeted at supporting intelligence analysts
plex social network analysis, customer engagement and
retention, risk scorecard

Statistical Analysis
System (SAS)

Complex portfolio solutions for analytics, business intelligence,

Tracking blogs, identification of key phrases and words
fraud and financial crimes, governance and risk compliance, supply appearing in social media, sentiment analysis, identificachain intelligence; social media analytics; social network analysis
tion of social connections of customers

TH!NK Suite
(Globalytica)

Multiuser alternative competing hypothesis (ACH), indicators validation, hypothesis generation

astounded to learn that corporate managers are unaware

of these advances and continue to analyze complex information and make critical decisions without these tools.

The Road to Implementation

The primary mission of professional intelligence organizations is to provide advanced warning on the actions
of strategic competitors and unpredictable catastrophic
events. In order to accomplish this goal, the collection,
organization, and storage of vast amounts (measured in
exabytes and beyond) of data from widely diverse sources
is required. To process and analyze this quantity of data,
the intelligence community has developed proprietary
analysis tools and supporting software that provide a
superstructure spanning the hundreds of individual data
stores, some of which are much larger than the entire
information content of a typical MNE. The output of
these systems, the intelligence product, is an essential
component of the decision-making processes of top leadership. Although the scale and scope of data collection
and analysis will be much different in the typical multinational enterprise, this basic intelligence architecture
and its specific analytic techniques can be adapted to
help upper management improve their decision making
and strategic planning. Few companies currently employ
these structured analytic techniques, since they have only
recently become commercially available in limited beta
tests. But it is possible now to begin building a true business intelligence function. Although there is no single
way to do this, we have identified several key steps that
must be taken and provide a few lessons from MNEs that
have implemented parts of these systems.
Clearly, the first step is to make the commitment to create an autonomous business intelligence group that directly

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Identification of key themes, opinions, and trending topics;

sentiment analysis; social graphing, viral tracking, reputation tracking, customer engagement, regulatory tracking

Use by business intelligence teams for comparing evidence against scenarios or hypotheses for future events
in the business environment

supports strategy formulation and decision making and is

seamlessly integrated with the highest levels of the organization. It is extremely important to begin with a clear, shared
vision of the role and objectives of this new function, and
the clearer and more precise executives can be about the
types of intelligence they require, the more likely they are
to realize their objectives. In order to get an estimate of the
time, money, and effort required to this realize their vision,
companies may find it useful to conduct an inventory of
their current intelligence resources. This makes it possible
to identify existing resources that can be repositioned
to support the new function, and identify the remaining
skills and capabilities that must be developed internally or
acquired from other sources. Although it is necessary to
specify the form and function of the intelligence group in

Many enterprises maintain

a corporate library
responsible for some
research. This resource is a
good candidate for incorporation into the new business
intelligence function.

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11

advance, some firms have found it beneficial to leave room

for flexible adaptation, since both the types of intelligence
gathered and the structure of the intelligence function may
evolve over time as managers become more familiar with
the potential benefits of these resources.
The next step is staffing the new organization. This
is usually done by repositioning appropriate internal
resources and hiring external intelligence professionals.
By working closely with human resources, the appropriate
personnel can be hired to fill any skills gap, and training
can be provided to help them successfully transition from
professional intelligence work to the corporate world. A
large Wall Street firm, for example, regularly hired intelligence professionals to work in their political risk area
but found that many of these workers were unprepared
for the unique demands of the corporate environment.
This is not uncommon since the size of professional
intelligence organizations provides few opportunities
for analysts to interact directly with their leaders, and
few analysts have extensive knowledge of or experience
with critical business issues. To solve these problems,
the company placed a manager from business strategy
above the intelligence group who ensured that the group
responded effectively to the needs of top management.
Although repositioned employees should not have the
same difficulties transitioning to the intelligence unit, it
is important to recognize that numerous cultural differences exist between intelligence professionals and corporate workers. As a result, it is important to select workers
who have a flexible attitude as well as the appropriate skill
set required for intelligence work.
As suggested above, training also is a critical step in
building an effective business intelligence unit. This training must take several forms. First, it is necessary to educate
upper management and other key personnel about the
fundamentals of the intelligence cycle and the possible
uses and benefits of intelligence. These executives must
also gain a basic understanding of the full portfolio of
structured analytical toolsthe so-called tradecraftin
order to communicate and work effectively with the new
intelligence group. This can easily be done by bringing in
a top-level intelligence expert with extensive government
and executive experience to brief upper management
on these matters. Second, it is necessary to train both
current and newly hired intelligence personnel in the
structured analytic techniques and other tools that will be
used. While professionals from the government or military
should already have experience in this area, they may still
need additional training to apply these tools effectively in
a business context and adapt them to the specific needs
of the enterprise. At the same time, employees who have

been repositioned into the intelligence unit will benefit

from learning these techniques and interfacing with intelligence professionals. Finally, training must be provided at
all levels to help employees get the most out of any information systems that will support the intelligence function.
This training is typically supplied by software vendors, but
since most of the new analytic software has been developed for government and military use, it is often necessary
to incorporate specific examples from the business world
during training to get the most out of these investments.
The fourth step involves the acquisition of advanced
intelligence analysis software. Building the technology
infrastructure needed to support the new intelligence unit
should only be done after the specific form and function of
the group has been determined, so that the most effective
technologies can be identified and implemented in the
most efficient manner. The corporate IT department plays
an important role in this process since the new hardware
and software needed to support structured analytic techniques must be capable of accessing existing corporate
information systems. As a result, the IT budget may need to
be increased to enable this integration. It may be useful to
completely secure the business intelligence system from the
rest of the enterprise architecture so that sensitive strategic
information will be less vulnerable to industrial espionage
using cyber methods. In the government, for example,
crucial intelligence information systems are not connected

DOI: 10.1002/tie

Thunderbird International Business Review Vol. 57, No. 1 January/February 2015

It may be useful to completely secure the business

intelligence system from the
rest of the enterprise architecture so that sensitive
strategic information will
be less vulnerable to industrial espionage using cyber
methods.

12 FEATURE ARTICLE

to the Internet and usually are not even connected to each

other so that they cannot be penetrated by outside parties.
As a result of these new endeavors, it may also be necessary
to hire persons with particular knowledge of intelligence
software to ensure that the new systems operate efficiently
and effectively. These persons will typically come from
either the software vendor or the government or military.
Finally, as noted earlier, it is often better to use a
phased approach to build the intelligence organization
and implement the necessary technology systems. The
problem set to be addressed by the new intelligence
organization is likely to change and grow as managers
become more comfortable using these resources. By
starting small, with a few highly specific problems, an efficient and effective working relationship can be formed
gradually between the intelligence function and upper
management before permanent intelligence processes
and systems have been locked in. An additional factor
involves the extreme geographic distribution of most
MNEs. As a result, intelligence problems and techniques
are likely to vary from one region to another, making it
difficult to begin with a full-scale intelligence function.
Careful thought also must be given to where to headquarter the unit and how to coordinate subsidiary operations.
In general, the central organization will work closely
with upper management to identify specific intelligence
requirements and translate these needs into tasking and

data collection operations that will often be carried out

by subsidiary organizations. But these issues typically take
time to resolve. Depending on the unique needs of the
MNE, it may be unrealistic to locate the business intelligence function at corporate headquarters. Finally, it takes
time to build the necessary external linkages required to
collect information. These may include a variety of informal and formal connections with trade associations, international standards committees, university think tanks,
and other professional organizations, all of which offer a
useful means to monitor important developments in the
market, find new ideas for innovation, and keep track of
the actions of competitors.
Although the road to implementing a fully functional
business intelligence operation may be long and difficult,
the payoff can be found in more effective strategic planning and decision making and improved organizational
performance.

Acknowledgments
We would like to thank the editors, staff, and anonymous
reviewers at the Thunderbird International Business Review
as well as Vince Swoyer, former CIO of Sara Lee, and Joe
Ferreira for their helpful comments, which have significantly strengthened the final version of this article. Any
remaining errors and omissions are our sole responsibility.

Edward M. Roche holds a PhD in political science from Columbia University and is a member of the California
Bar. He is an affiliate researcher at the Columbia Institute for Tele-Information, Columbia Business School. He has
taught at the Stern School of Management; the Haas School at the University of California, Berkeley; and Grenoble
Ecole de Management. He consulted with Booz-Allen Hamilton, then was chief scientist at Concours Group and
chief research officer at Gartner. Ed has written on international business, industrial espionage, global technology
management, and cybersecurity. His books include Managing Information Technology in Multinational Enterprises,
Corporate Spy: Industrial Espionage and Counterintelligence in the Multinational Enterprise, and Snake Fish:
The Chi Mak Spy Ring. Residing in New York City, he is president of Barraclough NY LLC, a provider of litigation
services.
Michael James Blaine holds an MBA in finance from New York University and a PhD in international business from
Ohio State University, where he taught. He also worked as a consultant for many years and as a senior strategist
for IBM. He has written on a wide range of topics, including economic development, American competitiveness,
Japanese business, and international finance. A fervent critic of war, radical capitalism, and quantitative easing, he
blogs occasionally on these and other subjects. Dr. Blaine and Professor Roche have collaborated on numerous
articles, books, and other projects, including the edited works Information Technology, Development and Policy
(Avebury, 1996) and Information Technology in Multinational Enterprises (Edward Elgar, 2000). He currently
resides in Columbus, Ohio.

Thunderbird International Business Review Vol. 57, No. 1 January/February 2015

DOI: 10.1002/tie

The Intelligence Gap: What the Multinational Enterprise Can Learn From Government andMilitary Intelligence Organizations

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