CIA Business Decision Making
Profitability and return on investment are determined by the successful conversion of information into meaningful intelligence. Let’s talk about what intelligence really is and what the parallels are between Wall Street, business, legal practice and the CIA.
It is very important that you understand the difference between information and intelligence. Information must be converted into intelligence for an informed decision to be made. Information is just raw data that hasn’t had meaning assigned to it yet. For example, a set of numbers – 1, 2, 3 and 4 – are nothing but numbers without a meaning. If we know that 5 is coming after 4, and that 5 will followed by 6 and then 7, we have meaning. With the application of intelligence, we are now able to forecast an event.
The entire point of intelligence, whether in the public or private sector, is to aid in the decision-making process. Let’s look at how the President makes a foreign policy decision. CIA field operations officers will collect raw intelligence in the field. That information is then sent back to Langley for an analyst to process. The intelligence analyst will examine all of the reports he is receiving from multiple field operations officers. Using a variety of intelligence analysis methodologies, an intelligence report is formed. The intelligence report will examine several scenarios and make recommendations. The executive team at the CIA will then present the intelligence reports-derived conclusions to the President. The main function of the CIA is to help the President make educated decisions.
Hedge fund managers, CEOs, law firms and others will operate just like the President of the United States does. For example, a hedge fund manager will make an educated decision on whether to pursue a merger and acquisition deal based on what his analysts are recommending. The hedge fund manager — like the President of the United States — will take his team’s recommendations and combine them with his own knowledge and experience. Then he will make a decision.
The intelligence community collects 80% of its intelligence from open sources such as newspapers. What is Open Source Intelligence? Open Source Intelligence, or OSINT, is simply intelligence collected from publicly available sources. Both Wall Street and Main Street are using the same sources as the intelligence community, so why is there a difference between the predictive capabilities of the CIA and of business? The answer is that Wall Street and Main Street are limiting themselves to only one kind of Open Source Intelligence. THIS IS VERY IMPORTANT: Intelligence collected in the field does not mean that it is illegal or that it is insider trading. Wall Street is so afraid of insider trading that they have limited themselves to computers. For example, if you want to know if the supply chain and logistics operations of a company are functioning correctly, how would you go about it? Would you talk to an employee? NO. That is definitively insider information. Instead, you need to use resourcefulness and ingenuity, possibly by developing a time series analysis from GPS devices placed on trucks.
Hedge fund managers, business owners, law firms, and CEOs are unnecessarily limiting themselves in the amount of information that they can turn into intelligence. What makes the CIA the best intelligence agency in the world is that it takes what seems to be meaningless information and turns it into meaningful intelligence. Public information, also known as Open Source Intelligence, is everywhere. But you have to blend CIA methodologies with big business practices to reach a new level of profitability.