Military Intelligence – A Template for Effective Competitive Intelligence

More than 95% of U.S. based businesses indicate that they have dedicated some amount of resources to the gathering of intelligence. This may include market, sales or competitive intelligence, but the goal is usually the same: be better at business than the next guy.

But, few companies would rate themselves as being very effective with the intelligence. And, the funny thing is the discrepancy of the perception between those that gather the intelligence and those that would use it. Executives usually rate themselves as “somewhat effective” or “very effective” as using intelligence while the intelligence professionals generally rate the executives as “not very effective.” Hmmmm. Why so many axes to grind?

Every organization should examine and reexamine its practices to create a continual improvement process. During this process, I would recommend that each organization take a little time to review other organizations that make intelligence a priority.

Now, it would be difficult to peek into other businesses and discover their secrets. You wouldn’t open your doors to this kind of review. Why would anyone else?

But, you can look at an institution that, overall, leads the world in the gathering, analysis and use of intelligence – The military. In fact, you can make the case that the military has the longest running and most successful intelligence system in history. (We won’t talk about policy makers and their use or misuse of intelligence. That’s another story for another day…

Where else are the stakes higher than on the battlefield? In a situation where lives and equipment are constantly at risk, we can learn some very critical things about how the military values its “competitive intelligence”, from gathering through strategic use.

“Most militaries maintain a military intelligence corps with specialized intelligence units for collecting information in specific ways. Militaries also typically have intelligence staff personnel at each echelon down to battalion level. Intelligence officers and enlisted soldiers assigned to military intelligence may be selected for their analytical abilities or scores on intelligence tests. They usually receive formal training in these disciplines.”

“Critical vulnerabilities are…indexed in a way that makes them easily available to advisors and line intelligence personnel who package this information for policy-makers and war-fighters. Vulnerabilities are usually indexed by the nation and military unit, with a list of possible attack methods.”

“Critical threats are usually maintained in a prioritized file, with important enemy capabilities analyzed on a schedule set by an estimate of the enemy's preparation time. For example, nuclear threats between the USSR and the US were analyzed in real time by continuously on-duty staffs. In contrast, analysis of tank or army deployments are usually triggered by accumulations of fuel and munitions, which are monitored on slower, every-few-days cycles. In some cases, automated analysis is performed in real time on automated data traffic.”

“Packaging threats and vulnerabilities for decision makers is a crucial part of military intelligence. A good intelligence officer will stay very close to the policy-maker or war fighter, to anticipate their information requirements, and tailor the information needed. A good intelligence officer will ask a fairly large number of questions in order to help anticipate needs, perhaps even to the point of annoying the principal. For an important policy-maker, the intelligence officer will have a staff to which research projects can be assigned.”

“Developing a plan of attack is not the responsibility of intelligence, though it helps an analyst to know the capabilities of common types of military units. Generally, policy-makers are presented with a list of threats, and opportunities. They approve some basic action, and then professional military personnel plan the detailed act and carry it out. Once hostilities begin, target selection often moves into the upper end of the military chain of command. Once ready stocks of weapons and fuel are depleted, logistic concerns are often exported to civilian policy-makers.” (http://en.wikipedia.org/wiki/Military_intelligence)

The points that catch my attention are:

1. Intelligence professionals are present at each level of the military
2. They receive formal training in intelligence practices
3. Good intelligence officers stay very close to the policy-maker or war-fighter
4. Good intelligence officers ask lots of questions to make sure that the intelligence program is on the right track and can anticipate the leaders’ needs
5. Good intelligence officers package the intelligence in ways that the users can easily consume while still getting the intended “nutritional value”
6. While competitive intelligence personnel are not responsible for policy, direction or decisions, they should try to understand how these decisions are made. This will provide a deeper context to make future intelligence efforts more valuable.

In the next post, we’ll look at the usual structure of intelligence in today’s business.

And, if you have any thoughts, leave me a comment. I dare you.

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New England Patriots Take Competitive Intelligence Too Far

Recent NFL headlines have been filled with the tactics employed by the New England Patriots. Apparently, the Patriots have been filming the opposing team’s defensive coordinator, recording their hand signals, analyzing them against actual field play to break the code and, subsequently, feeding their offense with the defense’s anticipated points of attack and weaknesses.

Some might wonder what the problem is. I have heard some say that “every team can do it,” and others have mentioned that the Patriots are certainly not the only team engaging in this activity.

And, the truth is that if the Patriots had employed a method of using binoculars, a pad of paper and a pencil to steal signals, they would not be in any trouble at all. Those methods are legal (if not ethical) in the NFL system. But, the NFL strictly prohibits the use of video capture of the opposing team’s signals.

What is the penalty for this “indiscretion?”

Head Coach, Bill Belichick was fined 10% of his salary this year ($500K), the Patriots were fined an additional $250K and the team loses a first round pick in next year’s draft. These are some of the heaviest fines handed down.

Is it possible that everyone else is engaging in this type of behavior? Football at the NFL level is hypercompetitive. While there is no evidence of anyone else doing this, there is no reason to believe that other teams haven’t engaged in this activity, assuming (just like the Patriots) that they won’t be caught or that the penalty would be outweighed by the positive benefit. In either case, the NFL has sent the message firmly that cheating will not be tolerated. I suspect that many teams had to examine their own operations this last week in light of the heavy judgment handed down to the Patriots.

For you in your company, take this lesson to heart. Know the law and stay away from the edge of the darkness. Grey areas still carry risk and the people that break or bend the laws suffer the consequences as much or more painfully than do the companies in which they are employed.

Just to jog your memory, you might consult the actual text of the Economic Espionage Act of 1996:

(a) Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly—
(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
(4) attempts to commit any offense described in paragraphs (1) through (3); or
(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy,
shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.
(b) Any organization that commits any offense described in subsection (a) shall be fined not more than $5,000,000.

Competitive Intelligence, The Super Bowl and a Very Small Detail

In the book, Greatest Team Ever: The Dallas Cowboys Dynasty of the 1990s, (Norm Hitzges and Ron St. Angelo), Norm Hitzges tells the story of “competitive intelligence” incident that had a powerful effect on the outcome of Super Bowl XXVIII, played in 1994.

According to NFL.com,

“To win, the Cowboys had to rally from a 13-6 halftime deficit. Buffalo had forged its lead on Thurman Thomas's 4-yard touchdown run and a pair of field goals by Steve Christie, including a 54-yard kick, the longest in Super Bowl history.

But just 55 seconds into the second half, Thomas was stripped of the ball by Dallas defensive tackle Leon Lett. Safety James Washington recovered and weaved his way 46 yards for a touchdown to tie the game at 13-13.”

This recap doesn’t tell the whole story of this fumble and recovery for a touchdown. The fumble was no accident and the impact it had on the game was extremely important. The Cowboys’ accidental discovery of a bit of intelligence ended up turning the entire game around. I’ll relate the story as I have heard it from Norm Hitzges.

As you know, there is an incredible amount of hype and press coverage leading up to the Super Bowl. Reporters are everywhere and no story is too small to receive significant coverage.

It just so happens that the day before the game, Buffalo Bills coach Norm Levy was being interviewed for television. He was down on the field with his team, but talking to reporters as his players walked through some drills. Coach Levy didn’t know that the camera was catching some of his players in the background. He probably thought that the camera was tight on him. Had he known that his team was on display, he certainly would have changed his angle.

Turns out that the Bills’ offense was adding a new wrinkle especially for the Super Bowl game. In the background, almost off camera, the offense was walking through a new play from shotgun formation. The idea was that the Bills’ running back, Thurman Thomas would take a direct snap from the center rather than the ball going through the quarterback’s hands. This type of play is meant to confuse a defense and create a quick strike opportunity. This play might be most effective in a passing situation, where the quarterback can fake the reception of the snap and distract the defense while the running back gets up to speed with the ball. This is a play that Buffalo had not used all year, and they figured that the element of surprise would work in their favor in the biggest game of the year.

In their hotel rooms, the Dallas Cowboys’ defense was watching Coach Levy’s interview. The Defensive Coordinator happened to pick up on the trick play being practiced in the background. It was almost sheer luck (or very thorough attention to all things related to the next day’s game) that he noticed at all, but the play caught his attention and he made note of the Bills’ formation.

He immediately called a meeting of the Cowboys’ defensive players. He explained what he had observed happening behind the coach during the interview. The defenders created a code word that would be called out if they observed the formation on the field during the game.

On Sunday, at the halftime break, the Bills lead 13-6 and were playing very tough football against the Cowboys. Just after halftime, the Bills had the ball again and in less than a minute, they had moved the ball to midfield. With only 55 seconds played in the second half, the Bills decided it was time to do something unexpected and break the game open. As they lined up in shotgun formation, the Cowboys began to yell their code word, indicating the trick play. Sure enough, the ball was snapped, the quarterback faked backwards as though he had received the snap while Thomas attempted to grab the ball out of the air and start around the left side of the line.

Completely prepared, Leon Lett of the Cowboys’ defense raced around the left side of the line and hit Thomas before the ball was secured. Thomas went one way and the ball went the other. Dallas’ safety, James Washington, scooped up the ball and returned it 46 yards for the tying touchdown.

This dramatic turn of events apparently demoralized the Bills while pumping up the Cowboys. The Bills did not score again all game and the Cowboys went on to win the game, 30-13.

So, what are the takeaways (pardon the fumble reference) of this Competitive Intelligence story?

1. Keep your eyes open and ear to the ground. Information is always in the air. You just have to know where the most likely places are to intercept that intelligence. (Too many people try to get that one silver bullet that they completely miss the dozens of little arrows that go by constantly)
2. Make sure that you can interpret what is happening. Any regular fan sitting at home watching the interview would certainly have missed the significance of the play being practiced. Find people that know how to interpret data and trust their opinion.
3. Everyone on the team needs to know how to assimilate and react to the intelligence. If not, there will be no coordinated action based on the information and the value will be compromised, at best.
4. Counterintelligence – Make sure that your secrets stay safe. Who knows where the camera is pointed, even at seemingly insignificant times?
5. Do something with the intelligence. Information that doesn’t result in improvement is interesting but completely worthless. And, there really isn’t any glory in telling someone you knew something was going to happen if you didn’t take action on the information. Hindsight may be 20/20, but for CI purposes, it may be very low on the value scale.

I might recommend a very fertile area of intelligence that should be mined often and consistently. Your current client list is full of people or companies that have shopped the competition, listened to their pitches or even have been previous clients of your competitors. If you want to stake out a very promising bit of territory and set up listening ears, I would make sure to include the current client base.

If you need some help incorporating these ideas, give me a call. I’d be happy to talk you through. (cdalley@primary-intel.com, 801-838-9600 x5050)

Life on the Prarie - The Best Ranchers Protect the Herd

At the risk of alluding to your client base as cattle, let’s consider the experience of a successful rancher. A small part of his year is spent on increasing the herd (birthing calves). Most of his time is spent nurturing, caring, feeding and protecting the herd from dangers. He builds fences, renders aid, steers the herd to the greenest pastures and fights to keep wolves, poachers and other predators away from his livestock. This herd of cattle is his life. He doesn’t have the luxury of a safety net or fallback plan.



A business has a great deal in common with the rancher. You work hard to bring in a few new accounts every year. But, if you are like most businesses, 75%+ of the value of your business exists in your current accounts.

Your competitors (either other ranchers or wolves) know the value of your accounts and want them for their own. They are fighting hard to get inside your fences. They may even dress up in funny little cow suits so as not to spook the herd and possibly even fool the rancher.

This is the reason why you have to focus a substantial amount of your competitive intelligence on maintaining your accounts.

There are two very important sources of competitive intelligence that need to be mined in the client lifecycle:

1-During the normal course of business (e.g. during the execution of the project or fulfillment of the contract)
2-Post renewal-defection (after the company chooses to renew its engagement or defect to a competitor or otherwise)

Your current client list interacts very frequently with your competition. Even the most satisfied accounts listen to your competitors. Occasionally, they reach out to discover new developments in the marketplace.

A big benefit of your current client base is that they are generally friendly to you and willing to provide quality information about your competitors. Usually, all you have to do is ask. They will talk.

They can tell you new development and tactics. They can tell you how you stack up in many different areas vs. various competitors. They will tell you what you will need to do to maintain competitive advantages in the marketplace against specific companies.

And, you can quantify competitive performance scores in order to perform statistical analysis and predictive analytics. With these tools, you can build very strong fences to keep the herd intact.

Keep riding cowboys (and cowgirls…). If you want some ideas on how to implement Competitive Intelligence among your current accounts, talk to me. (cdalley@primary-intel.com, 801-838-9600 x5050)

Competitive Intelligence – Save Yourself from the Cloak and Dagger

Today, I’m going to stray from the usual Primary Intelligence Competitive Intelligence thoughts to make a point about counterintelligence. Your company has to be prepared for major and minor efforts to infiltrate your confidential and proprietary information.

I’ll start with a story and follow-up comment:

"In the spring of 2005, Guy Enright, an accountant at KPMG Financial Advisory Services Ltd. in Bermuda, got a call from a man identifying himself in a crisp British accent as Nick Hamilton. Hamilton said he needed to see Enright about matters of utmost importance.

"Over the course of two meetings, Hamilton led Enright to believe he was a British intelligence officer, according to a person familiar with the encounters. He told Enright he wanted information about a KPMG project that Hamilton said had national security implications for Britain. Soon, Enright, who was born in Britain, was depositing confidential audit documents in plastic containers at drop-off points designated by Hamilton.

"But Nick Hamilton was not an agent of Her Majesty's secret service, and the documents never found their way to the British government..." (Continue Reading the Article)

Den Taylor, Strategic Insights, added his comments to the article:

"As a strategic intelligence professional, I am often asked to provide counter-intelligence counsel to deal with similar circumstances. What is invariably found in such cases is in today's global economy, intelligence gathering by any means is a simple fact of life.

"Unfortunately, many organizations do not convey this to their employees, making them easy prey to the entreaties of individuals utilizing simple forms of pretext. Interestingly, we have found that dealing with this problem is relatively simple.

"We recommend that clients conduct periodic education programs that cover the means by which outsiders gather intelligence. Such programs are often coupled with designating a knowledgeable intelligence person who can provide advice on how best to deal with unsolicited contacts. Although taking this step does not guarantee that valuable internal intelligence is never compromised, it does make the pursuit of such information much more difficult."

As a competitive intelligence professional, have you thought about educating your company on the tactics employed by your competitors? You can start by discussion your standard techniques for data collection and branch out into other possible areas of espionage. Your company’s employees don’t have to be experts on espionage. They just have to be able to sense suspicious activity and notify the right people.

In short:

-Your company has to have a plan to combat espionage and potentially harmful intelligence efforts
-As a market, sales or competitive intelligence professional, you should have input into that plan, if you don’t manage it outright.
-A list of suspicious activities needs to be prepared and distributed
-Your employees need to know how to handle a suspicious call or activity. Do they escalate it to a manager or contact your department?
-Be ready to prosecute. Illegal activity needs to be punished. (Your legal department should get a kick out of this)

If you have ideas or questions, let’s chat. (cdalley@primary-intel.com, 801-838-9600 x5050)