WHAT IS INTELLIGENCE?
Part 1: Looking for Trouble
By Dee Smith
Chief Executive Officer and Founder
As head of a private intelligence agency—Strategic Insight Group (or SIG)—I am often asked what intelligence is and how it works. How is it different from other kinds of research? So here is a description that I hope will be helpful.
First of all, intelligence is very different from espionage. Traditionally, espionage is the practice of using spies to procure information. A modern variant is of course “cyber espionage”: a kind of cyberattack where the goal is to enter a computer system in an unauthorized and undetected way to access valuable intellectual property (IP) or sensitive or secret information. Espionage is often conducted by governments against other governments, as well as against opposing parties within their own countries. All governments conduct some form of it. It is also used in commercial settings—often called “industrial espionage”—but this is considered unethical and is illegal in most jurisdictions. Government intelligence against other governments is usually not considered illegal in the country in which it originates, or its legality is disregarded. This is because different rules—or a lack of rules—apply to sovereign states. There is a level of anarchy in inter-state relations, as there is no real overarching global legal authority, and what international law there is is weak and is often disregarded and unenforced.
Intelligence is not espionage, but it is also not the same as the general kind of research as undertaken by many people. Often, research on a topic gathers relatively easily obtained information and categorizes, synthesizes, and draws conclusions from it.
In contrast, intelligence is a very specific kind of research with a focus on revealing hidden information—to find things that others do not expect you to know or do not want you to know. The goal is to enable you to more completely understand the nature of a situation and to characterize the forces influencing it. Furthermore, intelligence often strives to provide continuing awareness of how something is developing, and early warning of emerging threats and opportunities.
The goal of any good intelligence operation is to produce “actionable” intelligence: something that a client who uses the intelligence) can act on. Intelligence works best when the question being asked by the client is very specific: “Are there negative indicators that should warn me against investing with this group?” or “Will an opponent in a lawsuit fight to the end or settle?”
Finding things that others do not want you to know might seem ethically questionable, but consider, for example, that many of our clients at SIG are large investors who manage money for ordinary people who have entrusted their retirement savings to pension plans or other investment funds. Imagine the following situation: a fund manager is proposing to make an investment in an entity, but that entity is itself acting unethically by hiding or misrepresenting issues. A good intelligence process could detect this, allowing the fund manager to make a better decision.
When certain rules and procedures are followed, private intelligence can be conducted entirely legally, as SIG does on a daily basis.
The intelligence that SIG conducts is essentially threat identification, risk mitigation, and fraud detection: we are “looking for trouble” . . . so we can keep clients—and the people whose money is entrusted to them—out of it.
How does intelligence work? It works by collecting a large array of data—many small pieces, from many different sources, not all of which are decisive or even terribly important. But when you collect the right pieces, and put them together using appropriate tools and techniques, the process can reveal hidden information about actors and their intentions—good or bad—and about their weaknesses and strengths. The whole is greater than the sum of its parts.
The Importance of Patterns
Sometimes a single piece of information can make all the difference. Far more often, however, it is the pattern of evidence that reveals the “lay of the land,” so to speak. You never know, until you begin collecting and analyzing it, what piece of data, from what source, will tell the tale . . .
Consider a subject who suddenly begins to receive speeding tickets or to borrow increasing sums of money. This may be a window into their personal life. Has something changed? If they head an investment fund, is it something so distracting that it might take their eyes off the proverbial ball? Or consider an individual who is found to have 3 bankruptcies, is a defendant in multiple lawsuits, and has tax liens every year for multiple years. What does this pattern across indicators tell you about their operating style?
There are two key elements: 1) multiple sources, because NO one source is dependable, no matter how legitimate it seems and 2) zero-based analysis, in which assumptions that everyone “knows” to be true (even if they are not) are discarded in favor of collecting data, analyzing it, and looking for patterns and anomalies that can reveal the nature of individuals, companies, and events. Then, the intelligence process creates hypotheses that might explain what has been observed, testing them to confirm or contradict them.
Intelligence that produces insight is iterative by nature. A conceptual device known as the “Intelligence Cycle” illustrates the process in a general way. It may circle around several times within a project, as new information is found and analyzed or tested.
Results of the Intelligence Process
Intelligence does not seek to predict the future, but to provide a better understanding of the present. From that, it can allow a user to take action on the basis of early indicators—before irreparable damage has occurred. It can also provide a basis for projecting forward more likely or less likely scenarios. By pinpointing key elements, it can also allow focused systems of monitoring (known as “Indications and Warnings” or I&W in intelligence jargon) to be established as a way of providing continuous “situational awareness.”
In the end, intelligence is only as good as the processes and protocols used in its collection and preparation. But properly conducted, it can produce astonishingly accurate insights to detect problems at an early stage and then to avoid or mitigate them.
Next in the series: The Difference Between Open Source Intelligence and Human Intelligence, and their Uses