Tag Archives: CIA

Conference on strategic surprises at the CIA

On Wednesday, January 18th, I will be giving a conference on the topic of strategic surprise at EMLYON Business School, as part of the series “The Art of Management”.  In this context, a strategic surprise is defined as the sudden realization by an organization that it has operated on the basis of an erroneous threat assessment resulting in an inability to anticipate a serious threat to its vital interests.

While the majority of the research explains strategic surprises (such as September 11) with psychological, bureaucratic or cybernetic (absence of detection of weak signals for example) models, an in-depth research on more than 50 years of the CIA’s history shows that the origin of strategic surprises often lies with the characteristics of identity and culture of the organization.  This research was started by Milo a few years ago, and we now pursue it together.  We show how the CIA was the victim of several strategic surprises, and that these surprises are largely explained by the social construction of the organization: whom it recruits, how it trains agents and analysts, how it develops its culture, etc.  In essence, what an organization is surprised by depends on its identity. After presenting the finding about the CIA, we will discuss what lessons can be drawn from these results for businesses, particularly in the field of innovation and strategy.  We will make the case that here too, the difficulties are often cultural, and results can be improved using this mode of analysis.

If you are interested in the conference, please contact us.

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“Facts” Everybody Knows – Statistical Cautions about the BRICs (in honor of Igor Birman)

In business and finance, statistics and quantitative comparisons are daily companions.  Sometimes, however, key statistics can become too familiar, and reify, i.e. harden into “facts” that everybody knows.  In so doing, they play a large part in strategic surprises.

In the late 1980s, for example, the US Intelligence Community “knew” that Soviet GDP was $2.5 trillion, i.e. about 52 percent of the US GDP of $4.8 trillion.  How?  Their computer models told them so.  These models relied upon – among other things – assumptions about ruble-dollar Purchasing Power Parity (PPP).

Western academic Sovietologists also “knew” the USSR’s economy was about $2.5 trillion.  How?  Mostly, they relied on an authoritative source:  the CIA.

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How to Think like an Intelligence Analyst

To follow up on Philippe’s post about Thinking in Time:  at IE I teach a course called “Geopolitics” to Masters in Advanced Finance students, and “The Multinational Firm and Geostrategy” to Masters in Management students.  Students in those classes sometimes ask me to recommend books to help them “think like an intelligence analyst” and apply intelligence methods to analyzing business decisions.

I provide extensive bibliographies as part of my course syllabi, but often students want me to boil my recommendations down to a few key texts.  Call it a “getting started in intelligence for businesspeople” reading list.

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