Tag Archives: intelligence

Our new Forbes piece: Snowden and the Challenge of Intelligence: The Practical Case Against the NSA’s Big Data

Our latest Forbes piece discusses why the NSA’s PRISM surveillance program poses more than a moral problem. In fact, we argue that more data will not make America safer. Read it here.

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Our new Forbes piece: Three reasons why Big Data doesn’t make you smarter — Lessons from the world of Intelligence

Our latest post on Forbes piece discusses why Big Data will not make you smarter and potentially can be dangerous. Read it here.

Workshop on ACH – Analysis of Competing Hypotheses

Milo and I organize a workshop on Tuesday, May 29 on ACH (Analysis of Competing Hypotheses). ACH is a tool originally developed by Richards Heuer at the CIA to analyze complex and uncertain situations. It is widely used in intelligence and international politics, but Milo and I think it applies equally well to business for strategic decision making. ACH uses a deceptively simple framework to use ideas from the scientific method, cognitive psychology and decision analysis to overcome a common but immensely important bias:  the fact that we tend to perceive what we expect to perceive rather than what actually exists.

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Three Videos on Forecasting and Strategic Surprise

Many people are either beginning their  holidays or are already in the midst of them.  If you’re the type of person who  reads a blog like this, you probably already know what you’re hoping to read on your break.

Therefore, I thought I’d try a different approach and offer a summer watching list rather than summer reading list.  This list recommends three videos that you might consider for your travels or during your “down time”.   All address different aspects forecasting, uncertainty, strategic surprises and decision-making.  When you feel like a break from reading, give them a try.

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Business and Intelligence Techniques: the Role of Competing Hypotheses

I get a lot of requests to discuss further the application of intelligence analysis to business, so today I’ll discuss the uses and limitations of a common analytic technique.

One tool that I teach at IE is the Analysis of Competing Hypotheses (ACH).  ACH is an analytic tool originally developed by Richards J. Heuer at the CIA, but it is remarkably useful in business as well.  ACH uses a deceptively simple framework to use ideas from the scientific method, cognitive psychology and decision analysis to overcome a common but immensely important bias:  the fact that we tend to perceive what we expect to perceive rather than what actually exists.  To illustrate this tendency, read the words in the three triangles below:

If you’re like most people, the phrases “written” in the triangles are familiar.  To find out what’s actually written in each triangle, refer to the bottom of this entry (or try the old proof-readers trick of reading them backwards).

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China’s Present, the World’s Future, and the Pretense of Knowledge

Last Tuesday I attended the Economist’s Bellwether Europe conference in London.  Several speakers raised ideas that made me want to follow up Philippe’s latest piece “Has China Peaked?”.

At the conference, many speakers and panelist (from regulators like the FSA’s Martin Wheatley, to economists like Roubini’s Arnab Das, to portfolio managers like Blackrock’s Richard Kushel) linked the future stability of the Eurozone and the prosperity of America to the continued growth of China.  Niall Ferguson was even more explicit, saying at one point that “The governor of the PBOC has far more control over the future of the US and European economies than either Ben Bernanke or Jean-Claude Trichet”.  I tend to agree that US and EU economic stability is tied to Chinese growth, but am worried by that fact,  and skeptical about Chinese “control” of their economy either through their Central Bank or through “administrative measures”.

The People's Bank

The image evoked by statements such as Ferguson’s (even though I am sure he is too smart to have intended it) is of a carefully calculating Zhou Xiachuan sitting behind a desk in Beijing pressing buttons and pulling levers – a man in commanding a linear, essentially Newtonian system.  The same tends to happen when people talk about the powers and actions of the Fed and the ECB.  Even so-called “centrally planned” economies don’t work like that.  Economies are not not machines, and they are not linear in the sense that once the behavior of its component pieces are understood individually, one simply needs to add them up to predict – and control via a Central Bank or other bureaucracy – the behavior of the whole.

A point which is not original but which bears repeating because it is so often forgotten is that Economics is not Physics, it’s a “Social Science” (a false metaphor if there ever was one).  As one scholar says “God gave Physics the easy problems” and the behavior of economies is non-linear rather than additive.

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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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