Chess and competitive intelligence (part 1)

July 29, 2014

In one of his many excellent science fiction novels, the late Arthur C. Clarke, “invented” a device that basically eliminated privacy. Talking about it, one of his characters said:

“Before [that invention], business was a closed game. Nobody knew my cards….And that gave me a lot of leverage for bluff, counterbluff…I could minimize my weaknesses, advertise my strengths, surprise the competition with a new strategy, whatever. But now the rules have changed. Now the game is more like chess….Now – for a price – any shareholder or competitor, or regulator come to that, can check up on any aspect of my operation….”[1]

It sounds like Clarke was predicting the creation of CI. No, but the effect is similar. So what did Clarke mean that business became a lot more like chess? Hint: just insert the work “business” for “chess” and “competition” for “game” in the following 3 quotes from Chess Grand Masters and World Champions: [2]

     Accept the inevitability of imperfection

One of the problems in competitive intelligence (CI) is that you are asking for someone, and that someone may be you, to predict what someone else or another organization may do, based on what they have done, the resources that they have or will have, and how they perceive the competitive environment. It is impossible to be perfect 100% of the time:

“A good player is always lucky.” (José Raúl Capablanca y Graupera)

  • You are usually analyzing moving targets. When your analysis is finished, the targets do not then conveniently stop moving. That means that your analysis can be correct, as of the date it was done, but it may not necessarily be so when you or the end-user actually reads it, much less uses it.
  • Your CI efforts are an attempt to provide a precise output in a world of imprecise inputs. Mistakes in interpretation and analysis are almost inevitable in this context. Experience will help minimize them.
  • You may be seeking to develop specific intelligence reflecting an evaluation of the target’s intentions, as distinguished from its assets or capabilities. The end product may be in error, for it is ultimately very hard to predict with certainty how someone else, in a different environment, and with access to different facts, will act at some point in the future. Also, the target may later just change its mind. Or you may not have allowed (or been given) enough time to do an appropriate amount of analysis.

 “The worst enemy of the strategist is the clock. Time trouble…reduces us all to pure reflex and reaction, tactical play. Emotion and instinct cloud our strategic vision when there is no time for proper evaluation.” (Garry Kimovich Kasparov)

All of this means you and management should expect some CI failures. However, you and management must do more – not only expect failure, but affirmatively accept it. Why? Pressure for perfection in CI can actually be counter-productive.

An analogy may help illustrate this. In hospitals, surgeons were once be called to task if they appeared to have excessive numbers of deaths in the operating room. The goal: weed out those surgeons who were taking too many risks for their patients’ own good.

However, as medicine has become more sophisticated, we now see that hospitals perform the same type of review also on surgeons who have a substantially lower death rate than average. The reasoning: these doctors may not be taking enough risks in efforts to save patients. That means their patients may be dying outside of the operating room instead of being saved on the table.

The same dichotomy is present in CI. You and management must understand the likelihood of some failures in CI, since they reflect the limits inherent in the intelligence process itself. But, management must also be suspicious of a CI analyst or unit which is never wrong. A source which avoids being wrong usually ends up providing intelligence of such generality, and subject to such qualifications, that it ultimately becomes unusable. In other words, in an effort to avoid being wrong, it may also never be right – or actionable.

So your efforts should be focused on reducing errors, but always accepting that perfection is not possible.

“The winner of the game is the player who makes the next-to-last mistake.” (Ksawery Tartakower)

[1] Arthur C. Clarke and Stephen Baxter, The Light of Other Days. Thor Books. New York: 2000. p. 144.

[2] My thanks to for accumulating these quotes.

Early warning (part 6)

July 22, 2014

Sunday on Fox News, several doctors were discussing diagnosing patients. Unfortunately, I do not recall which doctors were on, otherwise I would give them credit.

One doctor said they were really two things that a physician had to keep in mind when diagnosing a patient based on the symptoms “presented”, that is to say the symptoms which the doctor would see as well as those which the patient would relate, plus any information provided by tests. The doctor should of course, first consider what was the most likely diagnosis, that is, what disease or condition has the highest probability of being an explanation for the symptoms that the patient had.

But that doctor added that, in diagnosing a patient, the doctor also has to consider what is the most dangerous possibility that the symptoms are consistent with. In other words, it is akin to a “black swan” event, one which is extremely unlikely, but potentially disastrous.

In the context of competitive intelligence and early warning, this is probably a good model to consider. That is, when looking at the long-term consequences of actions being taken by competitor, or someone else in the competitive landscape, first determine, through analysis, what is the most likely explanation for what you see. But also then determine what is the most dangerous explanation consistent with what you have seen, that is, dangerous to your company’s operations or even its very existence.

Everybody Needs a Rabbi

July 17, 2014

Today, I was getting ready to do this blog, and my (significantly) better half and partner, Carolyn Vella, suggested this topic. It is inspired by a book I am now reading[1], which I commend to you – and it has nothing to do with competitive intelligence. It is just very interesting.

By “Rabbi”, I mean the slang definition, a personal patron or adviser. Although, to be fair, your own rabbi could certainly be a priest, minister, imam, or even a rabbi.

Don’t I just mean a mentor? No, not really. Mentor has, for better or worse, become (too) closely associated with older, more senior associates in your business (or at least the same industry), who provide counseling to younger workers, with the goal of helping the younger to advance their careers.

No, I mean someone you can talk with, about business, family, anything. But that talk is frank and confidential. And, as noted in numerous examples in Rebbi, it can be about anything. What you want is someone you see as intelligent, grounded and willing to listen, and to teach, or even argue, as needed. Older or younger is irrelevant, and seeking out someone from your own business/industry is probably not even a good idea.

Why? Because you and I are not as smart as we think we are. And as time passes, we all come to recognize the need for someone to touch base with. I do not mean to omit spouses, family, or others in a committed relationship with you. But they are, by definition, in a relationship with you. You are looking for independence as well. And if you can find that, appreciate it.


[1] Rebbe: The Life and Teachings of Menachem M. Schneerson, the Most Influential Rabbi in Modern History by Joseph Telushkin, 2014.

July 4

My significantly better half, Carolyn Vella, suggested I write about what July 4 means.

I think that the first thing is that I could not write a blog like this (or like anything) many places in the world without facing preclearance of the contents, or of the very existence of the blog, and/or facing post publication sanctions, both official and “unofficial”, ranging up to death.

Pretty severe, right? Right.

That is one way our First Amendment means so much. It not only permits us to communicate with our government, it allows us free communication with other, without which there can be no education, no free exercise of religion, no intellectual or social advancement of any sort.

So, on July 4, we celebrate the liberties enshrined in the First Amendment and also honor the lives sacrificed to guarantee those liberties.

God Bless America.

George Washington and CI

July 1, 2014

I just finished reading a very interesting book, Spies, Patriots and Traitors.[1] It is a history of American intelligence in the American Revolutionary war, written by a retired career CIA operations officer who also holds two university degrees in history.

For those in competitive intelligence, it is an interesting read on the operation of military and governmental intelligence before the electronic age. Kenneth Daigler, the author, develops a couple of interesting points that bear repeating to those of us in the CI community.

  • The first is on the ever-present problem of the “fundamental disconnect”, that is where the person providing the intelligence and the person using the intelligence are separate, something even those who produce CI for ourselves experience The book is replete with examples supporting Daigler’s observation that “perhaps the greatest irony intelligence history of the [Revolutionary] war is that while British intelligence activities were highly successful in collecting information regarding American-French plans and intentions…, British failure to use information effectively in its policy formation and implementation negated most of its value.” (Page 81)
  • The second often contributes to the first: the “issue of decision-makers allowing preconceived views to stand even in the face of contradicting information” (page 246).
  • The book is also replete with illustrations of a problem those who work with CI as both the producer and consumer often face: a “duality of responsibility [that] periodically creates tensions that caused one of [Washington’s] roles to suffer at the expense of the other.” (Page 243)

The book is a great read on the American Revolution, particularly if, like me, you are not well versed in its details, as well as its geographic and political sweep. And for those of us in CI, it serves as a source of object lessons in how to do things well, and what mistakes to avoid.


[1] Kenneth A. Daigler, Spies, Patriots, and Traitors. Georgetown University Press, 2014, 317 pages, $29.95.