Geopolitics & Actionable Intelligence

In the previous newsletter, I elucidated why geopolitics matters and how to analyze the issues surrounding the subject. This week I would like to dive further into this issue by focusing on the definition of intelligence and how that relates to better geopolitical risk analysis.

One of the more contentious problems in the security profession is over intelligence. Ask any security professional, and they will say that intelligence is the lifeblood of security, the very foundation of what they do. Yet the same people will consistently complain about the intelligence that is provided to them, particularly when it comes to geopolitical issues. What should concern the industry is that the security professionals complaining about the intelligence have legitimate grievances. Most intelligence, especially about geopolitical risks, is often lacking the critical elements that make it intelligence. Too often analysts simply regurgitate the news or give reports devoid of analysis.

The academic literature in intelligence studies and reports by the government have attempted to give a definition of intelligence many times. These definitions overwhelmingly focus on intelligence from the government’s perspective, and the debates typically surround issues over “secrecy” and collection. Generally speaking, this is not a useful or practical debate for those in the security profession. Rather than rehash arcane issues, I will simply proffer the definition I utilize both professionally and for teaching.

Definition of Intelligence:

• Collection – AND – Analysis of information (any method)
• Reduces uncertainty about risks, threats, vulnerabilities, and opportunities
• Provides foreknowledge, advanced warning, or understanding of the current situation
• Actionable insight for decision makers
• Increases security and/or comparative advantage

If analysts keep this definition in mind, then they can produce better reporting for their clients. As such, it will be useful to explore how these different parts should be done when it comes to geopolitical risk.

Collection and Analysis

Collection, of course, starts with a question. The client (or more likely the analyst interpreting the client) posits a specific question or series of questions that need to be answered. Specificity of the question is paramount to good collection and analysis.

Of the various “INTs,” OSINT and HUMINT are the most utilized by corporate security intelligence analysts. Collection from these INTs can come in a variety of means. OSINT for geopolitical risk typically means reading the news, but here the analyst needs to be careful. News organizations often only report on what they believe readers will want, which means that there will likely be a significant amount of information missing. Geopolitics is also a long business, meaning no event in the news can give more than a single data point. Social media, government reports, NGO reports, and the like can help fill in some of the gaps when assessing a country or issue. OSINT is critical for geopolitical analysis. As Bill Donovan, the Director the OSS during World War II put it, “Even a regimented press will again and again betray their nation's interests to a painstaking observer.”

HUMINT can also play a critical role if the analyst knows people on the ground or has a network of experts in academia or government. All of this falls well within collection. But that is only the first step. Regularly that’s also where analysts will stop. Instead, analysts MUST draw the different data points together to demonstrate a trend, create a holistic picture of what is happening, or look as cause/consequence. Without analysis none of the other parts of the definition can be met.

Reducing Uncertainty

Thomas Fingar, former Deputy DNI and Chairman of the NIC, noted that “the primary purpose of intelligence inputs into the decision-making process is to reduce uncertainty” (Reducing Uncertainty, p. 25). In terms of analytic tradecraft, this often means scenario building “to uncover broader patterns and reveal cause-and-effect relationships that help anticipate where events are likely to head, and why” (Amy Zegart, Spies, Lies, and Algorithms, p. 86). Scenario building is assessing the different ways a geopolitical event could unfold over a given period of time. Once possible scenarios are delineated, the analyst then must add probabilities to them so decision makers can understand the likelihood of events; they are looking for a causal inference. That is what reduces uncertainty (although we must be honest and acknowledge clients would prefer absolute rather than probabilistic answers). However, life is not absolute. Rather there are a myriad of ways that life can take with an equal number for geopolitical events. Historical case studies are quite useful for forecasting work as the more similar the case the more likely that scenario will be.

Foreknowledge and Warning

What is important to reducing uncertainty is not just scenarios and their probabilities, but listing out the indicators that a particular scenario will take place. When discussing foreknowledge and warnings of major events, the best thinker to turn to is Roberta Wohlstetter and her book Pearl Harbor: Warning and Decision. Wohlstetter attempted to understand why the US failed to foresee the Pearl Harbor attack in 1941, particularly why the strategic indicators that Japan intended to attack were ignored (although she also dealt with the tactical indicators like radar). According to Wohlstetter, intelligence analysts determined an attack by Japan was unlikely because it was extremely unlikely the country could win a war. In addition, the military had gone on alert over the issue multiple times in the previous year, so people began ignoring the possibility. Lastly, analysts argued that if Japan attacked, then they would do so in the Philippines. The analysts misunderstood the adversary and failed to break down the issue to grasp correct indicators.

To establish foreknowledge and warnings for geopolitical issues, events, and crises, analysts must determine the appropriate indicators that an event will take place. Typically called “deconstruction,” analysts have to break down the problem to the relevant variables and then work on determining which indicators will make an event more or less likely to happen. Typically for geopolitics this means the PESTLE model (Political, Economic, Social, Technological, Legal, and Environmental). There are other such models, such as SWOT, SPRITE, and DEEPLIST. The point remains the same. For each scenario an analyst assesses, they need to create a list of indicators that will mean that scenario is more or less likely. Exempli gratia, say an analyst wants to determine if a country is about to invade. The following could be a potential indicator for each category:

• Political: Speeches by the leader of the majority party defending the possibility of war
• Economic: Markets moving to government bonds because corporations are likely to lose value
• Social: Internet postings by citizens defending government action or overtly criticizing the potential adversary
• Technological: Acknowledgement of a new weapons system
• Legal: New legislation to grant increased powers to the executive
• Environmental: Evidence of increased and unreported rare earth mineral extraction

These are just potential examples, but every analytic case will be unique. There will also need to be significantly more indicators for each scenario. The point is that geopolitical analysts need to establish these indicators so that the analyst can track a pattern and decision makers know for what to look.

Actionability

The sine qua non of intelligence is that it must be actionable. Although this word is bandied about as some ineffable goal, actionability is quite simple. That’s what makes it deceptive.

There are two ways to make geopolitical risk analysis actionable. The first requires the analyst to know the client’s interests (security, social, and business), and then draw direct impacts of any particular event to those interests. This is first order effects. The second is to look at how the geopolitical event will impact other sectors and countries, and then look at consequences over the medium-to-long term. This is second order and third order effects, respectively.

Let’s use the Russian invasion of Ukraine as an example. To match impacts of the invasion to the client’s interests, the analyst will need to know if there are any directly involved. (It means the analyst must get to know the client and their business.) The types of questions analysts need to ask will direct the analysis, such as:

Are there any personnel in the country? What are the client’s assets in either Ukraine or Russia? Are these personal or business assets? Will people need to be moved out of country? What are the egress routes? Will either military be using those routes? There are many other questions that can be asked, but this is a sampling of questions to answer to make geopolitical analysis actionable for first order effects.

But then the analyst must move beyond that to allow decision makers to better respond. Examples of questions for second order effects could be: Which airlines use the airspace that could be impacted? Where will the refugees go and how will this impact assets in other countries or disrupt services? How are other countries responding? Will there be sanctions or alternations to financial regulations?

Finally, the analyst must then think through third order effects: What are the long term impacts of disrupting fertilizer or neon gas production in Ukraine? How will energy prices impact other client interests, and will they remain high for the next X number of years? Which countries are aligning with Russia? Will business in those countries be impacted by their alignment?

Essentially, analysts must do the tedious and laborious process of “connecting the dots” on first, second, and third order effects, which should be easier if the analyst has followed the three previous steps of collection and analysis on cause/consequence, scenario development and probability analysis, and created a list of indicators for the scenarios.

Increasing Security and Comparative Advantage

If all four of the previous parts of the definition of intelligence have been met, then so will the fifth. Because if a report is presented that collects and analyzes data and information, reduces uncertainty about the issue, has established indicators and warnings, and given decision makers actionable insights, then the analyst has increased security and comparative advantage by increasing the acumen, capabilities, and posture of their organization.

And that should always be the point of geopolitical risk analysis. Security professionals need actionable intelligence, and keeping the definition in mind whenever one is working on a report will allow the analyst to provide it.