Strategic & Business Intelligence (S.B.I.)

• Strategic & Business Intelligence (S.B.I.) is a foresight and decision-making tool for managers.
• Nicolas Michelon is the CEO of Asia Intelligence Advisory, editor at asiapowerwatch.com, and holds an MSc in International Business & Diplomacy from ESCP.

Definitions of Strategic & Business Intelligence

• Strategic & Business Intelligence involves coordinated research, processing, and distribution to exploit information that is useful to economic actors.
• Actions are legally carried out with necessary protection measures to preserve company assets as noted in the Martre Report, 1994.
• It is the systematic research and interpretation of information available to decipher the intentions and capacities of actors, according to Christian Harbulot, Ecole de Guerre Economique.
• S.B.I. includes monitoring, analysis, protection, and influence.

S.B.I. in France vs. Competitive Intelligence in the US/UK

• France focuses on secrecy/protection via Competitive Intelligence and Corporate Intelligence and S.B.I.
• The United States and the United Kingdom use lobbying and PR.

6 Dimensions of an S.B.I. Approach

• Integrate & guide an S.B.I. approach.
• Monitor the environment.
• Process & analyze strategic intelligence.
• Manage intelligence & knowledge.
• Protect intangible assets.
• Influence the environment.

Geopolitical & Geo-economic Context

• Conflicts between state actors and economic players increasingly consist of hybrid, asymmetric, and grey-zone tactics.

Hybrid Warfare

• It employs multi-dimensional offensive action, creating instability or justifying kinetic action.

Asymmetric Warfare

• It is non-conventional offensive or defensive actions to counter a superior force.

Grey-Zone Tactics

• They are offensive or defensive actions occurring between classical statecraft/diplomacy and military action.

Relevance of Hybrid Warfare to Corporations

• Geopolitical and technological dynamics have a greater impact on corporates, multinational AND local.
• Hybrid warfare challenges traditional organizational structures and risk management.
• Corporations are facing increasing government pressure through extra-territorial legislative arsenals and biased industry norms & standards.
• Non-economic actors are being weaponized to wage hybrid warfare on economic interests.

Why hybrid warfare matters to corporates

• Threat: An increase is expected across almost all industries, due to hybrid warfare challenging traditional threat assessment processes.
• Vulnerability: Varies by company profile/operating context; operations and personnel exposed to "two-way risk"; traditional risk management processes are challenged.
• Consequence: The types of impacts are generally well understood, however the indirect implications of hybrid warfare events can be overlooked or underestimated.

Potential Impact on Business

• « Doomed if you do, doomed if you don't ».
• Hegemonic power rivalry & weaponization of nationalistic sentiment pose business challenges.
• Escalating conflicts disrupt supply chains.
• Nationalistic/value-based backlash use boycotts, name-and-shame tactics, and cyber warfare against corporations from "offender nations."
• Trade & finance weaponized as tit-for-tat responses, using economic sanctions or supply chain diversification efforts.
• Potential conflicts arise over resource access.

Mitigating Actions

• Traditional risk management struggles with the non-traditional risks of hybrid warfare.
• Resources, structures & processes must be reimagined for proactive rather than reactive crisis management.
• Security transformation requires shifting to a whole-of-company approach.
• Cross-competency experts who can drive change are crucial, as is leveraging new capabilities and partnerships.
• Integration is key for holistic security risk management, breaking silos to create fusion centers; security risk management needs to be enterprise risk management.

Movements in Civil Society

• Movements in civil society are increasingly technology driven.
• "Arab Springs" occurred from December 2010 to December 2012.
• “Occupy” included 951 cities across 82 countries beginning in September 2011.
• “Black Lives Matter” which began in July 2013, had 67% popular support, and raised $10.6 bn in six months.
• "Yellow vests” occurred in November 2018.
• "Global Week for Future" on 15 March 2019 involved 4500 locations, 150 countries, and 6 mn people.
• The Farmers strike (India) spanned from September 2020 to November 2021.
• “Freedom Convoys" happened January-February 2022.

Impact of Technology-Driven Social Movements

• Transformational power of digitization, enhanced stakeholderism, state interventionism, diffused responsibility, and ESG and industrial disarray.

Impact on Business

• Farmers' strike in India led to trade losses of Rs 70,000 crores in Q3 FY20-21.
• The Global week for future caused stocks of Carbon intensive firms to fall by about 40 basis points.
• Investors are shying away from Carbon Intensive firms due to the Climate Strikes campaign.
• Investors are withdrawing from companies sourcing labour from Xinjiang after human rights group action.
• Miscommunication and negative brand reputations led to disrupted workflows and a driven down value proposition.

Mitigation Strategies

• Employ Crisis Communication, and a Business Continuity Management (BCM) Plan
• Incorporate Risk Anticipation, Stakeholder Engagement, Drills and Procedures, and ESG Audits.

S.B.I., Trade Wars, and Lawfare

• Non-Covid19-related import-restrictive/facilitating measures are factors related to Strategic & Business Intelligence.
• The US uses extra-territorial legislative arsenals like FCPA, ITAR, EAR, and FATCA.
• China is snapping up strategic assets & growing influence on EU institutions & FDI legislation (CAI).
• The US controls FDI with CFIUS and EEA.
• China controls FDI with MOFCOM « negative lists ».
• Pressure to provide evidence against Huawei's CFO in Iran-embargo (CAATSA) violation case.
• Pressure to participate in the freezing of PRC & HKG officials' assets as a result of crackdown on HKG protests.
• Pressure to condemn violent demonstrations and support National Security Legislation in HKG.
• Pressure to participate in the freezing of HKG democratic opponents' assets at home and overseas.

"Unrestricted Warfare"

• QIAO Liang & WANG Xiang Sui wrote the book « UNRESTRICTED WARFARE » in 1999.
• Multidimensional conflict includes lawfare, economic warfare, information warfare, and terrorism/organized crime.
• The military dimension becomes one of many dimensions of conflict.
• The principles of unrestricted warfare are omini-directionality, synchrony, limited objectives, unlimited measures, asymmetry, adjustment, multi-dimensional coordination and minimal consumption.

Cases of Economic Warfare

• Airbus vs Boeing due to slowing down development of A380.
• Renault vs Nissan weakening FRA influence.
• Alstom vs US Dept. of Justice / General Electric due to taking over major competitor.
• Naval Group vs Mitsubishi Heavy / ThyssenKrupp Marine weakening chances to close « deal of the century ».
• Aixtron vs San'an Optoelectronics / Fujian Grand Chip attempt at hostile takeover.
• LafargeHolcim vs NGOs/employees/media/FRA justice financing Islamic State in Syria.
• Uniqlo (Fast Retailing) / Zara (Inditex) vs NGOs purchasing Xinjiang cotton involving forced labour.

Managerial Context

• S.B.I. is a benefit to the company and its managers.
• Porter's Five Forces are threat of substitution, suppliers' negotiating power, intra-sector rivalry, clients negotiating power, threat of new entrants
• Boulding's Three Faces of Power are Power of substitution, Power of integration and Power of coercion.
• D'Aveni's Five Zones of Strategic Supremacy are core business, vital interests, buffer zone, pivot zone and forward positions.
• Lafon, 2019 states S.B.I. is about managing risk & information in a controlled way through open source intelligence gathering & influence strategies
• The components of that are strategic & tactical decision, business threat detection & evaluation, business opportunity detection & evaluation and Information Risk Mitigation.

Managerial Context

• S.B.I. should help with monitoring, analysis, protection and influence.

Protection - Patent or Secret

• Jacques Bauvir, Head of IP, Michelin states "our principle is to patent everything that is seen and to keep secret everything that can be, especially with regard to manufacturing"

Intelligence Cycle

• The intelligence cycle involves direction, collection, processing, analysis, dissemination.

Direction: Building an intelligence plan

• It summarizes the collection of informational needs of an organization, progressing from strategic to operational levels via a research plan that defines who does what, how, and on what deadlines.

Intelligence Plan example

• Who,where, how, when: Past strategy: John, EU, Web - database, Mid-June, Current strategy: Sara, EU, Web – press releases,Mid-July, Shareholding structure: Becky, Worldwide , Annual reports - web, May, Main suppliers: William, France - Italy, Database - Web, Mid-June, BoD structure Jack,Worldwide, Annual reports - filings, May, Financial data, Cynthia, EU,Annual, reports - filings, Mid-July

Monitoring

• Monitoring involves human, subjective elements and is contextual and tacit.
• Transferability requires codifiable and explicit data as its easily transferrable.
• Monitoring employs RSS (« Really Simple Syndication ») feeds & feed aggregators.
• RSS feed is a XML file describing in a synthetic way the content of a website, including title, short description, and corresponding HTML links.
• It’s a simple, efficient & time-saving (automated) way to remain informed of content changes from an open source (OSINT), without manually accessing sources.
• RSS feed aggregators: Inoreader / Digimind / Sindup / Queryfeed (SOCMINT).
• To conduct monitoring using a PULL method you must manually search for information
• PUSH method monitoring automatically delivers the information

Intelligence Gathering

• OSINT – Open Source Intelligence
• HUMINT – Human Intelligence
• SOCMINT – Social Media Intelligence
• FININT – Financial Intelligence
• CYBINT – Cyber Intelligence
• SIGINT – Signals Intelligence
• COMINT – Communications Intelligence
• ELINT – Electronic Intelligence
• Hierarchy, added value, and cognitive bias are the core sources.

Intelligence Sources

• Secondary sources, OSINT, Internet, research & analysis documents and databases have been already received at least one level of treatment.
• Acquiring basic information & basic knowledge.
• Identify secondary sources, expert reports, research authors, list of participants to a conference and employee yearbook.
• Identify “dead angles” and validate information gathered from PRIMARY sources.
• With Primary sources first-hand information has not received any or minimal treatment.
• Acquiring missing information after a research on SECONDARY sources.
• Identifying qualified human sources: experts, Key Opinion Leaders – KOL.
• acquire information by elicitation

Intelligence Gathering

• A.k.a. « spying ».
• Includes, acquiring not publically-available information and /or acquiring it illegally, spying, theft, hacking.
• Confidential information, industrial/technological/trade secrets,sensitive biographical information.
• On average, an S.B.I. report is made up of: 80% volume, 10% cost by secondary sources, 80% cost/value by primary sources & unknown for « Other Sources."

Source Qualification

• Is confirmation/cross-reference by other information possible?
• Should you trust the information and/or verified sources?
• A checklist confirms source's expertise, is the information objective, and verifiable.
• The intention/objective of source, relevance to timeframe/context, and how primary the source is.

Cognitive Bias

• Cognitive bias can impact strategic & business Intelligence.
• Maréchal Foch, 1911 said"Aeroplanes are interesting scientific toys, but are of no military value".
• Robert Millikan, physics Nobel Prize laureate, 1928 said “There is no likelihood that man can ever tap the power of the atom".
• Irving Fisher, prof. of economics at Yale University predicted that “Stock prices have reached what looks like a permanently high plateau” only 10 days prior to the Wall Street Crash of 1929.
• Darryl Zanuck, CEO of 20th Century Fox, 1946: Television won't be able to hold on to any market it captures after the first 6 months".
• Sir Harold Spencer Jones, UK Astronomer Royal, 1957 said "Space travel is bunk » 2 weeks before Sputnik orbited the Earth.
• attriuted to Bill Gates in 1981 "640K ought to be enough for anybody"

Types of Cognitive Bias

• There are Conjuction Fallacy, Availability, and Framing Bias.
• Conjuction Fallacy affects probability assessments based on stereotypes.
• Availability bias influences when people rely on information that comes readily to mind when evaluating situations or making decisions.
• Framing Bias influences decisions based on information presentation.
• To avoid bias you must use structured analysis methodologies, carefully select the intelligence, cultivate a high degree of critical sensein your findings.
• It is also important to confront your hypothesis and that of the other actors involved in the process.

Stakeholder mapping

• Stakeholder Mapping is an exercise that allows to Identify who your direct/indirect, internal/external stakeholders are, determine how much engagement, communication, prioritise stakeholders and focus on making tatcial and strategical moves to maximise on impact.
• There are also those what are deemed defenders, promoters apethetics or latents.
• A framework of analysis from Mitchell, Agle & Wood states Power, Legitimacy and urgency.
  • Stakeholder Mapping is a "Local and Static approach" and a "Global and Static Approach".
• Strategic chessboards serve as a simplified tool to analyze & act.
• The strategic chessboard aims to better formalize and understand games of power and can widen strategic focus, determine ranges of responses, elaborate prospective scenarios, and inform influence strategies thereby escaping cognitive encirclement.
• Chessboards, are an objective grid of analysis of stakeholders allowing synthetic analyses and identification of maneuver margins that is the perspective of influence.
• Chessboards aid control of business, identify internal and external stakeholders, show the balance of power, show possibility bounds, and provide a competitive advantage.
• There are multi-dimensional strategic chessboards where you must consider multi-dimensional strategic chessboards - competitive, society and geo-economic chessboards.
• Sociodynamic chessboards also consider allied, committed, hesitant, neutral forces and passive forces, advesaries among other groups.

Characteristics of stakeholders

• Committed- has a direct & durable interest in supporting, allied- has a direct & immediate interest in supporting. passive- dows not feel concerned, neutral- refuses to take sides.
• Hesitant – does not commit but could easily change sides, Contradictor – has an interest in not supporting.
• Opponent has interests opposed to ours and Adversary has a strategy hostile to ours.
• Some chessboards in the global market are France's Banque Mondiale, US, Exxon, Elf, Shell, GReen Peace and WWF
• To appropriately course of action should be to weaponise and ensure flipping, influence for commitment, coerce into tactical commitment, avoid conflict and stabilise.

Steps to take:

• The recommendations are to be creative & Combine different actions into one strategy.
• Keep in mind to save your strength with military force, concentrate your forces & keep the initiative.
• To continue success of "Strategic & Business Intelligence" one must keep practive & culture, and cultural intelligence in mind for those in business, law, finance and human resoures.
• The concept of intelligence can also be taken into the past, with the art of war and swindling while considering future business & technological developments.
• Lastly in asian culture, you must look at business warfare by studying shoshin, wu wei, go and shogi.