1) Decision makers often ignore or reject intelligence that does not align with their preferences, leading to intelligence failures. Analysts tend to provide objective assessments while decision makers want intelligence that supports their desired course of action. 2) Effective intelligence analysis requires close cooperation between analysts and decision makers to ensure the intelligence provided addresses the decision makers' needs. However, too close a relationship can compromise objectivity while too much distance prevents proper guidance. 3) For competitive intelligence to be useful, it must influence decision makers' actions, whether by changing policies, improving implementation of decisions, or altering competitors' behavior. Regular dialogue is needed between analysts and decision makers to build understanding and ensure the intelligence makes a real impact.

1. Competitive Intelligence
Consumer-Producer Relations
1

2. Intelligence failures
“In the best known cases of intelligence failure, the most crucial mistakes
have seldom been made by collectors of raw information, occasionally by
professionals who produce finished analyses, but most often by the decision
makers who consume the products of intelligence services.”
1 BETTS, R.K., 2009. Analysis, war, and decision: Why intelligence failures are inevitable. In: GILL, P., MARRIN, S. and PHYTHIAN, M., eds.
Intelligence Theory: Key questions and debates. Abingdon, Oxon: Routledge, pp. 87-111.
© 2010 Douglas C. Bernhardt 2

3. Sound familiar?
“… the usual response of a policymaker to intelligence with which he [/she]
disagrees or which he [/she] finds unpalatable is to ignore it.”
Robert M. GATES
• US Secretary of Defence
• Former US Director of Central Intelligence
© 2010 Douglas C. Bernhardt 3

4. The problem of uncertainty
“Even [decision-makers] who acknowledge a vital threat intellectually
may not be ready to act upon such beliefs at great cost or at high risk.”
National Commission on Terrorist Attacks on the United States. 2004. The Performance of the Intelligence Community: Staff Statement
No. 11. Washington, DC
© 2010 Douglas C. Bernhardt 4

5. Intelligence and policy are different
“Analysts think analytically of what can go wrong”
“Executives tend to think wishfully of what might go right”
“WE’VE ESTABLISHED A CLEAR LINK…”
TREVERTON, G.F., 2001. Reshaping National Intelligence for an Age of Information. Cambridge University Press
© 2010 Douglas C. Bernhardt 5

6. Consumers Vs. Producers
“The most serious problem with … intelligence today is that
its relationship with the policymaking process is broken and badly
needs repair.”
PILLAR, P.R., 2006. Intelligence, Policy, and the War in Iraq. Foreign Affairs, 85(2), 15.
© 2010 Douglas C. Bernhardt 6

7. © 2010 Douglas C. Bernhardt 7

8. Intelligence pathologies
1. Politicisation
The process of manipulating intelligence to reflect policy preferences
Largely a function of internal ‘politics’
Affects both strategic and operational planning
2. Frequent neglect of intelligence by executives in the decision-making
process
3. Excessive harmony–a dysfunction that occurs when intelligence analysts
and/or managers and decision-makers become overly deferential to one
another
Leads to tunnel vision
FOR AN EXPANDED DISCUSSION ON BIASED INTELLIGENCE, SEE: ROVNER, J., 2009. Politically-Biased Intelligence: Causes and Consequences.
Paper presented at the International Studies Association 50th ANNUAL CONVENTION "EXPLORING THE PAST, ANTICIPATING THE FUTURE", New
York Marriott Marquis, NEW YORK CITY, 15 Feb 2009
© 2010 Douglas C. Bernhardt 8

9. Key issues
Balancing objectivity with intelligence utility
Intelligence production should be driven by the decision-making process
CI practitioners should clearly understand the action agendas of their core
clientele
Serving as servants
Objective professionalism involves adhering to a self-imposed injunction
against the unsolicited tendering of policy advice
CI exists to provide a service as defined by company decision-makers and to
focus its attention on areas selected for it by those masters, not on other
areas it might find of independent interest
Overcoming ‘cultural’ differences, or “tribal tensions”
Executives value intelligence on the basis of brevity, timeliness, and
relevance, in that order – Is this what you’re delivering?
Intelligence producers tend to reverse those priorities – whereas decision-
makers are driven by current needs, intelligence analysts are thinking and
planning for the long term
Adapted from: KOO, G.J., 1997. ‘Producer-Consumer Relations’. In: A Perspective on Intelligence Reform from Outside the Beltway: The Final
Report of the Snyder Commission. Princeton, NJ: The Woodrow Wilson School of Public and International Affairs
© 2010 Douglas C. Bernhardt 9

10. But beware!
The CI process can be undermined both when analysts are too close in their ties
to ‘consumers’ (inadequate independence) as well as when they are too distant
(inadequate guidance)
© 2010 Douglas C. Bernhardt 10

11. Intelligence analysts are deemed most
useful when they ...
Clarify what is known by laying out the evidence and pointing to cause-
and-effect patterns
Carefully structure assumptions and argumentation about what is
unknown and unknowable
Bring expertise to bear for planning and action on important long-shot
threats and opportunities
Dr. Paul D. WOLFOWITZ, former:
• President of the World Bank
• US Deputy Secretary of Defense
© 2010 Douglas C. Bernhardt 11

12. In short
The job of intelligence analysts is to provide direct support to decision-
makers’ efforts to define and defend the objectives, strategies,
operations, and security interests of the firm
They accomplish this by telling decision-makers what they KNOW,
what they DON’T KNOW, what they THINK, and WHY
© 2010 Douglas C. Bernhardt 12

13. Consumer-Producer relations
Is the glue which pulls together the Intelligence Cycle
© 2010 Douglas C. Bernhardt 13

14. What’s the problem?
Decision-makers Intelligence analysts
Enjoy possessing and using power Tend to distrust power, and those
Generally prefer to make hard who enjoy exercising it
decisions quickly–active rather Tendency toward extensive
than contemplative examination of issues
View the world has highly Essentially objective–rewarded for
personalised–anything that identifying problems and obstacles
impedes their preferred actions Have greater latitude to be seen as
amounts to personal attack ‘wrong’, usually without risking
Do not like to be seen as wrong self-esteem
Seek consistency, simplicity, and Have the potential to disrupt
stability in their external decision-makers’ lives
environments
© 2010 Douglas C. Bernhardt 14

15. Lyndon Baines Johnson
“… simply could not tolerate the thought of being the
President who presided over the first military defeat in
American history.”
Thus “the President did not explore the likely
consequences of an unfavourable end to the war in
Vietnam even when they were presented to him as a
reasonable gamble.”
HELMS, R., 2003. A Look over My Shoulder: A Life in the Central Intelligence Agency. New York, NY: Random House
© 2010 Douglas C. Bernhardt 15

16. CI and decision making
Why do many decision-makers not make good use of intelligence?
They’re not interested in anyone else’s input
Some executives want only supportive input, and shut out all contrary views
Some decision-makers prefer ‘crisis management’, in which events make their
“decisions” for them
Many managers do not understand what intelligence can and cannot do, or
how it works
© 2010 Douglas C. Bernhardt 16

17. The role of the intelligence ‘consumer’
Explicitly articulate decision challenges/intelligence requirements
What do you really need?
Why?
What impact will the intelligence have if you receive it?
Be willing to face the facts, and act on them
Refrain from dictating the ‘line of march’ that the analysis should take
Understand what CI can and cannot deliver
Provide feedback to the intelligence team
Suspend your ego
© 2010 Douglas C. Bernhardt 17

18. The role of the intelligence analyst
Keep senior management “well enough informed to make sound
decisions and avoid catastrophic mistakes” 1
Speak up when assumptions and information that form parts of
management dialogue are at odds with the facts as you them
Lay out options, not policy recommendations
1 HELMS, R., 2003. A Look over My Shoulder: A Life in the Central Intelligence Agency. New York, NY: Random House
© 2010 Douglas C. Bernhardt 18

19. For CI to be effective it must make a
material difference to its consumers
This involves …
Causing decision-makers to change policy or course of action
Enabling different or better implementation of a chosen policy or course of
action
Playing a central role in the strategy and other key decision-making
processes of the firm
Helping company executives to force rivals to change their policy or course
of action
Enhancing the effects of chosen policy, or diminishing the adverse effects of
competitor actions
© 2010 Douglas C. Bernhardt 19

20. The big question for CI analysts
Does the intelligence you deliver cause management to
‘think the unthinkable’?
© 2010 Douglas C. Bernhardt 20

21. In conclusion
CI analysts are in the business of forecasting, not predicting
“Prediction is concerned with future certainty” 1
“Forecasting looks at how hidden currents in the present signal possible
changes in direction for companies, societies, or the world at large” 2
The focus of CI must be on ‘what the product does’ rather than ‘what
the product’ is
CI departments should concentrate their limited resources on the kinds
of collection (e.g. HUMINT) and analysis where they have a clear
comparative advantage over traditional information streams and
sources
Without routine involvement on the part of management CI
programmes have little chance of achieving success – ongoing dialogue
between intelligence staff and decision-makers is essential
1 SAFFO, P., 2007. Six Rules for Effective Forecasting. Harvard Business Review, 85(7/8), 122-131
2 Ibid.
© 2010 Douglas C. Bernhardt 21