The WAY to WOW Shows
Functions of Intelligence and the Intelligence Cycle
December 19, 2023
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[0:13] hello and welcome to business lessons from the military I'm your host Kevin bamel and we are here every Tuesday at 10:00 a.m. indeed all of our shows now are at 10: a.m. Monday through Wednesday and on business lessons from the military we talk about all things related to military Doctrine history the methods of great military leaders all applying them to our professional lives how we can improve how our businesses operate and how we can do better as employees

[0:49] working in other people's businesses and for the last several months we've been talking about Marine Corps War fighting Doctrine and today is our final show on that topic so we're going to wrap things up this year um Bo both well we're going to wrap things up this year wrapping things up with the Marine Corps War fighting Doctrine we've been talking about intelligence the Spy versus spy kind for the last several weeks and this lesson is going to very much summarize both the use and the uh

[1:26] or the I should say the function and the the the cyclical process by which intelligence is collected disseminated and used and so we'll get our trusty PowerPoint going here we are and okay so um you're gonna see I'm G to quickly um go through the the previous slides there's I think uh 20 of them um all of these well first of all as I like

[2:01] to point out um all of the shows that we do on the way to wow um are based on the three pillars of attainment in um for business lessons from the military we're generally dealing in the finances realm in the Pursuits um pillar however um there are times we'll deal with relationships as well as as ourselves so um if you want to know more about the three pillars of attainment please go to our YouTube channel uh youtube.com theeway to wow and there is a show on that topic so we started out

[2:38] talking about the objective of intelligence and then we talked we defined it and then we talked about the intelligence challenge okay so then how to and how to deal with that challenge okay then we talked about the characteristics of good intelligence and then the classes of intelligence and the levels okay and last uh we talked about um requirements and sources of intelligence so um now we're going to talk about two subjects first we're

[3:13] going to talk about the functions of intelligence why why bother with it in essence um on the military side um it can be um costly both uh monetarily and peoplewise to acquire intelligence and as well it can be very very difficult so um although um you know these days we don't have a lot of military spies um in other countries at least as far as I know um I

[3:49] I I can tell you that um we do have um Assets in in places from time to time and they're specifically there to to gather intelligence on our enemies and uh were they to be caught um you you know the best we could hope for is is is that the service members would be taken captive um you know the worst case scenario is is is they would be killed so um in the business world uh Gathering intelligence

[4:24] is is rarely uh such a a potentially dire um uh function um however and and by the way I'm not talking here about industrial Espionage um that's that's a whole different subject and and I think um hopefully all of us would agree um that that level of intelligence is um in inappropriate we'll say um it's it's um certainly criminal in a lot of cases so we're not talking about um um

[5:00] infiltrating another business what we're talking about is the Gathering of intelligence from what are called open sources I've I've talked about this before so it could be reports that the comp that a company issues it could be Market appreciations put out by various analysts etc etc um there's a t and by the way it could also be information that's gathered and disseminated by by the government or various government agencies um at the the local state or federal level so um all of this information is is out there um the

[5:36] information itself is not intelligence as as we're g we'll talk about when we get to the cycle of intelligence however that's going to be our our our primary sources so there's probably not a lot of danger in accessing um that um but there is uh certainly a cost um at least in time um and there may be a cost to you know doing the research as as well um and I'm remained by the way probably the best um movie that I know of on um business intelligence so to speak is

[6:12] Trading Places right where the um the brothers who own the commodity firm hire um Mr beaks I believe the character's name is to steal the crop report um for uh Frozen concentrated orange juice so that they have the information before the market at large gets in and so that that presumably would tell them what to do prior to the Market opening so that they could you know make a lot of money um if you haven't seen the movie it is brilliantly funny um it stars Eddie

[6:48] Murphy and Dan akroy um and um it it actually from the standpoint of of how you know illegal business intelligence works um it's it's it's it's both informative and and hilarious um and but again that's not what we're talking about here what we're talking about here is is um you know doing doing our intelligence or gaining our intelligence from open sources so let's look at the six functions of intelligence the first function is support is to support the CEO's estimate of the situation now I

[7:25] use CEO in a in a somewhat generic term it's whoever is ultimately in charge of of the business um it gives the CEO um the picture of what are the market conditions what are the operating conditions in which the business is is taking place um and and by the way um if if something is relevant only to a particular division or subsidiary of of a company so then it may not be you know the CEO's astim it per se it could be a vice president of a

[8:02] division it could be a president of a subsidiary um it it could be just you know the owner of of a store okay but in any event the first function of intelligence is to give the the decision maker maybe would have been a better uh term to use an appreciation of what is the situation what is the market in which they're operating so that they can make decisions on an informed basis okay the second is to Aid in situation development so I may know what the

[8:38] market is that I'm dealing in but then what decisions do I want to make so to know what's going on currently is is good but I also need to have a sense of how might the market develop and change over time and that intelligence will then Aid me in um creating in in deciding how is the market going to change and and in that context be able to make a decision okay

[9:13] next okay so provide indications and warnings right so these are um um indications really I guess is the best word that something may be changing okay and a warning is something may be changing for the worse okay so we see this with the Federal Reserve board okay so over the last um roughly couple of years they've raised interest rates from near zero to over five% and during that

[9:50] time um uh Jerome po I believe fed is the chairman of the Federal Reserve so he would from time to time give speeches and those speeches were at least in part suppose purporting to give people an indication of where the FED might be going in terms of interest rate increases okay they were providing inform they're providing indications and or Warnings okay so most recently the indications and warnings have um about interest rates have been that they're

[10:27] probably not going to go up anymore and indeed next year 2024 um they may actually go down um a couple of times that seems to be what people are thinking so if if if we're um a company especially a company that um relies on debt either to fund our operations or perhaps to because consumers typically buy our products using debt say maybe it's you know maybe we're a home builder um maybe we're um a car maker so the direction that interest

[11:04] rates may be going has a profound effect on our businesses and so one of the functions of intelligence is to gather data about what the FED is intending to do what what the state of the economy is in terms of is it is it expanding is it Contracting is it peaking is it troughing and use that information to create an intelligence appre iation that would that would provide indications for what's going to happen with the The Lending in The Lending side of the market as a way again support

[11:41] decisionmaking okay fourth Provide support to Enterprise protection so businesses tend to be vulnerable to various factors okay and let's let's talk about the home business right um the buying and selling of homes is pretty heavily interest rate sensitive okay so if if we're in an uncertain interest rate environment one of the things we want to do is perhaps

[12:17] take less risk than we might otherwise if we have greater certainty about what's happening with interest rates okay and in that way we protect our business so so if we're very unsure about whether interest rates are going to go up stay the same go down okay we may not we may not um start a a large new Housing Development okay because we may you know get going on that development and then find that interest rates have gone up people can't um afford to to buy the homes or buy the

[12:53] Condominiums and so now we've got all this product on the market and we're not able to sell it okay if it's a rental project so you know we may need rents to be at a certain level if we're very uncertain what the direction of rents are then in order to support the protection of our larger Enterprise our company we may hold back on you know building a project we may even have the project approved okay and yet you know since we're not going to be bringing it to market for

[13:28] say 12 to 18 months we may not want to start construction and and and actually take on the debt that is required to build out that building because it's it's too uncertain as to whether the project is going to work out okay so that would be an example of providing support for Enterprise protection okay then the last two are to support objective setting and targeting so as as we look forward in our businesses and and we're here at the end of 2023 and

[14:04] we're thinking okay you know what should our goals be for next year and maybe for the next five years so intelligence needs to be gathered to give us a sense of first of all what's possible for us to accomplish over that time period okay again we so coming up in 2024 we still have economic uncertain cty it appears that interest rates have peaked and maybe will come down in 2024 but it's certainly not guaranteed that's number one number two we have a presidential

[14:39] election coming up okay are we going to a as a result of that election are we going to see um the you know the current pres President Biden reelected and therefore presumably continuity of policies or is um the uh Republican candidate the the presumed candidate right now seems to be Donald Trump is is Donald Trump going to be um uh elected president again in which case we would anticipate that there's going to be a very large shift in policy at least at

[15:14] the national level okay what's going to happen with Congress both both the Congress and the Senate are very closely divided just a few seats one way or the other could change who controls them so are we going to be dealing with divided federal government the way we are now or will one party be able to gain enough you know seats in wherever they need them and also take the white house so that you have um that party controlling th those two level two levers of government and therefore there's a

[15:49] greater likelihood that they'll be able to pass their agenda right that's a big unknown so unlike two years ago when we knew for for the time being we we were going to have the same president and although there may be a change in Congress um you know still you know major policies probably weren't going to change you know so we could be much much clearer about um what kind of objectives we we would set what kind of goals we set and and how we targeted them um going

[16:25] forward it's probably it's it it's not as clear right now because of among other things the impending election not to mention a lot of uncertainty in the international scene with Wars going on in at least two areas okay finally it provides support for Success assessment so um how do we know that indeed we are running our businesses successfully will you may say well if we're making more money then we're running it successfully well that's certainly one measure but just because we made more money this year doesn't

[17:01] mean that we're setting ourselves up for success in the future okay so um we want to be gathering other sources of data that um that may that may be um other ways of marking success so give you an example um let's say your uh well let let's let's let's stick with the um um the Home Building Company okay so um while a Home Building Company may have may have made a lot of money this year

[17:36] um let's say they also built a huge amount of homes but we're already starting to see that home sales are really lagging okay now interest rates did come down so maybe it'll be great that they have that inventory heading into next year because maybe next year if interest rates continue to decline um they'll be glad they have that inventory because they'll they'll have a lot of homes to sell there'll be buyers out there who can afford to buy Etc okay so

[18:11] intelligence can help us figure out based on what our situation is now are we really being are we successful in what we're doing okay and and and it may not always be so obvious Okay so if I were a home builder right now would I like to have a lot of inventory ready to sell next year I'm not sure I'd want a lot but given that the bias seems to be that interest rates are declining I sure would like to have some inventory available so if at the beginning of this

[18:47] year I made a decision to you know to hold back on construction if I'm coming to the end of this year with very little inventory so even though maybe this was a a great year for my company I did well you know selling the the inventory that I have next year when there may be more opportunity to sell because of potentially lower interest rates I I I I I don't have that inventory to sell now and so that could be um part of My Success assessment is how well did I uh

[19:22] set my company up for Success going forward not just looking back okay so those are the six functions of intelligence from a business standpoint I didn't go through a military example because I wanted to get right into the Crux of the matter um because we have just a short time together um for this show okay so next let's talk about what's called the intelligence cycle okay and there are six phases to the cycle I'm going to go through them and then come back and and talk about um each one in Greater depth oops whoa

[19:58] okay um okay so phase one planning and Direction phase two collection phase three processing and exploitation phase four uh I don't know why it's moving on its own uh phase four production five dissemination and six utilization okay so that's and it's a cycle and by and by the way and I I think this is actually on the next side so right no phase is more important than and the others okay they're all interdependent okay that's a that's a

[20:33] key thing to keep in mind as we go through each one and although they're presented in in sort of a a a linear fashion or you know a round fashion like 1 two 3 four 5 six the reality is is that sometimes we're going to be jumping between phases now if we're starting at Ground Zero with no intelligence developed then for the most part we're going to go through the six phase in order but once we start using intelligence and getting what in the military is called a battle Rhythm meaning a a a sense of the es and flows

[21:09] of activity in the business so then at certain times we may we may jump over certain phases in the cycle in order to be able to keep up with the battle Rhythm okay so sometimes it's faster and and and so in order for in order to get to the be the ability to use the intelligence okay where you know we we may not have time to collect as much new intelligence as we might do at other times so um we may we may use the data we've already collected to do a new

[21:45] appreciation of where we're at okay in order to quickly get to something usable it really it really depends on the circumstances all right so now let's go through the six phases first of all planning and Direction so planning and Direction well direction is is typically going to come from the person or people who are using or going to be using the intelligence okay so they're going to direct this is what I need to figure out these are this is these are the

[22:20] decisions I need to make these are the issues I need to be informed about and then working with whoever is in charge of the overall Gathering and processing of intelligence okay so that they'll they'll plan out what needs to be done okay and part of the planning is making sure that the the the the cycle can be got through in a timely basis so that when the intelligence is needed it's there and available to to

[22:56] create the situational awareness and facilitate the making of the decisions that the the person who's directing the whole intelligence uh cycle needs to have okay and the the planning and the direction are to a large extent going to set the tone for the rest of the phases okay um especially when it comes again to timing which which is which is typically a a crucial factor in all of this if we had unlimited time to make decisions so then

[23:31] presumably we could you know collect data forever okay but that's never the case um so what we need to do is look at the intelligence cycle through the lens of what do I need when okay so phase two second phase is the collection of information okay now I I I talked about this a little bit earlier um well I I mean in a in a pre prev show collection of data is not intelligence data is not intelligence data is the raw material

[24:07] through which intelligence is created however in order to get usable intelligence we need to collect the not only the correct type of data but also the correct amount of data okay and and we also want to consider typically multiple sources so if we're collecting data from only one source we're we are typically creating some kind of blind spot because whatever biases that data collector or data aggregator has are now

[24:45] built into our intelligence whereas if we collect data from numerous sources okay that we're we're much more likely to avoid blind spots okay because people typically have different kinds of biases and blind spots and so if we're Gathering from several sources we're more likely to um have um uh you know One Source would fill in the blind spot that another source has Etc okay so that's and you know we tend to think about well you know government data is

[25:20] the best data um because you know um it's it's it's not influenced by um you know what any particular business wants or things like that um that that may be true although frankly not not always um but but government the data that the government gathers can have its own set of blind spots okay and so having government data industry data um you know that often times is a good way to go okay by the way government data

[25:56] industry data um and um um data from um um um um nonprofits but like like think tanks and um um um organizations okay depending on where they got their data right can be can can give you even a third perspective okay now sometimes think tanks Etc uh rely on you know government data in in order to do their appreciations but other times they're Gathering data themselves so for example

[26:34] um the Pew the Pew Institute um they they do their own surveys often okay Gallup does their own surveys okay they may use government data too they may use industry data but they're also Gathering their own so that gives us a multiplicity of sources from which to G collect our data okay third phase processing and exploitation so this this is the phase in which the raw data is turned into

[27:12] intelligence okay so it's correlated and it's um synthesized um into something that's usable for the person who needs the the intelligence uh in order for them to make their decisions or or get gain their their understanding of the marketplace of the business cycle Etc Okay so until data is processed it's not actually intelligence yet it's just it's just raw data now raw data is fine okay but typically it's not

[27:49] going to facilitate the best decision making okay so the processing of the data is is Cru crucial and it it will often times take it will include not only the syn synthesization of the data but also the turning it into its most usable form so for example a written report can be fine but it may not be the most usable form it may be better to create some graphs some charts

[28:25] because that conveys the information better more quickly more vividly okay so the processing has to deal with with not just the synthesization but also with how it can best be communicated okay that's the exploitation side of it so it's all good and well to turn data in into intelligence but it needs to be done so in a way where it can actually be used most effectively I.E exploited

[29:00] okay phase four production okay in the production phase we're now going to produce the intelligence product so it may be a report it may be some kind of presentation okay it may be by the way a database is you'll see in a minute when we talk about dissemination it depends how the the intelligence is going to be disseminated okay so the production is is the is the taking of the processed

[29:35] and exploited data and turning it into the kinds of products that the people who need the intelligence can use most effectively so maybe it's a a PowerPoint with a series of graphs and charts that they can not only that they can go through slowly maybe initially but then once they familiarize themselves with it they kind of have it at their fingertips so that if they need to go back and review something they can quickly go back okay and maybe it has you know kind of a a one slide with a table of contents and it's you know slide One X slide you know two y slide 3 Z or

[30:12] whatever and so they can they can quickly that and maybe even mebe even it's it's um hyperlink so you click on you know slide three bang now you're at slide three okay yeah great just quick review and and and um and I'm good to go in terms of um you know making my decisions or or keeping my situational my market awareness up to date okay F uh next uh fifth phase is dissemination so we can we can produce the greatest intelligence in the world unless it's disseminated to the users who cares

[30:47] right it it means nothing I mean it may have been you know a lot of fun researching it and putting it together um but if it's not disseminated it can't be used used there's basically two ways to disseminate data to push it and to pull it so when we when we talk about pushing intelligence it means we actively send out to the users the intelligence we produced okay to pull intelligence means we put the intelligence in a place where

[31:23] people who need it can go and get it when they want it maybe kind of database okay um and it may be by the way it may be some kind of um uh passco protected database so only certain people have access to it or it may be something that's put on you know a company's share drive so that everybody can see it okay it it depends how sensitive the intelligence is okay but but generally speaking um intelligence is either going to be pushed or made available to pull um depend depending on you know why the

[31:59] intelligence is needed um you know who needs it how many people need it okay um and also how sensitive it is to um people outside the organization or even to people inside the organization broadly having access to it how sensitive that the data is if it's something that's very very sensitive so it it it may be um set up in a database that's past coded that's you know virtually impossible to be hacked into and then only those limited number of

[32:34] people who really need access to it will have the ability to get it okay on the other hand it may be something that needs to be broadly disseminated in the company and so it goes out in a blast email into everybody's you know email boxes and everybody has it okay and then finally there's utilization okay in the end we can create in elligence we can disseminate it but what's the point unless we're going to use it okay so you may be you may be tempted to think well so then utilization is the most important phase uh the six phas is is is

[33:10] the the you know ultimate phase except that you can't get to the six phase without the other five right so um but but in the end um there's there's no point in creating and disseminating intelligence if it's not going to be used okay so going and then this takes us back again to the planning and Direction the intelligence should be planned should be directed and planned based on what it's going to be used for so you see why these connect okay and the

[33:47] reason it's a cycle is because sometimes we'll go through the six phases we'll get to the utilization and we'll realize oh wait a minute this aspect is missing or we looked at it but this doesn't seem to comport with what we're seeing we need to take another look at this so then um we're not going to go back to planning and Direction per se we may need to go back to collection or we need may need to jump back to processing and exploitation um or even to production um

[34:22] because maybe we're we're looking to use it and it's just a it's in a uh it's in a form that it's just not usable for what we're trying to do so that's why I said at the beginning this the the phases are not necessarily linear once once the cycle starts going there can be points at which we won't you know go through them um um one through six we may go one through six and then jump back to three and come back to six and then and maybe at that point we realize wow you know what we we we misdirected

[34:59] where we needed to go now we're going to go back to one and go through it again or or you know whatever the process needs to be okay and then we we talked about this oops I'm not sure what's going on with my thing here today okay so again no phase is more important than the others each one has to be uh carefully considered carefully accomplished okay because they are interdependent if one phase is done in a body manner all the succeeding phases will also not be as valuable as they could have been okay so that is and

[35:37] we're we're just a little bit over time but that is um that is the final show not only on intelligence but also on Marine Corps Warf fighting Doctrine so if you have any questions any thoughts to share with us um here's some places you can contact the show um they'll be in all the show show notes um so um you don't if you know if you want to take a screenshot you certainly can or you can look down once the show posts on our YouTube channel and all of these links will be there including some other ones and uh then we have uh the legal stuff

[36:13] which which we do and I'm going to go ahead and stop the share so um you know for those of you who have been along for the entire you know sweep of Marine Corps War fighting Doctrine I I hope you found it interesting I I the reason I'm doing this of course is I find it quite fascinating how the processes that we use in the military have almost a onetoone equivalence in the business world and that's what makes them so useful and they also give us a sense of organization to follow so rather than

[36:48] making it up from scratch we can take Marine Corps warfighting Doctrine and as we've been doing the last several months we can modif if y it for the business world and not have to you know reinvent the wheel so to speak and so that's that's another reason why um I I I wanted to do this for you to show you that you can save a lot of time by um by relying on um you know military Doctrine um that's been altered as opposed to making up the doctrine for your company from scratch so I thank you very much

[37:25] for joining me today um that's that this is our show for today and tomorrow at 10: a.m. Pacific Time Of course is my show uh people making money and we're going to be talking about uh 10 tasks that you should consider doing for the end of the year since we were just a little over a week away um a week and a half away I guess from from year end so these are some things uh that you you you definitely want to take a look at um and and and and perhaps get done um over the next you know week and a half or so

[38:01] especially as things well sometimes they slow down this time of the year of course if you've got things that have to be finished by the end of the year they could be speeding up but um anyway you want to have these on your radar and then next week we'll be back on Monday at 10:00 a.m with trust and Estates weekly and Monday through Wednesday again 10 a.m. Pacific Time 1 p.m. eastern time are the way to wow shows so I again I appreciate you joining me for this and look forward to starting a new topic on business lessons from the military um next year uh we're going to

[38:36] have some classic episodes next week um and then 2024 we we'll launch our next seasons on all the shows with with some some new content and I think some some things that you will find um particularly both interesting but also usable and engaging so again thanks for joining me this morning uh this afternoon if you're on the east coast and um look forward to seeing you tomorrow and signing off Marie you are my bell all the best folks