Jan 1, 2017

I spy a way to help companies steal a march

The business world generally thinks it can learn nothing from the public sector, but, of course, this is nonsense. One specialist arm of the state which could teach many companies a great deal is the profession of spying. I don’t mean by this industrial espionage, which is, of course, illegal in most cases. Rather, I mean the various tactics and tools deployed by government secret services to further the gathering of intelligence.

Part of the world of espionage is sabotage of the enemy. A manual entitled the Simple Sabotage Field Manual is available on the CIA’s website. It was written in 1944 during the Second World War and declassified in 2008. It gives advice about damaging the enemy’s factories, offices and transport. The ironic aspect of the book is that most of the techniques are already endemic among all sorts of institutions, carried out by staff who are not even supposed to be saboteurs.

Examples include insisting everything is carried out through “channels”, with no short cuts; making long and rambling speeches; referring as many matters as possible to committees to delay any decision; haggling over the exact wording of any form of communication; assigning important jobs to the least efficient workers; giving incompetent staff praise and undeserved promotions; holding conferences when there is vital work to be done; and multiplying procedures and clearances in order to delay actions — making sure three have to approve something when really just one would do.

A key skill for any spy is to be able to recruit informants and traitors. This ability can be translated into the commercial sphere within the human resources department. In the book Work Like a Spy: Business Tips from a Former CIA Officer, author JC Carleson writes about what she calls offensive recruiting — siphoning off talent from your competitors to give you an advantage. We do this all the time in business, but Carleson suggests using it as a systematic management device. This policy both boosts your team and weakens your rival. It requires finesse and a full understanding of employment law, but many firms have been built by the adoption of such strategies.

Another area of work life where the CIA could help is interviewing. The book Get the Truth — Former CIA Officers Teach You How to Persuade Anyone to Tell All gives guidance about eliciting facts during an interrogation. The book says that interviewers must play nice, and persuade the interlocutor to stay in short-term thinking mode in order to exploit their inherent vulnerability to influence.

The book insists that to obtain any confession you must remove all distractions such as mobile phones and give the subject your total attention. You should use a low, calm voice and neutral language. Interestingly, the fund manager Jupiter Asset Management hired ex-CIA employees as consultants to train its portfolio managers to better interview directors of the companies in which they invest. This was designed to help Jupiter staff spot executives who were lying or uncomfortable.

Indeed, trust is at the heart of so much in life that being able to detect when people are being truthful is a marvellous proficiency to have. Former CIA officers wrote the book Spy the Lie. In it they give six telltale signs that someone is lying. First, the respondent delays too much before replying to a question; second, a verbal and behavioural disconnect — for example nodding when saying no; third, hiding either the mouth or the eyes when responding; fourth, clearing the throat or swallowing before answering; fifth, hands pulling on the ears or biting the lips; and finally grooming activities such as adjusting the tie or glasses.

Intuitively, these behaviours arouse suspicions, perhaps because subconsciously we are better at identifying liars than we realise.

One more CIA operative who has turned to business is Henry Crumpton, author of The Art of Intelligence: Lessons from a Life in the CIA’s Clandestine Service. He now runs an international advisory firm. He points out that on 9/11, 19 terrorists armed with box cutters compelled the US to spend more than a trillion dollars in a military response. As he puts it, “micro actors can have a macro impact”. Businesses need to be prepared.

Perhaps the most obvious overlap between the world of espionage and business is in the arena of security. Sadly, fraud — be it simple defalcation or cyber-crime — is endemic in business and no company is exempt. Senior executives must learn how to prevent and investigate it.

Very recently in a business of mine we noticed cash discrepancies, and conducted an unannounced check at the branch concerned. The manager fled, leaving what appeared to be a suicide note. After an anxious few days, we were relieved when he turned up, unharmed. But what else could we have done?

I suspect every entrepreneur could benefit from borrowing a few of the tactics and tricks of the spying game.