Stratfor blogging

George Friedman, Chief Intelligence Officer for the private intelligence firm Stratfor, is now blogging. We view this development, like much of Stratfor’s work, with mixed sentiments. On the one hand, Stratfor as an entity has done much to legitimize to concept of the privatization of intelligence – not merely in terms of government contracting, but also in terms of serving clients outside of the traditional community’s consumer list. Many multinational firms have much the same needs for robust geopolitical FINTEL as any government department, and Stratfor helps fill that niche.

Stratfor also one of the few private sector intelligence shops that has been in business long enough that it might perhaps be a profitable enterprise (although of this we are uncertain, as we have no inside information regarding its financial status). There are only a few other shops that may even attempt such a claim, however, many are affiliated with larger institutions – such as Oxford Analytica, or the Economist Intelligence Unit. The other major private sector intel concerns - the travel intelligence shops such as Control Risks, iJet, and International SOS - have faced quite varying balance sheets over the years, and much of their revenue comes from services outside of the core intelligence lines – K&R, due diligence, corporate overseas medical support, or continuous injection of new investor’s capital. In previous years (before their acquisition by Verisign) we might also have included the old iDefense shop in the list of profitable private sector intelligence efforts, but rumours of the shop’s troubles in its newest incarnation give us pause – including key indicators such as their recent loss of a number of key people, the complete loss of its branding into its parent corporate identity, and now the potential sale of the unit as part of Verisign’s divesture of its managed security services portfolio.

Stratfor thus stands somewhat apart from the rest, as an independent shop in continuous operation for over a decade. But in that decade, its track record has been exceptionally unsteady. It first made its bones during the Kosovo crisis, with unique new information sources (in an area where few shops had anything at all) and the occasional innovative but solid analytic line. Its attempt to act as a “global” shop in the mould – and even, boastfully, claiming competition with – CIA, did not fare so well over subsequent years. Occasionally, they have a good piece. But often their analysis reflects their hiring strategies, which Friedman himself proudly holds up as an ideal model – the selection of young students, fresh from university, with no prior intelligence experience. Stratfor claims this allows them to build new analysts with no “bad habits” that might have been learned in the intelligence community. However, it ensures that they have a workforce that will always lack substantive experience, creating a shallow bench on accounts. This can be quickly and professionally fatal on hard targets, or when they step into areas in which existing analysis is a career long affair for an entire analytical sub-specialty (such as oil market dynamics). While we are great believers in the value of the beginner’s mind, and of the importance of Smoking Mirror, we thinkStratfor’s approach goes a bit too far.

Their analysts also reportedly face a brutal gauntlet of forced predictions for quarterly and annual forecasts on their accounts, which are tracked and if found to be repeatedly inaccurate over time, results in their dismissal. While in theory an exercise in accountability, one of the enduring lessons one should learn when managing analysts is put forth by Nassim Nicholas Taleb. In any given population of forecasters – NNT chooses Wall Street traders as an example, due to his experiences and interests – there are a certain percentage that will be accurate each year simply due to pure chance. Year over year, this will result in a small number of “successful” forecasters, who at the end of any given evaluation period will appear disproportionately better than their peers. Again, while we are strong believers in analytic accountability, and continuous improvement in analytic tradecraft and accuracy, we are acutely aware of the limitations of intelligence as an activity, and the impact of random chance.

We will be interested to observe the development of Stratfor’s enterprise blogging over time. We would be most glad also to see its line analysts surface from behind the curtain, and have their occasional chance in the limelight that is typically dominated by a few senior faces. And we hope to see more than just a reposting of its public products – though it is an interesting experiment in feedback on those products, and one that takes no small amount of courage (for which they should be rightfully commended).

But in the blogsphere, it is not enough to rest upon one’s reputation, and to treat shallowly across wide fields of inquiry. There are real subject matter experts that may emerge unexpectedly in this medium, and these can pose both a challenge to the unwary or arrogant, but a tremendous opportunity to those willing to change and adapt to the new environment. For example, their latest piece on Blackwater could well have been far better informed with the cooperation of established bloggers that have long discussed the impact of PMCs (first in our minds is of course Mountainrunner, but also the boys at Coming Anarchy, and Shloky). Let us hope that Stratfor learns from their example, and involves such SME’s in their future products.

All in all, we wish Stratfor the best in their new approach into the blogsphere. It is rare to see such a conversation begin with a private sector intel shop, and we would see it continue. Of course, we hope they will discuss their tradecraft and forecasting methodologies in more detail – perhaps even proving our impressions wrong. But either way, we hope they will further contribute to the literature of intelligence from the basis of their unique experiences.