Since 9/11, a quiet intelligence revolution has been brewing inside many of America's leading companies. Hotel chains, cruise lines, airlines, theme parks, banks, chemical companies, consumer products manufacturers, pharmaceutical companies, and even tech giants have been developing in-house intelligence units that look and act a lot like the CIA.
These organizations don't steal competitor trade secrets or wiretap your phones. But many conduct surveillance of customers, visitors, and employees to collect information and spot potential threats. Some run "red team" exercises that involve dressing in disguise and casing company locations to test the security. For all of them, the main job is analyzing "hot spot" developments around the world, around the clock -- from violence in Syria to environmental protestors in California -- anything that could threaten the brand reputation, personnel, or business interests of their parent company.
Typically these in-house intelligence units have nondescript names like "the Office of Global Safety and Security." (Most of these companies do not like to talk openly about their intelligence activities for fear it will scare away customers or hurt their brand reputations.) But don't let the names fool you. These offices are staffed with former CIA, FBI, and military professionals who have close ties to the U.S. government and conduct global threat reporting by working through formal channels and informal networks around the globe. This is the privatization of American intelligence that you've never heard of. And it's part of the innovative and growing business of political risk management.
Concern about political risks to business is as old as the hills. In ancient Babylon, trade insurance covered looting and pillaging, the political risks of the day. Thomas Jefferson launched America's first unconventional war in 1801 because thieving thrones in Tripoli, Tunis, and other Barbary states of North Africa were sacking U.S. merchant ships and holding them for ransom. In modern times, oil companies have been at the forefront of political risk management, seeing competitive advantages to understanding turmoil in oil-rich countries. Royal Dutch Shell has been doing scenario planning since the 1970s.
But political risk matters more now than ever, thanks to the convergence of three things:
1. Supply chain improvements like "just in time" inventory management, which ships goods from factories to consumers as fast as possible but leaves no stockpiles to keep business operating if anything goes awry;
2. Globalization, which has made it possible to make and sell products in more countries, to more consumers -- and, in the process, generates more nodes of disruption;
3. The information revolution, which enables small groups to transmit messages to mass audiences in real-time.