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Despite growing demand for their services, many security and intelligence teams are experiencing a cut or freeze in their budgets. Yet there are exceptions - teams that have secured a substantial rise in the resources available to them. A recent Dragonfly client survey uncovered five critical factors that these teams have in common, says Chief Intelligence Officer Henry Wilkinson.

Business leaders have not always been great at overseeing geopolitical risks. But since the Russian invasion of Ukraine, many have been waking up to them. The systems, institutions and orders that have underpinned relative global stability and security – and planning assumptions – for decades are unravelling and taking new forms. Demand for geopolitical strategic intelligence advice to help them chart a way forward is, unsurprisingly, rising.

This produces exciting opportunities for corporate security leaders and intelligence teams to elevate the profile and value of their function as strategic business enablers, as well as operational ones.

This is no easy undertaking. A benchmarking survey we conducted with our clients – all corporate security and intelligence and mostly in senior leadership positions – shines a light on these shifts, and some of the approaches they are using to successfully elevate their function by supporting more commercial decision-making.

Demand is still focused on operational risks

The first takeaway is encouraging. Most organisations we polled have increasingly been turning to corporate security amid significant geopolitical risk and political instability. This shift can largely be traced back to the early days of the coronavirus pandemic that brought with it a surge in demand for crisis management and data analysis expertise, and opened up channels of communication with new internal customers. 

The clear majority (75%) of those that reported this shift were corporate security departments with their own in-house intelligence teams. And nearly all (95%) said they were now briefing on topics that went beyond core business travel and protective security duties, for example on geopolitical risks, political crises and Covid-related issues. 

Meanwhile, 32% reported a substantial increase in demand for geopolitical analysis in the preceding 12 months, and a further 59% a moderate increase. In the majority of cases, this demand was due to external events such as the war in Ukraine, concerns about security in Europe and tensions over Taiwan. However, much of the demand was still focused on operational-level risk implications of strategic risks.

Indeed, our survey results suggested that the more commercial and material aspects of geopolitical risks that engage senior audiences – such as risks to strategy, market and credit risks, economic risks, compliance risks and ESG risks – were much less developed as an advisory line for these teams.

Few respondents, for example, referenced the drivers of increased intelligence demand in terms of broader, systemic geopolitical risk changes and issues that impact business strategy. More abstract but highly consequential strategic thematic trends like de-globalisation, the erosion of the liberal rules-based order, rising authoritarianism and weakening governance standards rarely featured. Demand drivers were mostly specific immediate-term issues.

The support these teams give is often impromptu as a result, with 36% meeting surging demand by briefing ‘ad hoc and often’. So intelligence is not being fully embedded in a formal, proactive structure of geopolitical risk management. It is more often reactive to news and outside events.

Budgets are being cut at a critical moment

This reactive and unstructured on-demand model is putting pressure on these in-house intelligence teams which is compounded by the fact that they are not getting the resources they need to service such demand. Of those who report increased demand for intelligence support outside of routine protective security, 44% have had only a moderate increase in budget for intelligence resources in the past 12 months and only 30% expect one in the next 12 months, but the majority have had either no change or a cut. And with high inflation, no change can effectively mean a cut.

The most oft-cited reason for cuts was concerns about broader economic and business conditions.

This statement from one respondent captures this issue well:

“We have limited manpower, a global portfolio and increasing demand on the function without matching resources to the needs, and yet we still have a lack of exposure and knowledge of what the function can do.”

How some teams are securing a rise in budget

So why are these teams not getting the resources they need to meet rising demand, and what can they do to get the resources they need?

The easy answer is that as cost centres, operations staff are often cut back first in economic crises. But in our analysis of the data we collected, perhaps the most important finding is that those that reported both substantial rises in both demand and also of budget nearly always pointed to internal reasons as well as external risks as drivers.

These include five key factors:

  1. Increased awareness of the function and what it does
  2. Increased demand due to high and effective performance, such as prior warning of the Russian invasion – and then learning why and reflecting on why such warnings may not have been heeded by stakeholders
  3. Developing a demonstrable and auditable ability to prove performance in assessments and deliver in new ways that meet business priorities
  4. Prior work executed during the covid pandemic that demonstrated value, skills and capabilities and forged new collaboration channels and built relationships
  5. More work executed in support of the generation of new business opportunities in new markets, particularly as sanctions and other risks forced a rethink in business strategies and global footprint

In short, these teams that enjoy increased budgets have taken the initiative to proactively adapt and develop their functions. And they have essentially been internally marketing and diversifying their service lines in times of uncertainty, much like one would develop a business within a business.

Three steps to develop a strategy for corporate security

In developing such a strategy, corporate security and their intelligence leaders may wish to consider the following as they form their plans, based on what we at Dragonfly have learned in our engagements with our clients.

  1. Have a vision that goes beyond ‘enabling business’

Corporate security leaders have long argued that their value proposition is about “enabling business”. That is an important value proposition but it often proves to be operational rather than strategic in practice, and so can be quite reactive.

An example would be getting involved in projects that are exposed to risks, such as market entry or exit, only after decisions have been made.

Geopolitical risks and delivering anticipatory strategic intelligence advice on them represent a major opportunity to invert this. You can take the business enablement concept much further by “enabling business strategy” and getting in front of issues and decisions, rather than falling behind them.

This may require changing the narrative about what your intelligence capabilities can do and when, how, and for whom in the business, and altering perceptions about what role your function can perform in wider risk management governance structures. Those who have managed to do successfully – examples of physical and cyber convergence may be useful case studies – will have had a clear business case and value proposition.

  1. Create a business plan that demonstrates commercial value

Your business plan will need to make an investment case and set out the kind of returns it will bring the business. As an in-house supporting function, you most probably won’t be pointing to direct revenue generation, but other metrics can demonstrate real commercial value as well, such as: 

  • Revealing upside risks amid downside risks – i.e. pointing to the opportunities that are liable to be thrown up by negative developments
  • Enabling first mover advantage by helping stakeholders anticipate future scenarios and giving early warning to them to adjust business strategy
  • Loss avoidance and opportunity cost achieved by supporting and informing business strategy
  • Driving down costs when transferring risks to the market – and assessing whether market capacity for insurance is adequate to the risks.
  1. Market your function proactively

Our research with our global clients suggests that you should try to map out the governance structures your board will create (or ought to create) to understand geopolitical risks more proactively, as it’s likely that you will need to be in these.

But to ensure that corporate security – and especially intelligence – is integrated into those structures, you must raise awareness of what your function can do and how it can support boards in a practical way. Indeed, it seems that managing internal comms – alongside performance and responsiveness to demand – is a key success element for those that are actually winning bigger budgets. 

As one respondent said, “Covid put us on a much more globally connected footing, building on some internal response processes, particularly communications improvements.”

Build relationships with stakeholders

Our survey asked what these teams have found works best to engage with and brief senior stakeholders. By far the most successful approach was ensuring they invest in understanding the business’s strategy and the impacts of geopolitics on it so that they can shape their product and advice accordingly.  

This learning goes beyond reading strategy documents; it involves being attuned to internal dynamics and engaging with the needs of the business. It means being proactive in widening your internal target market and building collaborative relationships with those who have a stake in geopolitical risk management and those accustomed to giving board-level or strategy-level advice.

How to communicate geopolitical risks at a senior level

This is particularly important for corporate security intelligence teams whose routine workflow is protective security because, when it comes to geopolitical risks at a senior level, you cannot afford intelligence briefings to be operational or tactical in focus. Churning out tactical alerts and the interpretation of impacts at a security level, which many teams are accustomed to doing, is a key pitfall to avoid. 

Fixing this can be difficult if your analysts are pulled from highly operational, 24/7 GSOC work and thrust into strategic risk briefings without any prior exposure. Training, engagement and understanding of what senior stakeholders want and don’t want, and how they prefer to consume information, is a surer way to deliver value. And you may need to realign your team structures and not dual-purpose tactical-level reporting staff for strategic work. 

Training, workflow and governance design should probably not be on collection – that is what intelligence providers are for because it is a delegable task. It should focus on the interpretation of that intelligence for the business with an understanding of the business strategy, and on presentational skills to engage at a senior business leadership level. 

Intelligence teams that deal with geopolitical risks and inbound intelligence and data streams in their quotidian duties of protecting their organisations should be perfectly well equipped to deliver if they are able to secure the opportunity to do so.

Henry Wilkinson is the Chief Intelligence Officer at Dragonfly and editor-in-chief of Strategic Outlook 2023, our annual global security and geopolitical risk forecast.

To find out more about how Dragonfly can support your organisation with strategic geopolitical intelligence, get in touch with our specialists today:

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Image: Photo taken at Enkou-ji temple, Kyoto. Marser / Getty Images.