Most business schools offer a variety of specialities, from marketing and accounting to corporate finance. But there is a school in Europe with an MBA program in what faculty members call “defence against the dark arts.” The institution in question is well-known to its stated enemies—greedy corporate executives who attempt to dominate the business world via evil means—but is nearly invisible to the general public. Tucked away in the bowels of Paris, down a side street near where Napoleon once studied the finer points of waging war, its entrance is an unmarked storefront. Window blinds are typically drawn to keep out prying eyes. As a result, most people on the street tend to stroll by without ever gaining awareness of the powerful forces being taught inside.
Don’t be fooled by the reference to fighting dark arts. This isn’t a graduate program offered by Harry Potter’s beloved Hogwarts. The institution out to conquer evil in this case is the deadly serious École de Guerre Économique, known in English circles as the School of Economic Warfare, where students are equipped with a unique and controversial set of skills that school founders insist are required to successfully lead modern corporations on the battlefield of capitalism, 24 hours a day, seven days a week.
When most people talk about industrial espionage in the West, the finger wagging is typically aimed at China and Russia. In emerging markets, more than a few people insist that Uncle Sam somehow manages aggressively to deploy the CIA to steal trade secrets for select U.S. corporations without raising a legal peep from other American companies. But what those concerned talk about when not tossing accusations at China or the United States is France—an aggressive collector of industrial intelligence since the mid-1700s, when the British naively invited French operatives to inspect their mines, smelters and foundries. The British Board of Longitude even foolishly let French operatives examine John Harrison’s revolutionary marine clocks.
Intelligence experts around the world warn the business community not to underestimate the French. But faculty members at the School of Economic Warfare have little time for corporate Boy Scouts. They’re more concerned with warning executives not to underestimate the risks associated with always playing fair. “All is fair in love, war and business” isn’t the school’s official motto, but it fits the bill, insists faculty member Jean-François Bianchi, a specialist in information engineering who teaches courses on the theory and strategy of influence and counter-influence.
The School of Economic Warfare was founded in 1997 by retired French army general Jean Pichot-Duclos and his partner, business intelligence specialist Christian Harbulot. Duclos and Harbulot were concerned with the growing acceptance in Europe of the notion that businesses can successfully compete on the world stage simply by offering a competitive product at a competitive price. Seeing the global marketplace as an ongoing battle with no agreed-upon rules of engagement, they set out to transfer military know-how to the corporate world. The school has no sign, Harbulot once said, “because we didn’t want to upset the neighbours.”
Students are taught everything from the power of influence and lobbying tactics to reputation management and crisis communications. But the focus is on how to produce, protect and gain information, using what Bianchi calls “a mix-up of civilian and military exercises in the field of information and of opposition management.” Every student, he adds, must complete 12 to 18 exercises based on using military tactics to fight “the info war.”
Aggressive footing is what sets this school apart. Like most of his colleagues, Bianchi—who studied military management and warfare at the Canadian Forces College in Toronto—has a military background. As a staff officer and colonel in the French reserves, he serves at the French Ministry of Defence’s Joint Centre for Concepts, Doctrines and Experimentations. “We think that France and Europe need to have people well trained in all elements of economic warfare,” he says. “They must be ready to fight and to struggle against any kind of competitors. You cannot just defend. If you’re not able to protect your information and to be proactive, to be offensive, you cannot win an economic battle today. It’s just impossible.”
Piggy-backing on the work of competitors has become an accepted part of the real-life game of Monopoly. The real issue is that not all participants play by the same rules.
“Most large companies,” says Erik Glitman, CEO of Fletcher/CSI, a Vermont-based competitive-advantage consulting firm, “use ethical and legal methods to collect information on competitors, mostly through open sources such as social networks, Internet postings, conference presentations, marketing literature and similar publicly available tools.” As far as these activities are concerned, Glitman says, “fighting fire with fire is a well-established practice.” But when it comes to dealing with the bad guys of global capitalism, he chooses to sit in the two-wrongs-don’t-make-a-right camp.
Glitman is no boardroom Pollyanna. He is a director of the Strategy and Competitive Intelligence Professionals, the only professional society devoted to competitive intelligence. Nevertheless, rather than fighting unethical methods by deploying unethical methods, he insists reputable companies should stick to “legal methods to prevent competitors from getting the information they want.”
Flaws with this logic are obvious. Even Glitman admits, “What is considered to be unethical, or even illegal, is not always the same across different cultures.”
Furthermore, as pointed out by Richard Bejtlich, chief security officer with Mandiant, an information security company based in Washington, D.C., playing defence all the time can be “a losing strategy in more than just hockey.”
As the former head of General Electric’s Computer Incident Response Team, not to mention having served as an intelligence officer with the U.S. Air Force Information Warfare Center, Bejtlich has been following trends in intelligence-gathering for a long time. In the past, he notes, corporate espionage was more or less restricted to national intelligence agencies, because “they were the ones who had the trade craft, experience, connections and budgets required to make these sorts of operations feasible.” The risks involved also kept the private sector at bay, because “nobody wants to be a spy if they are going to get caught and put in jail.”
But thanks to the information age, the chances of getting incarcerated for conducting corporate espionage have come down along with the barriers to entry. “As more and more companies put more and more sensitive information online, stealing it electronically has become cheaper and more efficient, and so there has been a huge rise in that activity in both the public and private sector.”
According to Bejtlich—who also works with Black Hat, a series of technical conferences featuring elite security professionals run by Jeff Moss (a.k.a. the Dark Tangent), founder of DEFCON, the largest hacker community in the world—large multinational companies have their computer networks compromised hundreds, potentially thousands, of times per year. Even companies that do everything right face at least a dozen serious intrusions annually that pose serious risks to the bottom line. (A recent study by McAfee estimates “companies worldwide lost more than an estimated US$1 trillion in 2008 due to data leaks, the cost of remediation and reputational damage” related to unethical competitive activities.)
Bejtlich says most unethical acts of corporate espionage are still conducted by governments, or state organs, working on behalf of national champions. But he thinks more and more companies are being tempted to cross the line. And the security expert sees a growing desire to fight back in a far more aggressive manner. Whenever Bejtlich deals with a company that has been attacked, he says executives always want to know, “What can we do to get back at these guys?” Those conversations, he adds, never go anywhere because lawyers quickly get involved. “You will be hard-pressed to find any company with a legal department that allows them to do anything more than defend themselves,” he says.
The take-the-high-road school of thought is not popular at the School of Economic Warfare. But, for the record, it isn’t into bugging offices or hacking computers. Then again, it doesn’t have to teach these things. As Bejtlich notes, there is an incredible amount of information related to research and development, trade secrets and operational initiatives that can easily be mined using legal business intelligence practices and data-mining algorithms.
According to Bianchi, students are taught a process of information collection that targets open sources for this type of information, which is similar to what students learn at the Glendale, Ariz.–based Thunderbird School of Global Management, where a full-time MBA program in competitive intelligence is offered with instructors such as Paul Kinsinger, who spent two decades as an intelligence officer with the CIA’s Directorate of Intelligence.
But the School of Economic Warfare has no problem teaching students to push ethical limits if that’s what it takes to win a battle. Says Bianchi: “We strongly think that we need to be able to fight at the extreme ethical and legal limits. That’s a necessity because of this open market, which is not a safe market for whatever company.”
Bianchi offers an example of a crisis-management strategy his students developed as part of their education while working pro bono for an unnamed company with a compound in Africa: “There was a competitor in the same country,” he says, that created “what we call an informational crisis.” According to the French intelligence professor, the competitor in this case was spreading a rumour that local women were being bought and sold against their will in a compound cathouse run by his students’ client company to service the sexual needs of its 300 male employees. Obviously, “the says, the inhabitants of the country were extremely angry against this company, so [executives] used a traditional communication program to let people understand that it was not true.” Local journalists were invited to investigate. The compound was opened to locals so they could see first-hand that there was no cathouse. The company did everything possible, or everything ethically possible, and it could not stop the rumour from spreading anger.
Enter the School of Economic Warfare.
After being briefed on the situation, Bianchi’s class took off the gloves. Instead of fighting the source of the rumour, the students launched their own misinformation campaign essentially supporting the accusation aimed at the client company, but added the fictional fact that the company’s cathouse was very similar to one run by its competitor.
“They initiated a counterattack against the origin of this rumour,” Bianchi explains, “and suddenly the competitor became extremely vulnerable. They had to react by stopping the original rumour campaign.”
That story, Bianchi says, effectively sums up his school’s philosophy, which seeks to promote a French business culture that is ready to go on the offence, a “culture of not only defending. Sometimes to defend, you must attack. We assume a defensive posture first and an offensive second, but both are absolutely correct.”
Bianchi is aware that professors at other business schools would consider the counterattack developed in this case to be highly unethical because it involved the distribution of untruths that damaged the reputation of a company. But, as far as he is concerned, the initial attack was illegitimate and the counterattack justified, despite the fact the same tactics were deployed, because it was a response to an unethical aggressor. And while he admits that students could leave his class armed with skills that can be deployed to launch unwarranted attacks, he points out that he personally teaches “the ethical limits of our job, just to make sure that they will not go on the black side of the force.”
The School of Economic Warfare—which charges tuition of between €10,000 and €15,000 per year (depending on support from an employer)—was clearly founded to help French companies get a leg up on the competition. But it is open to students from around the world, although some nationalities can be blacklisted if the school suspects an untrustworthy government behind the application. It offers a one-year program that requires about 800 hours of study and exercises, aimed at the same audience that would undertake a traditional MBA. There is also a part-time program for working professionals, which requires about 350 hours a year. The school attracts students from all sectors, but the student body is typically weighted toward hyper-competitive industries such as energy, auto making and finance.
The program clearly is not for everyone. And ethical questions are not the only things potential students need to contemplate when considering enrollment. The School of Economic Warfare isn’t interested in fun-loving applicants. Traditions that help students blow off steam are important to many educational institutions—even members of Harvard’s graduate ranks have been known to play “going to the John” on the John Harvard Statue in Harvard Yard (probably because the statue in question doesn’t actually depict Harvard, who died portraitless, incorrectly bills him as school’s founder and features an incorrect founding date on its plaque). According to Bianchi, his students must be prepared to be all business, no play.
“We are a young school,” Bianchi says, “so those traditions are not here.” Student pranks aimed at the school’s professors are out of the question. “You must remember,” he adds, laughing, “most of our teachers are professionals in the intelligence business, so they probably have quite a different relationship with students than traditional academics. Nobody wants to fight against us because they’re going to be defeated, that’s for sure.”