22 February 2016

** To Keep America Safe, Embrace Drone Warfare

By MICHAEL V. HAYDENFEB. 19, 2016 
CreditMike McQuade
“ARE you sure they’re there?” the decision maker asks. “They” are Qaeda operatives who have been planning attacks against the United States.
“Yes, sir,” the intelligence analyst replies, ticking off the human and electronic sources of information. “We’ve got good Humint. We’ve been tracking with streaming video. Sigint’s checking in now and confirming it’s them. They’re there.”
The decision maker asks if there are civilians nearby.
“The family is in the main building. The guys we want are in the big guesthouse here.”
“They’re not very far apart.”
“Far enough.”
“Anyone in that little building now?”
“Don’t know. Probably not. We haven’t seen anyone since the Pred got capture of the target. But A.Q. uses it when they pass through here, and they pass through here a lot.”
He asks the probability of killing the targets if they use a GBU-12, a powerful 500-pound, laser-guided bomb.
“These guys are sure dead,” comes the reply. “We think the family’s O.K.”Photo
“You think they’re O.K.?”
“They should be.” But the analyst confesses it is impossible to be sure.
“What’s it look like with a couple of Hellfires?” the decision maker asks, referring to smaller weapons carrying 20-pound warheads.
“If we hit the right room in the guesthouse, we’ll get the all bad guys.” But the walls of the house could be thick. The family’s safe, but bad guys might survive.
“Use the Hellfires the way you said,” the decision maker says.
Then a pause.
“Tell me again about these guys.”
“Sir, big A.Q. operators. We’ve been trying to track them forever. They’re really careful. They’ve been hard to find. They’re the first team.”
Another pause. A long one.
“Use the GBU. And that small building they sometimes use as a dorm …”
“Yes, sir.”
“After the GBU hits, if military-age males come out …”
“Yes, sir?”
“Kill them.”
Less than an hour later he is briefed again. The two targets are dead. The civilians have fled the compound. All are alive.
TARGETED killing using drones has become part of the American way of war. To do it legally and effectively requires detailed and accurate intelligence. It also requires some excruciatingly difficult decisions. The dialogue above, representative of many such missions, shows how hard the commanders and analysts work to get it right.
The longer they have gone on, however, the more controversial drone strikes have become. Critics assert that a high percentage of the people killed in drone strikes are civilians — a claim totally at odds with the intelligence I have reviewed — and that the strikes have turned the Muslim world against the United States, fueling terrorist recruitment. Political elites have joined in, complaining that intelligence agencies have gone too far — until they have felt in danger, when they have complained that the agencies did not go far enough.

Gen. Nicholson's task in Afghanistan

February 18, 2016,
By Scott Smith, 
The most interesting revelation during the confirmation hearings of Army Lt. Gen. John Nicholson, who was nominated as the next commander of U.S. forces in Afghanistan, was the revelation by Sen. Mark Kirk (R-Ill.) that Nicholson's great-great-uncle was British Lt. Gen. John Nicholson, who had participated in the First Anglo-Afghan War (1839 to 1842) and been held captive in Ghazni.
It was also interesting that Kirk himself had served as a reservist under Nicholson in Afghanistan. It is a sign of how familiar Afghanistan has become to America's leadership. With the extension of our troop presence past 2016, it will continue being familiar to Americans for several years longer.
A number of senators encouraged Nicholson to provide the Senate, following his initial 90-day assessment, with his objective and nonpolitical assessment of how many troops are needed to achieve our objectives in Afghanistan, which Nicholson said were to "defeat al Qaeda and its affiliates, contribute to regional and international peace and stability, and enhance the ability of Afghanistan to deter threats against its sovereignty, security and territorial integrity."
For the first time in several years, the U.S. presence in Afghanistan is now being articulated in terms of years of engagement, rather than a countdown to withdrawal. There was a sense of relief that the lifting of President Obama's self-imposed withdrawal deadline had created breathing room for U.S. strategists, greater confidence for Afghan political actors (for whom the withdrawal of U.S. support was a political death sentence) and an opportunity to refocus on a conditions-based withdrawal rather than meeting a timeline that ignored — and arguably contributed to — depressing realities on the ground.

Repairing America’s Cybersecurity

Obama laid out an ambitious new plan last week while nobody was looking. Here are its flaws.
President Obama announced on Wednesday that Thomas Donilon, his former national security adviser, would chair a bipartisan Commission on Enhancing National Cybersecurity—a move that likely prompted reactions ranging from shrugs to quizzical brow-furrows.
The move was the follow-up to another announcement, made last week but buried in the flurry of headlines about the New Hampshire primaries and the 2017 budget proposal—namely, Obama’s release of what he called theCybersecurity National Action Plan, or CNAP. Donilon’s commission—which will be comprised of “top strategic, business, and technical thinkers,” tasked with drawing a “road map” for securing cyberspace in the next decade—is one piece of that plan.
Like many things that presidents call into being, blue-ribbon panels are whatever their creator wants them to be. Over the years, some have inspired serious debate and new policies, while others have proved to be purposeful distractions—a way of pretending to give an issue grave attention while in fact evading the deep thoughts and hard choices it entails.
Obama tends toward the former approach, and he is genuinely concerned about the challenges of cybersecurity (and its flip side, cyberwar). But in this case, the commission’s report isn’t due until the end of 2016, just in time to hit the doorstep of the next White House occupant, who—depending on the election results—will either mull its findings or shred it into pulp.
Meanwhile, it’s a shame that the rest of the CNAP drew so little attention, because some of its initiatives might really help ward off hackers—at least if the federal bureaucracy, Congress, and private industry go along. And that’s where stabs at reform in this realm have always fallen short.

Paying for America’s Wars in FY2017

The Projected Cost and Nature of U.S. Overseas Contingency Operations (OCO) in Afghanistan, Syria, Iraq, Counterterrorism Partnerships, European Reassurance Initiative (ERI), and the World
FEB 18, 2016
The United States is exceptionally transparent in reporting on its military activities and spending – but only in comparison to the far more limited level of transparency in most other governments. Security and “spin” still limit or color much of the official reporting, and it is often difficult to track any clear relationship between U.S. defense budgets and programs and what the U.S. actually spends on given wars. In most cases, it is even harder to determine what programs the United State is actually executing, and what the broad rhetoric used in official documents and briefings actually means.
U.S. National Security Strategy and Budget Documents: The Fog of Transparency in Dealing with the Fog of War
Almost all official U.S. reporting on strategy and future programs, for example, is so lacking in specifics that it justifies virtually anything the U.S. does, and is issued without supporting that rhetoric with either substantive cost-benefit analysis or meaningful measures of effectiveness. Like virtually every other country in the world, the budget data the United States issues is “line item” data that is tied to some broad category of what the United States buys rather than a key element of strategy, the efforts of a given major command, or a program budget that ties the assessment of spending to some key mission.
The United States has effectively abandoned any effort to justify and explain its national security efforts in terms of a public net assessment, future force plan, or “program budget” since the end of the Cold War. Where it once provided a clear Future Years Defense Program, and justification of that plan in terms of strategy, force plans, other details, and cost – the United States now issues a Quadrennial Defense Review (QDR) that is so general and focused so far in the future as to be nearly meaningless. Its annual budget justifications only really cover the coming year and the strategy sections are not tied in any specific way to the force, readiness, and budget data that follow – either on a Department of Defense-wide basis or by military service.
Improving Reporting on Overseas Contingency Operations (OCO)

** How Pakistan Runs Its Spies Inside India

February 20, 2016

Amazing Things You Can Do On The Internet

Since the 1990s Pakistan has quietly and extensively changed how it creates and manages spies inside India. For decades Pakistan mainly relied on agents recruited and trained in Pakistan to pass as Indians. After their training, which often took years, was completed these agents were sent to India where they often spent many more years working their way into jobs where they could obtain useful information. The Pakistani agents also sought Indians willing to gather information, usually for a price. India is a poor country and many low level, and poorly paid, government employees were willing to sell information if the price was right.

Over the years India became more effective and detecting and arresting these spies as well as their Pakistani handlers. As a result Pakistan began switching from using agents inside India to recruiting and managing spies via the Internet. The highly trained Pakistani agents could remain safe in Pakistan and develop techniques to find and manage Indian spies via the Internet. India still catches these spies, but has come to discover that there are a lot more of them. Sin 2015 more than a dozen were arrested. This included four post office employees who were intercepting mail sent from one Indian base to another and looking for salable information. That was passed on to Pakistan, which paid well for this stuff. Often information was literally phoned in using hard-to-trace SIMS supplied by the Pakistanis.

* Hackers Offering Corporate Insiders Money In Return for Confidential Login and Password Information

February 18, 2016
When Cyber Security Is an Inside Threat
Scott Stewart, STRATFOR, February 18, 2016
According to a recent article by Business Insider, hackers in Ireland, stymied by Apple’s information systems security, are taking another approach to gain access to the corporation’s data. They are offering Apple employees up to 20,000 euros for valid login credentials. While not all approaches to insiders are so overt, this case nevertheless serves as a great reminder that malicious actors are actively recruiting insiders to exploit their status.
Beyond that, it demonstrates that the insider threat is not just confined to an Edward Snowden type who steals a mass of data in one swoop before leaving the company. Insiders can pose a far more subtle and enduring threat. Because of this, we should think beyond Snowden when considering how insider threats can manifest.
Thinking About Insider Threats
It’s important when considering insider cyber threats to not let the cyber element distract from the basic problem; hacking is still fundamentally theft of information. In fact, I would encourage security managers to think about these insider threats much as they would any other sort of corporate or government espionage.
Certainly, those looking to recruit an insider would love to have access to a systems administrator — essentially the corporate equivalent of an embassy communications officer. Systems administrators normally hold the keys to the kingdom, and in many cases they can access a variety of email accounts and other systems of interest to those conducting corporate espionage, whether they are motivated by ideology, looking to steal proprietary secrets or seeking information for insider trading purposes. That said, company IT staffs are not the only people who could be recruited to help carry out a cyberattack.

Eurasia's Coming Anarchy

https://www.foreignaffairs.com/articles/china/2016-02-15/eurasias-coming-anarchy?cid=nlc-fatoday-20160219&sp_mid=50738255&sp_rid=bXVsbGljay5wa0ByZWRpZmZtYWlsLmNvbQS2&spMailingID=50738255&spUserID=MTUyNTg4ODc4NjczS0&spJobID=862423710&spReportId=ODYyNDIzNzEwS0
As China asserts itself in its nearby seas and Russia wages war in Syria and Ukraine, it is easy to assume that Eurasia’s two great land powers are showing signs of newfound strength. But the opposite is true: increasingly, China and Russia flex their muscles not because they are powerful but because they are weak. Unlike Nazi Germany, whose power at home in the 1930s fueled its military aggression abroad, today’s revisionist powers are experiencing the reverse phenomenon. In China and Russia, it is domestic insecurity that is breeding belligerence. This marks a historical turning point: for the first time since the Berlin Wall fell, the United States finds itself in a competition among great powers.

Economic conditions in both China and Russia are steadily worsening. Ever since energy prices collapsed in 2014, Russia has been caught in a serious recession. China, meanwhile, has entered the early stages of what promises to be a tumultuous transition away from double-digit annual GDP growth; the stock market crashes it experienced in the summer of 2015 and January 2016 will likely prove a mere foretaste of the financial disruptions to come.
China and Russia may forge a tactical alliance based on their compatible authoritarian systems and aimed at managing their frontier areas and standing up to the West.

Given the likelihood of increasing economic turmoil in both countries, their internal political stability can no longer be taken for granted. In the age of social media and incessant polling, even autocrats such asChinese President

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What might happen in China in 2016?

By Gordon Orr
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/what-might-happen-in-china-in-2016?cid=other-eml-alt-mip-mck-oth-1602
Millions of people being relocated from cities, fewer jobs, greater centralization, and more movie blockbusters are just some of the author’s predictions for the year.
In debates about whether growth is a percentage point up or down, we too often lose sight of the absolute scale of China’s economy. No matter what rate the country grows at in 2016, its share of the global economy, and of many specific sectors, will be larger than ever. My snapshot of China in 2016? An increasingly diverse, volatile, $11 trillion economy whose performance is becoming more and more difficult to describe as one dimensional.

What’s in store for China in 2016?
The reality is that China’s economy is today made up of multiple subeconomies, each more than a trillion dollars in size. Some are booming, some declining. Some are globally competitive, others fit for the scrap heap. How you feel about China depends more than ever on the parts of the economy where you compete. In 2015, selling kit to movie theaters has been great business, selling kit to steel mills less so. In your China, are you dealing with a tiger or a tortoise? Your performance in 2016 will depend on knowing the answer to this question and shaping your plans accordingly.
Many well-established secular trends in China will continue in 2016. The service economy’s expansion is perhaps most prominent among them. In this piece, as usual, I won’t spend much time on the most familiar things. Instead, I will highlight what I believe will become the more important and more visible trends in 2016, either because they are now accelerating to scale or a discontinuity may become a tipping point. (For a quick summary, see sidebar, “The China Orr-acle: Gordon’s predictions for 2016.”) I hope you find my ideas valuable
The China Orr-acle: Gordon’s predictions for 2016

Don’t get distracted by talk of Chinese economic growth moving a percentage point here or there. The country’s economy is still massive—as are its potential opportunities. Here’s a quick take on what I see happening in 2016. 
The 13th five-year plan—few surprises . . . but look for a solid GDP growth target, green initiatives, and action on productivity. 
Fewer jobs, flatter incomes—and, potentially, less confidence . . . with white-collar workers being particularly vulnerable. 
The maturing of investing in China: More options for Chinese investors and foreign investment managers . . . but remember the volatile mind-set of local investors. 
Manufacturing in China is changing, not disappearing . . . with the winners becoming even more competitive on a global scale. 
Agricultural imports are rising and rising . . . bringing opportunities for countries from Australia to Russia to the United States. 
More centralization . . . as efforts to devolve authority are shown to have failed. 
Moving people at scale—the middle class, not peasants . . . because China’s cities are bursting at the seams. 
Movies in China: $$ . . . a Chinese movie will gross $500 million domestically for the first time. 
China continues to go global, with the United Kingdom as a new focal point . . . the love affair between the two countries will continue, but others want in on the action. 
And finally . . . China will win soccer’s World Cup! Maybe not yet, but real money—domestic and foreign—is now flowing into the country’s soccer leagues. 

The 13th five-year plan—few surprises

World War 3 Could Start This Month: 350,000 Soldiers In Saudi Arabia Stand Ready To Invade Syria

By Michael Snyder, on February 14th, 2016

350,000 soldiers, 20,000 tanks, 2,450 warplanes and 460 military helicopters are massing in northern Saudi Arabia for a military exercise that is being called “Northern Thunder”. According to the official announcement, forces are being contributed by Saudi Arabia, the United Arab Emirates, Egypt, Jordan, Bahrain, Sudan, Kuwait, Morocco, Pakistan, Tunisia, Oman, Qatar, Malaysia and several other nations. This exercise will reportedly last for 18 days, and during that time the airspace over northern Saudi Arabia will be closed to air traffic. This will be the largest military exercise in the history of the region, and it comes amid rumors that Saudi Arabia and Turkey are preparing for a massive ground invasion of Syria.
If you were going to gather forces for an invasion, this is precisely how you would do it. Governments never come out and publicly admit that forces are moving into position for an invasion ahead of time, so “military exercises” are a common excuse that gets used for this sort of thing.

If these exercises are actually being used as an excuse to mass forces near the northern Saudi border, then we should expect an invasion to begin within the next couple of weeks. If it happens, we should expect to see the Saudi coalition storm through western Iraq and into Syria from the south, and it is likely that Turkey will come in from the north.
The goal would be to take out the Assad regime before Russia, Iran and Hezbollah could react. For the past couple of years, Saudi Arabia, Turkey and their allies have been funding the Sunni insurgency in Syria, and they were counting on those insurgents to be able to take down the Assad regime by themselves.
You see, the truth is that ISIS was never supposed to lose in Syria. Saudi Arabia and her allies have been funneling massive amounts of money to ISIS, and hundreds of millions of dollars of ISIS oil has been shipped into Turkey where it is sold to the rest of the world.
The major Sunni nations wanted ISIS and the other Sunni insurgent groups to take down Assad. In the aftermath, Saudi Arabia and her allies intended to transform Syria into a full-blown Sunni nation.
But then Russia, Iran and Hezbollah stepped forward to assist the Assad regime. Russian air support completely turned the tide of the war, and now the Sunni insurgents are on the brink of losing.
Aleppo was once the largest city in Syria, and Sunni insurgents have controlled it since 2012. But now relentless Russian airstrikes have made it possible for Syrian, Iranian and Hezbollah ground forces to surround the city, and it is about to fall back into the hands of the Syrian government.

If this happens, the war will essentially be over.

Islam Versus Islam

https://www.project-syndicate.org/default/library/27e86270a9b23eec233b6ca6cb5dfb58.square.png
Shahid Javed Burki, former Finance Minister of Pakistan and Vice President of the World Bank, is currently Chairman of the Institute of Public Policy in Lahore.
FEB 18, 2016 
LAHORE – Turmoil has seized much of the Muslim world. In Syria, a brutal war has already taken 250,000 lives, displaced half of the country’s 21 million people, and sent a million refugees to Europe seeking asylum. In Yemen, the Houthi tribe has risen up against the government, and are now facing Saudi-led airstrikes. Conflicts like these reflect a number of factors, the most prominent of which are the conflicts between Islam’s two sects, Sunni and Shia, and between fundamentalists and reformists.
Syrian President Bashar al-Assad’s Alawite regime enjoys the support of Shia powers, especially Iran, whose regional influence depends on a Shia regime remaining in power. And that is precisely why Sunni powers – most prominently Saudi Arabia – are committed to toppling that regime. Yemen’s government, by contrast, is Sunni-led, and thus has Saudi Arabia’s support, hence the bombings of the Iran-backed Shia Houthis. Unsurprisingly, tensions between Iran and Saudi Arabia have intensified lately, a trend that culminated in the severing of diplomatic relations over Saudi Arabia’s execution of a popular Shia cleric.
The chaos fueled by these conflicts – and by instability in other countries in the region, such as Afghanistan and Iraq –has enabled the rise of some truly contemptible forces, beginning with the Islamic State (ISIS). That group has gained so much influence that US generals have asked President Barack Obama to authorize additional troops to join the fight against it. Moreover, there are reports that the United States may postpone the withdrawal of its troops from Afghanistan, where an increasingly brutal war against the government has enabled the Taliban to gain territory and created an opening for ISIS to become active. ISIS has also penetrated Pakistan.

Did Saudi Arabia play a role in September 11? Here's what we know.



Updated by Max Fisher on February 17, 2016, 
Donald Trump, on Wednesday, became the latest American to wonder whether when al-Qaeda attacked the United States on September 11, 2001, it could have had some help from the government of Saudi Arabia.
"It wasn't the Iraqis, you will find out who really knocked down the World Trade Center, 'cause they have papers in there that are very secret, you may find it's the Saudis, okay? But you will find out," Trump said in South Carolina.
Trump, in his colorful way, was referring to long-swirling theories of possible Saudi support for the attackers, and to a still-secret congressional report that investigated these very questions.
Unsurprisingly, Trump was straying into conspiracy. But his allegations were not so far removed from a scenario that's been considered within the US government itself: Could rogue Saudi officials, acting without sanction from their government, have funneled state resources to aid the attackers?
This past June, the CIA's Office of the Inspector General finally released the findings of its internal investigation, concluded in 2005, into intelligence failures leading up to the attacks of September 11, 2001. The few sections left unredacted in the 500-page report did not appear to offer any major revelations. (Note: this article first published in June when the CIA report was released; it has been updated to reflect Trump's comments.)

But the very final section of the report, titled "Issues related to Saudi Arabia," touches on a question that has swirled around US inquiries into 9/11 since the first weeks after the attacks: Was there any involvement by the government of Saudi Arabia?
This section of the report is entirely redacted, save for three brief paragraphs, which say the investigation was inconclusive but found "no evidence that the Saudi government knowingly and willingly supported the al-Qaeda terrorists." However, it adds, some members of the CIA's Near East and Counterterrorism divisions speculated that rogue Saudi officials may have aided al-Qaeda's actions.

The War of Western Failures: Hopes for Syria Fall with Aleppo

AFP
The siege of Aleppo is a humanitarian catastrophe on a dramatic scale -- and a victory for Russian President Vladimir Putin. He has seized on the Syrian civil war to expose an impotent West and show his own geopolitical muscle. By SPIEGEL Staff
Aleppo has been a horrific place for some time now and few thought that it could get much worse. But things can always get worse -- that's the lesson currently being learned by those who have stayed behind in an effort to outlast this brutal conflict. People who have become used to dead bodies in the streets, hunger and living a life that can end at any moment.
"For the last two weeks, we've been living a nightmare that is worse than everything that has come before," says Hamza, a young doctor in an Aleppo hospital. At the beginning, in 2011, he was treating light wounds, stemming from tear gas or beatings from police batons. When the regime began dropping barrel bombs in 2012, the injuries got worse. But now, with the beginning of the Russian airstrikes, the doctors are facing an emergency. Every two or three hours, warplanes attack the city, aiming at everything that hasn't yet been destroyed, including apartment buildings, schools and clinics. Often, they use cluster bombs, which have been banned internationally.
They used to get around 10 serious injuries per day, but that number has now risen to 50, says Hamza, adding that most of their time is spent sorting body parts so they can turn them over to family members for burial. Russian missiles, he says, tear everyone apart who is within 35 meters of the impact.
"On one day, we had 22 dead civilians. The day before that, it was 20 injured children. A seven-year-old died and an eight-year-old lost his left leg." The Russians attacked in the morning, he says, as the children were on their way to school. "We are going to need years of therapy in order to be able to cope with all this."

* CLOAK & DAGGER How Pentagon Geeks & Russian Generals Plotted in Secret to Take Away Assad’s WMD

http://www.thedailybeast.com/articles/2016/02/20/how-pentagon-geeks-russian-generals-plotted-in-secret-to-take-away-assad-s-wmd.html

How Pentagon Geeks & Russian Generals Plotted in Secret to Take Away Assad’s WMD
A secret plan involving Pentagon scientists and Russian national security officials managed to take out the weapons of mass destruction belonging to a brutal dictator.
Every once in a rare while, a cunning plan to stop an evil dictator works. At least for a time.
Such is the story of a geeky group of Pentagon scientists, State Department experts, and White House politicos who plotted together with top Russian officials to find and destroy Syria’s weapons of mass destruction—more than a year before they got the chance to actually do so.
Getting rid of those weapons had been a top priority for the Obama administration. The president had famously warned that if Syrian dictator Bashar al-Assad dared to use them on his own people, he would have crossed a “red line” that could trigger a U.S. military response.
Syria eventually agreed to relinquish its weapons and sign on to the Chemical Weapons Convention in 2013, and at the time, many attributed Assad’s acquiescence to an offhand comment by Secretary of State John Kerry, who said during a press conference that Syria could avoid punitive U.S. strikes if it got rid of its WMD. The Russian foreign minister seized upon Kerry’s offer and within days, a deal was struck.
What the public didn’t know is that planning between Washington and Moscow had been underway to get rid of Syria’s weapons since the fall of 2012, spurred by doomsday scenarios spelled out by top U.S. officials.
The series of secret talks, held in luxurious locations across Europe, led to a meeting of the minds between arch frenemies U.S. and Russia, followed by rapid-fire tinkering worthy of 007’s Q to create the means to destroy one of the largest uncontrolled chemical weapons stockpiles in the world.
“We realized we in the U.S. didn’t have the capacity to destroy Syria’s chemical weapons—that nobody did,” Andrew Weber, then Assistant Secretary of Defense for Nuclear, Chemical, and Biological Defense Programs, told The Daily Beast.
Something entirely new had to be built.

The eight essentials of innovation

Article - McKinsey Quarterly - April 2015
By Marc de Jong, Nathan Marston, and Erik Roth

Strategic and organizational factors are what separate successful big-company innovators from the rest of the field.
It’s no secret: innovation is difficult for well-established companies. By and large, they are better executors than innovators, and most succeed less through game-changing creativity than by optimizing their existing businesses.
Innovation and creativity

In this engaging presentation, McKinsey principal Nathan Marston explains why innovation is increasingly important to driving corporate growth and brings to life the eight essentials of innovation performance.
Yet hard as it is for such organizations to innovate, large ones as diverse as Alcoa, the Discovery Group, and NASA’s Ames Research Center are actually doing so. What can other companies learn from their approaches and attributes? That question formed the core of a multiyear study comprising in-depth interviews, workshops, and surveys of more than 2,500 executives in over 300 companies, including both performance leaders and laggards, in a broad set of industries and countries (Exhibit 1). What we found were a set of eight essential attributes that are present, either in part or in full, at every big company that’s a high performer in product, process, or business-model innovation.

Since innovation is a complex, company-wide endeavor, it requires a set of crosscutting practices and processes to structure, organize, and encourage it. Taken together, the essentials described in this article constitute just such an operating system, as seen in Exhibit 2. These often overlapping, iterative, and nonsequential practices resist systematic categorization but can nonetheless be thought of in two groups. The first four, which are strategic and creative in nature, help set and prioritize the terms and conditions under which innovation is more likely to thrive. The next four essentials deal with how to deliver and organize for innovation repeatedly over time and with enough value to contribute meaningfully to overall performance.

** The U.S., the EU, and NATO


American officials have begun expressing concerns about the state of the European Union. In particular, U.S. Secretary of State John Kerry said on Feb. 12 that America has a "very strong" interest in theUnited Kingdom staying in the EU. Until now, the United States has seen the European Union's problems as something for the Europeans to settle among themselves. The U.S. did not see Europe's problems as directly affecting U.S. interests, nor did it see itself as capable of influencing EU policy. It was too monumental to influence.
The extent of EU fragmentation has changed this calculation for the United States. The deep fissures within the European Union will be reflected in NATO. U.S. policy in Europe is focused on security, while European powers are shaping their relationships on the continent largely based on other factors. For example, German concerns regarding the new Polish government and the Hungarian Fidesz government are guiding Berlin's relationships in Central and Eastern Europe. This approach differs from the commitment the U.S. is making to the defense of Eastern Europe from the Baltic countries down to Romania, as part of its strategy to contain Russia. Some Europeans are in favor of the U.S. approach, some may actually send forces and some want nothing to do with it. But their decisions will be more complex and not as focused on the threat itself.

Also important to the U.S., the flow of refugees from Syria has potential implications not only for Europe, but for terrorist capabilities elsewhere. The inability of the European Union to develop a coherent refugee program exacerbates its inability to deploy the forces needed to patrol the Mediterranean. After months, it is still unclear when the Europeans will deploy a sufficiently effective force. They want that force to come from NATO, which means that the U.S. will participate. On Feb. 11, NATO announced the deployment of ships in the Aegean Sea, following a request from Germany, Turkey and Greece to help reduce human trafficking in the area. The Americans are concerned, however, about deploying a force in such a chaotic political environment.

During the Cold War the mission was simple, there was political consensus and plans were made. There was friction of course, particularly because the French still wanted to be seen as a great power, but it was within bounds. For a while after the fall of the Soviet Union, there were few missions involving NATO. With the re-emergence of Russian power and the complexities of refugee policies that involve everything from fighting the Islamic State to rules for maritime interdiction of refugees, U.S.-European coordination becomes important again. The U.S. is discovering that the EU's fragmentation and odd decision-making process is affecting NATO. The military confrontation between Russia and Turkey, a NATO member, must by definition be a matter of interest for NATO. That in turn intersects the refugee question, which intersects the issue of Schengen zone, the European free movement area. Purely NATO issues, purely EU issues and hybrid issues litter the landscape. It boggles the European mind. The American mind is paralyzed.

DHS Issues Guidance on How to Share Cyberthreat

February 17, 2016 
Imagine this: A company discovers its web server log files show that a particular IP address has sent web traffic that seems to test whether the company's content management system has been updated to patch a recent vulnerability. Useful information to know outside that company?
The federal government thinks so, and cites this example of the type of cyberthreat information that should be shared by businesses with the government, which in turn will share it with other organizations in and outside of government.
The example appears in new guidance issued this week by the Department of Homeland Security to help governmental and private organizations visualize how best to share cyberthreat information.
4 Guideline Documents

DHS has issued four guideline documents that in the words of Secretary Jeh Johnson "provide federal agencies and the private sector with a clear understanding of how to share cyberthreat indicators." The four publications DHS issued are:

"This language is a positive step toward enabling the private sector to identify and share cyberthreat indicators with the federal government, which will help better protect consumers and our nation's security," says Chris Feeney, president of BITS, the technology arm of the Financial Services Roundtable, a trade group.
Step in Implementing New Law

The Cybersecurity Information Sharing Act, enacted late last year, dictates DHS to establish a mechanism through its National Cybersecurity and Communications Integration Center for the government and private sector to share cyberthreat data (see Obama Signs Cybersecurity Information Sharing Bill). The issuance of the guidance is the latest move by the government to implement the new law.

"The guidance provides a useful roadmap for non-federal entities seeking to ensurecompliance with CISA and the receipt of its corresponding protections when sharing information related to cyberthreats and defensive measures," Stephen Reynolds, co-chair of the law firm Ice Miller data security and privacy practice, writes in a blog.
One of the guides - targeted to non-federal government organizations - describes how to identify and share cyberthreat indicators and defensive measures.
Examples of Indicators

The growing potential of quantum computing

The CEO of D-Wave Systems, Vern Brownell, explains how quantum computers are poised to solve important problems in industries ranging from financial services to medicine.


As modern computers continue to reach the limits of their processing power, quantum computing is starting to offer hope for solving more specialized problems that require immensely robust computing. Quantum computers were once thought an impossible technology because they harness the intricate power of quantum mechanics and are housed in highly unconventional environments. But these machines now have the potential to address problems ranging from finding drugs that can target specific cancers to valuing portfolio risk, says Vern Brownell, founder and CEO of D-Wave Systems, the Canadian company that in 2010 introduced the world’s first commercially available quantum computer. In this interview with McKinsey’s Michael Chui, Brownell discusses what quantum computing is, how it works, and where it’s headed in the next five years. An edited transcript of their conversation follows.

Interview transcript
We’re at the dawn of the quantum-computing age, and it’s really up to us to execute. It sounds grand. But I think this is such an important enabling technology and can help mankind solve problems that are very, very important.

What is quantum computing?
D-Wave Systems is the world’s first quantum-computing company. We have produced the world’s first commercial quantum computers. A quantum computer is a type of computer that directly leverages the laws of quantum mechanics to do a calculation.

Why Should Military Leaders Use Social Media?

In my recent article on the lessons from employing social media in the military, I described our lessons from employing social media in a single combat brigade within the Australian Army. Collectively we learned many lessons over a year of implementing this enhanced approach to communicating with a range of different audiences.
But how might this approach within a single brigade ‘scale up’? That is, how can military leaders institutionalise their use of social media for the variety of ‘raise, train, sustain’ functions that are executed on a daily basis? This is not to say that military organisations don’t have a social media presence; they do. In the Australian context, the Army Facebook page has a following nearly ten times the size of the regular Army. The Twitter feed, while having a smaller presence, at least has established a foothold for the Army in the Twittersphere.
But presence is not the same as an institution fully exploiting the potential of social media. It is therefore worth examining the opportunities of organisational adoption of social media, and the areas where it is most likely to have a good return on the time and people invested in generating social media product, presence, and discourse. And, if military institutions are to fully realise the potential of social media, it will need all leaders from top to bottom of the Services to embrace and advocate its use. Therefore, below are seven reasons why military leaders should embrace and advocate the institutional adoption of social media.
Reason 1. Social media is a great way to understand, connect and interact with a global community of military professionals, many of whom are eager to engage in professional discourse and debate. Unlike email and journals, social media is open to a global audience at all times, and access is open to all. It permits leaders to gain an understanding of topical issues and challenges as a tripwire to great web content. It also permits leaders to understand the breadth of views and opinions among military professionals and to engage in debate. Initiatives such as @DEFConference have brought together young professional military personnel. It has spawned websites and social media feeds that have enhance the breadth, and further democratised, professional military discourse.

Reason 2. Social media is a terrific way to smash through the generational strata and for leaders to engage all of their workforce. It is one means that Generation X leaders can engage, interact with and understand their Generation Y work forces, which are now the vast majority of military organisations. As I have written previously, I don’t think we Generation Xers can fully appreciate how to best lead Generation Y service personnel without understanding social media. Persisting only with older forms of communication without embracing new and relevant means is like refusing to use telephones a century ago.

When Cyber Security Is An Inside Threat

20 February 2016 from STRATFOR
-- this post authored by Scott Stewart
According to a recent article by Business Insider, hackers in Ireland, stymied by Apple's information systems security, are taking another approach to gain access to the corporation's data. They are offering Apple employees up to 20,000 euros for valid login credentials. While not all approaches to insiders are so overt, this case nevertheless serves as a great reminder that malicious actors are actively recruiting insiders to exploit their status.
Beyond that, it demonstrates that the insider threat is not just confined to an Edward Snowden type who steals a mass of data in one swoop before leaving the company. Insiders can pose a far more subtle and enduring threat. Because of this, we should think beyond Snowden when considering how insider threats can manifest.
Thinking About Insider Threats
It's important when considering insider cyber threats to not let the cyber element distract from the basic problem; hacking is still fundamentally theft of information. In fact, I would encourage security managers to think about these insider threats much as they would any other sort of corporate or government espionage.
Certainly, those looking to recruit an insider would love to have access to a systems administrator - essentially the corporate equivalent of an embassy communications officer. Systems administrators normally hold the keys to the kingdom, and in many cases they can access a variety of email accounts and other systems of interest to those conducting corporate espionage, whether they are motivated by ideology, looking to steal proprietary secrets or seeking information for insider trading purposes. That said, company IT staffs are not the only people who could be recruited to help carry out a cyberattack.
In addition to the outright sale of a valid system login, as in the Apple example, insiders can also perform more subtle tasks to help hackers. One is to fill the role that an "access agent" would in traditional espionage: identifying potential sources. Rather than pinpointing and approaching individuals, in the cyber realm insiders can help hackers understand a company's systems and security procedures. They can also provide company organizational charts and examples of company communications. Perhaps more important, an insider has knowledge of who talks to whom and what topics they discuss; they may even pass along sample emails that show how people interact.
This level of detail can be incredibly useful in helping set targets up for a well-crafted and convincing attempt at spear phishing, an email attack tightly focused on an individual user. If a hacker learns that Carol regularly sends text documents or spreadsheets to Bob and even has examples of how Carol normally addresses Bob, including any company or personal jargon, he or she can then craft a highly tailored message spoofing Carol's email address and with it deliver an attachment loaded with malware.

DoD databases: A prime target for cyberattacks

John Edwards and Eve Keiser, February 18, 2016
Cyberattacks are on the rise, and networked military resources are on the front line of what may someday escalate into an all-out cyberwar.
Databases, storing tactical and various other types of sensitive information, are widely used across the Department of Defense. Yet a growing number of defense technology industry observers, including Oracle CEO Mark Hurd, believe that DoD is misapplying its security resources, prioritizing overall network protection over what has become the prime target of most attackers.
At a recent defense conference, Hurd produced a chart from Oracle’s database division showing that databases are, at 52 percent, the IT layer most vulnerable to attack. The network layer, on the other hand, is the target of only 34 percent of attacks. Databases are far more vulnerable to attack than networks, but only 15 percent of IT layer security resources are allocated to database protection while 67 percent are directed toward network security. Applications and middleware are the least vulnerable IT layers at 11 percent and four percent, respectively. Applications, however, are allocated 15 percent of IT security resources and middleware receives three percent.

Protecting vulnerable targets
Mark Savage, security principal director for Accenture Federal Services, noted that DoD’s security allocations make more sense when viewed from a wide-angle perspective. “Budgets are spent on network, end-point systems and application security because they have to be compromised to reach a database,” he said. “If a database has been compromised, you can be sure that the network services, application brokering the database, and/or insider system with communication access to the database server was hacked first.”

From Stalemate to Settlement

SWJ Blog Post | February 16, 2016
In June 2013, the Afghan Taliban opened a political office in Qatar to facilitate peace talks with the U.S. and Afghan governments. Negotiations between the United States and the group that sheltered al-Qaeda would have been unthinkable 12 years ago, but the reality is that a negotiated settlement in Afghanistan is one of several possible end games under the current U.S. withdrawal plan. Negotiating an end to an insurgency can be a long and arduous process beset by false starts and continued violence, but a comprehensive review of historical cases that ended in settlement shows that these negotiations followed a similar path that can be generalized into a "master narrative." This research examines 13 historical cases of insurgencies that were resolved through negotiated settlement in which neither side (insurgents or counterinsurgents) unambiguously prevailed. Taken together, these cases reveal that the path to negotiated settlement generally proceeds in seven steps in a common sequence. Although this resulting master narrative does not necessarily conform precisely to every conflict brought to resolution through negotiation, it can serve as an important tool to guide the progress of a similar approach to resolving the conflict in Afghanistan as U.S. forces prepare to withdraw.

Key Findings
Historical Insurgencies That Were Resolved Through Negotiated Settlement After a Stalemate Followed a Common Path: a "Master Narrative"
Of the 71 insurgencies resolved between 1944 and 2010, 13 ended in a negotiated settlement in which neither side (insurgents or counterinsurgents) unambiguously prevailed.
Each of these 13 cases generally proceeded from stalemate to resolution in seven steps executed in a common sequence: (1) military stalemate and war-weariness created an environment that was "ripe for resolution," (2) the government accepted the insurgents as legitimate negotiating partners, (3) the parties brokered one or more cease-fires, (4) the government and insurgents entered into official intermediate agreements, (5) the government extended a power-sharing offer to the insurgents, (6) the insurgent leadership became more moderate and willing to engage in political compromise, and (7) a third-party guarantor helped reinforce the settlement and transition.

The Master Narrative Distilled from These Historical Cases Could Guide a Negotiated Settlement to the Conflict in Afghanistan
As the United States prepares to withdraw from Afghanistan, a negotiated settlement is one of several possible end games.
The master narrative distilled from historical analysis could help guide such an approach to resolving the conflict in Afghanistan, should policymakers and Taliban leaders choose this option. It reveals what has been successful and what has been less successful in past negotiations, providing some indication of the challenges that lie ahead and what concessions the Afghan government, the Taliban, and U.S. and coalition forces may be required to make to achieve a lasting settlement.

Why the Silence by Silicon Valley Corporate Giants to Apple’s Refusal to Help FBI Break iPhone Encryption

February 18, 2016
Apple Letter on iPhone Security Draws Muted Tech Industry Response
Nick Wingfield and Mike Isaac, New York Times
February 18, 2016
After a federal court ordered Apple to help unlock an iPhone used by an attacker in a December mass shooting in San Bernardino, Calif., the company’s chief executive, Timothy D. Cook, penned a passionate letter warning of far-reaching implications beyond the case.
The response from other technology companies? A mix of carefully calibrated support and crickets.
Late on Wednesday, Sundar Pichai, the chief executive of Google, said on Twitterthat law enforcement demands to hack customer devices and data “could be a troubling precedent.” Not long afterward, Reform Government Surveillance, a coalition formed by Apple, Google, Microsoft and Facebook, released a broad statement that did not mention the Apple case or Mr. Cook’s letter but said technology companies should not be required to put “back doors” — the equivalent of a tech entryway — into their products.
Asked about Apple’s opposition to the court order, representatives of Microsoft, Twitter and Facebook declined to comment. A spokesman for Amazon, which is not in the coalition, also declined to comment.
The range of reactions highlights the complicated set of factors influencing tech companies’ responses to government demands for customer data in the era after revelations by Edward J. Snowden, the former intelligence contractor, of widespread government surveillance. Some companies may be keeping their heads low to avoid becoming targets during the raucous presidential campaign, while others may fear that being too vocal will jeopardize government sales and relationships with law enforcement, privacy experts said.

Ukraine’s Coalition Government Collapses

by Hugo Spaulding
February 19, 2016

Warning Intelligence Update: Social Unrest Likely as Ukraine’s Ruling Coalition Breaks

Key Takeaway: Ukraine’s post-revolution leadership faces an existential crisis on the second anniversary of the collapse of Russia’s client regime in Kyiv, which transpired on February 21, 2014. The pro-Western coalition lost its parliamentary majority at a moment of severe popular distrust of President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk. Without sustained efforts to support reform and combat corruption, Poroshenko faces the prospect of mounting social unrest and the resurgence of Ukraine’s political old guard.

Ukrainian President Petro Poroshenko’s party triggered the disintegration of the pro-Western four-party coalition by launching a failed vote of no confidence against Ukrainian Prime Minister Arseniy Yatsenyuk on February 16. Poroshenko called for Yatsenyuk’s resignation on the day of the vote after junior coalition parties announced their unwillingness to work with the prime minister, threatening to deadlock already stagnant efforts at economic and anti-corruption reform. The “Fatherland” party of former Prime Minister Yuliya Tymoshenko and the Western Ukraine-based “Self Help” party defected to the opposition in response to the failure of the no-confidence motion, which precludes another vote of no confidence until the next session of parliament begins in September. The withdrawal of the two junior parties deprives the “European Ukraine” coalition of its majority in parliament and takes it farther from the constitutional supermajority with which it began its mandate.

RIGOR IN JOINT PROFESSIONAL MILITARY EDUCATION

NICHOLAS MURRAY, FEBRUARY 19, 2016

Policymakers have called for more rigor in the Joint Professional Military Education (JPME) system for over three decades — at least since the Goldwater-Nichols Act, the Skelton Panel of 1989, and more recently the 2010 Congressional report Another Crossroads? Professional Military Education Two Decades After the Goldwater-Nichols Act and the Skelton Panel. All of these efforts sought to “grow” more strategically minded critical thinkers.
Despite this, the record shows that holding JPME schools to rigorous standards has been extremely patchy at best. Why is this the case? The main problem is that Congress and the Department of Defense do not have a clear definition of what they mean by academic rigor. And though Congress has required the services to educate more strategically minded thinkers, and provided guidance on broad topic areas (outlined below) to support this, it has not done the same for academic rigor. Despite this, the services have claimed they are academically rigorous, and point to the joint learning objectives they established in the Officer Professional Military Education Policy (OPMEP). However, an examination of the stated learning objectives of the service schools indicates that the rhetoric is not matched by reality. The measures, as assessed in the levels of learning outlined below, used by the DoD and the services to establish and assess rigor within JPME are grossly inadequate. Unless this is dealt with there will be a never-ending debate over how to improve the level of rigor within the JPME system and, in turn, to help fix the problems of poor strategic decision-making that have plagued us for the last fifty or more years.

David Kilcullen: Rise of Terror, Displacement is the "New Norm"

SWJ Blog Post | February 18, 2016 
The world must adjust to the growth of Islamic State and the displacement of millions of people from the Middle East as the “new normal”, according to former White House counter-terror chief David Kilcullen.

Warning that he believes there is a 100 per cent chance of another terror attack here, Dr Kilcullen predicted that this year would see continued heavy violence in Syria; a major Islamic State and Taliban resurgence in Afghanistan; a spike in violence in Libya; continued unrest in Yemen, Somalia, northern Nigeria and Kenya; and a significant expansion of Islamic State in Southeast Asia.

Speaking in Melbourne yesterday at a Deakin Univer­sity conference on terrorism, he said that over the next months Syria — in particular its second city, Aleppo — would experience a large-scale humanitarian disaster “that dwarfs everything we’ve already seen’’. He predicted that the violence would see hordes of asylum-seekers travel to Europe, on at least the scale they did last year…

Leaked NSC Document Reveals Obama Has Ordered Intel Agencies to Get Customer Information, Including From Apple’s iPhone

Michael Riley and Jordan Robertson
February 20, 2016

Secret Memo Details U.S.’s Broader Strategy to Crack Phones

Silicon Valley celebrated last fall when the White House revealed it would not seek legislation forcing technology makers to install “backdoors” in their software – secret listening posts where investigators could pierce the veil of secrecy on users’ encrypted data, from text messages to video chats. But while the companies may have thought that was the final word, in fact the government was working on a Plan B.

In a secret meeting convened by the White House around Thanksgiving, senior national security officials ordered agencies across the U.S. government to find ways to counter encryption software and gain access to the most heavily protected user data on the most secure consumer devices, including Apple Inc.’s iPhone, the marquee product of one of America’s most valuable companies, according to two people familiar with the decision.

The approach was formalized in a confidential National Security Council “decision memo,” tasking government agencies with developing encryption workarounds, estimating additional budgets and identifying laws that may need to be changed to counter what FBI Director James Comey calls the “going dark” problem: investigators being unable to access the contents of encrypted data stored on mobile devices or traveling across the Internet. Details of the memo reveal that, in private, the government was honing a sharper edge to its relationship with Silicon Valley alongside more public signs of rapprochement.

Apple Is The Odd One Out In China's Smartphone Market

by Felix Richter, Statista.com

Despite a record fourth quarter with shipments reaching 117 million units, the Chinese smartphone market slowed down significantly in 2015.

As vendors struggled to find more first-time buyers and the economic climate in the People's Republic worsened, the market's growth slowed down from 20 percent in 2014 to just 2.5 percent in 2015. According to IDC, a total of 434 million devices were shipped in the world's largest smartphone market over the past 12 months.

With 64.9 million smartphones shipped, Xiaomi maintained its market lead while Samsung and Lenovo, last year's second and third-placed brands, fell out of the Top 5 altogether. Samsung in particular saw its position weakened across all segments as Chinese vendors gained traction in the lower end of the market and Apple dominated the premium segment.

The iPhone maker saw its market share jump from 8.8 percent in 2014 to 13.4 percent, mainly thanks to the brand's strong appeal to Chinese consumers. Selling at an average price that is at more than three times as high as it is for most of its competitors, Apple's devices are still considered status symbols in China. In fact, when Chinese consumers were asked for their favorite luxury brand in 2015, it was Apple that took the top honors - ahead of Gucci and Louis Vuitton.

When Cyber Security Is An Inside Threat

February 2016
from STRATFOR

-- this post authored by Scott Stewart

According to a recent article by Business Insider, hackers in Ireland, stymied by Apple's information systems security, are taking another approach to gain access to the corporation's data. They are offering Apple employees up to 20,000 euros for valid login credentials. While not all approaches to insiders are so overt, this case nevertheless serves as a great reminder that malicious actors are actively recruiting insiders to exploit their status.

Beyond that, it demonstrates that the insider threat is not just confined to an Edward Snowden type who steals a mass of data in one swoop before leaving the company. Insiders can pose a far more subtle and enduring threat. Because of this, we should think beyond Snowden when considering how insider threats can manifest.
Thinking About Insider Threats

It's important when considering insider cyber threats to not let the cyber element distract from the basic problem; hacking is still fundamentally theft of information. In fact, I would encourage security managers to think about these insider threats much as they would any other sort of corporate or government espionage.

21 February 2016

How Facebook Lost Face in India

How Facebook Lost Face in India 
Feb 15, 2016 

When Facebook founder and CEO Mark Zuckerberg visited India late last year, he made the mandatory trip to the Taj Mahal in Agra. Almost every foreign visitor to the subcontinent does so; the late Princess Diana had posed alone before the mausoleum when the British royal couple came to India in 1992. A few months later, she and Prince Charles separated.

Zuckerberg also had himself photographed alone at the Taj. He posted the photograph on his Facebook page, accompanied by the comment: “It is even more stunning than I expected.”

Today, a few months later, Zuckerberg finds himself estranged from his Indian constituency. His Free Basics initiative has been banned by the Telecom Regulatory Authority of India (TRAI). Zuckerberg’s dream of being a pivotal part of Prime Minister Narendra Modi’s Digital India program has received a severe setback. And his target of “the next one billion” Facebook users – the first one billion was reached on August 24, 2015 – may have been postponed by months, if not years. (The first one billion is the number of people who logged on to Facebook on that day. It is different from the usually quoted monthly active users, which stood at 1.59 billion on December 31, 2015.)

Chinese Missiles in South China Sea Underscore a Growing Conflict Risk

By MARK LANDLER and MICHAEL FORSYTHE
FEB. 17, 2016
Satellite images show a part of Woody Island in the Paracel chain in the South China Sea on Feb. 3, left, and on Sunday, right. CreditImageSat International

WASHINGTON — China’s deployment of surface-to-air missiles on a disputed island in the South China Sea, at the very moment that President Obama is trying to buttress American influence in the region, underscores the growing risk of conflict among the Chinese, their neighbors and the United States.

A day after Mr. Obama gathered 10 leaders from Southeast Asian countries for a summit meeting in California, a United States official said the Pentagon had evidence that China had placed missile batteries on an island that is part of an archipelago claimed by Vietnam and Taiwan, as well as by China.

At the meeting, Mr. Obama sent a warning to China, declaring that the United States would “continue to fly, sail and operate wherever international law allows” and that “we will support the right of all countries to do the same.” He said he had discussed with the leaders the need to halt further reclamation and militarization of islands in the South China Sea.