Student Handout							October 1995

Methodology and Predictive Analysis

1. Objectives: Prepare a regional threat briefing in which the student uses predictive analysis to predict in advance what events they anticipate will occur. In preparation of the briefing the student utilizes and evaluates various methodologies that can be applied to predictive analysis.

2. Purpose: As MI officers, predicting future events for commanders is part of day-to-day mission requirements. You must not fail. The following are but four examples of past failures and the disastrous consequences:

a. Task Force Smith encountered difficulties during the Korean War because Military Intelligence Officers did not give sufficient credibility to the North Koreans' fighting ability. Their cultural bias against the Korean soldier and for the American fighting man led to a disastrous misjudgment of the outcome of the battle.

b. In the TET Offensive, by contrast, it could be argued that Military Intelligence Officers misjudged Viet Cong and North Vietnamese intentions because they did not understand their capabilities. Through a misunderstanding of enemy strengths and intentions, intelligence analysts concluded that an offensive of the scale and magnitude of the TET Offensive simply was not possible.

c. While there are many lessons to be learned from the Pearl Harbor case, the one that seems to stand above all others is that Military Intelligence Officers may have had the very best collection assets and information available, but they still failed to give an early warning because an enemy course of action was determined to be improbable. Much of the surprise of Pearl Harbor was due to the fact that we expected Japan to attack elsewhere.

d. In the case of the Arab/Israeli War, there were several factors which contributed to Israel's failure to predict Arab intentions. An aggregation of indicators, such as, increased Egyptian military activity on their side of Suez Canal, bulldozers cutting roads through the sand dunes, the appearance of bridging equipment, arrival of ships from the Soviet Union, and the request that all United Nations observers leave the area adjacent to the Suez Canal, should have led to the deduction that an attack was imminent.

3. Predictive Analysis: What is predictive analysis? In simplest terms it is the analytical process which allows the Military Intelligence Officer to predict events. To predict is simply to say in advance what events you anticipate will occur. Prediction is not guessing, however. The Military Intelligence Officer must base predictions on solid analysis using specific tools and methodologies. In conventional analysis, the Military Intelligence Officer examines, assesses and compares bits and pieces of raw information, and synthesizes findings into an intelligence product that usually reflects enemy capabilities and vulnerability.

Predictive analysis goes one step further, however, because the objective is not just to establish capabilities. The goal is to determine enemy intentions and probable courses of action. In short, the Military Intelligence Officer tries to predict what the enemy intends to do and how this will affect friendly forces.

a. Process Of Predictive Analysis: Predictive analysis is a continuous analytical process which determines a threat's capabilities, intent, and most probable course(s) of action and reaction(s) to friendly operations.

The challenge of predictive analysis is that it is both difficult and risky. The Military Intelligence Officer must stretch his or her intellectual resources to the limit to conduct predictive analysis, and still runs the risk that events predicted will not come to pass. This difficulty and risk apply less to the production of capabilities intelligence. As a consequence, there is a tendency to avoid predictive analysis and stick to beancounting. The bottom line, however, is the Commander needs to know enemy intentions as well as enemy capabilities. This is particularly true when the Commander initiates an action or when the enemy poses a vital threat to friendly forces. The Military Intelligence Officer who successfully performs predictive analysis and produces intentions intelligence in advance of events will earn a special respect from both the Commander and his staff. This officer may also save the lives and enhance the success of his or her unit.

4. Role of the Intelligence Officer: Who Does it?

a. U.S. Intelligence Community: Predictive analysis is the unique responsibility of intelligence officers at all levels of the U.S. Government, and is performed by both military and civilian personnel.

For example, intelligence officers at the Central Intelligence Agency conduct predictive analysis in an effort to forewarn policy makers primarily in the political and economic fields of intelligence. The Bureau of Intelligence and Research at the U.S. Department of State focuses on predicting developments in international relations and diplomacy. The Defense Intelligence Agency, by contrast, focuses more on predicting events in the military realm.

b. Military Intelligence: In the field of military intelligence, the Military Intelligence Officer may conduct predictive analysis at two levels.

(1) Strategic: At a strategic level, the Military Intelligence Officer is required to predict events that are global in nature and is not limited to military subjects. Often it is important for the strategic analyst to examine and make judgments about political, economic, scientific and technological intentions because these factors affect the strategic military plans of a force or country.

(2) Tactical: At a tactical level, the Military Intelligence Officer deals with a narrower scope of issues and events. Often he or she is concerned primarily with the composition, disposition and probable courses of action of an enemy unit just over the next hill. The narrower scope of consideration does not make predictive analysis less important at this level, however, especially when we consider that friendly lives and the unit are at stake.

5. The Intelligence Cycle: Where Does It Fit In?

a. The Intelligence Cycle: Where does it fit in? Predictive analysis does not exist in a vacuum. Like conventional analysis, it is part of a continuous analytical process characterized by complex interrelationships between the intelligence officer and other components of the intelligence community.

One method of visualizing this process is to identify predictive analysis within the context of the intelligence cycle.

At both the strategic and tactical level, civilian and military intelligence officers consider the intelligence cycle as a fivestep process by which raw information is converted into a finished intelligence product. These five steps include:

(1) Planning and Direction: Where collection requirements are developed and the entire intelligence effort is managed

(2) Collection: Where raw information is gathered from a wide variety of intelligence collection sources

(3) Processing: Where raw data is converted into a more usable form through mechanisms such as decryption, translation or computerized sorting

(4) Analysis and Production: Where basic information is converted into a finished intelligence product through analysis, evaluation, comparison and integration

(5) Dissemination: where the finished intelligence product is sent out to the consumer.

The intelligence cycle is a continuous process in which steps are executed concurrently, though not always sequentially. For example, while new information is being collected to satisfy one set of requirements, the G2/S2 plans and redirects efforts to meet new demands while intelligence produced from previously collected information is disseminated.

6. The Process of Analysis:

a. Analysis as a Continuous Process: When do we do it? It has already been stated that predictive analysis is a continuous analytical process. This is true of both conventional analysis which produces capabilities intelligence, and predictive analysis which produces intentions intelligence. The analytical process involves taking bits and pieces of raw information collected from various sources, and breaking them down into their component parts. In fact, the word "analysis" is based on the Greek word for dissolving or taking apart. Once the raw information is broken down into parts, they are examined in order to determine their:

(1) nature (qualitative analysis)

(2) proportion (quantitative analysis)

(3) function (functional analysis)

(4) interrelationships (systems analysis)

Once this assessment is completed, the intelligence officer compares and evaluates the information he derives with other intelligence information in his possession (comparative analysis). The final step in the process is integration or synthesis. This is when the intelligence officer attempts to put it all together in a concise statement of intelligence capability, vulnerability or prediction.

The important point to remember is analysis is a continuous process. Significant new information may be received at any time in the process, but the Military Intelligence Officer cannot wait for the picture to be complete. The Commander's needs, publication deadlines and the demands of the tactical or strategic situation all require the intelligence analyst be able to disseminate his products upon demand often with only a moments notice. As such, the intelligence picture is constantly changing, and the Military Intelligence Officer can never predict with absolute certainty every aspect of the threat that the supported unit faces. Living with and operating in these conditions of uncertainty is part of the challenge of being an intelligence officer. Another part is understanding that the process of analysis and prediction is ongoing, and does not end with the delivery of a particular intelligence product.

b. Intelligence as a Product: What should become clear from our discussion thus far is that intelligence is not something which is simply collected. It does not grow on trees, and cannot be picked out of thin air by the various collection systems. The collectors simply gather intelligence information which is raw and unevaluated. Finished intelligence, by contrast, is a product produced by an analyst through the continuous process of analysis from raw, unevaluated information.

The intelligence product takes various forms based on the subjects it covers. For example, an intelligence officer may produce political, economic, military and technical intelligence. It can be strategic or tactical in scope, and it can be disseminated through facetoface encounters, briefings, daily reports, periodic reports and occasional estimates. At a strategic level, intelligence officers produce the President's Daily Brief (PDB) or National Intelligence Estimates (NIE). At a tactical level the product may be disseminated through an Intelligence Summary (INTSUM) or Periodic Intelligence Report (PERINTREP).

c. Order of Battle as a Tool of Analysis: The analyst uses different tools in the production of intelligence, just as a factory may use different pieces of equipment to manufacture a product. Different methodologies, some of which will be covered, are available to assist in intelligence production.

One important tool the Military Intelligence Officer has available to use is the nine order of battle (OB) factors which focus intelligence production on enemy, friendly and neutral forces. These factors of intelligence are:

(1) Composition: Which is the identification and organization of units

(2) Disposition: Which is the location and deployment of units

(3) Strength: Which is the description of a unit in terms of personnel, weapons and equipment

(4) Tactics: Which involves the doctrine of maneuver for a particular unit or for larger numbers of units

(5) Training: Which involves individual and unit train

(6) Logistics: Which is how a unit or group of units are supplied

(7) Combat Effectiveness: Which relates to the fighting capability of a unit or units

(8) Electronic Technical Data: Which involves communications and noncommunications equipment characteristics

(9) Miscellaneous Data: Which may include unit history, personalities of unit commanders, unit code numbers and other identifying information.

OB intelligence in and of itself does not predict enemy intentions or probable courses of action. Rather, it is a catalog of intelligence data which qualifies and quantifies certain aspects of enemy, friendly and neutral units. The competent Military Intelligence Officer can use OB intelligence to make predictions, however, if he is willing to make an extra analytic effort.

For example, if it is known that a particular unit is at full strength, well supplied, well trained, and led by an aggressive commander with a past history of offensive activity and a mission to secure a piece of high ground currently held by friendly forces, the Military Intelligence Officer may be able to predict through inductive reasoning that the unit will attack. Using the methodology of inductive reasoning, in this case, involves synthesizing a sufficient number of intelligence indicators to arrive at a reasonable conclusion or hypothesis that the enemy unit will attack. If the Military Intelligence Officer also knows that enemy believes the 5th of every month is a lucky day, and it is currently the 4th of the month, he might predict through deductive reasoning that the enemy will attack tomorrow; especially if he has determined from his prior analysis that the enemy currently has the capability to attack.

d. Capabilities and Intentions: Order of battle intelligence generally falls into the category of capabilities intelligence. That is, order of battle intelligence gives us a picture of enemy capabilities and vulnerabilities. For example, if the disposition of an enemy unit is along a major route of advance for friendly forces, that would give the enemy force greater capability to inflict friendly casualties than if it was located elsewhere. Also, if we know the enemy force is a full strength, welltrained, wellsupplied and highly combat effective, we might also judge it is capable of threatening friendly forces. If the enemy force is out of fuel, however, this would be a significant vulnerability.

None of these factors, in and of themselves, or in the aggregate, tell us what the enemy force intends to do, however. Capabilities intelligence tells us what the enemy can do or can not do. Intentions intelligence, by contrast, tells us what he will do. Intentions intelligence is produced through predictive analysis, and gives the Commander a sense of probable courses of action.

For example, while the abovementioned enemy unit appears to threaten friendly forces by virtue of its disposition and capabilities, if we learn it intends to depart from our area of operations (AO) in the next 24 hours, we can predict with some certainty it will no longer be a threat. By the same token, if we determine another unit of lesser capabilities has been specifically ordered into our AO to attack our position within 24 hours, we can reasonably predict the second unit poses a greater risk to friendly forces, even though its capabilities may be less.

e. Prediction is the Highest Form of Analysis: Predictive analysis becomes a higher form of analysis than capabilities analysis because it goes the extra mile in telling the Commander what the threat is and what risks are posed to friendly forces and friendly courses of action. By the same token, predictive analysis is riskier than capabilities analysis because it deals more extensively with the unknown. Therefore, the chances of failure are greater. It is just because of this challenge that we consider prediction the fruit of a higher form of analysis.

This can be illustrated if we consider what is involved in determining capabilities as compared to determining probable courses of action. If a Military Intelligence Officer determines through the collection of raw information that an enemy tank battalion has moved into his AO, OB analysis will quickly show what the capabilities of such a unit may be. After all, the tanks are observable through aerial or other reconnaissance, unit designation may be determined through signals communications patterns, and combat effectiveness may be judged from a Prisoner of War (POW) interrogation. However, there is no quick and easy way of determining what the unit intends to do. As a consequence, the Military Intelligence Officer must use more complex methodologies in an effort to solve the puzzle of enemy intentions and probable courses of action.

f. Induction and Deduction: We have already mentioned induction and deduction as two methods which the Military Intelligence Officer may use to formulate a prediction.

Inductive reasoning is the analytic process of synthesizing particular facts or individual cases into a hypothesis which suggests a general conclusion. According to our prior example, if we accumulate order of battle intelligence on a variety of factors all of which point to an enemy attack, we can reasonably pose the hypothesis that he will attack. This prediction, based on inductive reasoning, may be shared with the Commander.

Deduction is the opposite process of reasoning from a general principal to a specific conclusion. Again, using our prior example, the Military Intelligence Officer knows the enemy has a certain religion which considers the 5th day of the month as a lucky day. Enemy soldiers who die in battle on that day are believed to have eternal life. In the past, it has been observed that the enemy generally prefers to initiate offensive activity on this day. Given these general principles, the Military Intelligence Officer can deduce with reasonable certainty the enemy attack will come on the 5th. This prediction is based on deductive reasoning and may also be shared with the Commander.

Inductive and deductive reasoning are two fundamental methodologies of predictive analysis. In the second hour we will examine these and other methodologies in greater detail. There is no reason why the dedicated Military Intelligence Officer cannot use these methods to go beyond conventional capabilities analysis, and attempt to predict enemy intentions and probable courses of action.

7. Needs of the Commander:

a. Prediction as Forewarning and Forearming: Why do we do it? If we accept the difficulty and risk of predicting enemy courses of action, it is clear why predictive analysis and intentions intelligence are so highly valued by the Commander.

It has been said that to be forewarned is to be forearmed, and that knowledge is power. The Commander who knows what to expect is able to marshal his forces in a more coherent fashion and with improved chances for a successful operational outcome. As such, predictive analysis and intentions intelligence act as a force multiplier on the battlefield.

b. Intelligence Preparation of the Battle field (IPB): The Commander plays a key role in intelligence analysis. In many respects, it is his judgment which decides what intelligence is needed to plan and execute an operation. Based on METT-T, he is the one that comes up with the primary intelligence requirements (PIRs) and forwards them to his Military Intelligence Officer (G2/S2).

One tool used by the Military Intelligence Officer to assist the Commander in determining where and when to use limited resources to achieve operational objectives is Intelligence Preparation of the Battlefield (IPB). IPB applies to all echelons of command and all phases of the battlefield doctrine. IPB allows the Military Intelligence Officer to present his or her estimate to the Commander in graphic form through templates and the use of overlays.

c. Probable Courses of Action: Much of the data presented in IPB is based on conventional capabilities assessments developed by the intelligence analyst. However, there is nothing to prevent a Commander from asking for enemy intentions and probable courses of action as a part of his IPB.

For example, a PIR could request, When will the enemy attack and where is the main effort? Conventional analysis will probably not answer this sort of question without a particular piece of intelligence information which specifically addresses the subject. In other words, if the Military Intelligence Officer cannot show the Commander a report saying the enemy plans to attack, he may be afraid to predict it. The application of predictive analysis, however, may provide the Military Intelligence Officer with a sound hypothesis on which he can base a prediction to the Commander in response to this type of PIR.

(1) Military Intelligence Officer Responsibility: It is a fundamental responsibility of the Military Intelligence Officer to answer the Commander's PIR with an acceptable degree of confidence. More often than not, this will involve predicting enemy courses of action and the probability that they will occur. Predictive analysis produces an estimate of probable courses of action based on capabilities and enemy intentions. As such, the Military Intelligence Officer develops his hypothesis on the integration or synthesis of his judgments regarding what the enemy can do and what he wants to do.

Winston Churchill stated you cannot argue with arithmetic, suggesting that enemy capabilities are the key to predicting enemy actions. The War in the Gulf demonstrates, however, that foreign leaders are prepared to go to war without regard for capabilities if the lust for battle overrides their fear of consequences. In this respect, it is more important for the Military Intelligence Officer to determine what a leader like Saddam Hussein wants to do or intends to do rather than to focus entirely on what he can do.

The point to remember is that probable courses of action do not depend entirely on the logical calculation of enemy capabilities; they may also be predicated on an accurate estimate of the desires of a madman.

d. Keeping the Commander Happy: It is generally understood that the primary user of tactical intelligence is the Commander. The Military Intelligence Officer has a fundamental responsibility to serve his needs and to keep him happy. This does not mean the objective is to produce intelligence to please. Rather, the goal should be to produce intelligence to warn and inform.

The Military Intelligence Officer is frequently placed in a position of ethical stress where the assessment he or she presents does not reflect happy circumstances. As one progresses in an intelligence career, it is not unusual to experience the difficulty of being the bearer of sad tidings; the messenger of bad news. The Military Intelligence Officer also faces the challenge of assessing capabilities and predicting enemy intentions in conditions where time is constrained and information uncertain. In short, the Military Intelligence Officer often runs the risk of being unpopular and wrong.

Nonetheless, it is essential that the Military Intelligence Officer understands the unique needs of his Commander, and presents the unvarnished truth in as timely and concise a manner as possible. This includes making the attempt to predict enemy intentions and probable courses of action. Our soldiers risk their lives whenever they embark on a military operation. The least a Military Intelligence Officer can do is risk the Commander's displeasure when told that the enemy situation does not "look good" or when a carefully thoughtout prediction does not come to pass.

8. Menu of Methodologies: Unfortunately, there is no foolproof method of making predictions. However, we can develop a process of predictive analysis, and we can also apply certain methodologies to the process. The methodologies may be used alone or in concert with other methodologies, and each application of methodologies can be tailored for the specific, analytical situation represented. The successful Military Intelligence Officer will probably develop a systematic process of applying the methodologies, and may also come up with a system of his or her own.

What follows is a sample listing of methodologies and analytical processes which can be applied to intelligence problems faced by the Military Intelligence Officer. As is the case with any menu, the choice of methodology is left to the Military Intelligence Officer based on his or her own preferences and the demands of the tactical or strategic situation faced.

a. Deductive Reasoning: Deduction is the process by which one reasons from the general to the specific. In other words, one takes a general proposition or truth, and uses it to arrive at a specific conclusion.

For example, we know that country A and country B are currently in a state of war. For the past five years, country A has attacked country B on Christmas morning. Tonight is Christmas eve and, therefore, in all probability, country A will attack country B tomorrow morning. Based on the methodology of deduction, the Military Intelligence Officer predicts that the attack will occur on Christmas morning.

Deduction works best, however, in closed systems such as in mathematics. In intelligence, we rarely deal with closed systems. More often than not, we deal with human beings and their actions which are often inconsistent and unpredictable. For instance, suppose Country A has a new leader or a new government that has decided to change the policies and patterns of the past. The new leader may decide to throw us off guard or achieve an element of surprise by attacking late Christmas eve. A close look at other factors such as troop movements, weather, and enemy readiness may be necessary before making a prediction.

In short, deduction is a useful methodology but it has certain limits. The Military Intelligence Officer must be prepared to assess the variables which may affect the general proposition or truth forming the basis of his or her prediction. Deduction must be used carefully with a full awareness of the limitations of the procedure.

b. Inductive Reasoning: Inductive reasoning is the process by which one reasons from particular facts or observations to a general conclusion. In other words, the Military Intelligence Officer must piece together all the clues available to forecast a future event or action. The majority of intelligence analysis falls into this category. For example, if it is Christmas eve, and country A has massed troops along the border of country B, has placed its reserves on full alert status, and has withdrawn its Ambassador, the Military Intelligence Officer might predict through induction that an attack will come the next day. Induction, then, consists of finding relationships among the information you collect and process, and aggregating those relationships to reach an overall conclusion.

Inductive and deductive reasoning provide the most commonly used analytical tools of the intelligence analyst. In fact, the analyst is more likely to achieve the best results when both techniques are used.

In summary, induction is the analytical tool used to arrive at general propositions or theses. Deduction is used to analyze these general propositions and arrive at a specific conclusion. The two methods of analysis are complimentary.

c. Formulaic (Bayesian) Analysis: Intelligence analysts are frequently asked to make a quick, offthecuff, assessment of the likelihood of the occurrence of an event. Bayesian Analysis is a method which allows the analyst to systematically update his predictive analysis as new information becomes available. In essence, the analyst takes prior probabilities for an event, adjusts them with the probabilities of the current situation, and develops new or posterior probabilities for the event.

Initial assessments are made on the basis of information already known about a problem. As an example, an analyst may be tasked with determining if North Korea, with its recent withdrawal from the NonProliferation Treaty, has nuclear missile capability. Prior to the tasking, the analyst has formulated two hypotheses:

H1: North Korea has a nuclear missile capability

H2: North Korea does not have a nuclear missile capability.

Using various data available, the analyst has assigned a prior probability of 0.8, or 80%, to hypothesis H1 (that North Korea has nuclear capability). Since H1 and H2 represent all of the possible scenarios of North Korean nuclear capability, the sum of these probabilities must equal 1 or 100%. Simple subtraction reveals that hypothesis H2 (does not have a nuclear capability) is assigned a prior probability of 0.2 or 20%.

The analyst then incorporates the elements of the current situation into his analysis. If he receives a report from a reliable source which indicates that several nuclear physicists and engineers, trained in the Former Soviet Union, have been sent to North Korea on an extended visit of up to six months, this fact (D) influences the probability of H1 and becomes one of the prime indicators of North Korea's nuclear missile capability. The analyst reasons that it is more likely that a large number of people would need to be educated in nuclear physics and related fields if North Korea was proceeding toward a nuclear capability than if it was not. He assigns a 90% probability to this information because, given the fact that North Korea has a nuclear capability, the probability of requiring nuclear experts for an extended period of time is 90%. The analyst also may assign a 70% probability of this visit being for reasons other than for developing nuclear missile capability. For example, the nuclear scientists could be designing nuclear power plants.

Using Bayesian analysis, the analyst can integrate this new information and update his predictive analysis. By plugging these probabilities into Bayes theorem, he can calculate the new or posterior probabilities for the nuclear hypotheses. As stated previously, the prior probabilities of H1 and H2 are 80% and 20%, respectively. The conditional probabilities, P(D|H1) and P(D|H2), are the probabilities of extended visits by Soviet nuclear physicists (D) given a nuclear capability (H1) and no nuclear capability (H2), and are assigned the values of 90% and 70%, respectively, by the analyst. After calculating the intermediate, or joint probabilities, the analyst calculates the new or posterior probabilities, P(H1|D) and P(H2|D), which are the probabilities of having a nuclear missile capability (H1) and not having a nuclear missile capability (H2) given the fact that the Soviet nuclear physicists came for an extended visit. These probabilities are 83% (83.2%) and 17% (16.8%), respectively.

The analyst's assessment of North Korean nuclear missile capability (H1) has increased from 80 to 83% in this example. As additional information is received by the analyst, he or she can update the assessment by repeating the Bayesian process, starting with a new, prior probability of 83%.

d. Delphi Techniques or Expert Opinion Forecasting: This is a systematic method for soliciting intuitive judgments from a group of experts. This methodology is based on the assumption that the collective judgment of prediction of a group of individuals is better than that of one individual. In short, three to five heads are better than one. It is also assumed that predicting events may in some circumstances be better done by a group of experts than by a complex mathematical model.

The process is relatively simple. First, the topic for discussion can be delineated in such a way that its boundaries and contents will be clearly and uniformly understood by those involved. A panel of experts is then assembled and asked to examine specific trends and developments. The experts project where these events may be leading and how they may interrelate, and judge what the combined effects on the topic under review will be. Their forecast, based on a consensus of opinion, as well as an addendum for dissenting opinion, is presented as a definitive view with a set of conclusions and recommendations.

Although this method is called Expert Opinion Forecasting, it is not necessary to gather a group of Ivy League graduates to make up the panel. If your unit is the only source of expertise available, the Military Intelligence Officer may want to tap into this readily available supply of in-house experts. In a tactical situation, it is important to utilize the resources that are available.

The Delphi technique or expert opinion forecasting is probably best suited to static tactical or strategic situations where forces are delineated but not engaged. This allows for speculation. It is less suitable for a fast moving tactical situation. In the future, Delphi forecasting may be conducted over computer conferencing networks. The real-time capability of computer conferencing could provide the Military Intelligence Officer with the expert opinion he or she needs to predict enemy courses of action.

e. Probability Diagrams: Probability or tree diagrams are tools for assessing the likelihood of occurrence of events which depend upon a large number of conditions. A diagram allows you to separate a problem into its component parts. To perform analysis with probability diagrams, you must start with all possible outcomes to an event. These outcomes must be mutually exclusive or non-overlapping. A completed diagram represents the branches of a tree with all possible outcomes of an event branching out from a point called a node. For example, if the event of interest is the status of Greece's continuing membership in NATO, the two possible outcomes include:

1) Greece remains in NATO

2) Greece drops out of NATO.

Each outcome has its own branch on the probability diagram. These two branches project out from the node representing membership in NATO. An analyst can assign probabilities in the range of 0 to 1 to each of these branches. It is important to note that the sum of the probabilities of all of the branches on a node must equal 1, or 100%. Assuming that an analyst has assigned the probabilities of 80% for remaining in NATO and 20% for dropping out of NATO, the probability diagram would appear as shown on slide.

If further levels of branching are desired, they must branch out from nodes formed at the end of each existing branch. To continue the example, regardless of the membership in NATO outcome, the analyst must determine if Greece will remain a trading partner with the U.S. There are four possible outcomes of the trading status event:

1) Greece increases level of trade with the US

2) Greece maintains same level of trade with the US

3) Greece reduces level of trade with the US

4) Greece stops trading with the US.

These four possibilities branch out from each membership in NATO branch creating a total of eight branches at the end of the tree. The analyst must then assign probabilities to each of the trading status branches ensuring that the sum of the probabilities branching out from a node equals 1 (i.e., 100%). Assuming that the analyst assigns a probability of 10% for increased trade, 60% for maintains same level of trade, 20% for a reduced level of trade, and 10% for a halt in trading, the probability diagram would appear as shown on slide.

A path probability can be traced for each unique set of conditions and outcomes. The probability is calculated by multiplying together the probabilities of each branch along the desired path. For example, to determine the probability of Greece remaining in NATO and stopping trade with the US, you would multiply the probability associated with each of these two branches:

P(remains in NATO) X P(stops trading) = 0.80 X 0.10 = 0.08

That means there is an 8% chance that Greece will remain in NATO and stop trading with the US. As another example, the probability that Greece will drop out of NATO and maintain the same level of trade with the US is:

P(drop out of NATO) X P(same level of trade) = 0.20 X 0.60 = 0.12%

An analyst can add as many events as necessary to the diagram. Each event adds a new level of branches to the tree. Probabilities can be calculated for each of the paths along the branches of the tree. At the last level of branching, all of the outcomes based on all possible paths must equal 1 or 100%.

Probability diagrams are also useful in performing sensitivity analysis. In this case, an analyst would assign a range of probabilities rather than a single probability to each branch. Final outcomes are computed based on using the upper and lower limits of each range, and the effect of the range on the final outcome may be determined. Sensitivity analysis can indicate conditions which should be studied in greater depth. Probability diagrams are tools for identifying the conditions which lead to certain outcomes. It must be remembered that the assigned probabilities are subjective and are usually based upon the opinions of a few people. The final results of a probability diagram analysis should be considered only as approximations, and the values should be rounded off.

f. Psycho-Historical and Psycho-Linguistic Analysis: A more traditional method of predicting probable courses of action is the examination of behavior patterns exhibited in oral or written speech, and in historical activities associated with an individual or country. Quite simply, a systematic examination of the words and/or deeds of a principal actor, whether it be a person, tribe, military organization or country, provide the skilled analyst with clues on which he or she can base predictions.

(1) Psycho-Linguistic Analysis: This is based on the assumption that behavior patterns may manifest themselves both in oral and written speech. Basically, prediction is based on the established link between the words of a nation or entity's leader and the actions that nation or entity will take. This type of predictive analysis requires a strong understanding of the leader's psycho-analytic profile. This method works especially well, when used against totalitarian leaders such as Hitler, Castro, and Saddam Hussein.

For example, just prior to the Yom Kippur War, President Sadat of Egypt while hosting a meeting with Palestinian guerrillas, made the statement, Prepare yourselves, we are going to war. Also Premier Sidki of Egypt presented a war budget to Parliament because, Egypt is going to war. Both of these statements were very strong indicators as to the disposition of Egypt towards Israel. However they were either largely ignored or misinterpreted by Israeli intelligence analysts.

(2) Psycho-Historical Analysis: This is based on the understanding that a country's behavior may be influenced by its politics, bureaucracy, language, history, anthropology, and sociology.

For instance, no analysis of Latin America would be complete without an assessment of the history of U.S. - Latin American relations. Since we have invaded most of the countries in that region, we would have to evaluate how our actions would be perceived there. In many countries, anti-U.S. sentiment runs deep in the anthropological make-up of the people. To forsake the psycho-historical element might be a very costly mistake, as it was in the Bay of Pigs.