| Mar 28, 2023

Company Rules: What an Ex-Spy is Teaching Business About Fraud, Competition, and Intelligence

Entrepreneurs can learn a lot from former CIA field operative Mike Baker, but it has little to do with the cloak-and-daggers image of spycraft.

When ex-CIA operative Mike Baker was first transitioning to the private sector, his boss at the fraud-investigation startup Maxima asked him to impress their first potential client. Up went a whiteboard with a long list of fake projects. The desks were covered with files and (blank) papers, and leather-bound books were positioned to add a note of gravitas. The administrative assistant they shared with another low-rent office was also instructed to use her cell to call the office phone throughout the meeting.

As the banker clients walked in, she addressed them with a rehearsed line: “Are you the gentlemen from Microsoft?”

As farcical as that set-up sounds, not only did Maxima get the client but became one of the leading fraud-investigation firms in London. This vignette is also a reminder that for whatever liberties Hollywood takes in depicting spycraft, the truth is often far more mundane. 

“The spy world is not all Jack Bauer, with sh-t blowing up all the time,” says Baker, who was a covert field officer with ‘The Company’ for nearly two decades. “[T]he world of business turned out to be remarkably similar in that whomever has the best intelligence, or the best information, typically wins.”

Baker packaged everything he learned at Langley and in the field in his recently released book, “Company Rules: Or Everything I Know About Business I Learned From the CIA.” So what lessons did Baker learn that proved to be so transferable?

Curiosity and Empathy

One of the commonalities of intelligence-gathering between the worlds of espionage and business is the fallibility of people who like to talk — often when they shouldn’t. Now the chair of global intelligence company Portman Square Group, Baker cites the time he wrangled an airline seat next to an executive suspected of planning to steal proprietary information and then posed as a potential investor to win his trust.

“They took the hook. After a while, they started talking to me and it’s always better if people start talking to you, right? Let them guide the conversation,” Baker told entrepreneur and author James Altucher’s podcast. “If you give people the opportunity, they’ll bang on … people love to talk about themselves.”

Good spies and successful businesspeople, Baker says, are curious about others. They also know how to listen, instead of thinking about what they are going to say next. It’s a rarer skill than one would expect. 

His observations are echoed by former CIA undercover officer J.C. Carleson, who advised attending awards dinners and networking events — and to listen to gossip and form industry alliances — to glean intel on the competition’s strengths and weaknesses. But none of this can be done if you don’t genuinely enjoy dealing with people. 

“The reality is, you need people who are empathetic, and who can, in a sense, mirror the values of the other person,” Baker says. “You’re always looking to mirror in some way to hook that person and get them interested.”


FOMO and Fraud

Long before the cryptocurrency exchange FFX collapsed over 10 days in November 2022, the red flags had been there for those willing to look, according to Baker. The crash was an example of how even big investors can get swept up in the fear of missing out and neglect due diligence. 

The jailed former CEO Sam Bankman-Fried had negotiated a $135 million sponsorship agreement for naming rights to the Miami arena where NBA team the Heat play home games — and he had also bought a private jet. Both should have set off alarm bells. “When you’ve got a company that just floats out of nowhere, and the next thing you know they’re naming an NBA arena, you might want to step back and think about this,” Baker says. 

His advice on due diligence is to do the legwork of an old-school detective. Whether as part of a hiring process, auditing IT systems, or backgrounding a crypto exchange, it requires doing away with presuppositions and working up from the “ground floor” to ensure things don’t fall apart later on. “If [somebody had] bothered to do their due diligence on Sam Backman-Fried, I guarantee you, a lot of people wouldn’t have been hurt,” he told Altucher.

Fessing Up and Getting Off the X

While fraudsters will always be fraudsters (the first time you see someone committing fraud, it’s probably not their first time), Baker says fraud often begins as an honest mistake until the cover-up ends up being worse than the crime. In the spy world, getting compromised can cost lives, so people are expected to immediately confess to an error in judgment. For the accountant or trader, however, the fear of getting fired or reprimanded leads them to dig themselves deeper. 

“If you have the right management, that doesn’t kick someone’s ass just because they made an error, a lot of really bad things can be avoided,” he told Maxim. 

Baker also borrows an old ambush term to describe the task of leaders facing their own judgment calls but who are tempted to delay while seeking more information. In high-risk situations in the field, operatives cannot afford any version of analysis paralysis — they have to ‘get off the X.’ 

“In a business sense, it means make decisions with less-than-perfect information because you are never going to get all the information you want,” he says. “[Y]ou spent all your time hoping to get to that happy day when you’ve got all the information, you want to be comfortable, and rarely does that happen.” 

Keeping It Real (and Accountable)

William Colby, the director of the CIA in the early ’70s, once described the perfect spy as the “traditional gray man” — the type of person who has trouble catching the waiter’s eye at a restaurant. In spycraft, Baker says, if you are drawing too much attention to yourself, you’re doing it all wrong. 

Baker is now a frequent intelligence pundit on the Joe Rogan Experience and was the host of the Discovery Channel’s “Black Files Declassified.” He is no longer the gray man. Baker says part of the reason companies can learn from spycraft is that it is not so far removed from the everyday realities of business. “Don’t f–k up the receipts and don’t f–k up your cash box,” he says of logging his accounts with the Outfit. “You can overthrow a small country, but if you don’t keep your receipts and submit them to accounting? Oooh boy…”

Justin Ballis
Justin Ballis

Opinion Contributor, Strixus

Justin has 20 years' experience working in the Australian media as a production editor, and is currently interested in the intersection of mental health, psychology, and the future of work. view profile


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