You are your own worst enemy
You are your own worst enemy
Internal conflict
Source: Pixabay
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Introduction
Sometimes your biggest competitor is inside your own company.
We meet a new anti-design pattern: Internal Conflict
Mark and Bob learn how Internal Conflict can be solved.
Wilshire Federal Building 11000 Wilshire Blvd
A hot Santa Ana wind is blowing in LA this Monday morning. Her skin, dry, irritated and itchy. Alice walks into her office unprepared for a surprise. 67 filing boxes waiting for her, filling up her entire office. What a way to start the week.
Sam, the SAC of the LA office, knocks on the door.
Alice, “What the hell is this?”
Sam, “Take a seat. I have a fun assignment for you. The guys at FinCEN in DC just reopened a 25 year old case and dropped it on our lap”.
They sat down on a couple of boxes.
Alice, “I thought these cases were archived after 20 years”.
Sam, “Normally yes, but a Palantir analyst working for the FBI in DC got creative with their anomaly detection software and he came up with something. It was bumped up to FinCEN”.
Alice, “I don’t understand. What are the suspicions? Why us?”.
Sam, “FinCEN is not sharing their theory. The Palantir analyst discovered 3 clusters of anomalous activity in deposits and transfers in small community banks in Southern California in 1998-1999, in 2010 and again a few months ago.
Investigators at FinCEN subpoenaed the bank records and sent them to us. SoCal is our jurisdiction. The court order forbids the banks to notify their customers of the subpoena.
Here’s the Palantir executive summary”.
Sam hands Alice 1 page.
Alice reads it slowly. During 3 time periods, small deposits of less than $500 were made in 67 community banks scattered across Southern California. Transfers of similar sums were made to banks in Switzerland and Pakistan. The transfers were made within a few days of the deposits but not the same sums. It’s impossible to see the pattern without anomaly detection software. The transactions look like background noise. The small cash transactions didn’t trigger credit card processors Falcon fraud detection and prevention systems.
Flying under the radar.
There were clusters in 1998-199, 2010 and late 2023. The heatmaps for each time period look identical to her.
Alice opens up one of the boxes and looks inside. She sees account statements, transaction records, wire transfer records.
Alice, “Sam, do we have a list of names?”
Sam, “Now we get to the strange part. FinCen is interested in one name in particular - John Stanley Edwards. The FinCEN investigator secure-messaged me the name. He didn’t want it on the executive summary and he didn’t want to share his theories. He wants us to work off a clean sheet of paper”.
Alice opens a box randomly and sees records for Hanmi Bank on Olympic. Sees statements for JS Edwards. Manylittle transactions with odd numbers like $143, $496.
Sam, “I want you to work on this alone. Report back to me in person. I’ll approve your expense reports. No one besides you and me knows about this. I’ll tell the office that you’re working on an audit for the next few weeks. Report back to me at the end of the day, every day. Good luck.
And one more thing - here’s a picture from the DMV from his California drivers license. It might help identify him”.
Alice, “Got it”.
Alice goes over to her PA, Karen. “Karen, I’ll be busy with an audit in the next few weeks. I’ll be in and out and I need you to hold down the fort here. Reschedule our court appearances. Tell the judges I’m on PTO for the next 3 weeks. If anyone outside the office asks, I’m on PTO”.
Alice opens another box randomly and sees records for First Citizens Bank on Beverly. More statements for JS Edwards. More transactions with odd numbers like $251, $387.
She gets a coffee and thinks for a few minutes. Maybe JS Edwards is a hawaladar. She’d never worked on a money-laundering case with hawala. Most of her work is with Columbians. They don’t do hawala. But JS Edwards is not an Arab name. Think again Alice, you don't have to be Arab to be a hawaladar. You have to be trusted.
Hawala is an Islamic system for money transfers without physically moving currency. It uses a network of hawala brokers, hawaladars.
A sender gives a hawaladar a sum of money and a name. The hawaladar verifies the identity of the sender and does the transfer. No paperwork.
A hawaladar in the recipient's location, contacts the recipient and provides instructions for collecting the funds. The recipient has to provide a pass code to confirm his identity. After confirming the identity of the recipient, the hawaladar gives them the money.
The sending hawaladar settles with the receiving hawaladar. They can offset cash, exchange cash or whatever arrangement works for them.
Flying under the radar.
She spends the next week going through all the boxes. There is a pattern, but she can’t figure it out.
The only way to know what’s going on is to hit the streets and ask.
Thursday morning, she leaves the house dressed in a pants suit and comfortable walking shoes. She puts a pair of heels in a bag in her car. Just in case.
She decides to start with First Citizens Bank on Beverly. She drives down Wilshire, left on Santa Monica Blvd and right on Beverly. Waze suggests Beverly Medical Center for parking. 25’ later she’s at the bank, politely asking for the bank manager.
Alice holds up her badge, “Janet, I’m Alice. I’m with the FBI. Following up on the subpoena you got from FinCEN. I had a few questions”.
Janet smiles at Alice, “Sure - how can I help you Alice?”
Alice smiles back, “How well do you know John Edwards?”
Janet, “He’s been a customer of ours for years. I’ve been here for 15 years. Very quiet, polite. Hardly comes in. He does most of his banking online. He listed professional freelance-photographer as his work. He was here a month ago to pick up checkbooks. I saw him come in and I went over to say hello.
You know we serve the community and I like to keep that personal touch”.
Alice, “Can you describe him to me?”
Janet, “Sure - JS is about 5’9. Heavy set. Round face. Light hair. Blue eyes”.
Alice, “Anything else that stands out in your mind?”
Janet, “Well, he seems to have a strong Southern accent. He’s not a native Angeleno”.
Alice, “Do you have his address?”.
Janet, “Sure. Let me pull it up. 8653 W Olympic Blvd, Apt #2”.
Alice, “Oh and one more thing. I almost forgot. What is his current balance?”
Janet, “Let me check. His current balance is $1200. He made quite a few small transactions, I suppose from his freelance photography work. He doesn’t seem to have a credit card with us. I imagine that with all of his freelance work and foreign travel, he must have an international payment card”.
Alice drives over to Pico-Robertson and knocks on the door of #2. No answer. She knocks on the door of #1. An elderly Persian lady opens the door.
Alice makes up a story on the spot, framing herself as working for National Geographic.
Alice, “Ma'am. I wonder if you can help me. My name is Alice, I’m with National Geographic”.
Alice shows the woman her California picture id, hoping the old lady won’t ask for a business card. “I’m looking for John Edwards, the freelance photographer. I might have a job for him, but he doesn’t seem to be home, and he didn’t pick up his phone”.
The woman is suspicious but doesn’t ask for a business card.
“I am Parisa Farahani. I own this building. JS is not home. He hasn’t been here for several weeks. He’s a good man, always pays his rent on time. How can I help National Geographic?”.
Alice, “We’re doing a feature issue in Australia and he sold us several beautiful photographs a few years ago of The Great Barrier Reef. I might have a lucrative job for him”.
Parisa warmed up to Alice, “That’s very nice. Good for him. I think he’s traveling on a photography assignment. You know he travels a lot but he always pays his rent on time and he is quiet but he listens to strange music”.
Alice, “Strange music?”
Parisa, “Mrs Alice, not American or Parsi music, not Middle Eastern, Indian, or Chinese music. Something else”.
Alice decides not to pursue this direction for the moment but makes a mental note.
Parisa, “Alice, Please come in and sit down with me. I’ll put up some tea”. She sits Alice down on the sofa and pours some fragrant Persian tea and puts out a plate of "Nan-e Berenji" rice cookies. “How do you like my cookies?”
Alice, “They are perfect!’.
Parisa, “Thank you Mrs. Alice. Leave me your number. When JS comes back, I will let you know”.
Alice, “Thank you for the tea and wonderful cookies!”.
Alice decides to strengthen her cover. She Googles copy shops in the neighborhood and finds one just up the street.
She walks in and asks for 50 business cards with the title Alice Fogelman, Special Projects Administration and the National Geographic logo on the best paper they have. The kid at the desk tries to upsell her to 300 cards, but Alice refuses. 15’ later, she has 50 business cards with her gmail and private mobile number.
25’ later Alice is at Hanmi Bank on West Olympic, politely asking for the bank manager.
Hanmi caters to the Korean community.
Alice holds up her badge, “Minho, I’m Alice. I’m with the FBI. Following up on the subpoena you got from FinCEN. I had a few questions”.
Minho smiles, “Sure - how can I help you Alice?”
Alice smiles back, “How well do you know John Edwards?”
The story repeats itself. Job listed as freelance photographer. Customer for years. Hardly comes in. No credit cards.
Minho, “I’m new here, the previous bank manager, Joon Park knows him better than me”.
Alice has a sudden hunch, “Do you have a picture in your database?”
Minho pulls up the client picture from the bank database.
White. Narrow face. Light hair. Blue eyes
This version of JS Edwards is the same age but a different person.
Alice, “Can you pull up his current balance?”
Minho, “Am I still under the FinCEN subpoena?”. Alice, “Yes you are. Your cooperation is appreciated”.
Minho, “Current balance is $900. I see a lot of small transactions, deposits/withdrawals/ small wires to a Swiss bank and a bank in Pakistan.
Alice, “Do you have his address?”.
Minho, “Sure. Let me pull it up. 1400 W Bedford, Apt #4”.
Alice drives over to 1400 W Bedford. She rings the doorbell of #4. No Answer. Knocks on Apt#1.
A middle-aged Jewish woman with a colorful headscarf opens the door, drying her hands on an apron.
Alice smells a warm, earthy aroma of spices, cinnamon, cumin and turmeric from the kitchen behind the woman.
Alice, “Hi I’m Alice. I’m a special projects administrator for National Geographic. I’m looking for JS”.
The woman smiles at Alice, “I am Sarah Ben-Asher. We own the building. Do you have an id?”
Alice shows her drivers license and hands Sarah the National Geographic business card she had just made.
Sarah looks at the card, “How can I help you?”
Alice, “I’m looking for JS. He did a wonderful job for us on our special on the Great Barrier Reef a few years ago and I wanted to reach out to John. I might have a very lucrative commission for him. Unfortunately, he’s not picking up his phone. I was in the neighborhood and decided to come by”.
Sarah, “Well you know, JS is a freelance photographer. He travels a lot. He is a very good tenant, pays on time and is quiet, except for the strange music he listens to. He’s from the South, some small town in Alabama, Cedar Bluff. I remember the name.
I did a degree in musicology at UCLA. It’s not Middle Eastern, Indian, or Chinese music. Something else. It might be Afghan music. Maybe he picked up a taste for Afghan music in his travels.
He’s an excellent photographer. We have some of his photographs in our living room. I can show you. He is traveling at the moment. I honestly don’t know when he’ll be back”.
Sarah puts on reading glasses and looks at the business card carefully and then up at Alice.
Sarah, “You’re Jewish aren't you? I can tell from the name. You look Jewish even with your blonde hair. It looks natural”.
Alice laughs, “Yes I am. My maiden name is Stein and yes my hair is naturally blonde”.
Sarah, “Stein is a nice Jewish name too. So what does your husband do?”.
Alice desperately wants to get out of the Jewish interrogation loop, “I’m divorced”.
Sarah, “I’m happy for you. I’m married to a Moroccan. I should have left him years ago. Children?”
Alice, “I have 3 kids. We live in Santa Monica”.
Sarah, “Do they go to a Jewish school? There is a Chabad in Santa Monica”.
Alice, “No. They go to public school”.
Sarah pushes on relentlessly, “They should go to a Jewish school. Know their heritage.
Do you want to stay for lunch? I made couscous and tagine with apricots.
My husband Eddie, will be back late.
It’s just you and me”.
Alice thinks for a moment. It’s lunch time. The woman is really pushy but has a lot of energy and information.
Doesn’t hurt to be sociable and she has to eat anyhow.
Alice, “I’d love to”.
It’s a weekday lunch but the table is beautifully set with dishes, silverware, placemats and glassware.
Alice feels at home. Sarah puts out lovely little dishes with Moroccan salads and serves the couscous and tagine.
Alice, “The food is delicious”.
The 2 of them eat. Sarah keeps the conversation flowing.
After tea and cookies, Alice is ready to go back to the office for a nap.
Alice, “Sarah this was the best lunch I ever had, thank you for your hospitality”.
Sarah, “When JS gets back, I’ll tell him that National Geographic is looking for him. You should talk to Rabbi Levitansky at Chabad in Simcha Monica. He's a wonderful guy. I’ll text you his number”.
Alice has one more stop before going back to the office.
Joon Park, former bank manager at Hanmi Bank has an office in Century Plaza Towers: JP Private Banking Services.
Alice decides to visit Joon Park and understand how he moved up in the world from Hanmi bank.
She parks and changes from walking shoes to heels. She wants to upgrade to a more sophisticated, power look.
Joon is cordial, “How can I help you?”
Alice, “Minho from Hanmi Bank mentioned that you were the bank manager over there”.
Joon smiles, “Yes, I was. It was a good stepping stone to my private banking services”.
Alice, “I’m with the FBI LA Field Office. We’re doing a broad survey at community banks and their international banking activities. Minho said you would be a great guy to help me understand the international picture after your career in community banking.
Joon flattered, “We do private banking. I represent Lacuna Wealth Management on the West Coast. We aim to preserve and grow our clients’ assets guided by a simple philosophy: ‘Rethink everything’. Our sole activity is to serve our clients through their various life stages, providing a holistic approach to help them achieve their personal goals”.
I work directly with Julian Weber, Managing Partner and Head of Private Clients. We are discrete and professional.
We can provide community banking clients world-class financial services”.
Alice hears the words “ Lacuna Wealth Management ” and her heart-rate pumps up to 150 in a second.
The Swiss bank that receives the transfers from JS Edwards from his Hanmi Bank account.
They chat for a few more minutes.
She pretends to get a call and stops.
Joon, “I have to go back to the office. You’ve been very helpful”.
CIA and FBI and Internal conflict
Alice walks in and Sam grabs her at the entrance.
Sam, “Alice, this is Ed. Ed works for the CIA. Ed and I were in the Marines together”.
Alice has a sinking very bad feeling in her stomach.
She is about to lose her case to the CIA.
Sam, “Let’s grab a coffee and a conference room”.
Ed, “Alice. I know you’re working on the JS Edwards case. We’re taking it over. This is international terror. I need you to share what you’ve found”.
Alice, “The hell you are. I bust my butt on this and I’m close to cracking it. I know what’s going on and I can crack it and build a case against this guy”.
Ed, “Look Alice. Sam and I were in the Marines together. I trust him and I trust you. If it were anyone else, we wouldn’t be having a discussion. It would be a direct order from your Director”.
Alice calms her breathing. Tonglen breathing like Bob showed her. Breath in bad. Breath out compassion.
She realizes in a flash, that Ed has not yet connected the dots between halawadars and JS Edwards. That was the FinCEN hypothesis that needed to be tested. And she has the proof but not all the moving parts.
Alice, “Ed, It seems you expect me to just roll over and give you the case on the platter.
I don’t see how I can give up the case at this stage. I built confidence with the community bank managers and I assembled the puzzle. I’m an expert in International Law and money laundering. I can build a case.
I agree with your assertion that this is a case of International terror but, there is a lot more money at the end of the line. I’m positive about it”.
Ed, “Sure, you can handover your findings, and we’ll take it from here”.
Alice, “The CIA is prohibited from conducting domestic intelligence operations within the United States, such as spying on American citizens or gathering intelligence on domestic matters, under the CIA Act of 1949.
How can you solve that problem?”
Ed looks at Sam. Sam nods.
Ed, “You win. I can’t. You’ll do it for us”.
Alice, “How?”
Ed, “We’ll send you to Switzerland and Pakistan to get to the end of the money trail. You’ll become part of a special understanding between the Bureau and the Company”.
Alice, “And this won’t go into my file?”
Ed, “No. It cannot go into your personal file. It won’t be part of your performance metrics. Look at this as a way to execute the mission but with a different hat. If you agree, you’ll undergo training before you travel. Sleep on it. Talk about it with Sam”.
Internal conflict anti-pattern
The CIA and FBI famously fight turf wars, even though they both work for the same country.
Our story with Alice and her hawala investigation happened over 20 years after 9/11. The FBI and CIA have gotten better at mitigating internal competition that leads to failure.
Alice succeeded because she negotiated with Ed.
How to lose a sales deal because of internal competition
In a strategy session in Singapore with a client that sells oil exploration systems, one of the salespeople was showing a plan for a presentation scheduled for the following Monday in Indonesia.
During the forty-five-minute presentation, an expatriate who had just moved from London was sitting in the back of the room smiling.
At the end he said, "Nice presentation. But would you be interested in knowing what's been going on at the corporate headquarters of this account for the last year?"
"Tell me," said the rep.
"We are two weeks away from a 2.5-million-dollar value pricing agreement with this company, the agreement has been negotiated by our chairman, and is going to the board of directors for approval.
This deal is already done. You don’t need to do this presentation on Monday at all.
All you can do is mess this deal up.
"Do you want to know how? If you quote one percentage more than twenty-percent discount it will ruin the whole deal because our chairman has worked for months to get this kind of pricing for this volume.
If you quote twenty-one, twenty-two, twenty-three, or more, you will discredit us all and ruin the deal."
What happened here is not unusual.
An individual rep doing opportunity-level activity was ignorant of enterprise-level strategy.
This happens all the time and is a major obstacle to large account management.
Even worse, at many companies with poor account management programs and poor commission or revenue-split policies, individual sales reps not only fail to cooperate on deals but actually fight among themselves.
They look like several different companies to the client.
How do we solve this anti-pattern?
Knowledge is power; the more you know earlier, the more advantage you can have. It's amazing how little most business developers know about their accounts after months of involvement and considerable resources.
Failure is the seed of learning. By studying why strategies fall, we learn how to make then succeed
One of the major reasons strategies fail is poor information.
Some salespeople have a clear strategy, but they keep it in their head. They don't communicate the plan to the team.
Another fatal error is not having a plan B. some leaders plan only for the best possible outcome and assume how the competition will react. The don't test their plan and develop alternatives
The speed of change in marketing and sales today is so fast that a rigid, inflexible, or static plan will result in defeat.
Speed of information drives speed of strategy drives competitive advantage.
Other sources of failure include poor execution.
Patton said a good plan violently executed beats a perfect plan we're constantly thinking about. Speed gives the opponent less time to perfect their plan and defenses.
On a park bench in Venice CA
Mark and Bob are sitting on the park bench.
The tall bald man remained silent as they sat on the park bench.
In front of them there was the green calm of the park.
Mark, “So Bob, what did we learn this week?”
Bob, “ That’s a good question. I learned a few things this week”:
I learned that internal competition can be deadly in sales and in combating international terror financing.
If Alice hadn’t negotiated with tactical empathy (How can I, not Why should I) she would have gotten a direct order to hand over her notes to the CIA. She would have felt like shit.
Alice solved the Internal Conflict anti-pattern, by negotiating and not compromising nor breaking up. That’s a lesson that I will take with me. Life is not a zero-sum game.
Mark, “I’d summarize it like this”:
The Internal Conflict anti-pattern is part of understanding why strategies fail in a larger sense.
Failures are divided into two classes - those that thought and never did and those that did and never thought.
Alice did and thought.