I always tell our analysts, we have the luxury of only having to be right. Unlike analysts at, say, investment banks, we're not trying to use our research to sell bonds in Argentina, or raise money for a billion dollar investment in China, or even lobby for a new policy initiative in Azerbaijan. Our clients pay us only for our analysis—put more simply, they pay us to be right.
On any given day, we translate our analysis into predictions on a whole host of issues. A few out there today: Will Turkey get into the European Union? Will there be a negotiated settlement to the North Korean conflict? Who is going to win elections in the Philippines? (Yes, No, and Poe, if you're keeping score.)
Making the right call is not always easy. And being wrong has direct consequences for the clients you're advising. They've taken your advice, and now they stand to lose a bundle.
We've made some pretty solid calls in the past year—the failure of Colombia's political referendum last October (Vitali Meschoulam); the arrest of Russia's leading oligarch Mikhail Khodorkovsky (Alex Brideau); the retreat of Taiwanese President Chen from an inflammatory referendum on sovereignty (TingTing Zhang); even the collapse of Democratic presidential hopeful Howard Dean (me).
But when you have to make calls all the time, you're bound to flub on occasion. Last year, our biggest mistake was Turkey—deciding on whether it was going to open its borders to station U.S. troops for the war in Iraq, the so-called "Northern Front." We were convinced it would—Kaan Nazli, our Turkey analyst had been talking to Turkish Prime Minister Erdogan's top advisers, and they told him they had the votes in parliament to push it through. Then the vote was delayed, and delayed again, and when it was finally held on March 1, the Americans were out on their ear. Kaan had made the case, we all agreed with the call, and it didn't happen. Investor confidence in Turkey faltered, and quite a few of our clients lost money in the process. (Fortunately for Kaan, he soon made up for his misstep with some spot-on calls on U.S. assistance to Turkey, and Turkey-Cyprus negotiations.)
It took me a little while to get started this morning. I sit out on the floor with the analysts—open cubicles, with each region more or less contiguous. Which means life can be noisy—everybody knows I'm in the office, and after a few days out of town, I can get swamped by a crush of analysts wanting to discuss various issues.
I didn't start Eurasia Group with that structure in mind. In 1999, when we moved into our first real offices downtown, I commandeered the corner space and barked out directives to the staff. But I was too isolated from the analysts; they had no idea how I was spending my day.
So, begrudgingly, I left my luxury digs for an open cubicle. I also made Dave Poritzky, our director of operations, move into a cubicle to share the misery. It worked like a charm—staff meetings became more productive (and shorter!), and the work environment much more enjoyable.
Now, in our new space on Fifth Avenue, I have a formal office for meetings—for my own and for anybody else who holds one. If there's a problem, it's that my continuous presence can irritate the staff. Sometimes, when there's a deadline looming, Charlotte Forbes, our research coordinator, will surreptitiously ask Dave Poritzky to have me vacate the premises. Dave always looks sheepish when he asks me to move.
Today my offices have been busy with interviewees. There's been a constant stream of interviewing for analyst positions recently. High unemployment and a glut of would-be academics mean we're deluged with applicants. We're currently interviewing analysts covering Latin America, Africa, and the Middle East.
We're obviously an intensely political group, but personal political predilections don't come up very often. When it comes down to it, the clients don't care if we're Democrats or Republicans (there's more of the former than the latter here at Eurasia Group, but the split is about 60-40). In fact, they're less likely to trust us if they think we're biased in favor of a certain policy or group.
This makes hiring a challenge. Let's say you're looking for a specialist on China. Most of the people that know China really well come from China. They have spent their lives focusing on this country, speak the language fluently, are intimately familiar with the situation on the ground. Needless to say, they tend to be pretty passionate about their area of interest—which usually means they either strongly support the government or they are fiercely opposed to it.
Political science can be that way. Who studies Russia? Mostly émigrés. Who studies feminism? Mostly feminists. Who best knows the inner workings of the Bush administration? Mostly Republicans. I remember a colleague of mine from my Stanford days, the renowned international relations theorist Bruce Bueno de Mesquita, saying that he thought you shouldn't learn the language of the country you cover because it creates bias. It broke me up at the time, as I had presumed he wasn't (completely) serious. But there is a constant tension between knowing your topic and identifying with it. Why don't psychoanalysts date their clients? If a researcher is serious about doing analysis, you have to maintain professional distance.
When we interview, we tend to ask the most controversial questions. Hiring a Middle East analyst? We'll ask an hour's worth of hard-edged questions on Israel-Palestine. If we don't trust the answers, we can't hire the person. It's hard to hide a deeply ingrained bias. But Ph.D.s can be sneaky about this, because they like to hedge. If there's a single problem with the overeducated (or if I had to put my finger on just one …), it's that we hate being wrong. As an academic, you are supposed to be a repository of knowledge—what you don't make in dollars, you make up for in intellectual authority. Equivocation is the survival mechanism of the trained intellectual.
Today, I try asking what an applicant thinks about U.S. foreign policy on Mexico—in particular, the recent rapprochement between Presidents Bush and Fox. A good answer tells me whether the policy is effective and why (and, ideally, where the policy came from), without letting me know whether the interviewee has a personal ax on migration policy, NAFTA, or the Bush administration. She launches right in and covers the bases, with no ax in sight. Maybe we're more trainable than I thought ...