Does modern business employ military warfare?
29 February 2016
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Hello and welcome to the latest edition of Old Mutual Live Business, my name is Chris Gibbons. In the modern business context, if we hear the word ‘strategy’ we might think of a team of executives in a conference room plotting out the future. Playing with scenarios, debating the merits of this or that option. But strategy has its roots in something far, far older and that is the military.
From time immemorial, generals surveyed the field of battle, worked out where to deploy their troops to the best advantage. The maximum effect, the lowest number of casualties and all of this in the context of a broader campaign or a war, usually fought between nations. How’s modern business lost sight of the roots of strategy? What could modern business strategists learn from their military counterparts?
We’re joined now by someone who has studied strategy in all of its forms, but has a particular interest in the military aspect, he is Professor Nick Binedell. Founder and former Dean of GIBS, the Business School where he’s now Professor of Strategy and Leadership. Nick Binedell, welcome once again to Old Mutual Live Business. First of all, have we lost that link between military strategy and business strategy?
The link between military and business strategies remains
Nick Binedell: Thanks Chris. I don’t think we’ve lost the link. If one starts in your very good introduction with the basic idea that business is about competing. Without overplaying the metaphor because you can talk about business as sport or business as a creative art.
But if we go to this military theme you’re raising, I don’t think we have because of the extraordinary rates of change. The extraordinary levels of competition between companies, industries and companies. I think the metaphor is alive and well.
CG: Some of the great events of modern history have been case studies in military strategy. It was only a couple of years ago we were celebrating the 70th anniversary of the D Day landings in France. One of the very grandest of strategies and on which hung the future of the western world.
NB: Yes, Normandy was one of the key battles. I think the Russian Campaign probably even more important. In fact, if you look at the numbers, the WWII was really fought in Russia. But also a key moment for the allies when they had to take the plunge and cross the channel and go for the German heartland.
Of course, as you said in the introduction, military warfare is never just a thing about the military. There are many factors at work; economic, technological, social, political factors at work. The Normandy landings were one of them. They say that the plan was 70% successful, which was actually pretty good for warfare.
Because one can plan much more easily in business than in war. In war you directly collide with the enemies strategy and so as Napoleon said: When two armies meet, a third thing happens. So military warfare is much tougher, in a way. We have a little more wiggle room as we deal with markets and rivals in business strategy.
Speed is one of the key issues in battle
CG: The collapse of strategy or the strategy that changes at the first point of contact with the enemy, that applies in business as much as it does on the battlefield?
NB: Yes, that’s why we’re constantly redoing our budgets because our plans don’t meet reality. That is the nature of competition and it’s particularly the nature of the massive sea changes that are going on as we speak. In terms of technology, services, innovation, how things get done, speed, deployment of resources, how you organise a business.
Speed is one of the key issues in the battle. Having the vital information, the right place at the right time and then reacting quickly to it is key. I think South African companies often tend to be quite hierarchical and slow. There’s nothing like battle to get you to make quick decisions.
I watch soccer occasionally and you watch a match and think about the coaches and their deployment and reaction to the flow of the game. One of the problems of planning is we tend to then get stuck in a framework and agility is going to be absolutely key skill, resilience and agility.
How to think quickly on your feet. How to make sure you’ve got the right information about the battle at hand. Not the theory that you had or the plan. How to respond creatively is very key and military understand a lot of that.
Everyone needs to understand the Grand strategy
CG: It brings me to a 19th century German General called Von Moltke who recognised very clearly this issue about no strategy surviving contact with the enemy. Von Moltke defeated France, spectacularly, humiliatingly in 1870. Having recognised this problem, he came up with the solution. He gave his officers in the field the freedom to act under the changing circumstances of battle. Provided they understood and adhered completely to the big picture. There’s still something to that, isn’t there?
NB: Absolutely! We probably call that these days The Grand Strategy, the broader objective. As you talked about the war, the campaign and then allowing enough agility to the units to take advantage of what they find. If you study WWII some years later, the Germans were very good at this in the Blitzkrieg theory.
They developed a new theory of bypassing the enemy instead of WWI trenches kind of warfare and that mobility required a lot of decentralisation to commanders. One of the very important things in a big organisation is to focus hard enough on your unit managers.
Make sure they understand their campaign in the context of the broader campaign, but understand what’s in front of them and decentralise enough decision rights to them so that they’re agile. I’ve worked in many big companies where the chain of command insists on detail. In the slowness of the information moving around, you’ve actually lost the opportunity or not responded to the threat.
Finding the balance in decision making
CG: How many times have you heard people down an organisation say, oh, you can never get a decision from the people at the top, it takes too much time, that’s a symptom of near death.
NB: Sometimes it is. It’s very hard to make these calls because if you decentralise too much autonomy, you lose consistency in a brand or in a product or a service. If you don’t decentralise enough, you lose the sensitivity and the agility. It’s about finding the right balance.
The incredible thing that I think is happening as South African economy tightens, while at the same time there are all these new ways, especially in financial services, doing things; is that at the top, the old order, the way we’ve done things may be stronger than the way we could do things or what is next.
This constant questioning of the fundamentals of the strategy, the assumptions we make is critical. In big companies, very often memory is stronger than vision. You need the mavericks to be bringing the new learning from the frontline of the battlefield to make sure that the generals who are making the decisions have that at their fingertips.
CG: You’re talking about the campaign being fought in transport by Uber, the big companies didn’t see Uber coming. The campaign being fought in hospitality, no one saw Airbnb advancing?
Leaders need to have a board understanding of what’s going on
NB: Right and of course, in a way, if we look back as Soren Kierkegaard said: the tragedy of life is we understand it backwards, but sadly we have to live it forwards. So it’s easy looking back now and saying, but why didn’t we all see the Uber opportunity? Digital banking is going to become a thing of the future, which may find branch based banks, which still think that way stuck.
Warfare is a fabulous thing to study. In warfare, in theory of warfare there’s a field called revolution in military affairs. What we normally find in campaigns a non-military factor has swayed the nature of the campaign or the battle. So it’s very important that leaders have a broad understanding of what’s going on around them.
Which is why getting out of your office and exploring the outer domain, what’s called the habitat of the organisation. Talking to customers, talking to ex-customers, talking to potential customers, talking to your competitors, talking to your ecosystem, becomes so important.
They say Wellington was a brilliant map reader and would take bets while riding on carriages through England. He would take a bet what was over the hill and make a bit of money that way. Because he was very good at reading the signals of what lay over the hill. Topography for generals was key at the time.
Today, understanding how South Africa’s changing, the new sociology of our country, the new debates in our country, what a younger generation are looking for, is absolutely key. You won’t find them on a spreadsheet and you won’t find it in your office.
Is there a place for ex-military in business?
CG: Nick, should big business, especially in South Africa, be hiring more ex-military personnel?
NB: I’m not sure about that because I’m not sure what our military personnel, you know, they haven’t been through major battles for a long time. So I don’t know what the capabilities are in the military. I’m sure there are some, but no, I would say what we want to look for is people who think strategically and who think creatively. I’ll come with that mix that you talked about, between the planning and the intuition. Napoleon was a brilliant planner, but he also was a highly intuitive general and so the capacity to have that mix is very important. In this country now, that means a different generation perhaps, people who haven’t all grown up inside the organisation. By changing the debates and engaging with them, maybe some good ideas will emerge.
CG: Sound advice, Professor Nick Binedell, Founder and former Dean of GIBS, the Business School and now Professor of Strategy and Leadership there, Nick, thank you for being with me on Old Mutual Live Business.