Monday, January 05, 2004

Central Staffs

Corporate staffs, especially central planning staffs, have few defenders anymore. Since In Search of Excellence most businesses writers have come down in favor of decentralization and line units. GE used to have a large and powerful planning staff, but Jack Welch dismantled and dispersed it. Most turnaround CEOs have followed suit.

The critique of planning staffs argues that they just generate paper, distract line managers, and generally make the business slow to respond. Nearly every indictment of GM and Ford notes that they were hamstrung by the power of their Finance department while the Japanese ate their lunch.

This critique is largely correct in my experience. The plans and projects are bureaucratic exercises, not courses of action which yield marketplace gains.

But what i find intriguing is that it is a different story in the military sphere. The rise of the staff-- especially the general staff-- is a critical element in operational prowess and military effectiveness.

The German experience is the most studied. A strong general staff was a key part of the Prussian military reforms which revived the army after Napoleon crushed Prussia in 1805-06. It played a key role in the rapid victories in the wars of unification (1864-1871) and was the critical instrument in the development of the Blitzkrieg.

The importance of a general staff is almost universally accepted by military historians. Lee's failure to develop a modern staff is one of the causes for the CSA's defeat. Patton had a good staff which was why he could respond so quickly in the relief of Bastogne. The French general staff was the antithesis of their German opponents which explains many of their failures between 1914 and 1940.

I'll hazard a few reasons for the difference in performance of military and corporate staffs.

1. The best military staffs are made up of officers who previously served in line positions and know they will return to such positions. The worst corporate horrors seem to come from companies where the staff world can provide a career path (Finance, Audit, HR, etc.). Staff-line rotation serves to broaden perspectives and as a reality check.

2. The German staff officers were trained in the totality of war-- history, planning, tactics, leadership. All too often corporate staffs have a limited, specialized toolkit that they apply to every problem. Not every situation can be approached as a question of financial control or process reengineering.

3. General staff officers were selected after a rigorous screening process which looked at intellectual potential, past-military performance, and academic preparation. Combined with their service in line positions, this ensured that they were respected by the officer corps as a whole. Too many corporate staffs fail to win this respect and must rely on executive fiat to gain even minimal cooperation.

4. Business staffers generally operate with the assumption that the world is predictable. Most of their efforts are devoted to measuring, explaining, and eliminating variances. The German General Staff understood that war was unpredictable-- as von Moltke said, "no plan survives contact with the enemy."

5. Business staffs generally assume that they have the answer and success is just a matter of applying the right template. Often those templates and methods come prepackaged by consultants. The best general staffs serve a vital role in creating new doctrine by studying past operations and potential enemies. The US Marine Corps had worked through the problems of amphibious warfare by 1937, The roots of Blitzkrieg are found in von Seeckt's creation of 57 study groups tasked to analyze the 1914-1918 war. He did this in 1919 and assigned nearly 10% of the officer corps to this task.

See also,

Waiting for our Clausewitz

Clausewitz (II)

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