Thursday, April 17, 2014

Strategy and Execution: Business and the Military

Originally posted 21 April 2005

As I noted below, Photon Courier has a very smart post on strategy, execution, and leadership with special reference to the thoughts of Field Marshall Lord Wavell.

Overall, I agree wholeheartedly with PC's analysis. However, I differ on one point he makes:
But I do think it's true that American business schools tend to overemphasize strategy at the expense of execution, and this has to some extent carried over into practice. Too often, the relationship between strategy and execution is thought of as a "handoff" individual or group of individuals come up with the strategy, which others then execute. In reality, strategy and execution are much more tightly intertwined, and many times strategic options will only become visible from within the details of the execution work.

He then discusses Lord Wavell's lectures on the importance logistics and administration as opposed to strategy. While that is a crucial dimension in war, I think the difference between business and the military works in favor of emphasizing more strategic thinking in most firms.

A military commander faces only a few strategic questions in any campaign and these often do pivot on calculations about logistics. Those strategic choices have the most profound consequences, which means that the general faces a moral pressure that a CEO cannot imagine. Moreover, battles and campaigns have a decisiveness that business operations lack. This is one of the key reasons that the commander bears such a heavy burden.

When Eisenhower took over the ETO in WWII, he did not have to ask who the enemy was or where the battle would be fought or what kind of war was to be waged. All of that was a given-Germany, Northwestern Europe, and a land campaign in conjunction with strategic bombing.

Contrast that with the executives at Ford's truck division. They have to compete with multiple companies, in global markets, and across different demographic groups. The competition within those resulting submarkets varies in its mix of pricing, efficiency, distribution, advertising, quality, and new products.

These executives have to make strategy for the long term because business success is transitory and lacks the decisiveness one sees in military history. The flip side of that is that failure can be sugar-coated and papered over. In war, victory is the ultimate metric; in business, there is a fog of numbers that can be made to point in many different directions (at least for a time.)

Overall, I think American businesses put too little emphasis on clear strategic thinking. They put a lot of emphasis on planning but these efforts are frequently evasions of thought rather than real attempts to clarify and define.

Zbigniew Brzezinski once wrote that large bureaucracies do not have strategies-they have shopping lists. That sums up the output of the strategic planning process in most businesses as well. The end result is a grab bag of initiatives and budget items larded with some wishful thinking and trendy buzzwords.

While it is true that B-schools emphasize strategy over execution, they do not do a very good job of it when compared to military education. The approach is superficial using cookie-cutter templates in textbooks and skimpy case studies.

The historian Michael Howard wrote a brilliant article ("The Use and Abuse of Military History")* on the right way for officers to study military history. He offered up three general rules:

1. Study in breadth. Look at wars and campaigns over a long sweep of time. Look for both similarities and discontinuities.

Only by seeing what does change can one deduce what does not.

I suspect that had executives done a better job on this score, billions of dollars would have been saved during the Internet bubble. Someone who has studied the "old new things" will not get trapped in the hype around the "new new thing".

2. Study in depth. Look at a single campaign by reading a variety of histories, memoirs, letters, diaries, etc. Recognize the confusion, chaos and varying perspectives at work. (Clearly, this is the antithesis of the classic business case study.)

3. Study in context. Do not just look at the military action, study the sociology and politics of the nations involved. Again, these are perspectives that are usually absent in the analysis of strategy foisted on executives and students.

* The essay can be found in Howard's book The Causes of War.

1 comment:

Son of Brock Landers said...

You have two months to write an awesome "Who Framed Nixon?" post OR you and i can write emails on our theories by email conversation and I will post it at 28 sherman. Simmons and Gladwell and Klosterman have done this. Reading your blog, I think you have a theory. I am refining mine.