I was having a conversation a few days ago with a new acquaintance. When I told him that I had done graduate studies in military history, he asked me what I had learned from this and what this may mean to me as a consultant.
I thought for a moment about this and answered that my study of military history had taught me to look at the decisions of military commanders from their vantage point, with the limited perspective they had at the time and in the place they had to make their decisions. In other words, I told him that I thought that too much military history is written as if the generals and other decision makers had perfect information at the time of their decisions and that their so called “errors” were either due to incompetence, hubris, or a combination of both.
Military commanders try to see through the “fog of war” when they have to make decisions about strategy, operations, and tactics. Should they attack or defend? If they do decide to attack, where should they do so? How should they deploy their troops and resources? How many forces should they keep in reserve? What should they do if their forces run up against the main enemy defences, instead of finding a hole in them?
These questions show some of the complexities inherent in military decision-making. The consequences of error can be catastrophic, not just for the soldiers involved, but also for the success of the mission and even the survival of a country.
Few decisions in business and management have this kind of impact or importance. Nonetheless, business and other organizational leaders are constantly faced with decisions that can have a major impact on real people. A seemingly abstract decision about closing a plant can leave employees without a livelihood, or can lead to other forms of dislocation, such as relocation and retraining. A decision on where to invest in a new facility can create jobs and can also have a long-term impact on revenue and profitability.
We only have to look at the current carnage in the automotive sector to realize the path dependency of the present situation on previous decisions. It would be easy to criticize current management at Ford, GM and Chrysler for failing to invest earlier in fuel-efficient designs and production. However, the current model mix is the result of past market demand. Even Japanese and European automakers have SUVs and pickup trucks in their product mixes. Moreover, the fact that the latter have a ready supply of smaller, more fuel-efficient models is a by-product of a longstanding tradition of high oil prices in their own domestic markets. One could argue that it is blind chance.
So, in a way, the senior management of carmakers are living with decisions made, in some cases, decades ago. Some of these are also dependent on cultural, political, and other economic factors. Business leaders are merely reflecting the social realities of the markets they hail from or are operating in. The decisions today on what to do and how to adapt to change are no easier than those faced by military commanders. It may not be war, but the impacts are real and potentially devastating.
The study of military history, particularly of decision-making in the midst of battle, can provide much perspective to anyone wanting to understand the pressures and stresses that any leader faces “in the heat of battle.” Moreover, the same philosophy of study can be applied to business decision-making.
This means looking beyond the journalistic and political blame game that occurs whenever the economy turns sour and the going gets tough. This is readily apparent in the U.S., with a renewed focus on economic and financial moralizing, and an attempt to pin the blame for the current economic woes on a few bad apples, whether they are corporate scoundrels or “speculators.”
A much better approach for someone trying to actually learn something useful in all of this – in other words, someone trying to gain wisdom – would be to study the reasons for the past decisions. What information was available to the leadership when they had to make the decision? How was it analyzed and assessed? What factors were considered and how were they weighted? Even more important, what risks were envisaged and how bold was the leadership prepared to be?
This may not make for fascinating copy, but it would help aspiring business leaders and executives to better understand the organic nature of business decision-making, its complexity, and the concrete impacts this can have on real people, both inside and outside an organization.
© 2010 Richard Martin. Reproduction and quotes permitted with proper attribution.
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