In Business, as in Combat, Victory Depends on a Strong, Swift Offense

It’s easy to see why many people equate operating a business in today’s environment with active warfare. Brutal competition, ethical strife, unanticipated changes in the marketplace, technological shifts, and a lingering recession can leave a company battle worn. However, say Jason A. Santamaria and Vincent Martino, former Marine Corps officers and Wharton MBA graduates, the answer to the uncertainties of business, similar to those of warfare, rests with a strong and swift offense.

http://knowledge.wharton.upenn.edu/article/932.cfm

In their new book, The Marine Corps Way—Using ManeuverWarfare to Lead a Winning Organization, http://www.amazon.com/exec/obidos/ASIN/007142377X/104-1187348-7271110 Santamaria and Martino, along with co-author Eric C. Clemons, a professor of operations and information management at Wharton, break down specific military strategy and leadership techniques and apply them to the day-to-day rigors of the corporate world.

The authors argue that business can learn much from combat philosophy, also known as maneuver warfare, as it emphasizes action in the midst of uncertainty. Maneuver warfare is defined as “the use of speed, surprise, and concentrated force against an opponent’s weakness to achieve maximum impact with a minimum expenditure of resources in the presence of strategic uncertainty and hostile intent.”

Today, Santamaria is a business consultant in Durham , N.C. , applying the tactics outlined in the book to real world cases. Martino currently works as a senior business analyst for Capital One, a major credit card provider. While graduate students at Wharton, both of them worked with Clemons on independent study projects that examined and applied Marine leadership and strategy to business. Says Clemons, “There was a clear intersection of the way I taught business strategy and the lessons Jason and Vincent learned in the Marine Corps.” After an article by Santamaria and Clemons appeared in a business publication, publishers pursued the trio asking for a book on the subject.

In the book, the authors note that many of the intangibles of warfare accounted for by the Marine Corps appear in some fashion in the business arena. “Reality is chaotic; events in business never proceed exactly as planned,” the book states. Such intangibles as friction, uncertainty, fluidity and disorder complicate decision-making – though effective leaders use their opponents’ weaknesses to their own advantage.

Friction results from factors including the actions of the competitor to “internal forces such as a lack of planning or coordination, the independent nature of human will, or even mere chance.” By uncertainty, also called “the fog of war,” the authors refer to the “opponent’s intentions and capabilities,” as well as environmental factors that complicate decision making and “optimal deployment of resources.” Fluidity describes the “continuous, fluctuating flow of activity replete with fleeting opportunities and unforeseen events.” A combination of the three preceding factors ultimately leads to a state of disorder, the authors say.

Full of case studies taken from the business world and from military history, the book highlights the seven guiding principles of maneuver warfare: Targeting critical vulnerabilities, boldness, surprise, focus, decentralized decision-making, tempo, and combined arms . With language relatively free of military jargon, it offers a useful breakdown of strategy and leadership techniques, balanced with specific examples from the corporate and military world.

A major component of the strategy, targeting critical vulnerabilities , involves an identification and quick exploitation of an opponent’s fundamental weaknesses. Case in point: In the early 1980s, upstart MCI captured a large segment of the long distance marketplace with a reasonably priced product, after recognizing industry stalwart AT&T priced much of its long-distance service to subsidize unprofitable activities of the company. The message: Hit them where it hurts, and quickly — because the prime opportunity is usually fleeting. Nevertheless, say the authors, be wary of your own company’s vulnerabilities.

Scenario analysis, or identifying and preparing for several possible futures, can play a large role in targeting critical vulnerabilities. In the late 1960s, Shell Oil pioneered the use of scenario planning in the face of strategic uncertainty, the authors say. Shifts in the oil market meant that the company needed to be aware of the potential future outcomes in the industry, and “simple extrapolation of historical trends” might not present the full picture. Looking at the many highly uncertain, though significant, events that could impact one’s competitors or one’s own business often helps in predicting critical vulnerabilities inside and outside a company.

Boldness in action, also a large part of the U.S.M.C. strategy, acknowledges that breakthroughs happen only with “calculated risk taking.” MacArthur’s amphibious assault at Inchon during the Korean War, for example, is listed as one of the boldest moves in all of modern military history. Specifically, MacArthur decided upon a landing at one of the most difficult places on Korea ’s western coast, as he surmised that this location would be the least defended. The authors break this boldness element down into a simple equation: Probability for success times the potential results from success minus the probability of failure times the potential cost of failure equals the expected value of the outcome. Says Santamaria, “Management must create an environment where people feel safe to take risk.”

Unfortunately, says Clemons, “to trust employees and to allow them to make decisions, particularly without all the pieces to the puzzle, is anathema in business today. However, it is often necessary and it first requires a shared vision and a sense of community at the company.” Martino adds, “People are risk averse by nature. You need to teach that it is okay to take risks for the right reason. A justified risk generally has no ethical or moral issues surrounding it. This is where breakthroughs happen.” Decisions will often need to be made quickly and with limited information, so encouraging staff to dissent to practices they deem risky can protect a company from its own vulnerabilities.

The authors emphasize that building a “propensity for boldness in the organization,” like in the Marines, results only from a sincere and direct commitment on the part of management. Martino notes that in today’s corporate environment employees are often not willing to be so decisive, as they fear mistakes and the resulting fallout. The Marine Corps philosophy runs counter to this. “Leaders correct, rather than punish, mistakes that stem from bold zeal, such as an inexperienced lieutenant charging off and leading his unit in the wrong direction during a night training exercise. At the same time, there is zero tolerance for indecision, lapses in integrity, and, above all, weakness—all of which can be career-ending.”

To surprise one’s competitors, stealth, ambiguity and deception are required to hide a course of action. While Santamaria, Martino and Clemons do not propose the use of deceitful or unethical practices, they do advocate spinning information, often to the media, in such a way as to hide or make unclear a company’s business strategy. “Conceal your intentions or coordinate your efforts so that your first moves do not announce the timing or direction of your initial attack or block your later efforts.” Protecting company secrets and inspiring a culture whereby employees are willing to safeguard proprietary information is essential. Today, says Clemons, after several corporate governance scandals, many executives are now erring on the side of providing too much information to the public and to the media, and, in turn, are unfortunately tipping their competitive hand.

The chapter on the surprise element of maneuver warfare not only highlights the ambiguous Coalition Forces’ attack in Operation Desert Storm, but also the ambiguity in the launch of Microsoft’s “.Net” umbrella initiative. The authors note that the Iraqis spread military resources much too thin to deal with a dispersed attack, much in the same way that Microsoft’s competitors have by creating a wide range of products and web-based services in response to what they may see as a serious threat from the dominating industry force.

Focus, another prong in the maneuver warfare strategy, involves committing significant resources to a particular action at a critical point in time. Anticipating and understanding customer needs remains essential to establishing the focus. As well, the authors point out that any concentrated initiative reduces effort in another place, and so they outline the Marine approach to dealing with this vulnerability. “Economy of force,” the first means to mitigating this risk, refers to the deliberate reduction of resources in less critical areas. The book recommends varying the degree of focus of resources to the major effort, allowing for a shift to “exposed weaknesses, should the need arise.”

Decentralized decision-making is described as “the delegation of significant decision making authority down through the ranks. The aim is to give those closest to the action the latitude to take advantage of on-the-spot information unavailable to their superiors.” The authors acknowledge the possibility for chaos and error when distributed authority is put in place. Nonetheless, they argue that the company’s overall objectives must be made clear to all in the ranks to minimize problems. Then, leaders must constantly assess and correct mistakes along the way.

The authors note that speed is essential to maneuver warfare, and so tempo, or “identifying opportunities, making decisions, and acting faster than one’s opponents, thereby forcing him into a constant state of reaction,” is critical. Martino says, “Tempo is the direct byproduct of decision making speed. Having decentralized decision making in place means that there is a rapid tempo to action—to stay a step ahead of the competition.” Cisco Systems is cited as an example of a company effectively employing “rapid tempo in product development, acquisitions, and internal operations.” The company continually outpaces rivals, say the authors, since Cisco leaders remember to usher in high-quality products to the marketplace faster than the competitor. By removing the layers of bureaucracy and following the Marine Corps way of decentralized decision-making, Cisco has continued to respond in a timely manner to market changes, they argue.

The final component to maneuver warfare, combined arms, refers to the “integration of complementary weapons in a manner that creates a synergistic effect and places an opponent in an inescapable, hopeless situation.” In business, they note an integrated marketing, sales, production, and distribution effort launching a new product as an example of a “combined arms” approach. For the strategy to succeed, employees must work as a team. The book states: “With regard to your people, invest heavily in initial and ongoing training to provide them with a shared sense of identity and common perspective.” The authors also emphasize, and rightly so, the need for management to be aware of the role of each employee.

Clemons says that while a number of books have discussed the applicability of some aspects of the Marine Corps’ tactics and skills to the corporate world, most have remained focused on human resource and leadership matters. The Marine Corps Way, instead, focuses largely on understanding the Marine Corps combat philosophy, and on using that philosophy to guide strategy and implementation. Clemons notes that while some gifted individuals are born as charismatic leaders with strategic vision, the rest of us can be taught both strategy and leadership. Leadership issues represent the smallest and last section of the book, but a thoughtful portion nonetheless.

Of course, the authors stand behind their choice of focus, and note that “Leadership … the Marines Corps Way ” is a “demanding philosophy. Maneuver warfare requires considerable self-confidence, sound moral character, a healthy appetite for calculated risk, and a high degree of commitment on the part of the leader.” Clemons adds, “Leadership requires followers, but you must earn the right to have the people follow. It is not earned automatically with a title. There is a reason why Marines follow orders at great personal risk, since they understand the rewards to the division and to the corps.” Santamaria concludes, “Strong leadership creates the trust that binds and enables the overall strategy.”