Organizations don’t plan to fail, and they don’t fail to plan; in fact, most have excellent plans for success. But then those plans run up against real life, or a better competitor executes a better plan. It’s a familiar story: an organization long touted for its excellence in its field is trounced by an upstart competitor playing by different rules. It survives (barely) and then goes through a painful process of remaking itself and eventually returns to even greater prominence.
No, I’m not referring to IBM in the 1980s; the organization from which Stephen Bungay draws modern management lessons is the Prussian Army, which was all but annihilated by Napoleon in 1806. Carl von Clausewitz survived that battle and later went on to study the nature of war at the War College in Berlin. In the mid-nineteenth century General Helmuth von Moltke used Clausewitz’s theories to develop his officers and shape his organization as head of the Prussian General Staff, and many of his ideas have shaped the thinking of the American military today.
The central idea of Clausewitz’s ideas was the concept of friction, his term for all the “uncertainties, errors, accidents, technical difficulties, the unforeseen and their effect on decisions, morale, and actions.” In other words, a general can plan in meticulous and brilliant detail how a campaign will go, but things will always deviate from the plan, and an organization must have the capacity to adapt to changed circumstances.
While this might sound like common sense, in actual practice many business organizations try to deal with uncertainty by searching for more detailed information and imposing ever more detailed metrics and controls, implicitly following the ideas of Frederick Winslow Taylor, who introduced scientific management to the world in 1911.
Taylorism was not all bad—for many repetitive tasks in a linear, unchanging environment it is the best way to make work as efficient as possible. The problem is that today’s business challenges rarely fall under that description. Ironically, while much of modern business writing recognizes this and looks for ways to escape from Taylorism’s influence, the Prussian Army had worked out an approach 50 years before Taylor.
Comparisons between military and business operations are often way overdone, but in both fields, an organization attempts to achieve certain goals in a competitive environment. Businesses strive to increase their share value by achieving profit and growth objectives. Their plans, however don’t act on inert objects. They run up against the independent will of customers and competitors, not to mention suppliers, regulators, legislators, general public opinion, changing technologies and even nature itself in a world that is ever more tightly connected and changeable. All of these impact each other in innumerable feedback loops, creating complexity that makes it impossible to plan with precision.
Complexity causes three gaps that make it so difficult to execute on the strategies devised by the top:
Knowledge gap: The central planning unit does not have all the information it needs to decide on the best course of action. Or it has too much information, much of which is simply noise.
Alignment gap: Its instructions may not be correctly understood or interpreted by lower levels, or they may not act on them as expected.
Effects gap: Even if everything is done as planned, it does not always have the intended effect, especially when competitors or customers don’t do what we want.
Faced with each of these gaps, it’s a common reaction to demand more detailed knowledge, instructions, and controls. These send a message to lower levels that they can’t be trusted to take the initiative, add to the noise and the net result makes the problem worse.
Directed Opportunism
The approach which the Prussian system took to address the three gaps can be summarized as follows:
To deal with the knowledge gap, von Moltke said, “Do not command more than is necessary or plan beyond the circumstances you can foresee.” Rather than detailed plans and orders, the leadership communicates its strategic intent, that is what needs to be achieved and why. They set the direction, not the exact path. Execute plans that are “about right—now”, and then make adjustments. The operative phrase is “PLAN – DO – ADAPT.” Bungay calls this process directed opportunism.
The alignment gap is addressed through changes in what is communicated: “Communicate to every unit as much of the higher intent as is necessary to achieve the purpose.” It’s important to master the skill of strategic briefing, so that each level clearly understands the intent of two levels above. They must then “backbrief” by articulating what their principal tasks will be as a result. The benefits are that the unit being briefed checks its understanding of the directive, and the superior gains insight into the implications of their own directions and can make adjustments accordingly. Thus, when subordinates are faced with a new situation and must make a quick decision, they can answer for themselves the question: “What would my boss tell me to do if he knew what I know now?”
Finally, because the top can’t react immediately when actions don’t have the intended effects, “Everyone retains freedom of decision and action within bounds.” This precept is the one that most violates the common stereotype of the German military officer as an unthinking automaton slavishly following orders. In fact, one of von Moltke’s exercises at the General Staff school required students to disobey orders in order to complete the exercise. In one incident, a general scolded a staff officer by saying: “The King made you a staff officer because you should know when not to obey.”
Bungay supplements these lessons from long-ago European wars with many current business examples. As with the Prussian Army, the aim for today’s businesses should be to create a system that does not require genius or “A-Level talent” to work, but instead gets the best out of reasonably intelligent people. Of course, they have to be the right kind of people, not those who “smile up and kick down” (as Jack Welch put it in one of his annual letters), who do not need to micromanage or get instruction from their superiors before every move.
It’s tough to do justice to the brilliance and depth of this book in a short article. Go out and get your own copy, and you will help to make your own organization more agile and effective and a better place to work.
