Revolution in business affairs?

Citation

Marren, P. (2003), "Revolution in business affairs?", Journal of Business Strategy, Vol. 24 No. 4. https://doi.org/10.1108/jbs.2003.28824daf.001

Revolution in business affairs?

Patrick MarrenPatrick Marren is a strategic consultant with the Futures Strategy Group. Clients he has worked for have included the US Coast Guard, NASA, the FAA, the Panama Canal Commission, various aspects of the US military, and numerous Fortune 500 companies. He lives in Crystal Lake, IL, Marrenp@aol.com

This is the Journal of Business Strategy. The word "strategy" comes from the Greek "strategeia", which means "generalship". The Greek word for "general" is "strategos", which in turn comes from "stratos", "army", and the verb "ago", which means "to lead".

So the ultimate root meaning of "strategy" is "army-leading". Many of our terms for everyday business activity come from the sphere of military affairs, so many that we do not even notice it anymore.

We speak of "campaigns", "capturing market share", "attacking rivals", business "empires", sales "forces", and "market intelligence". We "wargame" our "battle plans" and swap "war stories" after "defeating" our rivals with "blitzes" and "offensives".

Of course, these analogies can be taken too far. Business is not war. The objectives of the two activities could not be more different. The objectives of war vary from society to society and from era to era. In some cases, war follows the orderly Clausewitzean formulation of "the continuation of policy by other means". In others, it is a completely nihilistic form of mass murder. But in all cases, war is characterized by compellance of certain behaviors on the part of other peoples by the use, or the threat of the use, of violence.

Business, on the other hand, is the provision of goods and services to willing and paying customers. Its sole analogy to war comes from its competitive nature (in a free market, at least). Of course, it shares this competitive facet with sports, which is why sports have provided business with almost as many metaphors and pieces of jargon as the military has, to the eye-rolling of many a non-sports fan.

What people often forget, because we so often see business as patterned after war, is that business of one sort or another is probably at least as old as war. The traffic in terminology and ideas sometimes seems to be all one way - from the military, to business. But recent developments in military science, along with a far greater two-way interpenetration between business and military personnel, academic disciplines, and processes, have greatly altered this pattern.

About 20 or so years ago, for the first time in a very long time - perhaps ever - the military started consciously to think about itself as if it were a business. A wholesale application of business concepts to the military was found not only in the usual places, such as in facilities management ("roads and commodes"), weapons system procurement, and accounting procedures, but in the most basic and distinctive part of the profession: that of fighting wars.

Warfighting, though a contest of violence, has always had a business-competitive element as well. Efficiency would not seem to matter to a general who is ordered to "win at all costs." But in many of the major conflicts of the past century, efficient management of scarce resources was a hugely influential element in deciding the issue. Both World Wars were essentially decided by the superior industrial capacity and management techniques of the Allied side.

But this time, business theory has penetrated the castle keep of the military art: strategy. What has become known as the "revolution in military affairs" (RMA) is frankly based on concepts and ideas either pioneered in the private sector, or greatly influenced by business thinking, or with such close analogy to business processes that it is difficult to see how they could have evolved independently.

RMA, like most big and popular ideas, has many "fathers" claiming "paternity". Ironically, however, one main family branch of this business invasion of the military citadel can be traced to that bastion of capitalism, the Soviet General Staff. In 1972 or thereabouts, a couple of Soviet officers published a paper theorizing that a new generation of precision-guided weapons could bring about a revolution in warfare. Previously, in order to achieve "massed fire", "platforms" (e.g. tanks, planes, ships, artillery pieces - and soldiers) had also to be massed.

With this (then purely theoretical) new generation of long-range guided weapons, an army would no longer need to bring together masses of men and weapons to fight wars - it could stand back from a distance and fire its "long-legged" weapons from such a distance that it could not be interfered with.

At the same time that this seminal work was being published in a Soviet military journal, the first inklings of the potential of computers to alter the way work was done in the business world were occurring to some prescient thinkers. The earliest researchers into networked systems were patted on the head, at best, or dismissed as crackpots at worst. It would take a good decade and a half before their ideas began to interact with those of the warriors so as to alter world history.

Studies into workflow and "the paperless office", not yet yoked to the network concept, led many a company down many a garden path. But it is interesting to note that many companies were coming up with a similar idea: with new systems, more work could be done with fewer people. "Massed output" could be accomplished without masses of employees.

For a time it appeared that all this investment in information technology had been wasted. Articles in the late 1980s proclaimed that the net improvement in business productivity as a result of the trillions invested in IT had been exactly zero. The recession of the early 1990s seemed to confirm to many that computers were nice for NASA and other white coat-clad persons, but that in mainstream businesses, they were just overpriced typewriters. The "killer app" of the network, though, was just around the corner.

The same period in the military saw some very creative theoretical breakthroughs - in some ways anticipating changes in business, in others incorporating them. During the second half of the 1980s, US military thinkers such as Andy Marshall and Admiral Bill Owens began to flesh out the concept of the RMA.

Essentially, RMA took the initial idea of long-range precision guided weapons, added to it the new generation of "brilliant sensors", and then took from business the emerging notion of the network to make the whole thing work. The brilliant sensors were nice by themselves, but the real power came from hooking them into sophisticated networks, and connecting these nets to the precision-guided weapons. These three elements allowed the "massing of fires" that their Soviet predecessors had sketched out 15 years or so before to seem an imminent, and overwhelming, reality.

And so, in the early 1990s, the US military and US business both began to reap massive benefits from the new phenomenon of networked computing and communications. "Network centric warfare" evolved just as the Internet began to revolutionize the way business was done.

In business, IBM, with 400,000 employees, suddenly lagged the market capitalization of upstart Microsoft, which had one-twentieth the number of workers. (Massed commercial "fires" without massed "soldiers".)

In the military, the Tomahawk cruise missile - an adaptation of a nuclear missile to a conventional job - made use of networked sensors to strike targets from long distance. (Massed fires without massed platforms.)

In the mid- and late 1990s, as the "dot com boom" swelled, the interaction between military and business thinking became pervasive and even hip. In 1998, Vice Admiral Arthur Cebrowski of the US Navy, a pioneer of network-centric warfare and RMA, wrote in a paper with John Garstka that:

"Network-centric warfare and all of its associated revolutions in military affairs grow out of and draw their power from the fundamental changes in US society. These changes have been dominated by the co-evolution of economics, information technology, and business processes and organizations." (Cebrowski and Garstka, "Network-centric warfare: its origins and future", Naval Institute Proceedings, January 1998.)

Clearly, by the late 1990s, the military no longer saw itself as always and everywhere the monopolistic source of strategic thought; indeed, it saw a large part of its future in applying civilian business concepts to its own special sphere.

Just as clearly, the cult of the network, and of information technology itself, suffered a tremendous blow in the civilian economy shortly after Admiral Cebrowski wrote these words. This is a period of painful retrenchment in information technology; business investment in IT at the time of this writing is far below the levels of five years ago, and perhaps 99 percent of the "dot com" companies in existence in 1998 are completely gone now.

What of the military? Has cynicism overtaken its network centric warfare efforts?

There the situation has been quite different. While certainly even fewer Silicon Valley 20-somethings these days are being featured in high-level briefings at the Pentagon than are getting a hearing at white-shoe venture capital firms, the undeniable success of advanced technology in vastly increasing the lead the USA enjoys over any potential conventional enemy has kept network centric warfare and the RMA front and center in the future plans of the military.

The success of what is now known as "Gulf War I", the conflict in Afghanistan, and "GWII" have reassured the military that its basic direction is sound. While business has sharply cut its commitment to investing in anything visionary, and "boring basic industry" is enjoying the distress of its more modish fellows, the military has yet to see any reason to question the potential of RMA to guarantee them a successful future. One impressive statistic: in "Gulf War I", thirteen planes had to be assigned to ensure the destruction of one target; in Afghanistan, one plane was typically given four targets to hit per mission.

What might the future hold for RMA/network centric warfare? And is there hope for an early revival of the IT industry in the recent successes of our military?

At this point, analogy may fail us. The use of networked sensing and long-range weapons seems to have a secure future in conventional military application, and further amplification of its power will almost certainly come from closer alignment between the services that have yet to become truly "joint".

The success of the military, however, cannot necessarily be said to be a harbinger of analogous potential in the private sector. Recovery will certainly come to the civilian IT business, but the glory days of IPOs and overnight youthful millionaires are probably gone for a long time to come. In fact, the May 2003 Harvard Business Review contained an article by Nicholas G. Carr entitled "IT doesn't matter", the thesis of which, to oversimplify, is that business can no longer gain real competitive advantage through IT anymore. (A certain sign that someone will do exactly that very soon?)

On the other hand, there may be a different analogy from the private sector that could point to a vulnerability of the military going forward; it comes not from the immediate past, but from a decade or more ago.

When networked systems first made their appearance in business, the mainframe computer business went into a steep, and, as some thought then, fatal slide. Mainframes, the thinking went, would be completely replaced by networked PCs. Reports of the mainframe's death, as Mark Twain might have said, were surely exaggerated. The mainframe is still with us, even though it is now clear that the big story of the 1990s was not ever-faster and more capable mainframes, but the rise of networks and distributed computing.

Our military, even in its RMA, network-centric incarnation, is essentially a "mainframe force". It is a large, complex machine that is designed to engage similarly large and complex machines - standard military forces of nation-states.

The potential vulnerability was revealed by 11 September. The most urgent threat we face right now as a nation is not from "peer military forces", because for the immediate future we have no peer when it comes to conventional military might. The most urgent threat to us is from "distributed", "asymmetrical" forces such as those that perpetrated the horrors of 9/11.

The USA, like IBM, may have the best "mainframes" around, and getting better all the time; but it looks as though we face a painful adjustment to a world of small-scale, "distributed, networked" threats. The RMA, visionary and successful though it definitely is, cannot necessarily address this threat.

Perhaps we had better start poring over Russian military journals once again.