the ones who have MBAs – simply don’t possess the degree of flexibility (or mental agility) required in war games. The more confident they are, the more linear their approach tends to be in assessing the future. They don’t change their minds. Instead, they focus on the short term because that’s where their bonuses direct them to look. They forget the old acronym: one battle does not win the war (though it’s a heck of a lot better than losing the battle).
Hence the reason for this book – to introduce military-type thinking to business people. Not of the command/control kind, which is the stuff of the thousands of motivational epics which land on the bookshelves each year. No, we’re more interested in the games, the scenarios, the risks, the show-stopping discontinuities that are now part and parcel of the world at war as well as the world at peace. Think of the American Marines and the British Special Air Services or the SAS. When they’re called in for an assault on an enemy position, they have scale models, they have an understanding of the modus operandi and probable behaviour of the enemy, they visit every scenario over and over again in their game plan. Nevertheless, they know the limits to their knowledge and are ready to adapt spontaneously to any completely unexpected development.
We are qualified to give this alternative picture. In our last book, The Mind of a Fox, published in June 2001, we offered a very specific world-view to George W. Bush in the first months of his first term as US president. In an open letter to him, we painted a picture of a world increasingly divided, a world in which the nature of war had changed completely, where terrorist groups could basically build a nuke off the internet; where his prime risk was a massive terrorist strike on a Western city, and where the strategies and tactics to win a war on terror were totally different to those employed in conventional warfare.
We received an interesting comment from an American woman who bought our book at the airport to read on an overnight flight to New York on September 10, 2001. She finished it before she went to sleep, and subsequently recalled that the only thing she thought was ridiculously over the top was our suggestion that terrorism could redefine George Bush’s presidency (the word was only mentioned once in the lead-up to the 2000 election). Then she woke up to the announcement that the plane was being diverted because of the terrorist strike. The rest, as they say, is history.
The 9/11 Commission in Washington recently reported that the principal reason for the intelligence agencies failing to detect the plot beforehand was a ‘failure of imagination’. We imagined it – albeit using a scenario of nukes being planted in the middle of a city as opposed to planes being flown into tall buildings. We were vaguely right because we never underestimated the sophistication and patience of modern terrorist organisations, combined with a deep resentment and religious hatred of the West. And it’s much better being vaguely right than precisely wrong. That’s where games are central to envisioning the future. Interestingly, Rudy Giuliani – the mayor of New York at the time of 9/11 – confirms this approach with his phrase ‘relentless preparation’. All the emergency service departments in New York had gone through the drills for a plane crash in the city (one had even been simulated). So even though no one imagined planes being used as missiles to hit buildings, the evacuation and fire drills were similar to a plane crash and saved thousands of lives on the day. In other words, the exact scenario does not have to materialise for the process to pay off.
At this juncture, we feel obliged to point out some significant differences between games and the real world. In a game of chess, for example, the rules never change. Bishops move diagonally, rooks horizontally and vertically, and victory is achieved when the king is checkmated. In life, only the moral rules don’t change. All the other rules can and do change and have to be examined before moves can be contemplated. And the meaning of victory in a field like business can differ from person to person. In chess, the gameboard never changes shape and will always have 64 squares, half white, half black. In business, you can change the shape of the gameboard yourself and so can your opponent. The number of squares can grow or shrink; and irrationality, emotion, greed, fear, envy and anger can turn the colours of the squares into every shade of the rainbow. The whole gameboard can even be tipped over temporarily by external events like the bombing in Bali. In chess, the players move the pieces. In the real world, the pieces can take on a life of their own and resist being pushed around if they feel it is not in their best interest – like nonaligned nations and employees.
All in all, business is much more complicated than chess, and demands greater imagination. Business strategy is therefore more of an art than a science (just like war). It is not a game to be played by planners who are solely analysts and believe that the future is a projection of the past. The future is never like the past, because there is always something new, something different. The gift of intuition, the gift of capturing the extraordinary, are therefore vital ingredients in playing successfully on life’s gameboard. These are talents that foxes possess – but more of that anon.
Straight talk about strategy
In politics, the path from A to B is never straight.
It almost always goes through C, D or F.
L. PAUL BREMER
During Victorian times, travelling abroad was a real mission. It was not simply a case of weighing anchor and setting sail, it was about planning for a major adventure. So it was a strategic decision to go overseas and choose a foreign destination. Subsequently a series of disciplined tactical manoeuvres had to be executed in order to implement the strategy: what coach to take you from home to the harbour; where to stay before embarkation; which ship to be a passenger on; when best to sail; what provisions to take in addition to the ship’s own fare; what medications to pack, etc. (the choice in those days was fairly limited and certainly did not include seasick pills). For the captain of the ship, the operational decisions that needed to be made in order to arrive at the destination were somewhat grander: what provisions to take for the entire complement of crew and passengers, what to do if extreme weather conditions prevailed, at which ports to replenish stocks, what spares to have on board during the voyage, etc.
The sailing metaphor is a useful one to explain the difference between strategy and tactics. Strategy is about where you are going. Tactics is about how to get there (including logistics). Once you’ve set off on the voyage, there are only two strategic decisions you can make: change the ultimate destination or cancel the journey altogether and go home. Everything else is tactics. If you stray off course on account of difficult weather, getting back on course is a tactic. If you are becalmed, how to ration the food is a tactic. If you are in danger of being attacked by pirates, steering clear of them is a tactic. Make no mistake, being an expert tactician is as important as being an expert strategist. If you’re a bad tactician, you can sail the boat into the rocks and lose all life and goods on board. But they are different functions.
An old nineteenth-century saying sums it up quite well: “Strategy differs materially from tactic; the latter belonging only to the mechanical movement of bodies, set in motion by the former.” In other words, a handful of strategic decisions determine all future operational decisions. Yet so many businesses confuse strategy with tactics. They spend three days having a strategic workshop of which a couple of hours are spent on strategy and the rest of the time on operational matters which are totally subsidiary to strategy. We have found that in the largest of companies a genuine strategic conversation covering all the bases and unearthing the deepest issues need take no longer than four to five hours, on average a day or, comfortably stretching it, two days. The topic is after all about the commanding heights of the business and there the landscape is relatively simple, with only a few issues needing resolution.
Understandably, it makes sense to have this type of strategic conversation before the start of the normal annual planning cycle, the purpose of which is to put together next year’s production targets and budget. The latter constitute the steps on the road to the company’s long-term destiny, so it is prudent to have a discussion about where the road leads beforehand. Nevertheless, as you will see later on, we do make accommodation in our
