The Soft Stuff Is the Hard Stuff, and Other Lessons From Iraq

The metaphor that equates war and business is about as wrong as you can get -- unless you know what similarities to look for. For business leaders who are studying the war in Iraq, here are five lessons worth learning.

One of the most annoying conceits of Wall Street is that "it's a war out there every day." Let me rephrase that. The single most annoying conceit of Wall Street in particular and the business community in general is that its daily activity is akin to war. Business is not war, and war is not business. But there are business lessons to be learned from Operation Iraqi Freedom, and they are worth recounting here.

1. Rapid dominance matters.

In any attempt to occupy new territory, the most important things that happen are the things that don't happen. By simultaneously and immediately securing the oil fields in southern Iraq and disabling Iraqi communications to the northern oil fields, the U.S.-led coalition prevented an ecological and economic disaster. By disabling Iraq's missile-launching ability and by securing key air bases, the coalition prevented Iraqi Scud missiles from landing in Israel -- the nightmare scenario of all night-mare scenarios, since the last thing the United States needed was al-Jazeera portraying Operation Iraqi Freedom as a U.S.-Israeli invasion.

"Luck is the residue of design," Branch Rickey once said, and the U.S. war plan was designed around the idea of rapid dominance. Most corporate planning, on the other hand, is designed around the political principle of risk avoidance. The problem with what might be called corporate incrementalism is that it doesn't forestall. Which is why it invites trouble.

2. Battlefield awareness matters.

Using satellites in the sky and chip markers on all American military personnel and hardware, commanders in Qatar were able to see coalition forces as "greens" or "blues" and enemy forces as "reds" on their computer screens and position their forces accordingly. The big idea: Technological interoperability is an essential ingredient of large-scale success. The Army and Marines may be able to see every soldier and every tank on the battlefield, but that's worthless information unless the Air Force can see and act on that data and do it in real time.

The reason that most corporate mergers don't work is that the promised synergies almost never develop. When synergies don't develop, it's because interoperability isn't happening. One division keeps its data from another division. Or, more pathetically, one division's computers can't access another division's databases. AOL Time Warner is the Mother of All Metaphors for the failure of unrealized interoperability. Want to win? Work together.

3. It's a digital world.

Information technology can provide a decisive strategic advantage. American forces are indeed extraordinary, but what sets them apart from the Iraqi warriors is their digital capability. The Americans have better information, more lines of communication, and unprecedented access to command and control. Say what you will about the bubble; the technological capabilities it brought are indisputable and permanent. If you're not digital, you're not relevant.

4. Transparency is a fact of modern life.

One of the most remarkable things about Operation Iraqi Freedom has been the basic candor of the commanding officers and the unprecedented access given to journalists. Reporters and TV producers who are "embedded" with the troops are constrained on points of operational security, but otherwise, they are allowed to see the war exactly as the soldiers experience it. It's a lesson that business leaders should have learned, not from this war, but from the round of scandals that came before it. There are no secrets anymore.

5. Software matters as much as hardware.

Winning a war is terrible, brutal work. Winning the peace requires the same kind of dedication and a great deal more finesse. If Saddam is replaced by a functioning Iraqi administration that begins to rebuild the infrastructure of a civil society, then there will be reason for optimism. If not, then the consequences will spill over into the region as a whole.

In the post-bubble economy, this is a lesson that corporations need to relearn. Once again, business is turning to hard numbers and tough practices. All the hardware in the world can be a mighty force, but an old truth is still at the heart of business: The soft stuff is the hard stuff. Today, the software of management skill, leadership, and ethics matters more than ever. Arthur Andersen was a mighty force five years ago. It doesn't exist today -- because its leaders neglected the software of business. They forgot that conduct matters as much as product.

John Ellis (jellis@fastcompany.com), a writer and consultant, works in media, politics, and technology. Read his weekday musings on the Web (www.johnellis.blogspot.com).

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