Business As War

What It Takes to Change, Part 2

To change, companies need a framework that guides people at all levels as they convert informed choice into timely action. In military terms, they need corporate doctrine.

Doctrine is fundamental to war. As defined in Warfighting, the Marine Corps' handbook on strategy and operations, doctrine is "the fundamental beliefs of the Marine Corps on the subject of war, from its nature and theory to its preparation and conduct. Doctrine establishes a particular way of thinking about war and a way of fighting, a philosophy for leading Marines into combat, a mandate for professionalism, and a common language. In short, it establishes the way we practice our profession."

In business, doctrine is still waiting to be created. All executives accept the need for formal strategies to define the means by which companies compete. Most executives have embraced mission, vision, and values to communicate the ends for which companies compete. Still, something is missing: the doctrine that provides the integration between ends and means - how companies compete.

Doctrine is not minutely prescriptive. In the case of the military, it does not provide detailed instructions on how to fight specific campaigns. Rather, it is a mixture of philosophy ("maneuver warfare," says Warfighting, "is a way of thinking in and about war that should shape our every action") and practice (subordinates "should understand the intent of the commander two levels up") and the connections between the two.

In business, good doctrine meets three needs. First, it establishes a common purpose - the company's definition of victory. Second, it establishes a common language - a shared way of expressing the corporate strategy. Third, it establishes common decision rules - a shared framework for action. The sum of these elements answers the questions that any company must answer if it expects to win: How do we compete? Where do we compete? How do we conduct ourselves? How do we know whether we're winning or losing?

Whether they use the word or not, innovative companies are beginning to invest in doctrine. Motorola, one of the world's most competitive high-technology manufacturers, operates Motorola University in part to create a company-wide language and decision-making system - a doctrine - for quality. Koch Industries, another remarkably competitive (if less visible) enterprise, has made significant investments in the Koch Management Center to create what it calls "management technology" - the common vocabulary and shared understanding that is the substance of doctrine.

Perhaps the most elaborate example of corporate doctrine is at Emerson Electric, where CEO Charles F. Knight has institutionalized a rigorous management process. Knight's doctrine includes a clear definition of victory expressed in unambiguous financial measures; a common vocabulary, with critical terms ("best cost producer," for example) that all Emerson managers understand; and decision rules that inform behavior from the executive suite to the factory floor. Every manager and worker at Emerson is expected to be able to answer four basic questions about his or her job: Who is the "enemy"? Do you understand the economics of your job? What cost reduction are you currently working on? Have you met with your managers in the past six months?

The overarching point of Knight's management process is to create a framework for decision making that allows people throughout the organization to convert informed choice into timely action consistently. It is no accident that the company has recorded 35 consecutive years of increased corporate earnings and earnings per share. Doctrine matters.

What It Takes to Change, Part 3

Every year the Department of Defense issues its list of the technologies essential to national security. And every year these "critical technologies" include many of the same items: gallium arsenide chips, photonics, artificial intelligence - and simulation. Why simulation? Because the Pentagon understands that one way to improve its chances in battle is to practice fighting.

The origins of military simulation go back to the Navy in the late nineteenth century. In those days, officers practiced war games by moving toy ships around large tables. The modern Pentagon spends hundreds of millions of dollars a year on computer-driven war games. A thriving simulation community - a cottage industry - of analysts, programmers, and consultants works with the military to push the technology.

Business is just coming to recognize what the military has known for 150 years: competitive simulation allows managers at all levels to practice converting informed choice into timely action. From such practice comes faster decisions, crisper execution, and better integration. The essence of learning is doing; the essence of doing is teamwork.