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April 16, 2006

10 Lessons from the Corporate World For Donald Rumsfeld's Fight to Keep His Job
Posted by Suzanne Nossel

Since I spend my days in the corporate world, given the outcry over Donald Rumsfeld’s leadership at the Pentagon the analyses of commentators like David Brooks who tie the SecDef’s failings to the style he developed in business, I thought it might be fun to try to distill 10 lessons from the corporate world that apply to Iraq:

  1. If a Seemingly Wise and Sound Venture is Failing, Question the Management – This is the basic principal behind calls for Rumsfeld’s ouster:  if, as Bush insists, the Iraq invasion was correctly conceived and still stands a chance to succeed, there’s got to be some explanation for why the detritus of failure piles up day after day.  Had new management in the form of John Kerry come in in January 2005 there would still have been a chance to turn things around.  It may well be too late now, but the retired Generals and the public are right to demand that Bush try, and the way to start is with new management.

  1. Don’t Confuse Marketing with Sales – The Administration has put heavy efforts into trying to market the Iraq War through speeches, outreach, and artfully worded statistics.  But sagging poll numbers show that no one’s buying.  To get the public to buy into this war would have required addressing their fundamental qualms – the shaky rationale, poor planning, and absent international support.  The biggest marketing blitz in Hollywood can’t sell tickets to movies people don’t want to see.

  1. After About 9 Months, Lack of Trained Personnel is No Longer an Excuse – When the occupation of Iraq began in 2003 there might have been some grounds for excusing the unavailability of American troops trained in peacebuilding (after all, Bush had decried nation-building during the 2000 campaign).  But three years later soldiers are still finding themselves in roles and jobs for which they had not training.  The Pentagon ran out of excuses a while back.

  1. Staff Must be Obligated to Dissent – Well-run companies spend a lot of time trying to tease out alternative thinking from their executive and line ranks, knowing that functional experts see things top management cannot.  At the McKinsey consulting firm, consultants have a “obligation to dissent,” meaning that they are urged to speak their minds if they think a project is off course.  This is easier to administer in paper than in practice, where loyalties and career fears constrain openness.  But well-managed companies find ways of overcoming these barriers.  From all reports, the Rumsfeld Pentagon does the opposite.

  1. Ventures that Start Very Badly Are Typically Impossible to Turn Around – This is true in the corporate world (think the AOL-Time Warner acquisition or Bertelsmann's acquisition of Napster, to name a couple of fairly recent and sexy examples), and – it would be my guess – equally so for the military.  There are a variety of reasons why:  leaders wind up spending more time trying to defend failed policies than looking ahead; they lose confidence; they cannot attract the support of others; competitors are emboldened by the perceived failure; shareholder pressure increases which can curb resources, etc.  Many of these are at work in Iraq too.

ow 6.  Major Splits in the Ranks Should Not Simply Be Allowed to Fester - It is not uncommon for controversial leaders to divide the ranks underneath them.  But if these rifts can swallow up so much attention and energy that they drain away the ability to solve problems and otherwise make progress.  Every action is evaluated not just on its merits, but on how it will play into the feud.   Partly because the market reacts negatively to the uncertainty they create, well-run companies move quickly to end power struggles and clarify direction in the face of major divisions.  External signs indicate that the military may be at this level of polarization.  Allowing that to persist may, in its own right, compound the challenge we face in Iraq.

7.   The Perception that Positive Change is Afoot Can Become Self-Fulfilling Prophecy – In a failing company or division, the sense that change is afoot and a turnaround is gaining steam can become self-reinforcing.  People start to regain confidence, they begin to believe they’ll make money again and that the stock price will go up, the perceptions of colleagues and competitors improve and are reflected back.  The Pentagon badly needs to recreate this sense of positive momentum within the military.  Replacing Rumsfeld would be a way to start.

8.  A Change in Management is More About the New than the Old - Those pushing to boot Rumsfeld should keep in mind that if he goes the story will immediately shift to his successor, who will not be saddled with the last 3 disastrous years of policy and performance.   Meanwhile a lot has changed since some of the most thoughtful sets of policy recommendations on Iraq were published last fall:  is the oilspot theory still relevant now that sectarian warfare is proving more of a risk than the insurgency?  is there any indication that the delays in forming a new government are really due to an almost lazy over-dependence on the US which would be alleviated if we announced an intent to decamp?

9.  A New Leader Must be Given Broad Leeway to Set New Strategy – While Rumsfeld’s removal would be an important stride toward accountability for the thousands of mistakes being made in Iraq, it alone won’t necessarily improve the course of the war.  If the White House and the Pentagon bureaucracy remain wedded to current ways of doing things a new SecDef may represent symbolic change only.  When companies replace CEOs it is because things are seriously off track, and incoming leaders are typically asked to chart a new course after an initial period of diving deep into the problems that did in their predecessor.  The same should be true at the Pentagon.  For an Administration that considers the replacement of Andy Card by Josh Bolten a "shake-up," this seems unlikely.

10.  Shoring Up a Seriously Flagging Leader is Impossible – By some estimates, 75 percent of army officers want Rumsfeld out.  Under those circumstances, every ounce of energy he has will be devoted to trying to cling on, counter his critics, and shore up his image.  Even with all that, the effort will fail.   When someone becomes embattled, loses the support of their own staff, colleagues, and shareholders, it becomes a matter of time before they are out.  This Administration has defied that logic before, but I believe the clock is ticking for Rumsfeld.

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Comments

Had new management in the form of John Kerry come in in January 2005 there would still have been a chance to turn things around.


Your Dissent article provides no evidence for this, other than "failure is not an option." In the summer of 2003, the Pentagon commissioned this report: the next 12 months will be decisive in the reconstruction of Iraq; the next three months are crucial to turning around the security situation. IOW, we reached the point of no return in July of 2004 at the latest.

And all of this assumes that the Iraq war was a "wise and sound venture" to begin with. Most experts thought it was foolish.

Cal, I don't think she's asserting that Kerry would have turned things around. She's asserting that without a management change there wasn't much hope of turning things around.

The business analogue is, you have a company that's doing badly. Management has a plan to turn things around, they make projections for how it works. Six months later their projections have failed but they have a new plan to turn things around and they state their new projections. But six months later the new projections have already failed, and they have a new plan and new projections.

Often with failing companies new management fails to turn them around. But when it's like the above, it looks pretty unlikely without new management.

Perhaps J, but I would argue the business analogue is a company that makes buggy whips, in which case Jack Welch couldn't turn a profit.

Yes, Rumsfeld has been inept, but when the strategy is unsound, tactical excellence isn't going to make much difference.

The government-business analogy is trite, misleading and inapt.

It's trite because so many conservatives have (ab)used it into meaninglessness.

It’s misleading because government is essentially different than a business. Government has authority to use force, businesses do not.

It’s inapt because government agancies have no accountable management. The administrative state is not run by elected officials. The Progressives created a professional Civil Service intentionally granted immunity from electoral management.

When conservatives use the analogy, it’s dumb. When anti-business liberals us it, it’s both dumb and disingenuous.

The military,though, does have accountable management. Very similar to businesses, in a different context.

And when stockholders get upset with a corporation, they hardly ever say "We demand you fire your Vice President for Marketing.". If marketing is a big problem and firing the marketing head was at issue, the CEO has already failed by not firing him. Stockholders don't try to micromanage the details of running the business. They hold the top guy accountable.

The guys to hold accountable here are Bush and Cheney. The war is likely to be run much more responsibly after they are gone.

The military,though, does have accountable management. Very similar to businesses, in a different context.

Laughably false. It’s nothing like business.

And when stockholders get upset with a corporation, they hardly ever say "We demand you fire your Vice President for Marketing.". If marketing is a big problem and firing the marketing head was at issue, the CEO has already failed by not firing him. Stockholders don't try to micromanage the details of running the business. They hold the top guy accountable.

True but incomplete. Stockholders just as often hold boards accountable for poor management decisions, especially when boards approve a campaign that stockholders later deem a mistake.

The guys to hold accountable here are Bush and Cheney. The war is likely to be run much more responsibly after they are gone.

True but incomplete. Congress is just as culpable, if any culpability is to be had. (I don’t think there is any.)

Since no Democrat has advanced any plan significantly different than Bush’s, except a rapid exit from Iraq (and the vapid "more diplomacy" exhortation), I can’t find anything to support your last claim.

Democrats usually win national elections by acting like Republicans. I suspect the "reframing" formula won’t change.

""The military,though, does have accountable management. Very similar to businesses, in a different context.""

"Laughably false. It’s nothing like business."

Well, it is accountable. In business, if you are at a lower level and you show you're disloyal to the company, or if you appear incompetent, you can expect to get fired. And if you do everything right but you don't persuade your boss of that, then too bad -- part of the job is to make your boss think you're loyal and competent.

In the military if you are in lower ranks and do something equivalent you might get prison time and a dishonorable discharge. You might not see a similarity, but I do.

Of course a diminishing number of businesses have unions to keep disloyal or incompetent members from being fired, so sometimes it might be more similar to civil service jobs than the military.

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