As the Defense Department was getting ready for another one of its large-scale strategic planning drills, senior Washington analyst Anthony Cordesman offered a grim assessment of such past efforts: “If God really hates you, you may end up working on a Quadrennial Defense Review (QDR). … You will waste two years on a document decoupled from a real world force plan, from an honest set of decisions about manpower or procurement, with no clear budget or Future Years Defense Plan, and with no metrics to measure or determine its success.”
Even though the recently completed 2010 QDR has some potential to make a more meaningful contribution to U.S. national security than its predecessors, the overall utility of the current models of strategic planning inside the Pentagon remains highly problematic.
The rational design model that dominates much of defense planning inside the department represents the state-of-the-art of the strategic management literature of 50 years ago. The business world left this model behind decades ago as archaic and unresponsive to the real world. Therefore, its failures to produce successful strategies for today’s defense challenges are not terribly surprising. It is high time for the Pentagon to profoundly reorganize the ways it conducts strategic planning, and the business world could once more be a source of inspiration. Even if defense strategy and business strategy are different in several obvious ways, the processes of strategy-making in all large organizations share certain important similarities. Above all, both Pentagon strategists and business strategists must operate in a complex and rapidly changing external environment, they face limited resources, need to overcome bureaucratic obstacles inherent in large organizations, and compete against a number of thinking adversaries who constantly attempt to foil their plans. Therefore, there are important insights that defense planners can consider from the ways in which the business world changed its practice of strategic planning in recent decades.
Much like corporate America in the 1960s and 1970s, the Defense Department’s strategy-making process is conducted by large planning staffs operating in a highly bureaucratized structure. However, while U.S. businesses realized the limitations of the rational design planning model a few decades ago and subsequently adopted new forms of strategy-making, the Pentagon’s planning process is still largely mired in the framework imposed by former Defense Secretary Robert McNamara 40 years ago. This framework, built around a top-down hierarchical structure, resisted subsequent efforts to improve the Pentagon’s strategic planning capability because most such efforts, including the congressionally mandated QDR, failed to question some of the fundamental premises of this model. One of the foremost business theorists, Henry Mintzberg, identified three major fallacies of traditional planning in his highly influential book,, “The Rise and Fall of Strategic Planning”:
å The fallacy of predetermination — “[Planning assumes] the prediction of the environment through forecasting … the unfolding of the strategy formation process on schedule, and the imposition of the resulting strategies on an acquiescent environment, again on schedule, with the organization stabilized to do so through programming.”
å The fallacy of detachment — “The detachment of strategies from operations, and, as a result, of what is called strategic management from operational management,” or more simply, the separation of strategy formulation from strategy implementation.
å The fallacy of formalization — “The fallacy that strategy formation can be formalized … that innovation can be institutionalized.”
Each of the three major criticisms raised by Mintzberg could be profitably applied to national security planning, as well. First, the predictive accuracy of forecasting documents such as the National Intelligence Council’s Mapping the Future series or of the U.S. military’s Joint Vision 20xx series is surely just as problematic as the long-term economic forecasts of the business world. Second, the strong separation of “planners” from “doers” (for example, in the area of weapons procurement) often leads to a mismatch between future “strategic investments” and present real-world needs, a phenomenon captured by Defense Secretary Robert Gates in the term “next-war-itis.” The Pentagon must surely worry about distant threats as well as current ones, but the fact that professional planning staffs conduct “long-term strategic thinking” tends to lead to an overemphasis on preparing for the kinds of wars we would like to fight rather than the ones we are most likely to enter. Lastly, history shows that the large-scale formal strategic reviews conducted by the U.S. government rarely produce innovative ideas. At best, their role has been to officially formalize a strategic concept already present in the public debate, and, at worst, to create a vacuous document that failed to have any meaningful impact on future strategic decisions.
Even more fundamental than these three fallacies, business strategists realized that many successful strategies are formed through an emergent process of organizational learning from the experiences of the “guys on the ground” rather than from the efficient implementation of detailed plans laid out beforehand. The same cannot be said for most national security experts, whose efforts are often aimed merely at advancing structural or bureaucratic reforms that would allow senior leaders to implement their strategic plans more effectively. The idea that the “right” long-term strategy is something that can be “discovered” through extensive analysis by senior-level planners, and then implemented throughout the organization, is something that modern business theorists understood to be an illusory vision of how successful strategic planning takes place in the real world. It is time for Pentagon leaders to incorporate this insight, as well, and to shift the strategy-making process from one based on deliberate, formal planning to one that encourages emergent learning.
In recent years, there were a few hopeful signs that such a shift may be underway in some parts of the military. One recent example of the U.S. military conducting successful emergent planning is the evolution of the surge strategy in Iraq. Some important elements of this strategy have been the result of a bottom-up process of learning from the experience of leaders on the ground, rather than from top-down directives. Cols. H.R. McMaster in Tal Afar and Sean McFarland in Anbar province showed the importance of providing security for the population and, respectively, of making deals with Sunni sheiks and the future members of the Sons of Iraq, two crucial components of the “surge” approach that became the official U.S. strategy after Gen. David Petraeus assumed command in Iraq. More broadly, the successful adoption of the counterinsurgency (COIN) doctrine as a core component of America’s grand strategy in the war on terrorism has been an evolving process heavily influenced by the bottom-up lessons from Iraq and Afghanistan, rather than the product of a formal strategic review.
Unfortunately, even though the U.S. military improved its ability to develop emergent strategies in recent years, particularly when it comes to dealing with tactical and operational challenges, the Pentagon’s formal strategic planning process remains grounded in the outdated premises of the rational design model. Despite its repeated manifest failures in achieving the integration of strategy, programs and budgets, the Planning, Programming and Budgeting System (PPBS), a holdover of the McNamara era, continues to represent the management approach used to build up defense budgets. Similarly, the QDR exercises, another attempt to “make strategy” through a top-down rational design model, have been so overtaken by the bureaucratic rivalries among the military services that they served little strategic purpose once they were finalized. Despite the frustration with this traditional form of planning, both among civilian and military participants, the Defense Department at an institutional level has not yet found a way to adapt its strategic planning mechanisms to meet the demands of today’s rapidly changing external environment.
To better understand the evolution of corporate strategic planning, and consequently how we can apply lessons from this arena to national security planning, it is worthwhile to offer a very brief account of how the debate on this topic unfolded in the business world. The disappointing results of the traditional model of strategic planning led legendary General Electric CEO Jack Welch to begin his famed transformation of the company by making major reductions in the burdensome formal strategic planning mechanisms that were in place in the early 1980s. Over the next several decades, other leading corporations such as Intel, Honda, Royal Dutch/Shell Group, Exxon and Google followed highly successful strategies that had little to do with large-scale strategic planning exercises similar to the QDR. The stories of these companies’ successes, and of their innovative planning practices, could be profitably mined for insights by the government’s strategic and defense planners.
The turbulent business environment of the 1970s made long-term forecasting very challenging, and hence corporate strategists shifted their focus from long-term “corporate planning” to “strategic management” and the search for competitive strategies that could best maximize the internal resources of the firm. According to one of the most eloquent advocates of this concept, Harvard’s Michael Porter, “Competitive Strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
This focus on “competitive strategy” has been advocated in the debates on U.S. defense strategy by Andrew Marshall, Barry Watts and Andrew Krepinevich, among others, who have urged the U.S. military to focus on creating and exploiting asymmetrical advantages as the key to successful strategy-making. While these authors’ have been remarkable in their attempt to shift the focus away from the 1950s and 1960s traditional model of planning, recent developments in the business literature in the past decade have now moved away from this emphasis on competitive advantage (prevalent in the 1980s and 1990s) to an emphasis on strategic innovation and planned emergence.
The “learning model” of emergent strategy formation is based on Mintzberg’s premise that the “complex and unpredictable nature of the organization’s environment, often coupled with the diffusion of knowledge bases necessary for strategy, precludes deliberate control; strategy making must above all take the form of a process of learning over time, in which, at the limit, formulation and implementation become indistinguishable.”
The learning school does not deny the importance of certain elements of deliberate planning: As Mintzberg says, “all real strategic behavior has to combine deliberate control with emergent learning.” Most successful real-world strategies are neither purely deliberate, nor are they purely emergent. However, unlike the design school’s focus on detailed strategic planning exercises, and then on implementing the strategies resulting from such planning, the learning school has a different role for strategists. Deliberate planning should focus on managing the process of strategic learning. The strategist’s role is to create the conditions for a process of “planned emergence,” i.e. to provide a general guiding perspective, and then to recognize the successful strategic innovations coming from the bottom up and adopt them at the level of the entire organization. As Nassim Taleb writes in “The Black Swan,” “Contrary to social-science wisdom, almost no discovery, no technologies of note, came from design and planning — they were just Black Swans. The strategy for the discoverers and entrepreneurs is to rely less on top-down planning and focus on maximum tinkering and recognizing opportunities when they present themselves.”
The empirical record accumulated in the business literature over several decades offers some significant support to the “learning school”; in-depth studies of several large companies have confirmed the importance of emergent processes in strategy formation. The success of Honda in the U.S. motorcycle market was initially regarded as the result of a carefully planned formal strategy, but later scholars showed that Honda’s success in fact had little to do with initial planning and much more to do with flexibility, adaptation and good fortune. More recently, Robert Grant analyzed the strategic planning processes of the major oil companies in the turbulent markets of the past few decades, and found a process of “planned emergence.” The oil industry has been the source of major innovation in strategic planning in the aftermath of Royal Dutch/Shell Group’s famed use of “scenario planning,” as opposed to forecasting, as the principal tool to prepare for the future by virtue of a process of organizational learning. Grant found that the “oil majors” continue to innovate successfully in the area of strategic planning, and that their approach aptly combined design elements with emergent processes: “Although hierarchical in structure with decision-making power ultimately vested in the top management team and critical inputs provided by corporate planning staff, the major oil companies’ strategic planning systems in the late 1990s had little in common with the highly bureaucratized, top-down processes caricatured by Henry Mintzberg. In particular, strategic planning was primarily a bottom-up process in which corporate management provided direction, but primary inputs came from the business units and operating divisions. However, consistent with the process view of strategy formation, it was clear that the strategies of the oil majors were not created by their strategic planning systems.”
Undersecretary of Defense Michèle Flournoy, the head of the Pentagon team that prepared the 2010 QDR, identified “increasingly prevalent hybrid forms of warfare” as one of the critical elements that will impact “how we need to shape our forces now and in the future.” The greatest challenges of dealing with emerging hybrid forms of warfare, she argued, is that the U.S. military is being pulled in two very different directions: “On the one hand, we must be ready for irregular forms of warfare, warfare among the people, as some of the academics say, in which non-state actors use tactics like [improvised explosive devices], like suicide bombings, mixing in with the population, mixing non-combatants and combatants and so forth. … On the other hand, we also have to prepare for what I would call high-end asymmetric threats where rising regional powers and rogue states can use highly sophisticated technologies to deny us access or deny us the ability to use some of our advantages. Here I’m thinking of sophisticated anti-satellite capabilities, anti-air capabilities, anti-ship weapons, undersea warfare, as well as weapons of mass destruction and cyber attacks.”
In a traditional form of defense planning, such as the QDR, the strategic adaptation, flexibility and innovation needed to address the two intricate sets of challenges described above is constrained by the power given to the institutional forces that oppose changing the current status quo. Political scientists who study the inner workings of large bureaucracies highlighted for a long time the many problems associated with attempts at implementing strategic change from above: logrolling, “paralysis by analysis,” settling for the least common denominator and foot-dragging are only some of the many obstacles to innovation. Rather than encouraging strategic adaptation and innovation, traditional planning reviews usually end up as bureaucratic slugfests with parochial interests dominating the debate. The structure of the QDR process further harms the search for a strategy tailored to real-world needs by pushing important parts of the military to worry more about protecting their favorite weapons systems rather than looking for innovative solutions to today’s challenges.
The way that successful companies such as General Electric adapted to the internal challenges of a sclerotic bureaucracy and the external challenges of facing a fragmented and rapidly changing competitive environment was to decentralize the strategy-making process and emphasize bottom-up emergent learning rather than top-down deliberate planning. The current and future security challenges posed by “hybrid wars” appear particularly well-suited to be addressed by emergent strategies rather than by traditional deliberate ones.
Military analyst Frank Hoffman, one of the foremost experts on hybrid threats, underscores the complexity and unpredictability of this type of warfare: “Future threats can be increasingly characterized by a hybrid blend of traditional and irregular tactics, decentralized planning and execution, and nonstate actors, using both simple and sophisticated technologies in innovative ways. … We do not face a widening number of distinct challenges but rather their convergence.”
Therefore, one of the essential attributes of contemporary strategic planning must be the ability to remain nimble and adaptive. The nature of the current security environment is such that not even the most brilliant of today’s Pentagon planners are likely to come up with a long-term strategy that would not become obsolete in less than a decade. A strategy is needed nevertheless, and the “learning model” of emergent strategy formation provides one of the most useful frameworks that could guide the Pentagon’s strategic planning process. AFJ
IONUT C. POPESCU is a PhD candidate in international relations at Duke University in North Carolina, where he studies the formation of American grand strategy and the connections between strategic planning in the business world and in the U.S. government.