Why Business Strategy and Military Strategy Don't Always Mix

Why Business Strategy and Military Strategy Don't Always Mix

Trouble is, the atmosphere of war stubbornly resists economic logic, however desirable rational oversight may be.


Here's What You Need to Remember: Military sage Carl von Clausewitz hints at why business precepts furnish partial guidance at best for martial ventures. Clausewitz distinguishes sharply between “preparations for war” and “war proper.”

Caveat emptor.


That’s my advice to military officials beguiled by treatises from the business world, works promising to help them instill total-quality management, or accelerate learning and adaptation within the services, or do more with less when times are tight. This is no slight. Such authors have something valuable to say about their chosen topic—namely, industry. Such tracts also have something worthwhile to say about that subset of military endeavors that resembles business operations. They fall short, however, when it comes to the hurly-burly of combat.

Warriors inhabit a world starkly different from the mercantile world. Or at least they do so in wartime. Think about it. Efficiency is the watchword for industry chieftains. Same goes for defense firms and government bodies that manufacture hardware and software for the armed forces, or perform upkeep on the widgets once fielded. Nurturing a culture that prizes experimentation and free communication throughout the hierarchy while empowering junior folk is all to the good from an efficiency standpoint. An entrepreneurial ethos is also apt to prove helpful at the margins in times of war, when the ability to improvise on the fly is at a premium.

An institution mindful of fluid surroundings is an institution primed to keep pace with the times rather than fall behind. Niccolò smiles.

Business writers even have something useful to say about routine military operations. Peacetime operations, that is, such as steaming around a warship or flying an airplane in permissive surroundings. Here, too, the quest for efficiency predominates. But the chief function of armed forces is combat—and the climate enveloping martial strife departs so radically from everyday pursuits that embracing business practices could prove hazardous. One of these things is not like the other. Indeed, too fervent an embrace of peacetime methods could wreak positive harm in battle.

Military sage Carl von Clausewitz hints at why business precepts furnish partial guidance at best for martial ventures. Clausewitz distinguishes sharply between “preparations for war” and “war proper.” By preparations for war he means what contemporary military folk call manning, training and equipping fighting forces before the outbreak of war. For Washington, the war proper means dispatching forces to far distant battlegrounds to advance strategic and political purposes. It means compelling a living, thinking, resolute foe with every incentive to thwart American strategy to do America’s bidding.

That’s where ideas from the business world start losing cogency. Yes, business is a competitive endeavor—but not in the same sense as the profession of arms. Fleets of Hondas and Toyotas do not hurtle into one another to determine who gets to sell cars on a given bit of turf. Well, not this side of Top Gear, at any rate. Business competition is a far cry from war, which is a collision of two living forces striving constantly to outdo each other on the battlefield. War, says Clausewitz, is a trial of moral and physical forces through the medium of physical force. That’s fundamentally different from free enterprise, and demands a different sort of genius to prevail.

Business is something like a peacetime strategic competition in which there’s little chance the competition will flare into open conflict. Strategic competition is about flourishing military implements to mold opinion among allies, rivals, third parties and domestic constituents for diplomatic ends. Business competition is about flourishing goods and services to mold opinion among current and prospective customers, winning market share for the firm. Both endeavors are about shaping perceptions in one’s favor, and thus reaping benefit for the firm or armed service doing the shaping.

Business is also something like insurgent and counterinsurgent warfare. It’s a contest for popular allegiance. Yes, incumbent regimes battle insurgents militarily. But the clash of arms is fundamentally about winning the loyalty of the bulk of the populace. According to Timothy Lomperis, the combatants vie to demonstrate that they can provide for the common interest, that they will make ordinary people stakeholders in their rule and even that they have the right to rule. Firms try to win the allegiance of customers—a shallow, transactional form of loyalty by contrast. If some competitor comes out with the next big thing, away go the customers.

But again, the analogy between the two spheres remains loose. Armed forces must designate a prospective foe or foes to craft strategy. In business there is no enemy in that sense, just competitors. Nor is there a direct fight between firms to determine a victor in the marketplace. Companies, consequently, don’t have strategies in the political or military sense. They have plans, geared to create and market products while keeping costs down and profits up. The competition, moreover, unfurls under close supervision from lawmakers and government regulators—supervision conspicuously absent from power politics and warfare. The settings are simply different.

Here’s how strategist Edward Luttwak puts it. Peacetime pursuits like business proceed by the familiar, linear logic of cost/benefit analysis. And indeed, Clausewitz exhorts statesmen, generals and admirals to try to impose cost/benefit logic on trials of arms. He declares that the value of the political object, a.k.a. the goal, must govern the magnitude and duration of the effort invested in obtaining that goal. How much a combatant wants it, in other words, determines how many resources the leadership expends—and for how long. If the price spirals too high or statesmen lose interest in the venture, Clausewitz urges them to cut their losses and get out.

Trouble is, the atmosphere of war stubbornly resists economic logic, however desirable rational oversight may be. Clausewitz frets ceaselessly about how hard it is to keep campaigns under rational control. He spends page after page cataloging factors that sweep war away from peacetime logic—chance, uncertainty and the fog of war alongside dark passions like fear, rage and spite. And never forget the enemy, bent on confounding one’s strategy. “So long as I have not overthrown my opponent,” proclaims Clausewitz, “I am bound to fear that he may overthrow me. Thus I am not in control: he dictates to me as much as I dictate to him.”

He almost seems to despair. Only a supremely gifted commander—Frederick the Great and Napoleon being Clausewitz’s go-to examples—can impose a semblance of rationality on this chaos. For Luttwak this myriad of passions and not-strictly-rational factors gives rise to a seesaw, “paradoxical logic” of war. Generals gripped by passion and guided by incomplete or false information, in other words, are prone to overshoot their goals—subjecting themselves to “ironic reversals” of fortune. Remember the Korean War. UN and communist forces repeatedly overextended themselves. They surged into enemy territory, only to get thrown back with extreme prejudice each time. Only after an equilibrium settled in around the thirty-eighth parallel could rationality reassert itself.

In short, the logic of business competition maps vaguely, at best, to the realm of violent interaction between antagonists. It’s possible for military officialdom to grow too accustomed to operating by peacetime logic. Commanders and their political masters can concentrate so much intellectual energy and so many resources on efficiency, industrial processes and other linear undertakings that they lose sight of the battlefield—and forget that topsy-turvy rules reign there. War—a grim, remorseless teacher—may furnish a reminder.

Caveat emptor.

James Holmes is J. C. Wylie Chair of Maritime Strategy at the Naval War College and author of “Visualize Chinese Sea Power,” in the current issue of the Naval Institute Proceedings. The views voiced here are his alone.

This article is being republished due to reader interest.

Image: Flickr.