Stephen Bungay on What Business Can Learn from Military Strategy

Stephen Bungay on What Business Can Learn from Military Strategy

          
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Stephen Bungay on What Business Can Learn from Military Strategy

An Interview with a Military Historian
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  • In This Video
    Stephen Bungay

    At a Glance

    Born in Kent, U.K.



    Year Born: 1954

    Education

    M.A. in modern languages, Oxford University, 1976



    D. Phil. in philosophy, 1981

    Career Highlights

    2001–present, director of the Ashridge Strategic Management Centre and program director of Strategic Decisions and Making Strategy Happen



    1999 –2001, CEO, Commercial Division, Cox Insurance



    1981–1999, The Boston Consulting Group

    Outside Activities

    Guest lecturer, U.K. Defence Academy (Joint Services Command and Staff College)
     

    Stephen Bungay sees military history not so much as a clash between nations or individuals but rather as a clash of organizations. Clearly, business is not war. But in the areas of strategy, leadership, and organization, many of the issues facing military and business leaders are the same. In addressing client problems and in teaching executives, he draws on his work as a historian to cut through management jargon and bring history and business together in a way that people find novel and engaging.

    He believes that developing and executing strategy is a distinction without a difference. Organizations that execute a strategy successfully work on gaining a shared understanding of the outcome to be achieved and then give people the space and support to achieve those outcomes as circumstances change. Bungay teaches managers about strategy and leadership and consults some of the world’s leading companies. The foundation of his practice is some 30 years of consulting experience, almost two-thirds of which were spent in the London and Munich offices of The Boston Consulting Group.

    His most recent book, The Art of Action: How Leaders Close the Gaps Between Plans, Actions, and Results, was published in 2010. In 2000, he published The Most Dangerous Enemy: An Illustrated History of the Battle of Britain and followed it in 2002  with Alamein, about the campaign in the North African desert during World War II. He is a regular contributor to TV programs such as the Spitfire Ace series in the U.K. His current research focuses on the role of chance and serendipity in strategy.

    Bungay recently talked with Martin Reeves, a senior partner and managing director at The Boston Consulting Group, about what business can learn from military strategy.

    Given your knowledge of both military strategy and business strategy, how would you define strategy?

    Strategy is the art of the general. It comes from the Greek word strategos, meaning “general.” What a general has to do is to deploy limited resources to achieve an end which he determines against opposition. The effect of strategy is to gain a competitive advantage, as we would say in business. Strategy won’t guarantee success, but it will shift the odds in your favor.

    The purpose of strategy in running an organization is to enable people to make good, coherent decisions. I like to think of it as a framework for decision making, which is going to allow freedom but also create coherence. And strategic thinking itself is a constant, intricate process of thinking through what your aim should be in the light of the opportunities there are and the capabilities that you have.

    What has been the broad sweep of how military strategy has changed over time, and what has driven the evolution in thinking?

    The environment has changed to a point at which there is more and more emphasis on agility and adaptation. In the military world, there have always been periods when people believed in master plans and periods when people believed in improvisation. In successful people, there’s usually a combination of the two.

    If you look at the likes of Julius Caesar or Napoleon, you find very similar kinds of thought going on, and similar balances. There have always been people who have been weaker, who have tended to use certain generic types of deception to get their way, and people who have been stronger, who have tended to rely on attrition. So you have always had maneuverists, who want to use speed and skill, and attritionists, who want to pin the other guy down and pummel him into the ground. The same is true in business. But these are not new or old things; they’re just patterns that recur depending on the position that people are in.

    We often treat strategy as being quite a different entity from organization. Some people even say organization follows strategy. You’ve written a lot about the intimate linkage of organization and the successful prosecution of strategy. Could you say a little more about that?

    What I see in successful military organizations, which I think is mirrored in business, is that people spend as much time building organizational capabilities as thinking about strategy. The senior guys, the commanders, have to work out what a strategy should be, in a given context, and give direction to the organization. But actually, they spend most of their time building organization capability.

    You’ve written and talked a lot about the challenges and the importance of breaking the tradeoff between alignment and autonomy in organization. Could you say a little bit about that?

    The way in which people think about these things is that we are either going to have an organization that is highly aligned or we’re going to allow autonomy. But if we allow autonomy, we have to give up alignment. It’s very often expressed in terms of a choice between centralization and decentralization.

    High-performance organizations have always realized that alignment and autonomy are not two ends of a single spectrum but rather are two dimensions that define where an organization can be. The example that I use, because it’s the most recent and the best documented, is that of the nineteenth-century Prussian army. It has a very interesting history, because it moved from giving no autonomy at all to junior people to encouraging very high levels of autonomy.

    It found that it thereby created an alignment problem. It got very fast, very agile, but internally chaotic. It lost coherence. That problem was solved in the middle of the nineteenth century with the introduction of the idea of the directive, which tells people what to achieve and why. So you align around the outcomes—the what and the why—and you leave autonomy about how to do it.

    What you find is that specifying the outcome is a lot more difficult than you probably thought it was. That is why an awful lot of training in the Prussian army went into developing the intellectual skills to be able to sort through a complex situation and simplify it by grasping its essence. It really makes a huge difference to organizational performance if the managers conceive of their role as that of mastering and simplifying complexity. What they usually do instead is spend a lot of time thinking about the complexity, make it a bit more complicated, and then pass that on and expect something to happen. And, of course, it doesn’t.

    For the large modern corporations that find themselves now in much more turbulent times, trying to increase their organizational and strategic agility and adaptiveness, what are some of the lessons that military history offers as to how to make that transformation? And where can managers look specifically in military history for inspiration?

    The three outstanding examples of organizations that have done this are the Roman army, the eighteenth-century Royal Navy, and the nineteenth- and twentieth-century Prussian-German army. There are a few others, but these are the best-documented ones, and these are three of the highest-performing military organizations of all time. They all basically do the same thing. The language is different, the technology is different, but the principles don’t change.

    My first bit of advice for managers is don’t start to try and invent wheels. And don’t, for God’s sake, believe what gurus tell you. Have a look at what those people have done, because other people have been in similar environments to the one that you’re in now. It’s just that they weren’t business environments.

    You then have to be very disciplined. You have to think about not just issuing instructions but also giving your own subordinates time to brief you back. The military uses a system that’s called briefing and back-briefing. You’re only allowed to use one-third of the time available between taking a decision and initiating action for yourself, and you’ve got to give two-thirds of it to your subordinates to think about what they’re going to do as a result.

    Remember that communication is a loop. If you’re trying to explain to someone what to do, what matters is not what’s in your head at the beginning of the conversation, but what’s in their head at the end. And you’ll only find that out when they have told you what it is they’re going to do as a result. So, don’t just brief, don’t just tell—allow them to back-brief.

    And then you’ve got to give them the freedom to act within boundaries. One way of killing that very quickly is to punish any kind of failure. Treating an error of judgment as a learning opportunity is perhaps easier said than done. If somebody tries to do the right thing but gets it a bit wrong, and if you come down on them like a ton of bricks, you kill initiative right across the organization. This will have an enormous knock-on effect, because people will observe and take very seriously what you do, regardless of what you say.

    It’s fairly simple stuff. These are skills that need to be built. The only way to do it is to start practicing them.

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