November 29, 2006

Hostile Takeover

Hatched by Dafydd

I've been thinking about Iraq lately.

All right, all right; I rarely think about anything but Iraq lately, unless it's to think about Iran. Or Syria. Or the GWOT in general. A few days discussing the principles behind police raids was a welcome respite. But here I am again, like a junkie, back in Iraq (mentally).

Yep, I'm goin' to Mes'potamia in my mind.

The Iraq war was really two main phases. Some folks split it finer, but that's more detail than I want at the moment. Broadly speaking, we had the kick-out-the-Baathists phase I -- which was a screaming success -- and the build-up-a-stable-democracy phase II... which has been less than a screaming success. I wouldn't say phase II was a failure; but it was sure going a lot better a year ago than it is today.

For some reason, this reminded me of the classic example of a start-up technology company: they often have an incredible first two or three years; they introduce radical and highly profitable technological advances, allowing them to capture a small but still significant market share... but then they tend to stagnate.

Suddenly, they can't do anything right: they mismanage their IPO; they start having labor problems; QC becomes a big problem, and they're swamped with help-desk calls. They promote their smartest engineers to head up the European division, and within six months they're hopelessly mired in regulatory purgatory. They drop a bundle on TV advertising -- and sales actually go down, rather than up!

The Midas touch has turned to a black thumb. What's going on? How did they go from gold to grunge in such a short time?

Often the very person who made them such a success at the very beginning -- the entrepeneur who started the company and whose vision has been guiding it all along -- is precisely the reason they fail later. The successful engineer is not only creative and innovative, he is easily bored by the mundane reality of running a middling large company. Of course he is; if he weren't, then he probably would have continued working where he was before starting his own company!

The very act of starting a new company implies the entrepeneur prefers to roll the dice than slog through the day-to-day quagmire of corporate shenanigans. But when a company reaches a certain size, it needs an innovator at the helm far less than it needs a steady and experienced player who knows how to work the machine and where all the metaphors are buried.

Innovation is essential; but it's less essential than really knowing how to get a payroll out, how to mollify the workers and (if necessary) deal with the unions, and yes, how to grease the skids of foreign regulatory systems: who you must pay off to get certified for retail sales in Upper Iguana.

The company no longer needs an entrepeneur at the helm: it needs a CEO.

But the founder will rarely leave his baby voluntarily; thus, unless the board of directors ousts him and hires an actual corporate-manager CEO, the company will probably founder, becoming yet another failed start-up.

I think you may see where I'm going with this...

Secretary of Defense Donald Rumsfeld has been one of the most innovative SecDefs in American history; a recent article or blogpost I read about him said he had initiated over one hundred major reforms at the Pentagon. His "snowflakes" (Post-It notes asking tough questions or suggesting alternative ways to think about some problem) are legendary.

And he had a tremendous impact on the American military, probably moreso than any SecDef in the last forty years.

But Rumsfeld has also antagonized the hell out of the E-ring of that five-sided building. He has become the lightning rod for everybody who hates American hegemony. He has been subject to scurrilous and vicious attacks by former generals, foreign defense ministers, the U.N., NATO, and many other representatives of "the military industrial complex" around the world.

In other words, Rumsfeld, like the classic entrepeneur with a cool start-up, has been long (very long) on innovation but quite short on management and people-relations. For a good, long while, that was exactly what we needed.

But now that the Iraq war has shifted into a new state -- call it phase II.V, if you want -- where what it needs is finesse, management, diplomacy (to drag in more coalition allies and make them actually fight), diplomacy (to wheedle a reluctant Democratic Congress aboard), diplomacy (to sooth the ruffled feathers of the brass and hold their hands while the reforms creak slowly forward), and above all, diplomacy (to do a better job explaining to the American voters what the heck we're doing)... well, I think maybe it's time for the entrepeneur to step aside in favor of the experienced CEO.

Robert Gates may be just the fellow:

  • He's a career bureaucrat who rose up the ranks of the CIA from a mere analyst to the Director of Central Intelligence... probably the only man ever to do that; so he knows how to play a bureaucracy probably better than anyone currently in government. (In that respect, the Pentagon is likely little different from Langley.)
  • He has served in the White Houses of five different presidents, both Democratic and Republican; so he knows how to talk to both sides of the aisle and cajole them into doing what the current president needs to have done.
  • He worked closely with James Baker -- and with Ronald Reagan.
  • He can convincingly peddle the line that he had nothing to do with getting us into Iraq... but now that we're there, we'd bloody well better win, not lose.
  • He has credentials both as a "neocon hawk" (with Reagan against the Soviet Union) and as a "moderate realist" with Baker and Scowcroft... so he will probably get along better with various factions within the GOP.
  • And he might turn out to be better at communicating with everyone that Rumsfeld was -- which frankly wouldn't be hard, as the current SecDef is notoriously prickly and closemouthed.

The reforms that Rumsfeld initiated have become part of the system; the best person to shepherd them through now is probably someone who is part of that system, not an outsider imposing it from above. Such monomaniacal brilliance was necessary to kick-start reform in the first place; the insiders were too comfortable endlessly refighting World War II. But now that the bureaucratic reform ball is a-roll, I suspect we need a bureaucrat (who isn't afraid of innovation) to keep it rolling in the right direction.

The entrepeneur vs. the CEO; I have always suspected that the larger a corporation, the more it resembles government. I think we're about to see just how far that analogy applies.

Hatched by Dafydd on this day, November 29, 2006, at the time of 5:26 AM

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Comments

The following hissed in response by: Big D

In my MBA classes they identified giving up control of an organization as the classic method by which start-ups fail.

When a company starts up, the founder(s) has complete control over every step.

As it grows larger, the problems get bigger, more complex. New problems arise that the founders may not be well suited to solve.

The founder(s), however, decide to stick with what worked in the beginning, retaining all control, spreading themselves too thin, making decisions they are relatively unqualified to make. Everything starts to flounder.

I think your analogy is good. Our initial success was like a start-up. I remember a time when Rumsfeld was hailed as a genius, the press loved the guy.

The problem was he failed to cede enough control to others at the right time, he thought his expertise in conquering Baghdad made him an expert at running Iraq.

I Rumsfeld should have left in 2004, but so it goes. I think Gates will do fine.

What also gets lost here is that success or failure was always, ultimately, up to the Iraqis. All we could ever do was create the conditions for success. I think we did that. The one thing I would have done different - take down Muktada al Sadr early in the war.

The above hissed in response by: Big D [TypeKey Profile Page] at November 29, 2006 9:33 AM

The following hissed in response by: Davod

As you say, Gates is an insider. As an insider, he will be rolled by those who do not want change to continue.

Change is dead.

The above hissed in response by: Davod [TypeKey Profile Page] at November 29, 2006 12:40 PM

The following hissed in response by: Terrye

I read Barone's post on Gates. He seems to think the man is more than qualified. I figure Barone knows more about this kind of thing than little old me, so I say give the guy a chance. We need more cooperation and less drama.

The above hissed in response by: Terrye [TypeKey Profile Page] at November 29, 2006 2:26 PM

The following hissed in response by: madconductor

I have to agree with Big D. This is a good analogy and takes some of the lowbrow critics in the media out of the picture when they try to brand him as "an insider" - and phrase it to be a bad thing. I always enjoyed Rumsfeld's news conferences - if nothing else at least for the surprises. Rumsfeld did a good job and I think he will soon be far more appreciated than viled. Whiners from the left, the Pentagon, and the media are hitting the limit on the limbo stick. Some of the ranting is getting by but much of it is falling flat.

The above hissed in response by: madconductor [TypeKey Profile Page] at November 29, 2006 4:23 PM

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