The biggest challenge facing higher education is market-based myopia. Wealthy board members, echoing the politicians who appointed them (after massive campaign donations) too often believe that universities should be run like businesses, despite the poor record of most actual businesses in human history.
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Universities Are Not Businesses, and Neither Is the Military
June 18, 2012 | Posted by Abu Muqawama - 6:20am | 21 Comments
Last week, the president of the University of Virginia was fired. Although the reasons for Teresa Sullivan's dismissal are still unclear, there is evidence to suggest that the Board of Visitors believed she should be behaving less like an academic professional and more like a chief executive officer of a major corporation. Sullivan lacked, one board member complained, the "strategic dynamism" necessary for a person in her position.
I have spent all but a few months of my adult life in either the U.S. military or in institutions for higher learning. I was commissioned as an officer in the infantry two days before graduating from college, and I started graduate school three months after leaving active duty. I then began teaching about six months after earning my Ph.D. In my work for the Center for a New American Security, meanwhile, I spend a lot of time with corporations. I am sometimes asked to meet with corporations with interests in the Middle East, for example, to help them think through the business environment and to talk about trends in the region.*
So I think I know something about universities and the military and a little bit about the way in which corporations function. Which qualifies me to say this: Not-for-profit universities are not corporations, and neither is the U.S. military. Neither organization should be treated like a corporation.
Smarter people than me have patiently explained why it makes little to no sense to treat an established, esteemed university like the University of Virginia as one would treat a corporation. As one Virginia professor put it:
Universities do not have “business models.” They have complementary missions of teaching, research, and public service. Yet such leaders think of universities as a collection of market transactions, instead of a dynamic (I said it) tapestry of creativity, experimentation, rigorous thought, preservation, recreation, vision, critical debate, contemplative spaces, powerful information sources, invention, and immeasurable human capital.
I agree with all of this but want to extend this professor's worry to another institution I hold dear: the U.S. military. Over the weekend, I began to wonder why so many professional military reading lists contain business books that you would be less surprised to find on sale in an airport bookstore's "Management Excellence" section. Some of these books -- no disrespect to the authors -- can be summarized in a five-slide PowerPoint presentation. They probably were once a five-slide PowerPoint presentation but now push other, worthier books -- like Paret's Makers of Modern Strategy -- off the list of books we're telling military officers to read. The result is an officer class raised to believe their role in life is to manage organizations rather than, as the late Sam Huntington would have said it, to manage violence. I guarantee you we have officers running around Fort Benning, for example, who cannot tell you anything about Huntington's model for soldier-state relations and do not know the difference between the Moltkes elder and younger but can sure as hell explain the difference between spiders and bleeping starfish.
One can argue that businesses have a lot to teach universities because the former are more accountable to the cruel realities of the bottom line. Fair enough. But the price of victory and the costs of failure are more keenly felt in military organizations than they are in businesses, which is why some business writers study military organizations rather than visa versa. And which is why it makes good business sense for businesses to recruit military professionals.
But the military is not a for-profit corporation. It is a public organization that is specially recruited, trained and equipped to achieve the political objectives of elected policy makers through force. Can it learn something from studying the performance of businesses? Absolutely. I wish, for example, the U.S. Army officer corps had half the appetite for risk as entrepreneurs in Silicon Valley. But at the end of the day, the U.S. military, as results oriented as it should be and is, is not about turning a profit or rewarding shareholders, and its leaders should rein in their love affair with business models and the mostly execrable "literature" we force on our students in business schools.
Besides, this craze to make our universities and military organizations mirror our businesses is ironic. While the American model of capitalism is generally strong and often admired, it is by no means seen by the world as the undisputed model for how other businesses and business environments should look. Other successful capitalist economies often look at U.S. business culture and find much to criticize. U.S. institutions of higher education, though, are the undisputed model for others to follow and are universally admired outside the United States. The same can be said for the U.S. military, which for at least two decades has been the world's strongest and most admired military organization. Even before the financial collapse, meanwhile, during which your average second lieutenant could have taught most U.S. banks something about risk management, most businesses in the United States failed.
That's a luxury military organizations are rarely allowed.
P.S. One final bit of irony? The decision made by Virginia's business-minded Board of Visitors is seriously hurting the university's bottom line. The decision to remove Teresa Sullivan may in fact end up a Harvard Business School case study. But not in a good way.
*Any compensation I am eligible to receive for this work I either decline or turn over to the Center for a New American Security in order to preserve the intellectual integrity of my work. The list of corporate or institutional sponsors for the Center for a New American Security, meanwhile, can be found here. Unlike all but a few think tanks, we make no effort to hide our sponsors. I join my colleagues in thanking them for their support.
I think in large part
I think in large part universities increasingly DO mirror corporations. The one I have the most exposure to is the University of Michigan, which absolutely exhibits that dynamism, and I mean that in the most backhandedly complimentary way that one possibly could. The original purpose is an uneasy fit with the more recent goals of attracting cash and protecting the brand.
We're all connected to
We're all connected to customers. The closer you are to your customer, the more responsive you will be to their feedback. When an economy is abstracted by grades, grants, football scores or credit default swaps you should anticipate a disconnect between clients and service providers. A great education supports customers in two ways.
1. Educated consumers make better decisions.
2. Educated service providers provide better services.
It's not clear why higher education should be subsidized at all, but particularly if universities do not or cannot contribute to better decisions or better services.
Terrific post!
Terrific post!
I think your post is too
I think your post is too harshly critical of American businesses and too generous to the universities and the US military. How much of our capabilities and commensurate reputation stem from access to stupendous resource levels compared to other nations' armed forces? Don't mistake my argument here, I think we are good, but how good would some of our allies be with access to the same resources? I also posit that lack of resources has led to some of our allies to develop spectacularly creative solutions.
As for your criticism of businesses, unlike the military, they are in contact every single day, and unlike nation states which sponsor them, there is nothing preventing them from becoming insolvent when they fail at their missions or cease to deliver on their purpose for existence. Yet some nations' armed forces stumble along and continue to exist without evidence they can deliver on their purpose. For every American business that fails, new ones emerge with fresh resources and new methods of solving problems. This dynamism and harsh environment drives rapid technological and economic innovation, which tends to only occur in a military context during wartime. (See Williamson Murray & McGregor Knox, "Dynamics of Military Revolution" http://www.goodreads.com/book/show/912428.The_Dynamics_of_Military_Revol...) Some other nations tend to shelter their corporations from this kind of competition, which prevents the kind of turmoil you and I have described, and provides stability over innovation. (or does it? The Euro crisis seems to make this proposition suspect, except possibly in Germany).
Finally, as I mentioned to you this weekend, professionals have an obligation to expand their domain of knowledge. You do that by bringing in outside knowledge and exapting and assimilating it. (Paparone, http://www.au.af.mil/au/awc/awcgate/milreview/paparone_mar08.pdf) Promulgating the existing body of professional knowledge is important too, so "On War" and "Makers of Modern Strategy" certainly are important too. But without going outside our field and bringing in new concepts, we will fail to adapt.
Your point about the level of analysis of some of the books is a fair one, but as COL Paparone points out in the aforementioned article, new concepts are often conceptual or intuitive in nature and require discussion to flesh them out to make them acceptable to assimilate. Moreover, I'd rather have my leaders provide a wide aperture and give me a broad starting point and allow me to explore from there than to constrain my choices to their narrow interests. Some leaders I've worked with confiscated any reading material from duty officers which was not explicitly on their approved reading list. Which would you prefer?
Finally, I don't know a lot about how universities are run, but something is going haywire with the fees they charge their students versus the value of what they seem to be getting out of them. I also submit that many of their advantages have more to do with the environment they exist within than how they are run. US universities have benefited from a prosperous economy, a culture that thrives on free inquiry and exchange of ideas, and benefited from sheer economy of scale building a self-reinforcing critical mass of idea recombination. They also benefited enormously from a huge influx of some of the most talented people in the world during World War II and after, not because of their intrinsic characteristics, but again, because of the environment here.
"I have spent all but a few
"I have spent all but a few months of my adult life in either the U.S. military or in institutions for higher learning."
And you're blinded by Love. It's true, true love. I will endeavor never to harshly criticize again. I had no idea, really.
The Military is not a business.
That's good, because if it were Pepsi they just lost two California sized markets to kids with Lemonade Stands.
You're just noticing Business practices are oft misplaced in government or the Military? You missed Robert Strange McNamara? I know you weren't alive..but for a guy who loves History...
As far as reading lists...I'm not sure I'd read too much into them, they are at best a step up the food chain from the dash-1 [OER support form - the Officers self promotion list]. And self promotion is one of an Officer's missions.
Universities aren't Businesses.
No, but they're damn sure about the money. They just don't have to compete on product or price, or results. They're also more predatory than all but the most fringe, sub-prime prey on the desperate businesses.
" despite the poor record of most actual businesses in human history...." I'll settle with this arrogant POS at his link.
Elf, I disagree with your
Elf, I disagree with your comment that universities "don't have to compete on product or price, or results". My wife was a Prof at the University of Delaware and now at Harvard. Believe me, they compete on product, price and results. My wife's former department at UD is number two in the US. They are constantly competing with other like products, Physical Therapy. Students are constantly comparing programs to see to determine ROI. You come out of the UD PT program and you know you are going to be able to negotiate a better salary with a better organization.
When i attended my first graduation, the President did not say they were conferring the degrees from an institute of higher learning or from an august university...he said their degrees were being conferred to them "by this corporation". Universities are corporations and being ran like corporations.
The military can learn from civilian corporations however, as a veteran with 25 years of service, I feel corporations have a lot more they can learn from the military. Especially in the field of Leadership and Organizational Development. The lessons from the strategic and the tactical levels are too many to list hear but the obvious ones would be risk management, task organizing and reacting to immediate changes within their industries.
Good article.
Respectfully,
D2
@D2, What's the inflation
@D2,
What's the inflation rate of higher education compared to the base rate of inflation? About 500% higher.
http://inflationdata.com/inflation/images/charts/Education/Education_inf...
The really high spikes seem to correspond to economic downturns.
Go and look at the arrogant little Slate article. About halfway down there's this gem: "So as tuition peaks and federal support dries up, the only stream still flowing is philanthropy.... Either we beg people for favors or our research grinds to a halt and we charge students even more."
or our research grinds to a halt and we charge students even more.".
Predator Corporatism. AKA - economics of Fascism. The Children are given 12+ years of State Education that offers a choice of 1) more education at backbreaking debt levels OR LOSER. The differences between college and sub-prime mortgage lending is you aren't faced with Draconian sanction for not having a mortgage, you can break a mortgage, and a mortgage gives you a place to live.
The education debt bubble and the backs of the Youth are about to break. So's the bubble round the Magic Kingdom.
Abu M 1) Some business books,
Abu M
1) Some business books, especially those found in airport bookstore (perhaps), are bad. Some business books (Christensen, "Innovator's Dillema) are good. Some military books are bad. Some military books are good. What purpose does such a comparison serve?
2) Militaries are not businesses and vice versa. Concur. One exposes its members to risk of death, the other does not; one tries to kill people and break things, the other does not. Concur. Militaries and busineses are both organizations or possibly institutions, depending on definition, and thus comparison may beneficial. Concur.
3) Combining 1) and 2) of the above, what is your BLUF?
3 You still pursue athletics and seem to know a lot of restaurants, bars and interesting people - you are probably a fun as well as insightful consultant. ("Consultant" is a bandied-about term without licensing requirements whatsoever. See "Consulting Demons" or "Dangerous Company," or check out the Mitchell Madison Group - this used to be a standard component of their Don Draper-like sales pitches). If I needed analysis about the Middle Insight, I sure wish I could afford your hourly rate, five star accommodation, travel and dining, etc..
Best
ADTS
Which is not totally
Which is not totally O/T...
"Ronan, named Satchel Ronan O’Sullivan Farrow when he was born in 1987, is the sole biological child of Woody and actress Mia Farrow. He is currently serving as special adviser to the Secretary of State for Global Youth Issues and director of the State Department’s Global Youth Issues office."
Next time someone complains that DOS doesn't have enough people or budget...
BTW I hear we're looking for an ambassador for Iraq. I think the young man above looks well qualified.
If you want to go the other way, I'm available for Rhodes/Clive compensation and plenipotenary contracting powers, Hernan Cortes rules of engagement,
Exum, this is not straight
Exum, this is not straight forward because their is so much overlap in characteristics of the military, universities, and corporations.
Universities are more like a cross between a non-profit organization and a public work program. Military leans more towards a public work program because it draws more from tax revenue. I am saying public work program because the organizations are used to bring jobs into US Representative's districts.
Our University boasts 30,000 employees in the core school and extension programs, that is about one employee for every two students. That ratio has always boggled my sensibilities. Latest local news is the multimillion employment separation package that is being given to an athletic coach for being fired for cause. Tenured Profs get six-figure salaries, their kids get half-price tuition, and now they are b*tching that they might get their pensions cut (90% of their pay after 20 years service with medical). Profs doing research receive at least 40% of the royalties with the rest going to the U. Few summers ago there were 51 major construction projects on campus during the summer all the labor is Union. It is how the local politicians hand out the cash. There is a lot of waste. Example of waste is the number of Union tradesmen the U keeps on staff then contracts out most of the work on campus. Sure looks like a public works program to me.
There is a lot of good things that comes out the U in the way of research and that is where the devil is in the details. The research is where corporations and academics overlap. Profs are only teaching one class a semester which frees them up to work on research.
Universities are not the pillars of learning that they use to be, lot has changed. The last part of your UV Prof's quote is the romanticized version of what U management say to get more funding. Who could not deny such a good cause more money? The changes started to occur in the 80's when public tax revenues were pulled out of the U's and more corporate research as funding was introduced. Think the emphasis on research really changed the way the students were taught from the 70s' as compared to today.
There is no doubt that students are "the product" it is how the U keeps the attention of Industry. Lot of money is spent to make sure the U's look good (country club good) to attract people to the environment. Our U has people that plant flowers and water them. Cafe's dot the ten square mile campus staffed by state employees. Cafeterias are boutique to enrich the environment. Public restaurants are just across the street from the State contracted eateries.
Corporations compete to get the product each graduation cycle, it is a revenue chase. The herd is culled as bargaining chips to get Profs funding. Corporations reach into the school to get their pick.
Just like corporations, U's are going global. Many State funded Universities now have off-shore campuses to get closer to where US Corporate operations are. "The Product" is local to the customer.
Really I think that Universities have sold their souls to get more money. As a result, those curriculum that do not attract Corporate interest (like studio arts) are being phased out. The differences in salaries between corporations and Universities has diminished over the last twenty years and the U management are more corporate like then ever before.
Because performance brings more money, American U's are looking past the people they should be admitting to get more attractive "product". The closer you live to a State University, the larger the chance you will go somewhere else cause the academic selection is skewed to out-of-state more then ever.
I am not sure what Universities are anymore. Have some real heart burn supporting schools with tax money that will not give enrollment to the people that provide that support. That was the issue that caused public money to be pulled out of Us in the first place.
American Universities really do not meet the reality test anymore, they are fantasy islands.
BTW...The administrators of our local U fly in to town in business jets, with limo service door-to-door, and have State Police protection while on campus. Each person has their own limo, the drivers and vehicles are parked for the few hours of the campus meetings.
All taxpayer funded.
BLUF: The essence of the
BLUF: The essence of the comparison between corporations, the military, and academia is one of return on investment, otherwise expressed as the ends relative to means. Regardless of their differences, the military and the university system have both garnered scrutiny from the public in recent years over a perceived gap between the investment in means and the return in ends. As such, beyond direct lessons that corporations can provide on the tactical and operational levels, the military and universities could stand to learn strategic/philosophical lessons from corporations with respect to producing ends that justify the investment in means.
***
First, a nitpick: most businesses in the United States DID NOT fail in the financial crisis. Many have struggled, and a few high profile businesses have failed. At the risk of sounding overly political, one could even argue that those businesses that have struggled most or even failed usually did so not
because of the capitalist model, but because of excessive influence from government, but that's an argument for a different time and venue.
The military is an instrument of political means, rather than an end unto itself. Publicly supported universities (a category into which nearly every American university falls, directly or indirectly) hold the same distinction. Universities neither exist nor receive public funding for the sake of their existence; rather, societies provide funding based upon an expectation that the benefits reaped (ends) will either meet or exceed the value of those resources invested/sacrificed for the sake of their maintenance (means), even if that means that the university itself does not turn a profit (though most would probably agree that a university should at least break even). The same can obviously be said of the military. In modern society and throughout history, the military represents an investment/sacrifice of scarce resources for the sake of managing international security risks. Society thus expects that the resources invested in military capabilities and operations (means) will result in an equal or greater return on that investment in the form of managed risks and satisfactory political outcomes (ends).
In the case of universities, societies expect their investments to be paid in socioeconomic dividends, and there's a growing disillusionment over the ends society is enjoying relative to their investment in means. The disillusionment is especially poignant given that the investment represents a growing sacrifice of scarce resources for diminishing economic returns. Your citation notes that a university's roles include "teaching, research, and public service"; and yet, if a corporation's training, R&D, and customer support/outreach records were as poor as those of many universities, said corporation would have far more recourse to terminate executives and staff who had performed poorly and change strategy or funding on such programs. As an example, let us remember Ward Churchill, who was hired, promoted, and given tenure within the Colorado university system without adequate credentials as required by the university's own regulations; when he was found more than fifteen years later to have misrepresented his qualifications in the first place and to have subsequently committed academic research misconduct, it took nearly two years to terminate his employment. Can anyone imagine such a process taking that amount of time and resources in a corporate (or, to their credit, military) environment? In my experience, my employer (a Fortune 500 company) is far more dynamic, responsive, and productive than my alma mater (a major state university). By way of another example, look at the relationship between corporate performance and CEO turnover for a company like Hewlett Packard over the course of the past decade, compared to the lengthy tenure of most university presidents. While acknowledging their differences, it seems quite obvious to me that my alma mater has far more to learn from my employer than vice versa.
Of course, comparable expectations of the military must be tempered by the realization that military leaders must cater to the whims of policy makers by way of both resourcing and mission. That said, it seems reasonable that the military could stand to learn both strategic and operational lessons from corporations. For example, consider acquisitions, which the military has struggled with for decades. The IED threat in Afghanistan and Iraq led private security contractors (corporations) in both theaters to procure armored vehicles while troops in both theaters were still travelling in unarmored or up-armored HMMWVs, and a 2011 IG report suggested that the DoD's combined lack of sufficient manpower and institutional knowledge in the required areas ended in heavy reliance on contractors (corporations) to manage the MRAP rapid fielding initiative. That's a fairly granular example, but it's a poignant one, and there are others like it, ranging from strategic communications (PA/IO), to long-term strategy, to emerging market research (intelligence preparation of the battlefield), streamlining (or simplification of regulations and procedures), and so on.
Beyond such granular examples, Elf's quip about Pepsi vs. lemonade stands isn't far from the mark (oversimplified, perhaps, but so is the statement that "the military is not a for-profit corporation"). At the very least, an argument could be made that for the investment in military means, Americans might have expected more decisive ends in both Afghanistan and Iraq. Again, policy makers deserve no small measure of criticism for their part in the situation, but there are plenty of military leaders who deserve their share of scrutiny. The situation in Iraq imploded under the leadership of GEN George Casey as MNF-I CG, and he was subsequently promoted to CSA; GEN Stanley McChrystal made the colossally ill-conceived decision to cede the Taliban's rural sanctuaries in order to focus on securing the Afghan cities, and he was only relieved for a colossal strategic communications fiasco. You're correct that the military is not a for-profit corporation, but the military is an organization in which stakeholders - America's citizens - expect to see a return (ends) on their investment (means); the dividends are an improvement in national security. These are concepts and attitudes that one might acquire if studying business management, and with some reorientation they are certainly applicable to the profession of arms. You're correct that the stakes are much higher for the profession of arms than they are for corporations (or, for that matter, for universities), and as such, the expectation for ends must necessarily be higher as well. As such, the military could stand to learn a great deal from corporations, as could universities.
That said, I do tend to agree with you about the training of individual officers and the general "business management vs. military leadership" paradigm that the military has adopted as an institution since the 1990's (and which I believe Dr. Tim Kane may have touched on this in his 2011 article in The Atlantic about officer retention). Though MBA programs may be the best large scale substitute for education in strategy given the relative scarcity of military/defense-based post-graduate programs in America, it seems as if those business concepts which ought to be adapted to military purposes are often accepted wholesale. The result is a cadre of mid- and senior-level military leaders whose priority is the implementation of square business management strategy "pegs" into round military "holes", instead of properly "whittling"/adapting those square pegs into round pegs that fit the holes for which they would otherwise be a good fit. While corporations have plenty of wisdom to endow on today's military, no officer should be reading "Good to Great" as a substitute for "On War", though a case can certainly be made for FOGOs being educated on both.
"All taxpayer funded." Not
"All taxpayer funded." Not entirely - Speaking of Pharaohs....and angry streets... The students are placed into indentured debt servitude to fund the Mad High Life. The entire public sector is looking like DC, which seems bent on living the Mad Celebrity high living CEO of the last 15 years.
Not being entirely straight? He's blinded by True, True Love . We may not want him to see. We could have a Titus or Coriolanus on our hands.
They're Gentry Dear All and Sundry. That's what "Educated" now means.
Education = Gentry. They are the meritocracy you see...America's True Nobility. Oh do ask them if you doubt me.
So we shouldn't wonder they are behaving so...nobility you see acts as madly as it likes. For a time.
The flaws in the plan being; they're bankrupt, their credentials are purloined, bought or fraudulent, and fatal for nobility they cannot physically defend their fiefdoms or persons. That's why they have State Police protection and Campus Security.
So it's a matter of waiting for Pepin of Paris to tire of the drooling idiot Merovingians.
Speaking of Pepin...hey "Ex"?
Good read! I'm not sure when
Good read! I'm not sure when you completed your commissioned, active duty service as an Infantry officer...but, you should know that infantry officers, ranging from 2LT and up, are all businessmen. Day to day patrols and missions in Iraq/Afghanistan are all about controlling the infrastructure through contracts and intelligence deals. You have to be a businessman for the job. Eventually, with enough rank, the field grades end up dipping their fingers in the project bonuses as well. It's all business.
Good post, even if I differ
Good post, even if I differ with some points.
But to continue on this line of thought -- the contrast between businesses, the military, and universities.
How many businesses do you know that are one hundred years old? Two hundred years old? Three hundred years old?
What about universities? militaries?
I think we can all see my point. Universities and the military are institutions with long time horizons. At their best, they will endure for hundreds of years or even more. In this sense, they are conservative, in the best sense: they have to be constructed to endure. Businesses are not expected to endure one hundred years. In fact, it is a bit of a shocker when a company like IBM has not only endured, but maintained greatness. We simply don't expect this. With businesses, change has to happen fast, or you are toast.
Universities and the military also have, as a core mission, to serve the public good. One would be a lousy businessman or woman if one put the public good ahead of duty to private interest: the interest of stockholders.
That universities and the military have to learn from businesses is a no-brainer. But refashion themselves into businesses? That would be utterly absurd.
Enigma on June 18, 2012 -
Enigma on June 18, 2012 - 9:52pm
I did business with Siemen AG which dates160 years when I worked for a company that was over 100 years old. Ford Motor Company has been in business since 1903. Bank of England goes back to 1694!
Not sure if horizon is the best to measure the differences.
Problem with Universities there is a lot of hype that supports institutions. Like the Catholic Church's veneer was cracked so was the image of Penn State. Universities put a lot of polish on that veneer cause it gets them prestige. They do not like it when you look at their books.
Talked to my State Rep about our little Payton Place U and it is a thriller of a story. No one can rain on the U's parade because no politician will touch it cause of the jobs it creates, but they all know the thriller story.
@Enigma: How many businesses
@Enigma:
How many businesses do you know that are one hundred years old? Two hundred years old? Three hundred years old?
Plenty. I've personally worked for one company that's having its centennial this year, another two that were founded in the twenties, and one that was founded in the late '60's.
What about universities? militaries?
Not many of either, particularly outside the western world. There are only a handful of militaries that predate World War II, and even fewer that predate World War I. Most of the militaries (and nations) of the Middle East are new since the 1960's. All of Central Asia, most of Eastern Europe, and parts of Central Europe have militaries that are brand new since the end of the Cold War. Western nations, and particularly the United States, have been fortunately insulated from the impact of many of the events of the last couple of centuries, but we are certainly the exception rather than the rule. By contrast, there are plenty of companies around the world that are older than their national militaries, governments, and universities - some of which have survived multiple regimes and/or turnovers of power.
@Visitor...., @al
@Visitor...., @al Dhobaba:
Enigma's main point is correct. Yes, one can find examples of long-lived companies. This is called Survivor's Bias. And we have to account for the size of the sets, since corporations outnumber universities by several orders of magnitude, and universities outnumber militaries by several orders of magnitude. But Siemens is an incredible outlier. As is Ford. As is the Bank of England, though it's weird to list the last as an example corporation. Instead of pointing out exceptions, it would be more illuminating to note that most entrepreneurs fail, and that even successful corporations often find that winding down their business after a relatively short time is the most responsible way to serve their shareholders. None of this is really controversial.
Do you really disagree with Enigma that corporations have different planning horizons than universities and militaries? Really? Publicly held corporations, with earnings estimates to beat? This is something we can throw numbers at--there's a lot of data on this. And Mr. Exum's original point, that pop wisdom from the business world ought to be well below reading level for our military leaders? Different planning horizons is one of many, many reasons why this is so.
@Enigma: Thanks. The important, quantifiable differences in planning horizons tend to be overlooked in this debate, for reasons I don't understand.
Wow, I really regret reading
Wow, I really regret reading the comments here.
Besides the sarcasm, the invocation of fascism, the weirdly elliptical prognostications of the end of society as we know it, and the grand ToE that assumes we're going to start our argument by assuming that a notional ROI can stand in for all ranges of outcomes, there's a glib insinuation that all field grades in theater are embezzling? Visitor at 8:38 pm, I have a pretty good idea when and where Abu Muqawama served, because he's a public figure and I follow his blog, but I am totally unclear on where you served. You served in a place where all the field grades were embezzling? That's not cool. Also, I am pretty sure some lieutenants did most of their work without much purchasing authority.
FWIW, this was an excellent post. And it's something that needs to be said and repeated over and over, as the temptation to look for magic bullets (for the military as for universities) is always present and always strong. It's disappointing that some people skipped over the parts where Abu Muqawama gave credit to the business world for evolving through crises, and skipped over the part where he spoke well of the private sector's appetite for risk, and skipped right ahead to bashing one of the best pieces of our educational infrastructure and the piece of our war effort that has functioned best in Iraq and Afghanistan (Hint: no, it wasn't the part we outsourced. And it wasn't the leadership we borrowed from the corporate world either.)
@That One Guy: Your points
@That One Guy: Your points are well taken. I'd written up an extremely verbose response, but I'm going to try to start over and keep it a bit more brief.
1) We can respectfully disagree on the accuracy of Enigma's point, but his point is irrelevant to the discussion. Dr. Exum's thesis is that universities and the military are so dissimilar from corporations that officers' professional development reading lists shouldn't put so much emphasis on 'Management Excellence' and 'business models'. I understand and agree, to some degree, with his point, as I noted in my first comment. That said, I think I demonstrated (probably in excessive detail) that corporations have a great deal to teach the military at both the tactical and strategic levels. Enigma said: That universities and the military have to learn from businesses is a no-brainer. But refashion themselves into businesses? That would be utterly absurd. As others have pointed out, universities already function like quasi-businesses, so he's just plain incorrect on that point. He's correct that the military shouldn't refashion itself into a business, but nobody's made that claim, so it's irrelevant.
2) Enigma made the point about the age of universities/militaries versus the age of businesses, and it was answered. We can agree to disagree on specifics. I stand by my points: the average age of sovereign states is extremely young, and the average "age" of a national military establishment (measured either by the overthrow or foreign conquest of a national regime, or by an army's defeat in a war) is extremely young as well. Even with the long-term success rate of your average business, there are plenty of examples of long duration businesses. Call them outliers if you like, the point is that plenty of them exist, from small businesses to multinational corporations.
3) Do you really disagree with Enigma that corporations have different planning horizons than universities and militaries? Really? Publicly held corporations, with earnings estimates to beat? Yes, I disagree. My experience and observation is that most successful companies don't plan month-to-month or year-to-year, but do everything in their power to position themselves for success in the longest terms possible. I'm underwhelmed by the ability of most universities to manage their curricula, finances, and administration in the long term. As for the military, I've been generally impressed with the Department of the Navy's ability to plan for the future, and stunned by a near complete inability of the Army and Air Force to do so.
4) And Mr. Exum's original point, that pop wisdom from the business world ought to be well below reading level for our military leaders? Different planning horizons is one of many, many reasons why this is so. Again, we can respectfully disagree. I believe I demonstrated in my original comment post that business has a great deal to teach our military leaders on the tactical, operational, and strategic levels. Upon reviewing Dr. Exum's original post, I'm convinced that he's asking the wrong question and coming to the wrong conclusion based upon a set of inaccurate or flawed assumptions. The question is not whether military leaders can garner valuable wisdom from corporations; the question is how to apply quality control measures so that relevant and substantive 'management excellence' literature can be included alongside military-specific literature in professional development reading lists for our officers. By way of comparison, my studies of the history of amphibious warfare aren't irrelevant just because certain readings I was assigned from Assault from the Sea were of poor quality. Dr. Exum might enjoy good results if, instead of downplaying the relevance of business-related literature on military professional development reading lists, he were to instead advocate for greater quality control while recommending specific examples of literature that meets a higher standard than those poor quality books he's lamented.
Thanks for the opportunity to respond, and again, sorry for the length - believe it or not, the original version was longer!
Spot on again, Ex. Plus,
Spot on again, Ex. Plus, "execrable" is about the most perfect word to describe those books in question. I do, however, submit that there is one bottom-line-oriented business tenet that the military might do well to adopt: fiscal responsibility with regard to property. Regular Army units are abominable when it comes to training and enforcing supply discipline, and the after-effects are rarely felt because our budget is effectively Monopoly Money. The level of absurd insolvency in any typical infantry company or battalion would tank a business with a limited line of credit, and shareholders would hardly allow a system as labyrinthine and worthless as Property Book - Unit Supply Enchanced.
That One Guy on June 19, 2012
That One Guy on June 19, 2012 - 4:32pm
As is the Bank of England, though it's weird to list the last as an example corporation.
Bank of England was a private company until nationalized in the 1940's. It might be a weird example but for a private company to run from the 1600's to the 1900's was the point.
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