Maginot Mentality

The last year of economic and business calamity has shattered much of public and leadership faith in business structures and controls. Regulation failed to regulate, economic self interests of financial institutions imploded from the inbred complexity of derivatives underpinned by illusionary value creation, and the dynamics of a virtual world provided no sea walls against an economic tsunami. The unraveling of the US auto industry is likely to precipitate yet more fundamental changes of how we will all operate and conduct our enterprises. I suspect that this theme will provide a fertile ground for several of our discussions.

What is emerging is clear:

·       The nature and rate of change we face will remain unpredictable for some time.

·       Many of the historical data that has bred our paradigms of how to lead and manage are our greatest source of risk.

·       Your upcoming decisions about how to compete and win must focus on agility and not build rigidity.

Last year, while developing some themes for a book I was writing for an organization, I gave some thought to how, from our personal histories, beliefs, and paradigms, we create constraints that shortchange the quality of our decisions. By shortchanging, I mean we make assumptions and impose filters that block out important alternatives. The adverse consequences of these decisions are the choices and investments we make that often reduce subsequent degrees of freedom, that is, they build rigidity. The terrible consequence about rigidity is that we can often become the spectator to our own demise.

A catastrophic example of the dangers of rigidity happened between the first and second world wars in Europe. It serves as perhaps one of the most important examples of how disruptive innovations and agile enterprises can completely redefine competition. Our example is the Maginot Line.

The Maginot Line was a series of concrete and steel fortifications built by the French along the German and Belgian borders after World War One as a defense against a German invasion. Coupled with what was believed to be the largest and best army in Europe, the French were confident that their capability to protect their interests and people was fail proof. The history of the Maginot Line is a fascinating topic that merits your investment in further reading, for its lessons are still relevant. For now, we will stipulate that it failed miserably in 1940. Technology, strategy and execution agility not only made the Maginot Line ineffective and irrelevant, it actually accelerated the capitulation of French forces.

It failed for some key reasons:    

·       The French leadership invested in rigidity of structures and strength of numbers as a consequence of paradigms resulting from the previous war experiences. Yesterday’s data built today’s solutions to tomorrow’s problems.

·       The decision makers assumed some impossibilities:

o   The Ardennes Forest was a barrier the German army could not cross, and therefore was left virtually undefended

o   Technology and tactics would not change significantly from the trench warfare of World War One.

·       The French leadership applied a lens of enforced optimism and overconfidence about their garrison solution and the size and competence of the French armed forces.

·       Affirmation was sought and dissenting perspectives were sidelined or ignored.

·       The huge and distracting cost of funds, attention and resources created an organizational gravity that pulled against alternatives.

These issues are as relevant today as then to the challenges organizations face. They are as visible in the building of border fences as in the application of draconian controls to achieve compliance. Many of us are challenging ourselves to build defenses against the risks we perceive and capabilities to compete in an emerging environment.

Are we building Maginot Lines as defenses to the threats we face? Are there agile alternatives we should explore?