War-Mart

, a former assistant editor at The New Republic, is managing editor of Democracy: A Journal of Ideas. On September 10, 2001, Secretary of Defense Donald Rumsfeld gave an address that seemed remarkably prescient. Speaking at the Pentagon, Rumsfeld warned of "an adversary that poses a threat, [a] serious threat, to the security of the United States of America"--one that "attempts to impose its demands across time zones, continents, oceans, and beyond. With brutal consistency, it stifles free thought and crushes new ideas. It disrupts the defense of the United States and places the lives of men and women in uniform at risk."But Rumsfeld wasn't talking about Osama bin Laden, Saddam Hussein, or Abu Musab Al Zarqawi. The "serious threat" he was referring to was something else entirely: The Defense Department, Rumsfeld said, was dangerously out of touch with the modern boardroom. "Successful modern businesses are leaner and less hierarchical than ever before. They reward innovation and they share information. They have to be nimble in the face of rapid change or they die," he said. The military, in Rumsfeld's view, was none of these things--and it needed to change. Given his experience as a Fortune 500 executive, it made sense that Rumsfeld would turn to business for insights. It made sense, too, that, during a time of relative peace, the Pentagon's CEO would look for ways to make his operation more efficient and responsive. But what is striking about Rumsfeld's speech is how little the events of the following day--or the following four years, for that matter--altered his goal of transforming the military according to the latest corporate crazes. Outsourcing, "lean" management and just-in-time logistics are all the rage in Rumsfeld's Pentagon. Officers are encouraged to attend top business schools, and generals deploy consultant-speak--cross- service cooperation produces "synergies," while new, more lethal weapons provide better "returns on investment." As the recently released 2005 Quadrennial Defense Review (QDR), the Defense Department's primary planning document, states, "The department must be responsive to its stakeholders. ... It must also provide the best possible value to the American taxpayer." Rumsfeld's business revolution is changing more than the way the military is structured; it is altering the very way war is fought. On the back of a small but influential coterie of military thinkers, Rumsfeld has argued that the U.S. Armed Forces are so technologically advanced that traditional doctrine--and thousands of years of military history--are largely irrelevant. Instead, an increasing number of military leaders and thinkers argue, we should look to the lessons of Wal-Mart. The Bentonville miracle and other new-economy stars have succeeded in large part because they leverage vast computer systems to lower inventories, respond better to consumer demand, and even predict where their respective markets are headed. In the same way, business-minded brass would restructure battle plans around a vast information and intelligence network, eschewing tanks and heavy artillery in favor of high-tech, lightly armed, nimble units that would flood the war zone and attack only those targets whose destruction would bring the enemy to heel, an enemy whose activity will be precisely monitored and analyzed electronically. Efficiencies, taxpayer value, networked warfare--it all sounds pretty good on paper. There's just one problem: What happens if the analogy between business and war turns out to be fatally flawed? With chiseled features that gave him more than a passing resemblance to Tommy Lee Jones, Vice Admiral Arthur Cebrowski was not the first person you might finger for a dot-com egghead. After flying in Vietnam and skippering the USS Midway during the first Gulf war, Cebrowski spent the late '90s as president of the Naval War College, and he seemed destined for a post in the Pentagon's highest echelon. But there was another side to Cebrowski, a nervous energy and a maverick streak that made him prone to trendy theories and sky-high philosophizing-- which, for a long time, kept him out of the Defense Department's inner sanctum. He spoke in the rapid-fire argot one expects from a McKinsey consultant or a Silicon Valley venture capitalist. September 11 was a "systems perturbation." Military operations should be "value-added processes." He was an obsessive PowerPointer, and, when away from his computer, he was given to back-of-the- envelope, "working in the white space" diagramming that is all the rage among the MBA set. It was Cebrowski who, along with an acolyte named John Garstka, would co- author what many consider the founding text of the current military transformation, an article that appeared in Proceedings, the U.S. Naval Institute's academic journal, in 1998. Titled "network-centric warfare: its origin and future," the article has all the casual utopianism one expects in a socialist manifesto--or a Tom Peters management book. "Here at the end of a millennium we are driven to a new era in warfare. Society has changed. The underlying economics and technologies have changed. American business has changed. We should be surprised and shocked if America's military did not," Cebrowski and Garstka wrote. Cebrowski believed that the real lessons for the next generation of warfare lay less in cutting-edge weapons systems than in the ways new-economy businesses built their operations around powerful computer networks. These IT backbones, reaching from the cash register to the plant floor, make companies extremely responsive to the marketplace while eliminating the need for costly inventory: When an item is sold, an order for a new one gets sent directly to the factory. Such a network, Cebrowski believed, could be replicated on the battlefield by a vast system of sensors, surveillance, and computers linking the individual soldier, the high-tech satellite, and the operational commander. Like Wal-Mart, through network-centric warfare (NCW) the military could achieve a level of total information awareness that would allow it to know exactly what the enemy was doing at all times. What the military theorist Carl von Clausewitz had termed the "friction" and "fog" of war would be eliminated. Vehicles could be made lean and more lightly armored, because they would rely on the power of the network, rather than their own strength, to bring precise amounts of force to bear when needed. Set battles were a thing of the past; precisely measured surgical strikes were the future. Cebrowski predicted that America's information dominance, deployed through NCW, would allow it to "lock out" the competition--i.e., dissuade enemies from ever going to war--just as Microsoft DOS and Windows effectively locked out competing operating systems in the '90s. "Network-centric operations deliver to the U.S. military the same powerful dynamics as they produced in American business," Cebrowski and Garstka wrote. The article--and subsequent proselytizing--unleashed a furious debate among the military establishment. New adherents rushed to unpack their own versions of NCW in the pages of military journals, while Cebrowski's critics attacked him as wooly-headed and utopian. "That guy needs to come up for oxygen more," one anonymous Army official told U.S. News & World Report. Perhaps part of his critics' ire came from the fact that, at least for those above a certain age, they had seen it all before. Indeed, the Pentagon's obsession with business theories seems to come in long waves. During the 1960s, the E-Ring was in the thrall of Secretary of Defense Robert McNamara's systems analysis, which he imported from Ford Motor Company, where he had been president. But the end of Vietnam also wrought the end of the McNamara era, and, in its aftermath, officers and theorists cast off the systems-analysis approach in favor of a return to the basics. Fortuitously, a new, more accessible translation of Clausewitz's classic, On War, which argues that friction and fog are war's eternal qualities, appeared in 1976, just in time to inculcate the first post-Vietnam generation of military leaders. Clausewitzian strategy, which focuses on massing overwhelming force in battle, undergirded much of the 1980s military buildup, which in turn created the force and the doctrines that won Operation Desert Storm (which, paradoxically, also featured many of the "smart" weapons that Cebrowski and others would later herald as paradigm- altering technologies). The fall of the Soviet Union, though, called into question whether a massive conventional force was necessary. At the same time, rapid advancements in information technology--the Internet, computing power, global positioning systems, and miniaturization--gave military planners a new rationale: figuring out how to use new technologies to radically rethink the way war is fought. "By the second Clinton administration, not only was the Internet the big coming thing, the fashionable, trendy idea that was going to transform everything from commerce to culture, but also, by that point, the military services were casting about somewhat desperately for a concept that could unify their post- cold-war military preparations," says defense analyst Loren Thompson, chief operating officer of the Lexington Institute. Secretary of Defense William Cohen presided over a disparate collection of in-house eggheads who produced a long list of next-generation theories, all built around information technology. At the same time, young officers were heading back to school--business school. Officers get vouchers to attend such top business schools as Wharton and Northwestern; meanwhile, the University of Maryland has even created a special "Combined MBA" program tailored to naval officers. The Pentagon became enamored of outsourcing, and just-in-time logistics (which eliminates supply depots and warehouses of spare parts) took hold, facilitated by Cohen's so- called "Revolution in Business Affairs." It seemed like Cebrowski's moment had arrived. "Sometimes people come along with similar ideas and the times just aren't right, and so they don't connect. Other times gurus manage to connect with a well-established institution that is desperately searching for a new identity. And that was the case with Cebrowski, " says Thompson. Still, had the political winds blown differently, Cebrowski and his vision for a new-economy military might have foundered. But Bush won the 2000 election. And that brought Rumsfeld to the Pentagon. Much has been made of Rumsfeld's previous tour in the White House, as chief of staff and then secretary of defense to Gerald Ford. But less has been made about what he did afterward. In 1977, Rumsfeld parlayed his administration experience into a lucrative yet challenging position at the head of G.D. Searle, then an ailing pharmaceutical giant. During his eight years there, he focused on defining Searle's core competencies--and shedding everything else. He cut 30 divisions and trained the company on research and consumer products; when he left, Searle's stock price had quintupled. Rumsfeld did the same at General Instruments, focusing on its cable and high-definition TV businesses. Following his axiom ("Prune--prune businesses, products, activities, people. Do it annually"), he fired all but 23 staffers at its headquarters, including clerks. Not for nothing did Fortune rank Rumsfeld one of America's "toughest bosses." Rumsfeld brought the same approach to the Pentagon. "If you ran a business this way, you'd go broke awful fast," he told BusinessWeek soon after taking office. "[I]f he has his way," the magazine predicted, "business concepts like downsizing and restructuring will find a place next to nukes and missiles in Pentagon strategic thinking." A major 2001 report, written largely before September 11 and released just afterward, states that "DoD's organizational structure will be streamlined and flattened to take advantage of the opportunities that the rapid flow of data and information present. As in business, entire functions need to be eliminated. Boundaries must be broken to accelerate change across the entire organization, promote cooperation, share information and best practices, and institutionalize change throughout the Department." Rumsfeld installed business leaders at the tops of the individual services--including Secretary of the Army Thomas White, a former Enron executive--and promoted generals and admirals who espoused business ideas. Rumsfeld immediately embraced Cebrowski. He placed the by-then-retired admiral in charge of a newly created Office of Force Transformation, reporting directly to the secretary. And Rumsfeld began to follow, with little deviation, the Cebrowski vision: smaller units, lighter-armored vehicles, and billions in high-tech information networks--everything from new information grids for the Navy and Air Force to the Army's Future Combat Systems, a suite of high-tech tanks, missile launchers, and unmanned surveillance vehicles. Before September 11, however, it appeared that Rumsfeld's effort was on the verge of being written off as a failure. The conventional wisdom was that Rumsfeld had met his bureaucratic match in the Pentagon top brass. "There is almost nobody in this town who is not tearing him to pieces," one observer told BusinessWeek in August 2001. But the terrorist attacks, and the subsequent war in Afghanistan, changed that. Not only did the war make internal dissent easier to repress, but Rumsfeld and his allies were also quick to claim that the war in Afghanistan, with its roaming Special Forces teams and high-tech targeting systems, was an NCW success story. Military experts have since challenged that conclusion (saying it was both too unique and too short to tell much about how future wars will be fought), but the force of Rumsfeld's personality--and thus his agenda-- carried the day. NCW-based transformation went into overdrive. Iraq, in turn, was set up from the beginning to be the ultimate test of network-centric warfare: a small, high-tech invasion force, moving quickly and striking at only those targets necessary to instill "shock and awe" in the Iraqi government. "Iraq will be the template for doctrinal changes and defense investments that will favor high-tech air power and more Special Forces," a "key" Rumsfeld adviser told The International Herald Tribune at the outset of the war. On May 1, 2003, Bush announced the end of "major combat operations" in Iraq. Predictably, Rumsfeld, Cebrowski, and others quickly hailed the war as the first truly network-centric conflict. "If you look at the speed of response in the efforts to target Saddam Hussein, intelligence was developed, decisions made, locations determined, forces assigned, weapons selected, and a strike made, all within about 12 minutes," Cebrowski said in an interview published in 2004. "This is an example of the time compression that's available when you put forces in the networked environment." But this is not, to say the least, the view taken by many officers, academics, and military analysts. Granted, they say, both Afghanistan and Iraq illustrate how IT can greatly enhance our fighting capabilities, reducing casualties and increasing killing power. But that's different from saying that IT is so important that the military should replace Clausewitz with Walton--not least because battlefields are nothing like boardrooms, no matter how much technology you stuff into them. For one, businesses don't fight each other. The executives at General Motors may talk about competing with DaimlerChrysler, but what they really mean is that they're competing for customers and through the marketplace. If company A "defeats" company B, it doesn't mean that company A physically destroys all or most of company B; it means that company A convinces enough customers to buy its products to drive company B under. After all, actually trying to destroy your competitor is usually illegal. The existence of the market is crucial for another reason as well: While individual consumers make lots of irrational choices, in aggregate, consumers--and the markets they constitute--can be objectively measured, analyzed, and, to some extent, predicted. War is the opposite. There is no objective, mediating element; combatants, like street fighters, go one on one to physically defeat one another, with very few legal constraints. Individual decisions, at both the tactical and strategic levels, are not fully aggregated, but rather can each have wide-ranging consequences. "The uncertainties of war ... make precise calculation and control impossible. Interactions with the enemy and uncertainties associated with those interactions are fundamentally different from business interactions with either markets or competitors," wrote Colonel H.R. McMaster in an influential 2003 critique of the war-as-business model published by the Army War College. And war introduces a level of risk unseen in the corporate world. "If the military gets something wrong, people die," says Frederick Kagan, a military historian at the American Enterprise Institute and the author of the forthcoming Finding the Target: The Transformation of American Military Policy. "You can't get around that. Businesses can take risks--and accept risks--that the military can't." Nor can war be measured in the same way you can measure, say, sales. As McNamara learned, war is not a Newtonian operation, but an art. Clever generals can do much with very little, and poor generals can lose even with an overwhelming force. "Some things you can measure, but the intangibles, such as the will to fight, or morale, or unit cohesion, you cannot attach a number to," says Milan Vego, a military historian at the Naval War College. And, while it's always a good idea to make the rear echelon--base maintenance, accounting, and so on--as efficient as possible, the closer things get to battle, the less important efficiency becomes. The goal is not to win at the least price in dollars, but in lives. "The business of business is money, and the business of war is victory," says Kagan. Peter Singer, a scholar at the Brookings Institution and the author of Corporate Warriors: The Rise of the Privatized Military Industry, notes that, the closer one gets to the battlefront, the sharper the clash between efficiency and effectiveness becomes. "Business-speak would say, `Cut out all redundancies,'" he says. "But, to a general, redundancies are sometimes pretty good. There's a reason why, in the Marines, they say every cook is also a rifleman. Because there may well be situations where you need them to be. If you change that, then the commander in the field loses that insurance policy." All of these problems have played out in Iraq. Indeed, if our tanks and soldiers performed admirably, the networks that they were supposed to rely on did not. A recent rand analysis of the largest tank battle of the war found that, rather than improving the frontline commanders' intelligence picture, poor data transmissions created gaping intelligence blind spots that made it impossible to see a Republican Guard counterattack until it was right on top of the U.S. forces. "We kind of lost track of them in the smoke, haze, and confusion of the battle," an intelligence officer told Defense News. So much for the "post-Clausewitzian" battlefield. A June 2003 Wired article, examining the performance of Rumsfeld's networked occupation force, enumerated how an IT- dominated battlefield actually created new kinds of friction and fog: Information overload, overheated servers, glitches in navigational systems, and too few networked devices to go around meant that many units were left off the grid--and out of luck. And, even if the technology--and the military's use if it--were perfect, we would still have to contend with the enemy; not a blip on the radar or a variable in a computer simulation, but a living, thinking enemy. And that's something too many NCW advocates, despite countless lessons, seem to ignore. In the Kosovo campaign, Serbs quickly learned how to use decoys to distract American pilots. In Afghanistan, Taliban fighters realized how to use rough terrain and weather conditions to fool night vision and other sensors. And, of course, the suicide bomber is the technology-killer supreme--even the most high- tech equipment will not make U.S. forces impervious to people willing to die in an attack. As the Iraq war drags on, insurgents have figured out that a reliance on just-in-time logistics (streams of trucks delivering water, food, and other supplies to troops just as they run out)--instead of bulky supply dumps--makes troops vulnerable. Again, such networks are great for Wal-Mart, but only because it's illegal for Target and Kmart to attack those supply lines. By 2004 in Iraq, however, "the insurgents started to hit the supply convoys hard," says retired Colonel T.X. Hammes. "Because we were doing nearly just-in-time supply and not building `iron mountains,' the forces in Iraq faced a real logistics crisis." The course of the war has not altered Rumsfeld's plans. With casualties mounting and Democrats casting the war as a quagmire, Defense News noted in spring 2004 that Rumsfeld had issued "speed goals," in which the branches would "structure themselves to deploy to a distant theater in 10 days, defeat an enemy within 30 days, and be ready for an additional fight within another 30 days"--the next step in the military's transformation into a force capable of performing a narrow range of tasks very well, but little else. And the 2005 QDR, while paying lip service to the wars in Iraq and Afghanistan, puts more emphasis on expensive, purportedly "transformational," systems like the Army's Future Combat Systems and the Navy's $3.5 billion DD(X) destroyer; meanwhile, it actually calls for fewer troops and underfunds the Army in favor of the more NCW-friendly Air Force and Navy, even though the Army is the service bearing the brunt of the war effort in Iraq. NCW is clearly still the Pentagon's goal. Which is not to say that Rumsfeld's transformation agenda is proceeding at full speed. Cebrowski passed away last year, his critics are growing in number, and his acolytes complain about the slow pace of military transformation. But there's evidence that the paradigm remains in place and that NCW has become the new black--the norm around which the defense-industrial complex fits itself. Every new defense contract gets labeled "transformational," and the industry has even developed transformation-measuring metrics. And, as a result of Rumsfeld's transformation focus, funds have been unavailable for even the most basic equipment. An October 2005 Government Accountability Office study found gaping readiness deficiencies in many of the military's core equipment categories, from tanks to jets. Which means that, like the military's previous obsession with a businesslike, tech-centric battlefield in the '60s, it will take more than just a few good articles in Proceedings, or even a change in the civilian management, to burst the Pentagon's dot-com bubble. It took the disaster of Vietnam to dispel the McNamara myth. Will it take a similar disaster in Iraq--with all the ensuing social, political, and security fallout--to bankrupt Rumsfeld Inc.?