Security and Strategy in the Post-9/11 World

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April 25th 2002 notes on leadership, business and economics

Ralph Schrader and Mike McConnell, senior executives at Booz Allen Hamilton, lay out the harsh reality of our post-September 11th world. At the same time, they lay out hope for thriving in such a world. An integrated dance (my word) between security and strategy is the key.

Security must be built into core processes, budgeting cycles, and strategic planning, not just bolted on. Here are the key areas to secure:

• People (“The implications for recruitment, retention, and productivity are real”)
• Core business (systems, facilities, infrastructure [assets, really], and processes)
• Networks

Peter Drucker identified four key sources of disruption:

1. Globalization (of the economy)
2. Technology (explosion of new technologies)
3. Pluralism (growth of pluralism)
4. Knowledge (emergence of knowledge as an asset)

Nokia is a good case example:

The peril for the unprepared can be profound---as can the opportunity for ready competitors [Telefon AB L.M. Ericsson of Sweden v. Nokia Corporation of Finland; p 40].

A fire in the New Mexico semiconductor plant of Koninklijke Philips Electronics NV disrupted their supply of chips, and Nokia officials noticed a hiccup in the product flow even before Philips informed them. They acted immediately to bring in their chief supply troubleshooter, and within two weeks a global team of 30 officials patched together a solution:

• Redesigned chips
• Accelerated a project to boost production
• Used its company clout to get more chips from other suppliers

Result: Nokia gained three share points, and Ericsson not only lost the same but also ended up exiting the handset market.

Booz Allen Hamilton has used strategic simulations to analyze conflict situations. In a well defined scenario, teams of client personnel (and consulting personnel, I imagine) represent the key forces, methods, or ideologies in question and compete against one another.

Idea: Contact Lou Quast and Cori Hill about how to leverage this in our client work. I believe Active Leader builds off of such thinking. Perhaps PDI senior management might utilize it to strengthen its business.

For example, Caterpillar has used strategic simulations to break the truck market into several segments. The experienced executives who took part

did not know how much they knew about what they marketplace wanted until they matched wits against one another [p 40].

Schrader and McConnell make a persuasive argument about the importance of companies partnering with government and other public organizations. In the age of fear and insecurity, both need to be on the same side and not be foes.

For instance, Chevron partnered with the World Wildlife Fund to ensure environmental compliance as it developed oil and gas reserves in the eastern half of New Guinea.

“The environment inside the oil fields is actually in much better shape than outside the fields,” said Jared Diamond.

Idea: I see Scott Alford and I going to a Chicago official and exploring ways that PDI can help ensure security for the people in the city.

Reference: Security and Strategy in the Age of Discontinuity: A Management Framework for the Post-9/11 World.