The Business Rusch: Fighting The Last War

Business Rusch Freelancer's Survival Guide On Writing

The Business Rusch: Fighting The Last War

Kristine Kathryn Rusch

Military historians have a saying:  Generals usually fight the last war.

What this means is simple: the generals running a new war make plans based on the previous war.  The concept actually makes sense.  Generals usually had a lower rank in the previous war.  They watched comrades die senselessly due to mistakes that should never have been made in the first place, and the generals vow to never make the same mistake as the leaders of the last war.

The problem is that as the generals are looking backwards, furiously defending themselves and their soldiers against the mistakes of the past,  the new war goes on around them.  The new war has its own priorities, its own set of problems, and its own mistakes. Often those mistakes result from fighting the last war.

How does all of this square with the concept of learning from your mistakes?  In the Freelancer’s Survival Guide, I constantly told you that my philosophy is to never make the same mistake twice.  It sounds like, from the military history perspective, the generals are attempting the same thing.

And they are. They’re making new mistakes, but often these generals miss the bigger picture—they miss that this war is different from the last. That’s where a visionary leader comes in.  The visionary leader can see the differences between this war and the last, and often knows what to do about those differences.

The problem is that visionary leaders and stable organizations, like the military, don’t mesh well.

In the comments for last week’s post, writer Carolyn Nicita attached a link to an article on The Daily Beast titled “Why I Fired Steve Jobs.” The article is interesting, although not nearly as dishy as I had hoped (so sue me; I like to read business gossip).  When looked at from a purely managerial perspective, John Sculley had no choice but to fire Jobs.  Jobs was arrogant, difficult, out of control, and refused to respect authority.  He was also brilliant and visionary.

A caveat here: I’m making assumptions based on my 25 year-old knowledge of the problem and the very short article Carolyn sent.  I do not want the comments section of my blog to turn into a religious discussion—no Apple versus Microsoft arguments, please, and no pro- or anti-Steve Jobs junk.  I’m going to use this article as a jumping-off point.  If some of the things I list below did indeed happen and I am unaware of it, pretend they didn’t happen for the sake of argument.

What is clear from the article is that Sculley didn’t see Jobs’s value to the company.  Instead, Sculley saw Jobs as a difficult employee, getting in the way of the smooth operation of the organization.  Had Sculley seen Jobs as a valuable employee, Sculley would have done everything he could to keep that difficult employee.  Sculley would have given Jobs warnings, talkings-to, sent him to those weird socialization classes that businesses offer.  Sculley might have taken the extreme step of assigning a handler, just to keep Jobs in line.

With the benefit of hindsight, Sculley’s move is boneheaded.  From the things Sculley knew at the time, the decision made perfect sense.

What did Sculley know at the time? He knew how to manage.  He came from Pepsi, where he had saved the company with a brilliant marketing campaign.  He was brought to Apple for the express purpose of taking those Pepsi skills and applying them to a company that couldn’t seem to get traction.

In other words, Sculley was hired to fight the last war in a brand new company.  And wow—surprise, surprise—it didn’t really work.

As one of the commenters after the article pointed out, Jobs has often said, “Management tends to be about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.”

Unfortunately, leaders can only inspire so long.  At some point, they need managers to help them get the troops to actually do the work.

Dean Wesley Smith and I learned this lesson the hard way at Pulphouse Publishing.  We’re both visionary.  We suck at people management.  I’m a little better than Dean if you look at it from one perspective: I don’t yell in the office.  I’m worse than Dean if you look at it from all other perspectives: I expect everyone to get the job done and to leave me alone.  At least Dean follows up.

We both knew we had this failing.  We hit a point in the business where we needed a competent business manager to take us to the next level.  We had a good manager for a small company, but we needed someone on a much larger scale, with the ability to run an international corporation.  Unfortunately, the people we knew who could do this would have to be hired away from some other company—and we couldn’t afford that salary.  Heck, we couldn’t afford to hire a head hunter to look for someone who might fit the bill.

Many small companies get stuck in this place.  Even more react like Apple—they hire someone unsuited, because they’re fighting the last war.  They think they know what they need based on what happened before, but in reality they have no idea what the future will bring.

The solution I always wanted for Pulphouse, one we could never achieve, was the one depicted in the movie Big.  Tom Hanks’s 13-year-old boy, magically grown up, got a job at a toy company where they gave him his own office, let him play with toys, and come up with “ah, cool!” ideas.  Then the company, without question, would implement the ideas.

If all businesses worked like that—the true visionaries in their offices, playing with their toys, while the managers implemented the ideas efficiently and accurately—no company would ever fail.

Of course, I can’t think of a single company that works like that.  Not even Apple, no matter how much the press wants us to think so.

Most of us run small businesses and we scramble to keep our heads above water.  We often don’t have time to think about the last war let alone the current war.  We’re trying to make our rent and get through the day.  We reflexively fight the last war, because it takes little thought.  We analyze the mistakes we made, figure out how not to repeat them, then  move on.

But what we really need to do is lift our heads up as often as possible and look at the world around us.  We need to realize that the war going on around us is a new war.  We have to see with clear eyes whenever we look.

I know that’s hard.  Most people can’t see what’s going on around them—or if they can see it, they don’t understand it.  People can’t just have an understanding of the past and a knowledge of the present.

They also need to be able to extrapolate into the future.  The if-this-goes-on thinking that most good science fiction writers have needs to exist in business as well.  It’s this kind of thinking that puts “visionary” into the business world.

Not every person can be a visionary.  Some far-sighted people hire visionaries, not to develop  product, but to understand what kind of product is needed.  And the visionary has to understand the industry.  Futurist seminars are good to explore the overall culture, but would they  have helped Sculley with Jobs? No.  Hardly anyone saw the direction the tech industry would take in the ten years between 1985 and 1995.  Those who did see it often didn’t know how to capitalize on it.

As you can tell, I’m thinking about this a lot right now as my industry—the publishing industry—changes. The changes occur almost daily, and are sweeping in scope.  What will happen in the future? I don’t know.

I do know that Big Publishers are still fighting the last war—looking at e-books as an annoyance that could get in the way of their profits, rather than seeing how to profit from them.  It would be easy for me, as a writer, to do the same.  Instead, when I received the opportunity to put my entire backlist into e-books, I jumped at the  chance.

Will it benefit me? I hope so.  Will it matter ten years from now? I hope so.  Will I look visionary twenty years from now? I hope so.

But do I know? Of course not.  Anymore than I understood the importance of blogging 18 months ago. But I am willing to be flexible.

What disturbs me the most about this “fighting the last war” phenomenon is that it doesn’t just happen in the military or in business, but in other areas as well. As I listen to stockbrokers and economists talk about fighting inflation, I’m acutely aware of the fact that the average interest rate on a 30-year-fixed mortgage in 1981 was about 17%.  The average interest rate on a 30-year-fixed mortgage today is about 5%.  The problem, at the moment, isn’t inflation.  The problem is that the United States has lost its manufacturing base.  We don’t make anything in this country any longer.  Our economy is based on consumers spending dollars rather than Americans making product that we are selling to ourselves and overseas.

But are the people in charge of our financial system discussing this? Behind closed doors, I hope.  But I doubt it.  The economists and stockbrokers, the heads of the various Federal Reserve Banks, are all discussing inflation, as if it were a greater threat to our economy than joblessness is.  And that’s simply myopic.

Those of us who run small businesses have created something.  We’ve created a store or a law firm, music or artwork, buildings or building materials.  We understand the difficulties of inflation—borrowing money becomes difficult, for one thing. But no one can borrow money right now anyway.  All the big banks and lending firms are waiting for the other economic shoe to drop.  So inflation—to those of us who run small businesses—is somewhat irrelevant.  In fact, those of us with money in the bank would like to see interest rates rise a little.  Then we would make money on the money we have in reserve.

That’s just an example of the last war having an impact on all of us.  As I stare down the new face of publishing, I try to analyze my own attitudes.  Am I looking at it from an old-fashioned, out-of-date position, or am I using the past to understand the present? Am I dreaming of a better future while ignoring the signs of upcoming disaster? Am I being realistic?

Unfortunately, in the terms of future predictions, only time will tell.  The problem with being human is that we cannot know the future.  (Sometimes, I would argue, we don’t know the past either.)  We have to make educated guesses on where the future will go, and what it will bring.  Those guesses should be based on knowledge without fear, on not making the same mistakes but on being unafraid of making new ones.

And honestly, that’s a tall order.

Not all of us can do it.  But those of us who can will thrive in the changing environments we face, instead of being tossed around by events.

Running a business isn’t easy, no matter what the business.  In fact, it’s fraught with all kinds of perils.  Never make the same mistake twice.  But remember that fighting the last war is a common business mistake.  When you’re reviewing the past, make sure it doesn’t hold you—and that the war you’re fighting happens to be the one you’re in the middle of now, not the one you survived in the past.

Thanks for all the great letters and comments last week supporting the new column/blog.  I’m going to keep the donate button here.  If you feel so inclined, leave me a dollar or two to carry me to the next installment.

“The Business Rusch: “Fighting The Last War” copyright 2010 by Kristine Kathryn Rusch.

3 thoughts on “The Business Rusch: Fighting The Last War

  1. Ms. Rusch,

    First off, thank you to you and Mr. Smith for visiting us in Bellingham many years ago for “VikingCon” along with Vernor Vinge and Marion Zimmer Bradley. That was the best con I ever attended because it had such a “big name” line up, but was a very intimate setting.

    If this post is off-topic, please don’t let it through, that’s fine.

    You talked about two things that are going on in the US economy at this time: Banks are not lending and depositors are not getting much interest.

    Do you see an opportunity there?

    I do. Which is why I make “hard money” loans to those who can create a good proposal and show that I will not only get my principal back, but will get a good return on my investment – about 18%.

    “Wow! 18%! That’s highway robbery!” some folks may say. That’s only true if you don’t consider two points: 1. By the time anyone comes to me, I would expect them to have exhausted the traditional channels. 2. Interest rates are commensurate with risk.

    I’m using myself as an example to show that if someone feels they are not getting a good return on the money they have in the bank, and they know a small businessperson who could have a positive effect on the economy if only they had some money to get their business going, or to expand, then the solution to both problems may be to lend some of your money to the small businessperson.

    1. A lot of private investing, like you’re talking about, is happening these days, Michael. Studies are showing that small businesses are getting their funding from individuals–often family and friends. 18% is high, I think, but no higher than the first loan my ex and I got from a bank in the 1980s. What the market will bear, after all. A lot of people that I know who do the same kind of investing are charging 10%–which is still high, when you consider the prime interest rate, but again, it provides necessary capital.

  2. Heteromeles said he couldn’t post this to the blog directly, so via e-mail he asked me to do it. He has good points:

    “Hi Kris,

    Couldn’t post this, so I thought I’d email it.

    Great post, but there’s one part missing. Two parts, really.

    The first part is that being a visionary doesn’t mean you’re right. It just
    means that you see things differently.

    The second part is more involved, but the gist is that, if you haven’t read
    The Black Swan, you really should, because the book starts with you just
    said and goes on. I’m excerpting from his thinking here.

    There’s nothing wrong with not making your previous mistakes, provided that
    those are the type of problems that you will face in your future.

    If those are not the problems you face, then that strategy is worse than
    worthless, because you have this false confidence that you know what you’re
    doing, based on your previous experience.

    Confidence can be a good thing, but it can also lead you into making disastrous
    mistakes about the future. Taleb’s example is the Thanksgiving Turkey, who
    lives 101 days. For the first 100 days, that turkey is quite sure that humans
    love him and want him to live a happy, healthy life. And based on those first
    100 days, the turkey would predict that the next 100 days would be more of the
    same. Except that Day 101 is Thanksgiving…

    Note that the turkey couldn’t predict Thanksgiving. Taleb has an amusing graph,
    showing in fact that the turkey’s self-predicted life expectancy curve looks
    almost exactly like the financial performance of Lehman Brothers right up to
    2008, where they lost every bit of money they had, and then some.

    Similarly, you can’t predict many of the future’s disasters, but you can make
    sure that you are less vulnerable to them. As you noted, this is why insurance
    is so critical, as is having little or no debt.”

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