What Al Qaeda Can Teach Us About Management

US Military in a helicopter. Photo: Rolling StonesIf you want a glimpse of the future of work, you need look no further than Molly Katchpole. Last fall, the 22-year-old college grad from Washington D.C. took on the mighty Bank of America [Molly Katchpole ]— and won. The bank had recently announced a plan to charge $5 a month to use its debit cards, and Katchpole wanted the policy scrapped. So she reached for the most potent weapon in her arsenal: her network.

Hours after she posted a petition on Change.org, it “went viral” on Facebook, Twitter, and other social media. Within days, she had 300,000 signatures, inspiring 21, 000 Bank of America customers to pledge to cancel their checking accounts. One cable news anchor even destroyed her debit card on the air. Less than a month later, the bank announced it was abandoning the proposed fee.

While it’s tempting to look at Katchpole’s story as a rare win for the little guy, the reality is in fact just the opposite. The moment she connected with her fellow consumers over social media, the balance of power shifted: the bank became the lone, isolated figure pitted against an agile, well-connected network.

Over the past year, consumers repeatedly employed social technology to affect sweeping corporate change: a Chicago jewelry designer blogged about Urban Outfitters ripping off one of her designs, prompting the company to pull the item from its stores; Netflix customers deluged the company with more than 27,000 negative comments, leading the company to halt plans to spin off its DVD-rental business.
Indeed, whether we like it or not, a powerful new technology paradigm has once again transformed the way we work. A hundred years ago, the birth of the assembly line enabled us to mechanize handwork. Twenty years ago, the growth of PCs led to the automation of paper-based processes through spreadsheets and other business software. And ten years ago, the Internet and email allowed us to connect and communicate with one another in a different way.

Today, technology is at the heart of a new workplace revolution: a social revolution. In 2009, the number of social media users worldwide surpassed the number of email users. There are now more than two billion people on social media, according to Comscore. And they are spending an increasing amount of time on Facebook, Twitter, and other social networks — more than eight times as many hours as they spend on the rest of the web.

The companies best able to adapt themselves to an increasingly agile and connected customer base will thrive in the social era. Those who don’t will find themselves left behind.

“To Defeat a Network, We Had to Become a Network”

Customers like Molly Katchpole are defining the conversation about our companies and our brands. If we want to successfully develop products for them, sell to them, market to them, and support them, we too need to create our own internal mobile social networks.

One model for success comes from an unlikely place: the U.S. Military’s Joint Special Operations Command (JSOC) — the elite unit responsible for locating and killing Osama bin Ladin in Afghanistan. Indeed, the story of how General Stanley McChrystal re-wired the JSOC’s organizational structure to adapt to a new kind of enemy offers several key insights for companies looking to adapt to the social era.

McChrystal is best known as the general who lost his command in Afghanistan after some of his staff bad-mouthed the Obama administration to Rolling Stone. But that public persona overlooks the staggering impact McChrystal made on the way the military now organizes itself.

When he arrived in Afghanistan in 2003 to assume control over the JSOC, McChrystal began to evaluate his new adversaries the way he had been taught: with a traditional organizational chart. “Like all too many military forces in history, we initially saw our enemy as we viewed ourselves,” he writes in Foreign Policy. “By habit, we started mapping the organization in a traditional military structure, with tiers and rows. At the top was Zarqawi, below him a cascade of lieutenants and foot soldiers.”

But as McChrystal learned more about his adversaries, he discovered that the traditional model didn’t hold. “Al Qaeda in Iraq’s lieutenants did not wait for memos from their superiors, much less orders from bin Laden,” he writes. “Decisions were not centralized, but were made quickly and communicated laterally across the organization.” The organization was  “a constellation of fighters organized not by rank but on the basis of relationships and acquaintances, reputation and fame.”

McChrystal’s central insight, gained over six years of careful study, was that Al Qaeda in Iraq was actually a self-forming network — a decentralized model that allowed for tremendous flexibility. “We would watch a young Iraqi set up in a neighborhood and rise swiftly in importance: After achieving some tactical success, he would market himself, make connections, gain followers, and suddenly a new node of the network would be created and absorbed.”

As a result, McChrystal transformed the JSOC to respond to this new threat. “It became clear to me and to many others, he writes, that to defeat a networked enemy we had to become a network ourselves.”

McChrystal achieved these changes in several key ways:

First, he improved transparency, breaking down longstanding physical and psychological barriers both within the JSOC and between other areas of the military. He brought together operators and analysts from different agencies so they could sift through data together. As a result, intelligence from both the CIA and the NSA played a crucial role in the discovery of Bin Ladin.

Second, McChrystal increased visibility. In the past, teams would only have access to information about their specific role in a mission. Over time, he was able to share information in real-time across different teams, so moments after an attack or an interrogation analysts could begin poring over data in order to determine the next course of action.

And third, McChrystal broke down traditional hierarchies, decentralized decision-making and removing barriers where crucial information would get bogged down in the approval chain. “Traditional institutional boundaries fell away and diverse cultures meshed,” he writes. “The network… valued competency above all else — including rank. It sought a clear and evolving definition of the problem and constantly self-analyzed, revisiting its structure, aims, and processes, as well as those of the enemy. Most importantly, the network continually grew the capacity to inform itself.”

The Networked Enterprise

Modern corporate structure is based on the military. Our CEOs are our generals, disseminating orders down the chain-of-command in a linear, hierarchical fashion, to the VPs (colonels), middle managers (captains and lieutenants), and line employees (enlisted soldiers).

But work has changed. It’s mobile, social, and in the cloud. People want feedback on how they are doing in the moment, so they can get better at what they do. This is particularly true of the generation of 90 million Millennials who have grown up with Facebook, Twitter, Foursquare, and other social applications. They are now running some of the fastest growing, highest performing organizations in the world, and they want tools that will help them foster a feedback culture.

Just as the military had to refashion itself to face a networked enemy, enterprises need to re-organize themselves to respond effectively to their networked customer base.

Yet many enterprises still rely on technology built for another age:  software that takes 50-year-old forms and automates them. Instead, we should be thinking about how to take advantage of social technologies to help us become more efficient and effective at work. The market economy is a giant information-processing machine. It stands to reason therefore that the winners will be those who can respond and allocate the necessary resources most efficiently. In order to do this, we need to identify the most important priorities and align our people around them; engage and motivate through ongoing recognition; and provide a mechanism for real-time feedback and coaching so people can learn — and respond — faster.

Like the JSOC in Afghanistan, companies need to eliminate rigid hierarchies and chains of command and align themselves around common objectives. They need to value and reward competency and influence over title. And most importantly, they need to encourage a self-informing, self-sustaining network by encouraging ongoing, real-time feedback.

Our customers are already taking advantage of social technology to build efficient, real-time networks. They are defining the conversation about us—and about our brands. If we want to be able to develop products for them, sell to them, market to them, and support them effectively, we too need to create our own internal mobile social networks.

Photo: Rolling Stone