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 / First Quarter 2002 / Issue 26(originally published by Booz & Company)


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

When the Chevron Corporation wanted to develop oil and gas reserves in the eastern half of New Guinea, it entered into a partnership with the World Wildlife Fund (WWF) to ensure environmental compliance in an area whose unique ecology is a global treasure. The WWF has offices and monitoring stations at two Chevron camps. “The environment inside the oil fields is actually in much better shape than outside the fields,” the physiologist and Pulitzer Prize–winning author Jared Diamond told strategy+business last year. “They’re probably the best protected national park between the Himalayas and California.” Globalization, Professor Diamond concluded, “has enriched New Guinea; it has brought to New Guinea lots of stuff from the outside — computers and management skills and petroleum engineers.” Globalization benefited Chevron as well, not only by allowing it to continue to develop a rich resource, but also by providing platforms to develop best practices that are then shared in locations around the world.

Public Policy Formation
Even as they learn new ways to operate on a global stage, CEOs need to be more mindful than ever of the delicate relationship between enterprise and government at home.

Strategic security will require a new, negotiated balance between private companies and the public sector generally — cooperation that doesn’t always come naturally. Just as it has become less common in political circles to rail against “big government,” so will industry leaders need to recognize that lawmakers are not the enemy. For chief executives, the relegitimization of government means it is time to invest more time and resources in furthering the public–private partnership. This is not the time for adversarial mind-sets, nor is it time to turn to lobbyists to carry the message. Helping legislators craft appropriate security standards will indeed be an integral part of your business strategy.

With power grids, banking networks, industrial logistics systems, and telecommunications networks subject to disruption, mitigating the antagonisms and inefficiencies in the public–private sector relationship will be crucial in preserving citizen trust in the economic system. It will also save lives.

Some things did change forever on September 11. Americans know they are vulnerable now, even in the homeland, the way Britons, Israelis, and Peruvians have known it for many years. America’s opponents know that if they can get scale and financing, they can inflict terrible damage, and Americans know that, too.

At the same time, if the war on terrorism is pursued and the coalition holds, our foes will have less and less opportunity. Given the size and spread of the American economy, including what is driven globally by American enterprise, the world has an economic interest in helping America win the war on terrorism. If not, the inevitable result is more isolationism, and the consequences of that, no matter what it means to America, will be far worse for the rest of the world.

At this moment in history, it is difficult to imagine a scenario that returns us to the picture of unhindered prosperity we imagined not long ago. But imagine yourself a business leader at the outbreak of the U.S. Civil War, not knowing that the United States and Europe were on the verge of the Industrial Revolution. Similarly, there was no way to envision the economic expansion — in the United States as well as in Europe, and later in Asia — that followed the devastation wreaked by World War II.

At each moment in history, business leaders have had to understand the forces that were shaping their world and to work those forces to their advantage — and the wider population’s — through profound and fundamental changes. As the forces of terror and freedom continue to battle, the organizations that survive and prosper will be those that recognize the interdependence of openness and security, and that craft strategies to bolster both.

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  1. Randall Rothenberg, “Jared Diamond: The Thought Leader Interview,” s+b, Third Quarter 2001; Click here.
  2. Ralph Shrader and Mike McConnell, “Security, Strategy, and the Commercial Enterprise,” s+b enews, November 1, 2001; Click here.
  3. The Constellation Organization: Organizing to Win in the 21st Century, Booz Allen Hamilton Viewpoint, May 2001; Click here.
  4. “Wargaming: Exploring the Future of Defense,” May 2001; Click here.
  5. Peter F. Drucker, The Age of Discontinuity: Guidelines to Our Changing Society (Harper & Row, 1969)
  6. Cyrus Freidheim, The Trillion-Dollar Enterprise: How the Alliance Revolution Will Transform Global Business (Perseus Books, 1998)
  7. John R. Harbison and Peter Pekar, Jr., Smart Alliances: A Practical Guide to Repeatable Success (Jossey-Bass Inc., 1998)
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