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Published: July 30, 2003

 
 

How to Win the Information Battle — Lessons from a Modern War

Business leaders can learn a lot from how the military manages the flow of real-time information.

The former British prime minister Harold Macmillan was once asked what made his job most difficult. “Events, dear boy, events,” he replied. In this age of information overload, events befuddle and bewilder leaders more than ever. From battles in foreign countries, to explosions in space, to CEOs’ defense of their honor in court, events are relayed to our television screens and computers in real time. Transmission and production delays in the media once allowed time for editing and perspective. Today, news is unfiltered — and rat-a-tat rapid. There are few guidelines (let alone rules) to help senior executives understand how to manage the outflow of information — or assimilate the avalanche coming in.

The best practices for managing information may lie not in business, but in the military. Long a supplier of metaphors and guidance for grappling with strategy dilemmas, the armed forces are also showing business leaders how to manage real-time information.

Brittle Reporting
The war in Iraq illustrates both the problem and the solution. Where the military once could hope to control the flow of information, in Iraq it could only respond. In contrast to earlier wars, when military censors controlled the coverage of war correspondents, in Iraq reporters were embedded with American and British forces. Other journalists roamed the countryside independently, out of reach of any public relations control. Their unfiltered stories were dramatic in their immediacy, but, as the broader picture became clear, the initial conclusions often proved to be overblown or plain misleading. The rush of breaking information often produced emotional, incomplete reporting.

“Transmission and production delays in the media once allowed time for editing and perspective. Today, news is unfiltered — and rat-a-tat rapid.”
The Iraq conflict showed how the very character of information is changing. Traditional war reporting was built on distilling various officially endorsed sources of information and combining the result with observation (if available) to establish the truth of the situation — the first draft of history. The new form of war reporting catches events at their source, when they are still history’s raw material. The earlier robust reporting has given way to what could be called brittle reporting. The result has been wide, unpredictable swings in public sentiment, compounding the government’s challenge of building support for the war.

Businesses today must contend with similar issues. Business reporting used to consist of relaying the publicly released information of publicly traded companies. In an era when share-price growth was incremental and steady — and investors relied largely on dividends — there was little competition among media, and little pressure on most companies from unanticipated events. With changes in investment patterns, pension funding, and communications technologies, that comfortable predictability is now nothing but nostalgia. Investors can choose from an ever-growing array of information providers and channels, all of which are deeply competitive. Like war correspondents reporting from the front lines, business reporters increasingly are “embedded” in companies and industries. Because they have close relationships with senior executives, securities analysts, and industry observers, journalists often report unprocessed breaking news, rumors, and speculation.

“An erroneous report — or, indeed, an accurate report — on an obscure business channel can affect a company’s stock price immediately.”
And that’s only the official media. The Internet offers a world of opportunities for people with an ax to grind. Discussion boards on individual companies react instantly to news and rumor. Web “blogs,” linked to one another, spread the word, good or bad. This technology and these forums are available to anyone — free of charge. Participants can even include current and former employees of the company under discussion. Anybody can report or distort “news” about a company. Then it can be commented on endlessly, before the morning newspaper hits the porch.

 
 
 
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Resources

  1. “The Co-Creation Connection,” by C.K. Prahalad and Venkatram Ramaswamy, s+b, 2Q 2002. Click here.
  2. “Corporate Governance: Hard Facts about Soft Behaviors,” by Paul F. Kocourek, Christian Burger, and Bill Birchard, s+b, Spring 2003. Click here.
  3. “Enterprise Resilience: Managing Risk in the Networked Economy,” by Randy Starr, Jim Newfrock, and Michael Delurey s+b, Spring 2003. Click here.
 
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