Applying military principles to business risk
The motto of the United Kingdom’s Special Air Service (SAS), probably one of the world’s best Special Operations Forces (SOF) is, “Who Dares Wins.” The history of the UK SAS, founded during World War II, is one of daring and victory across the globe.
The UK SAS are the leaders in hostage rescue, desert warfare, and jungle fighting to name only a few areas of their vast military specialties. It is easy to see how a highly trained group of commandos can view risk and risk taking seemingly with ease, but how can businesses take more risk and still succeed?
The concept to take more business risk is a counter intuitive principle to most organizations. There is a risk management industry as well as a risk management department, whose sole task is to understand, plan and mitigate risk across the entire business enterprise. So, how can taking more risk be good for business? Yet, when Apple created the iPod and iTunes, they took a great amount of business risk by launching a new device and entering an entirely new distribution channel for music. What allowed Apple to be so successful was built upon their internal strengths of great technology, simple design principles and a strong customer focus. The introduction of the Apple iPod is a SOF-like adoption of the daring to win principles that SOF teams employ.
Before military SOF teams under take high-risk operations, they slow the enthusiasm for a mission by conducting an emotionally detached, honest and intelligence driven assessment of the mission. The SOF team fully explores the mission objectives and determines if they have the training, resources and skills to accomplish the mission. One of the truly unique attributes of SOF mission planning is that personnel safety is one of the preeminent principles of a successful operation. Why? Because for SOF, highly skilled, dedicated and experienced operators are the resource in shortest supply. You can get more helicopters, weapons and ammunition easily. Getting skilled crews to fly the helicopters and operate the weapons? That can truly take years. Finally, SOF mission planning lets intelligence and open discussion guide the final decision for a mission. If the intelligence does not provide the detail to achieve the outcome, then the mission is rarely approved.
Military SOF like the U.S. Army Special Forces (Green Beret), the U.S. Navy SEALS, the Air Force Para-Jumpers, and the U.S. Marine Corps Force Reconnaissance view and approach risk in two distinct segments: internal risk and external risk. Internal risk, how the organization trains and operates to complete its missions, is an area, just as in business, where there is an extensive risk mitigation process.
Individuals are put through an extensive selection and training process to ensure they meet the unit standards. Military operations are extensively rehearsed to ensure their success on the battlefield. New technology is tested extensively without the rigorous of combat to make sure it performs. Finally, potentially dangerous activities such as parachuting and underwater operations have rigorous standard operating procedures to ensure they are conducted as safely as possible.
In SOF, extensive internal risk mitigation procedures allow greater external risk for daring operations. SOF units are employed for high-risk external operations, such as hostage rescue, but their internal risk mitigation practices of training, planning, intelligence operations and contingency plans actually make them less risky in execution.
Examples of risky SOF operations for high reward include the raid on Osama Bin Laden and the use of Army Special Forces as the first military forces to invade Afghanistan shortly after 9/11. All of these operations contained very high external risk that was mitigated by the personnel, training, planning and intelligence analysis that eventually made the operation’s successful. High risk and high reward operations is where military SOF creates the greatest impact to a successful military campaign. By using strong internal risk mitigation and risk management principles, it allows greater success for externally risky operations where SOF has the greatest impact.
The internal and external risk frameworks apply equally well to business. The internal risk mitigation measures that most businesses have today fall into the categories of quality programs, personnel training, safety enforcement, manufacturing excellence, strong cost controls and rigorous accounting standards. These create organizations that can sustain and adapt to more risk. Externally, a business with strong internal risk mitigation measures can look for greater opportunities that appear risky, but that their internal risk controls actually mitigate much of the true risk to the enterprise.
To help businesses undertake greater risk to win, these three SOF risk techniques that can be applied to business in a simple and straightforward fashion.
Three Risk Principles Special Operations Forces Employ to Win:
Principle 1 for Internal Risk Mitigation – Train Well Beyond Your Comfort Zone. SOF training is incredibly physically and mentally demanding. The goal of all SOF combat training is to make it as indistinguishable from combat as possible so people are as well prepared as possible to succeed when they enter combat. The SOF training starts with identifying and recruiting great people and then testing them under a rigorous selection process to ensure they succeed in training. Once the best have been recruited and selected, then a series of training events bring them to the level of a honed and skilled SOF operator. Finally, personnel retention practices go hand-in-hand with training to ensure highly trained SOF personnel do not leave.
Principle 2 for External Risk Success – Identify, Anticipate and React Early to Events Critical to Your Competitors Success. In both business and the military, the classic question of “what will my competitor do” confronts both organizations at all times. In the military, intelligence and operational leaders create a “most likely” enemy operational plan of what they believe the enemy will do and then identify several critical and identifiable junctures in the estimated enemy plan. Identify these critical “action” points in a competitor’s plan then creates your own “action” points. When you see your competitor acting or about to act, you can implement a strategy to counter or mitigate your competitor’s success. For example, if you expect a competitor to open a new restaurant location, you may examine your pricing, a frequent customer card, a menu redesign or certain special menu items in the same geographic location. When your competitor’s new restaurant is about to open, you then can launch the new menu, pricing and specials to mitigate effectively your competitor’s new location opening. This is a fantastic way to stay not just one, but three or more steps ahead of the competition.
Principle 3 for External Risk Success – Create Contingency Plans to Solidify and Exploit Your Success. Few businesses create plans and operational extensions to fully exploit their success. One of the worst failures a business can have is to have a very successful product launch or a new service and then not be able to effectively expand or maintain the high levels of service that brought them the initial success. SOF teams have multiple, highly elaborate contingency plans for all parts of a special operations mission from infiltration to completing the mission objective to exfiltration from the mission area back to base. It is entirely possible to have a successful mission without exercising a contingency plan.
During the final days of World War II, a U.S. Army Ranger Battalion, a skilled behind-the-lines commando force, was tasked to find and rescue prisoners of war (POW) held in a Japanese camp. American commanders feared that the POW’s would be moved or killed before conventional American forces reached the POW’s. The Rangers conducted rapid mission planning and then set out immediately to rescue the POW’s. When the Rangers successfully seized the camp, they discovered far more POW’s that had to be moved to safety. The Rangers had created some basic contingencies and through prior coordination with friendly Philippine guerilla fighters, used ox carts to move the POW’s to safety. Contingency plans saved the day for the Ranger’s.
Being as successful as possible in risky situations is an absolute must for military SOF and business organizations alike. How successful you are in a risky situation depends directly on how well you have trained and led your organization to mitigate internal risk so you can exploit external risk into success and long-term opportunity. Business needs to use the success they have created by have a strong internal risk mitigation strategy to identify and seize external opportunities to grow their company and grow their customer satisfaction.
Original Article by Chad STORLIE (Oct 18, 2014) on www.agprofessional.com