10 Jan 2007  HBS Cases

The Challenge of Managing National Security

What can we learn from mistakes made in managing national intelligence before 9/11? Professor Jan Rivkin discusses the difficulties of integrating a highly differentiated organization, and the dangers of overcentralizing decision making. From HBS Alumni Bulletin. Key concepts include:

  • The issues around managing national security provide an extreme example of the challenges faced by organizations that break into specialized parts yet must get the parts to work together.
  • While private sector organizations can roll out complex changes over time, the intelligence community must change quickly—it must be patient and impatient at the same time.
  • In the highly turbulent field of national security, a single "intelligence czar" could be quickly overwhelmed by informational burdens, and oversight groups can bury talented individuals under bureaucracy.
  • The Director of National Intelligence should serve as a centralized provider of leadership and infrastructure that allows both decentralized and coordinated action.

 

Associate Professor Jan Rivkin joined the HBS faculty in 1997 as a member of the Strategy Unit. His special area of interest is examining the interactions that occur between and across the various functional and product boundaries of the firm, which is the subject of his popular MBA elective Advanced Competitive Strategy: Integrating the Enterprise.

Rivkin's most recent case, coauthored with former HBS colleague Michael Roberto and published this year, is "Managing National Intelligence (A): Before 9/11." The case plumbs the background of what will likely be remembered as one of the most tragic organizational failings in American history: the inability of the country's government and its relevant agencies to forestall the deadliest attack ever on U.S. soil. The case is dedicated to Waleed Iskandar (MBA '93), a colleague of Rivkin's at Monitor Company, who died in the 9/11 attacks.

Garry Emmons: The focus of your work is on how to manage integration within a highly differentiated organization. Post-9/11, how's the intelligence community doing on that score?

Jan Rivkin: Intelligence issues are enormously complex, and I should say right at the outset that Mike and I are only beginning to learn about these matters. And by the way, we don't have security clearances. The case is based on publicly available documents and information.

The role of this case is not to assess how well the intelligence community is doing. Rather, its purpose is to provide an extreme example of the challenge of differentiating and integrating an organization—that is, breaking it into specialized parts yet getting the parts to work together. Cases about extreme circumstances force students to think outside their usual domains. The aim is for students to draw lessons that they can then carry back to private-sector organizations.

As for how the intelligence community is doing, we're still seeing the structural changes in the community play out. Two of the most important are the establishment of the role of Director of National Intelligence (DNI) and the establishment of the National Counterterrorism Center. Their effectiveness remains an open question, and in fairness they've not yet had a chance to prove themselves. In the private sector, this kind of change would happen over the course of a generation of management. But when it comes to national security, you can't wait that long. You have to be patient and impatient at the same time. A poor response would be to overhaul sweeping organizational changes before they've had a chance to take hold.

Q: Do you think these changes are a step in the right direction?

A: It depends on how the DNI role plays out. I see three possible outcomes—two bad and one good. One possibility is that we give in to the temptation to centralize—give all the decisions to the "best and brightest" at the top. A lot of the rhetoric about the need for an "intelligence czar" points in this direction. But we've seen in the private sector that, in highly turbulent environments, overly centralized organizations get overwhelmed by the informational burdens placed on them. So while it makes good political theater to give responsibility to a strongman or strongwoman at the top, I hope the intelligence community can resist that.

Cases about extreme circumstances force students to think outside their usual domains.

A second possibility is that the DNI becomes a mere figurehead for the intelligence community and a new layer of bureaucracy. That's the last thing the community needs.

My hope is for a third outcome: The DNI becomes the centralized provider of the leadership and infrastructure that allow the community to take decentralized yet coordinated action. That's what we see in really effective private-sector firms, like what Jack Welch put in place at GE.

One concern in this process of change is that of overwhelming oversight. Oversight is clearly important, but I see some weariness among intelligence personnel who have to answer questions again and again and have been reorganized only to have the reorganizations reorganized. As one pundit put it, some overseers seem to be preparing not for the next 9/11 but for the next 9/11 Commission.

Q: What has struck you most about your exposure to the intelligence community?

A: When I meet people from the intelligence community, I am deeply moved by the sheer degree of passion they have to prevent another 9/11. The motivation of the community is unmatched in the private sector. Individuals are going to extraordinary lengths to connect with others and to do their jobs better. They're frequently overworked and underpaid.

The question is this: Can we as a nation get the systems, structures, and processes in place so those individuals can do their jobs? It reminds me of one of the most poignant lines in the 9/11 Commission report: "Good people can overcome bad structures. They should not have to."

Q: It's been said that, post-9/11, the intelligence community's culture must change from "Withhold, and share by exception" to "Share, and withhold by exception." Have private-sector firms undergone similarly rapid, wholesale reinvention?

A: I would say that IBM's transformation under Lou Gerstner (MBA '65), with its shift from hardware to software and services, is an example of that. However, while IBM's situation required urgent action, it enjoyed the luxury of time, relatively speaking, to find its new identity. By contrast, the intelligence community's national-security imperative puts great pressure on it to change immediately.

Consider the challenge facing the FBI, for example. The FBI's historic mission has been to solve crimes after they occur. They are phenomenal at that, as in the way they tracked down the Lockerbie perpetrators, to cite one case. That's a very different role from preventing terrorist attacks before they occur, which is their top priority now. The FBI was pursuing both missions to some extent before, but its "product mix," unlike IBM's, changed in a single morning.

Q: Turning to teaching, is there a case of yours that's a personal favorite?

A: One of my favorites is the three-part Ryanair series. In Part A, it's 1986, and Ryanair is set for launch as a competitor to Aer Lingus and British Airways. Will it succeed? Many students think it will because they know Ryanair is successful today. The B case is set in 1991, and the company is two hours away from bankruptcy, largely because it failed to anticipate rivals' reaction. Few students know that crucial part of the story, and that makes the case exciting to teach.

By 1999, as described in Part C, Ryanair is the most profitable airline in the world. I like this case series because you get to see success and failure side by side in one industry and in one company. It's a case series where the lightbulb consistently goes on for the students and for me.

Q: You're perennially honored for teaching excellence. What's your secret?

A: Great students. Think of it: we have an admissions department for our customers. How many companies have that luxury? If you've got the right people in the classroom, the guy in the pit can't mess things up too badly. I've also had terrific mentors who've taught me how to teach.

And there's nothing more motivating than seeing that lightbulb come on. If you teach and you don't love the lightbulb, you're in the wrong job.

About the author

Garry Emmons is senior associate editor of HBS Alumni Bulletin.

Reprinted with permission from "Forestalling Terror," HBS Alumni Bulletin, Vol. 82, No. 4, December 2006. See the current issue of the HBS Alumni Bulletin.