What should business leaders know about the ambitions of Russia, China, and the European Union? They should know how geopolitical conditions exert enormous pressure on companies, according to Harvard Business School professor D. Quinn Mills and coauthor Steven Rosefielde in their new book, Masters of Illusion: American Leadership in the Media Age. The book weaves together insights from economics, leadership studies, history, geopolitics, and national security to make a case for strategic independence and improved leadership assessment in the U.S.
In this Q&A, Mills, the Albert J. Weatherhead Jr. Professor of Business Administration, reflects on the book's implications for managers and executives.
Martha Lagace: What is there of interest to a businessperson in this book?
D. Quinn Mills: This book is full of hard-hitting, in-depth assessments of international trends and risks—crucial information for all companies striving to succeed in today's global economy. The book identifies two much-loved illusions that pervade today's mass media:
- a) the conviction that all of the world's economic systems, including China and Russia, are becoming more and more like America's democratic free enterprise system; and that
- b) all peoples inhabiting the planet are potentially our friends if we could only get rid of a few terrorist troublemakers.
American foreign policy is often based on these erroneous beliefs—which we demonstrate to be false. So to no one's surprise, America's international objectives are in jeopardy today. To the extent that business strategies are based on these same erroneous notions, they are also at great risk.
Q: What can a business executive learn about leadership from your research?
A: We offer a novel approach for evaluating international leadership and a framework that has significant corporate applications as well. The concepts in this book are grounded in a historically significant case study on how the American President deals with foreign policy. We are highly critical of much presidential leadership in the past, asking not just whether what happened was good or bad, but whether or not much better results could have been achieved with better leadership. This is a very important question to be addressed to business leadership also. We conclude that America has not had very good presidential leadership. Our country has survived, prospered, and often prevailed not because of our political leadership, but in spite of it. We posit that this occurs with corporations as well. Could this be true of your company?
A successful leader must be able to persuade people to follow a certain path, which inevitably requires the ability to change people's minds.
This book takes a long look ahead—yes, the future can and must be envisaged, and it can be done well—and devises a strategy based on what is to come, not what is past. Business leaders must be able to predict the changing dynamics between powerful organizations under multiple international economic and geopolitical scenarios. As an example, this book takes as a starting point the breakdown of old alliances caused by the end of the Cold War, and projects how the world will look in terms of alliances in 2010, 2015, and 2020. Similarly, in the business world alliances are continually being formed and then abandoned. Reformulating strategy in the aftermath of outdated alliances—and the inevitable addition of new alliances among competitors—is crucial for today's business leaders.
Q: Your book draws on leadership, economics, geopolitics, history, and national security. What drove you to write this work? What are some of the illusions you uncovered, and which ones strike you as most important to grapple with?
A: Our country is in the midst of a major controversy regarding U.S. foreign relations and questions of war and peace. Many people don't think we are doing very well. My coauthor, Steve Rosefielde, and I became interested in the impact of the media age on American leadership, especially as it relates to foreign policy.
With respect to the American presidency, it involves economics, geopolitics, history and national security. So Steve and I had to assess them all.
We found over decades of collaboration that clever piecemeal solutions to international security problems were always inadequate on a global basis because they omitted existing linkages. Also, American policymaking tends to be based on wishful thinking and platitudes; even worse, the same shallow approach appears to drive policy formulation behind closed doors in Washington.
Once we grasped the global security trends we felt obligated to describe the threats as we saw them and to devise effective American responses. This book is the result of that work.
Q: What isn't working in the current leadership models you outline? What should our business readers be noticing about prevailing leadership models, and how should they re-conceive leadership imperatives for the years ahead?
A: A successful leader must be able to persuade people to follow a certain path, which inevitably requires the ability to change people's minds. In order to do this, he or she must be a good persuader (part salesperson, part teacher), skills that some business leaders ignore as unimportant. Being decisive is ineffective if employees can't be convinced to follow the new strategy—this is one important lesson from the difficult situation in which President George W. Bush finds himself today. In the book we examine the President's missteps that turned tremendous widespread support into overwhelming opposition for his Iraq war.
A major failing of current leadership models is the lack of knowledge, awareness, or even interest in life beyond our country's borders, a limitation of growing importance as the global economy expands. This is evident everywhere; our boards of directors have, on average, very few executives from other countries. Our presidential candidates have little or no international experience going into the job, a huge handicap that leads to poor foreign policy. Our leaders assume that the U.S. model of business and governance is ideal, with some small adjustments, for all countries and that our job is to go forth and remake the world in our image. This approach is naive and self-defeating.
Q: Your book deals extensively with the complexities of public policy. For business readers, what impact do current conditions of policy have on the future of their companies? What should they understand about how to operate in this current era?
A: The success or failure of American foreign policy directly impacts the success or failure of American companies abroad. For example, wars currently impede ordinary business in the Mideast and Africa. Anti-Americanism is curtailing the flow of students from Europe to American universities and American companies. Negative attitudes toward American companies, brands, and products are growing stronger in much of the world. The situation is not yet critical, but it is worsening.
Yet the U.S. mass media continues to paint a dangerously optimistic picture of the global business environment for American companies. Companies who remove their rose-colored glasses will be much better positioned to profit from both positive and negative global developments.
In summary, successful business operations in the current global economy necessitate a deeper understanding of political and international dynamics in order to devise effective strategies.
Q: What is missing in mainstream political debate? And what do you envision as a more effective position for the United States given current world conditions?
A: American political debate is increasingly dominated by hype, exaggeration, and the demonization of our opponents. When complex events transpire, the media instantaneously supplies a convenient explanation, even as the players conceal the real facts. When the true story emerges the originals are never corrected, particularly on television. One consequence is that our minds contain decades of misinformation that now forms the foundation for faulty decision making.
The only evident remedy is in-depth analysis by knowledgeable people after the fact, looking a good distance ahead. This is what we attempted to do with this book. We have also filmed a discussion with experts that is available from Harvard Business School Press.
The most effective position for American foreign policy is one of strategic independence. This concept involves devising a strategy for international relations that is not dependent on unreliable allies who have their own agendas, but does strive to work effectively with allies and partners as conditions permit. Business executives will immediately recognize this as the standard corporate approach to strategy and operations in the market place. This is why a book which investigates American foreign policy for the decades ahead is not foreign to business thinkers, but instead is very familiar—and one from which they have a lot to gain.
The most important threats to America in the decade ahead are from major powers, not terrorists per se. Much of what we treat as dangers from terrorists and rogue states are in fact actions conceived of, supported, and protected by our major rivals (i.e., Russia, China, and the European Union). The sequence in which the threats occur will be determined by the economic prospects of other major powers. The final order that Steve and I arrived at is likely to be a surprise to many. Russia is now rearming and will be a major threat in the next decade; China is growing rapidly and modernizing its military as fast as it can, and will be a major threat beginning in about another ten years. Even Europe, which is now trying to move unification forward by anti-Americanism (which we cannot stop, no matter how much we might toe a European line), will become an increasingly aggressive rival as the century lengthens. These threats will take on many forms including terrorism, the proliferation of weapons of mass destruction, and the breakout of wars with the potential to become nuclear exchanges. America must devise a more realistic and effective foreign policy to avoid becoming ensnared in future global conflicts.
Q: What does the next President of the United States need to do first to change the present course?
A: Here's what we think:
- (a) Keep real vigilance in the homeland against terrorism. (It was primarily a lack of vigilance that allowed the attack on the World Trade Center, not a failure of intelligence. The U.S. had dealt with plane hijackings for decades and should have prevented these also.)
- (b) Utilize American military power sparingly.
- (c) Avoid large-scale police actions (such as are now occurring in Iraq), especially where our military is diverted from their primary mission to perform police work.
- (d) Minimize the perceived danger that we present to other countries through continuous consultations and through self-imposed limitations on our ambitions.
- (e) Master the illusions offered to our public by the mass media, and avoid quixotic efforts to reshape the world into our own image.
Q: For our business readers, what core concepts would you like to impart from Masters of Illusion?
A: The most significant core concept is strategic independence, described above. The second is critical leadership assessment—the notion that a leader should not be evaluated solely on the basis of what was accomplished, but also on the opportunity cost of what could have been accomplished, such as avoiding war or fighting a shorter war, and wasn't.