Strategic lessons for business from Afghanistan
The fall of Afghanistan to the Taliban would seem an unlikely place to glean lessons for future business strategy but ignore them at your peril. CEOforesight has identified 10 key lessons for the formulation of business strategy which can be gleaned from the Taliban takeover:
Distinguish between strategic and non-strategic factors.
Disruption happens sooner than you think
Always question assumptions.
Accord equal value to contrarian views.
Make sure the CEO doesn’t hear just what he/she wants to hear.
Don’t let money drive strategy.
Ignore a forward-looking capability at your peril.
Rebranding must reflect reality.
Communication is central to strategic success
Think through the potential impact on your business from big picture external influences.
We'll deal with each in turn.
1. Distinguish between strategic and non-strategic factors.
Afghanistan is a graveyard for mistaken strategic thinking, from the British and the retreat from Kabul in the 19th century, to the Russians in the 20th and the Americans in the 21st. All 3 mistakenly viewed the country as strategic, threatening their national interests, when it wasn’t. Blood and treasure were shed by the British in the retreat from Kabul, by the Russians in a war they could not afford, given their dire economic circumstances, and by the Americans in the cost of the Afghanistan and Iraq campaigns. Top end estimates suggest that American taxpayers have spent $6.4 trillion on post 9/11 wars and military action in the Middle East and Asia (Afghanistan, Iraq, Pakistan (border regions) & Syria). They also estimate that 801,000 people have died as a result of the fighting across all 4 countries.
Even within Afghanistan, the price in blood has been enormous. The US alone has lost 2,448 service members and 3,846 contractors. 47,245 Afghan civilians are reported to have died and 51,191 Taliban and other opposition fighters.
For a price so high one might think that it was a strategic imperative. And in terms of the US needing to end the terrorist threat emanating from Afghanistan it surely stands to reason that a military response was required. Most people would surely answer yes to this, but that doesn’t mean that the conflict made strategic sense i.e., did it threaten core US national interests? Preventing an attack on your homeland is undoubtedly the core national interest but that does not necessarily mean that a comprehensive invasion and occupation makes strategic sense. Similarly, in business, it can often be difficult to define and agree on exactly what is or isn’t strategic.
There are parallels between Afghanistan and Vietnam. Debate rages over whether Vietnam presented a strategic threat to core US national interests. The justification for US participation was the potential domino effect from a spread of communism across South-East Asia. But this justifiable fear proved less of a threat in reality and within 2 decades communism had collapsed across the globe. What might or might not be strategic is no easy task to decide and requires deep thought.
Lesson number 1 therefore is that there needs to be a ruthless identification of what is and isn’t strategic. This will never be easy. Geopolitically, there will always be a debate between realists focussing on core national interests, and those inclined towards pursuing democracy and freedom as the central tenant of foreign policy. The latter will of course argue that democracy and freedom across the globe are a core national interest. And so the battle wages about what is or isn’t strategic.
2. Disruption happens sooner than you think
Lesson number 2 is very obvious from the speed of the Taliban takeover. Less than a month ago President Biden asserted that a Taliban takeover of the whole country was unlikely. That assessment now looks naïve. Disruption can make political and business leaders look inept. Best to be ahead of the curve not behind it.
3. Always question assumptions.
Linked to lesson 2 is lesson 3. Always question assumptions. The assumption that the Taliban wouldn’t gain control was predicated on the idea that large swathes of Afghanistan were anti-Taliban and that the Afghan army had been trained over the past 20 years into an effective fighting force. The reality – outside of resistance by Afghan special forces – was one of rapid capitulation. The Taliban’s rapid ascendency was also greased by money and promises, but this was missed because of the mistaken focus on the Afghan army.
4. Accord equal value to contrarian views.
Lesson 4 is critical. Contrarian views tend to be ignored or given little weight. In the recent Afghan context, the CIA had warned that rapid withdrawal of American forces, combined with the fractious relationship President Ghani had with many Afghan ethnic groups, risked a very rapid collapse of the Government. But this was ignored because the focus of the overwhelming political narrative was withdrawal. This in turn links to lesson 5.
5. Make sure the CEO doesn’t hear just what he/she wants to hear.
Make sure the CEO doesn’t hear just what he or she wants to. Of course, this is no easy task. President Trump famously never read any of his briefing books or engaged in any intellectual debate with his advisers. As far as we can judge he simply wanted out of Afghanistan due to the economic cost. From a strategic perspective both Trump and Biden may well be proven ultimately to be correct, but neither has articulated their push for withdrawal in clear strategic terms. Making decisions is not the same as making strategy.
6. Don’t let money drive strategy.
Lesson 6 is that money shouldn’t be the primary driver of geopolitical strategy. Of course, it is a key element, but matters of ‘Grand Strategy’ and core national interest are bigger. If America had gone around the world reducing its military presence for cost reasons during the Cold War, we’d probably still be in it.
7. Ignore a forward-looking capability at your peril.
Lesson 7 alludes to the complete withdrawal of American forces in Afghanistan. If a decision had been made to retain a small counter-terrorism special forces group in support of the Afghan Government, then circumstances might have taken a different course. It would have provided a forward-looking capability. Similarly, in business, even limited resources devoted to forward-thinking could yield disproportionate results.
8. Rebranding must reflect reality.
The difference between Taliban version 1 (pre 9/11) and 2 (now) is striking. The Taliban leadership is now far more media savvy. Indeed, it held a press conference after the fall of Kabul, promising an amnesty for those who had worked with NATO forces, guarantees on rights for women and said it wanted to encourage investment into the country. But words need to be matched by actions. Numerous reports are already questioning whether anything has really changed, with reports of door-to-door searches and murders. Rebranding without delivering, merely reinforces the previous perception and reminds people how bad the Taliban threatens to be. Customers, like Afghans fleeing to the airport, vote with their feet. If Taliban version 2 turns out to be the same as version 1, then no amount of re-branding will change perceptions of a return to the dark ages.
The Taliban is reported to have promised Iran that it will not allow Afghanistan to be used as a base for Saudi sponsored Sunni militant rebels in Iran. It is also said to have promised Pakistan it won’t support Islamist revolt in Pakistan. Assurances are said to have been given to the Russians that Afghanistan won’t provide harbour for Chechen, Uzbek and other militants. So, there are a lot of countries opposed to any Islamic State activities supported by the Taliban. In business terms, market pressure may have forced a strategic re-alignment. But then again, can a leopard change its spots?
9. Communication is central to strategic success
The next strategic lesson from Afghanistan centres on communication. There appears to be 2 Taliban’s at present – a media savvy leadership which has learned how to communicate better during the Doha negotiations, and the street fighters on the ground who appear little changed if at all. Either the strategy has changed and not been effectively communicated to the workforce, or it hasn’t changed and there is no version 2. If the strategy has changed, then to be successfully implemented it has to be effectively communicated to the workforce to get buy-in.
10. Think through the potential impact on your business from big picture external influences.
Perhaps the hardest lesson from a business perspective is understanding just how apparently distant events can impact far closer to home. So, let’s unpack the potential knock-on effects of the Taliban returning to power. The key principle to understand here is that major geopolitical events will almost certainly have significant economic consequences, for good or ill. The Falklands War in the early 1980s showed that a NATO country was prepared to fight for freedom and democracy and emboldened the Government to accelerate economic reforms as well. The collapse of communism led to the triumph of the market (at least up until the financial crisis) and hastened globalisation.
But geopolitical events can have negative consequences as well. In the wake of the fall of Vietnam and images of the triumph of the Viet Cong and the last helicopter out of Saigon - indelibly printed on everyone’s mind - America became more insular and less confident. That didn’t last long, and reversed in the 1980s, but there was a period when the US appeared directionless.
Fast forward to the present and a similar risk of aimlessness is rearing its head. In the 1970s it perhaps mattered less due to the distractions of the Cold War and the focus of NATO. But Russia doesn’t provide the threat it once did and a US priority towards NATO has been replaced by a pivot to Asia and the rise of China. The Cold War has been replaced by ‘Great Power’ rivalry and there is no clarity as to how this might now unfold.
The US has alliances from the Indian Ocean to Japan. Despite the rise of China both economic and military, the US retains enormous power in the Pacific and beyond, through the presence of its carrier battle groups and military facilities - with countries from Japan to the Philippines and island chains in-between. Unlike in Afghanistan, the US is here to stay in these countries and across the oceans surrounding them. That means intensified ‘Great Power’ rivalry if China seeks to exploit perceptions of American weakness. Expect continued trade tensions with China under the Biden administration albeit with less hyperbole than under Trump.
This is not the only potential outcome, however. A cold hard realpolitik analysis by the Chinese might lead them to deduce that the best option for them is to accelerate their economic growth and as a result offer significant trade liberalisation with the US and other countries. It might see this as a route towards greater world leadership in a post-American era. Both these potential outcomes have very different implications for world trade and economic growth, one good one bad. So, there is a chain of causality here from geopolitics to economics to business consequences.
An additional dimension to this final lesson, is that a big picture geopolitical event in one part of the world could trigger surprising consequences in another. The US may have all but withdrawn from Iraq and Afghanistan but that does not mean it wants to be perceived as weak in a part of the globe it sees as central to its national interest, namely the Middle East. If Iran and Hezbollah over-reach in the Lebanon, there could be a swift reaction by Israel. Moreover, such action could have the quiet nod of approval in Washington, despite what might be said publicly. The commander of Israel’s Northern Command has recently stated that Hezbollah would pay a much higher price than previously, in any future conflict. It’s also reported that Israeli ground forces are fully trained and prepared for ground combat in Lebanon. Any action by the Israeli Defence Force in Lebanon might also be seen as providing increased leverage for the US in nuclear talks with Iran.
Afghanistan, a country with just 38 million people, 90% of whom live on less than $2 a day and where almost half of the economy is accounted for by foreign aid, might not be the first choice for a set of strategic lessons for business. But in fact, it highlights the key point that strategy matters everywhere, rich or poor, and consistent lessons are always there for the taking.
Afghanistan also illustrates the yawning and sobering divide between strategic success or failure. A basket case economy could be completely destroyed by a festering civil war and the Taliban version 1, or a surprising Taliban version 2 could secure multi-billion-dollar investment in copper mining by China, and other interests intent on extracting its vast mineral reserves, including substantial quantities of lithium.
This short paper highlights the lessons from geopolitics for business strategy. It acts as a reminder that strategic thinking about the future external environment is critical to the future success of countries and companies.
Professor Graeme Leach