Business lessons learned the hard way

The war in Iraq is well into its fourth year, and the situation is not looking good. An official review of the US surge is due in September, but the violence continues unabated and dozens of Iraqis are losing their limbs and lives every day.

This is the reality on the ground, and can be gleaned from the war-zone coverage. In Imperial Life... Rajiv Chandrasekaran, the Baghdad bureau chief of The Washington Post, gives us a sober assessment of the Coalition Provisional Authority (CPA), and its viceroy Paul Bremer.

Imperial Life... caters to all audiences, regardless of their view on the war. Incompetence, corruption, criminal activity, political and cultural ineptness, failed policies, and vanity are extensively covered, in addition to the occasional depiction of intellectual honesty and laudable humanitarianism. The fact that the CPA was not a successful endeavour mutes the positive and amplifies the negative, especially with the incessant bloodshed in Iraq overpowering our perceptions.

When a war book review is intended for a business audience, the most pertinent business lessons should be gleaned. In the tradition of The Art of War and Machiavelli's The Prince, corporate leaders, especially those who are expanding internationally, can learn from the mistakes and missteps of the US in Iraq. Imperial Life... outlines (in broad stokes) three factors for success: Plan before you deploy, set attainable goals, and establish frameworks that ensure accountability.

Preparation is the first and most important key for success. Planning for the unexpected is an expensive exercise, but is cheaper than broaching the unknown. Understanding the terrain, culture, and politics is incumbent on planners, leaders, and administrators. The limits of US understanding has been well publicized, but the simplest remedy of ignorance, education, was ignored.

Chandrasekaran tells us of a harrowing exchange: "When an Iraqi American interpreter offered to loan a senior CPA official a copy of Hanna Batatu's The Old Social Classes and the Revolutionary Movements of Iraq, a seminal work of regional history, the staffer declined. He pointed to a small book on his desk. ‘Everything I need is in here,' he said. The interpreter picked up the book. It was a tourist guide to Iraq, written in the 1970s."

The lack of preparation had many consequences. Ignoring the politics and culture of Iraq, Bremer and his staff dismissed Grand Ayatollah al-Sistani's fatwa for the constitution to be drafted by elected Iraqis. One senior official said: "The view was, ‘We'll just get someone to write another fatwa.'" This misstep wasted time and credibility, and laid the groundwork for the apathy of the CPA. Setting attainable objectives is integral to most business plans, and was putatively part of the war plans. The delay in reopening the Baghdad Stock Exchange (BSE) demonstrates the significance of setting goals and also shows more planning failures.

A low ranking US soldier who, as a civilian worked as a stockbroker, reviewed the exchange and had a quick fix. "Reopening the BSE requires three things: (1) a building, (2) some cell phones, and (3) a blackboard." This simple plan would restore the market to pre-war conditions and enable local companies to raise funds. The soldier's superiors agreed to the strategy, but decided that the opening should be delayed to ensure best-in-class practices in technology and regulations. Chandrasekaran tells the remarkable adventure of the 24 year-old real estate consultant who was shipped to Iraq to create the super stock exchange. (The exchange eventually opened, without the improvements). Establishing accountability enhances reputation and public perception, and markedly affects the chances of achieving objectives. In many cases, businesses overlook lapses during expansion, and the CPA has become infamous for its lack of accountability. Chandrasekaran does not delve into the more conspiratorial and impossible-to-prove corruption charges; what he brings up is part of the public record, and it is shocking. The shoddy contracting is well known, but the incidence of one military contractor egregiously overcharging the CPA sticks out. The contractors accidentally forgot a spreadsheet after a meeting and there "in black and white, were the numbers showing that the company had billed the CPA US$9,891,550 for work that cost US$3,738,592 - a markup of 162%." But one wonders about the US$20bn that the CPA managed to spend in its 15-month existence. The book is a riveting tale of war that blends history with economics, politics with hubris. The debacle of the US occupation of Iraq is the main takeaway, but the deeper understanding of the challenges of interacting with faraway cultures is a lesson for businesses operating on an international scale. Gulf companies that are expanding abroad can learn from the mistakes of the world's biggest corporation, the US government, and international companies looking at the Middle East have a blueprint of what not to do.

Verdict: If you find yourself confused about Iraq, or if you are looking to expand your dinner conversation repertoire, this book delivers on all counts. Don't wait for the movie.