Sunday’s NY Times article by Michael Gordon titled “Hussein Saw Iraqi Unrest as Top Threat” holds some interesting lessons for legal risk management.  It reports how Hussein was so preoccupied with threats inside Iraq in the days and months leading up to the US invasion that he not only miscalculated the the external threat — he undermined his own chances for success.

1.  Documents showed that Hussein was fearful of a palace coups and intensely distrustful of his own military forces.  The distrust caused him to limit communications, making good information scarce for Hussein and for those who reported to him.  ”Top military leaders were stunned,” for example, ”when [Hussein] told them three months before the war that he had no weapons of mass destruction and they were demoralized because they had counted on hidden stocks of poison gas or germ weapons for the nation’s defense.” 

     The failure to effectively communicate has the same effect in business.  Shareholders get demoralized when earnings reports get restated and paper profits vanish before their eyes.  Customers get demoralized when they are led to believe one thing during a sales pitch and the product’s performance or the customer service falls short.  Poor communications lead to lawsuits.  Poor communications are also the Achilles heel of effective leadership.  Few people are mindreaders.

2.  Hussein’s distrust of his own government caused him to hand picked a leader for his elite Special Republican Guard based on loyalty, not competence.  As a result, he appointed a general who was “widely viewed as an incompetent drunkard.” Brilliant, eh?  But let’s be honest.  It’s not unheard of in the corporate sector.  Indeed, the aftermath of Enronesque scandals put a blistering spot light on boards of directors packed with friends of the boss and Sarbanes-Oxley has now required more independence.  

     In my world, incompetence is merely another name for liability and that’s the problem with highly politicized organizations.  Their flawed management style eventually catches up with them.

 

This entry was posted on Wednesday, March 15th, 2006 at 12:21 pm and is filed under Business Blind Spots, Decision Making, Leadership. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.