Monday, July 15, 2013

"Pearl Harbor" by R. Wohlstetter: Entrepreneurship, Universities, Signals/Noise, Unimaginable/Improbable?

It would seem that the Japanese, in playing out the detailed strategy that led to Pearl Harbor, were prudent and ambitious. They did not conceive of continuing to be "a tenth-rate power" , so not attacking was a matter of honor and national destiny. They could imagine a fairly quick defeat of US/Britain/The Dutch, but beyond a year or so of battle their imagination failed them. They knew that in a long war they were likely to be defeated, but to have that be crucial in their decisionmaking and planning (perhaps to have made it part of their considerations) would be to accept defeat and be dishonored. They could not imagine the US... not withdrawing, and accepting Japan's enlargement of its sphere of power, for if they did their plan of attack would make no sense.

So, imagine you are a university with great ambitions. You look around and you realize that your competition is formidable, able to counter your moves. But over a "short" period of say 5-10 years you can imagine how you might act to enlarge your sphere of excellence. To admit that your moves might blunted by other institutions would  be to admit the limits of what you might do. So your plan is quite detailed in the next few years, but becomes a patriotic fantasy beyond that. You aggressively recruit new faculty, raid other institutions, run successful fund-raising programs (even though your endowment/student is perhaps 1/10th of your competitors). You have a business plan that allows you to do all this, retain your reputation among the convinced, yet in fact there are weaknesses you might be aware of but indicate that they are not crucial (at least now).  That is, you figure that the short run campaign is where you will triumph, and know that if it is a very long campaign, all bets are off. You imagine that the competition will allow you to get away with striking moves, accepting your new power and their decreased power.

Likely, you find ways of measuring your success that provide the kind of technical reassurance you need. In areas like athletics, where measurement is not at all subtle, you must be preeminent, in effect giving you assurance that your other measures are reliable.

Since most deans and provosts are in positions for less than 10 years, they leave the long run to their successors. Presidents rely on a supportive board and boosters and committed alumni to allow them to "see" over the horizon--for vision is what this is called. The deans and provosts are on on the battle-field, and do not tell the president just how things are going, and the president and supporters do not admit doubts. All cannot have any doubts about the short term, and all do not dwell on the longer term. Never can they acknowledge their weaknesses. We're always number one, somehow.

Yet, some institutions really do transform themselves. As far as I can tell, they find a niche where in fact they do have advantages, and that niche allows them to become more dominant, and that partial-dominance allows other parts of the institution to grow. It helps to be in an especially rich region or field, it helps to take big risks, it helps to have superb taste. We might want to study such triumphs--Stanford, University of California system, Stony Brook, MIT in economics, NYU in part.

Here is another cut on this, posted on my This Week's Finds Blog

Originally published in the early 60s, Roberta Wohlstetter's PEARL HARBOR accounts for the surprise of PH by the noise that overwhelms the signals. Retrospectively, all is clear. Prospectively or in actual time, all those breadcrumbs are mixed in with crumbs from seven other bakeries and a thousand passersby.
The best you can do is to take warnings seriously, AND set up picket fences to slow down opponents. You won't stop them completely, but you can make it harder for them at modest cost to yourself. Hence even an inadequate deployment of cruisers around Oahu would have made the Japanese think twice.
Just because something is unimaginable does not mean that it is improbable, is the message in Schelling's forward.
My take is about entrepreneurship: You have an idea, and figure that you must succeed in something like two years. You feel that if you don't pursue it, you have lost your mojo. You also know that your competitors will doom you if you don't succeed in those two years, for they might well catch up. You will make your major announcement now, for you are ready--and you tell yourself that the competitors might cede some of the market to you. But that is just telling yourself. But that uncertain longer term is not going to stop you from trying. In other words, you don't think in terms of real options.
(Japan is the entrepreneur; the competition is US, UK, the Dutch; the idea is the Greater Asian Prosperity Sphere; the announcement is PH (albeit you have made earlier announcements, as in Manchuria, but no real competition is present then); mojo is Japanese honor and also the anti-mojo is Japan becoming a tenth-rate power, unable to follow the West's imperialist model (the UK is also a small island state); catching up is awakening the US's industrial military might; you are ready since you have extended the range of your bombers to 450 miles but really need 500 miles and hope the pilots are careful with their fuel, the torpedos have been adapted to PH's low-depth; and no one really thinks through what might follow if success does not happen in the first year, for to do so is to violate a taboo and to be dishonorable.)
As for the picket fences in actual entrepreneurship, they may be patents, design elements, pricing, proprietary features, even disinformation.