What the Military Teaches About the Importance of Planning

"Erik: What have you learned about planning from the military? Simon: One of the things that I think is very interesting, the difference between at least the Air Force, and -- and the military at large – and the private sector, is “planning” quote, un-quote, is something that happens in businesses either once a year – it’s either you know, your annual strategic whatever -- or when something goes wrong. We have to have planning sessions. And that’s pretty much the only time there’s planning, right? In reaction to something, or this prescribed annual event. In the military, and in the Air Force, they’re constantly, constantly, constantly planning. And they will produce thousands of plans a year of which only maybe a few hundred will get implemented. And, you know, Dwight Eisenhower said a long time ago – and I never understood what he meant until recently – when he said, “planning is everything; the plan is nothing.” And basically what that means is the plan is irrelevant the minute you try to implement it because your competition, the enemy, whoever it is, they’re not following your plan, you know? And your plan will go wrong almost as soon as it’s implemented. And it’s this constant process of planning. That it’s not the plan, per se, but it’s the process of planning, that if something does go wrong, you can react to it. One of the interesting practical applications for this was the housing crisis, the economic crisis. Which was, the actuaries had figured out that there was a 99 percent chance of success for this mortgage-backed security thing. And they thought, “oh my god we’re all gonna get rich, let’s do this thing” and they did, and we all know exactly what happened. The problem is there was no plan for that one percent that happened, which is the housing market collapsed. There was no plan ever developed or thought about if the one percent were to happen. In the military, I can promise you, they would have thought about that opportunity, if that – “what would … how would we react if that happens?” Um, and panic is what ensued and nobody knew the answer, and things collapsed, and banks collapsed, and people lost money because there was no plan. And now the planning began and we’re still digging ourselves out of the hole, only because planning was an event and not a process."