The McNamara Syndrome

My book about HBS ends with a thought about Robert Strange McNamara, the man who conducted much of America’s disastrous war in Vietnam, and who died on Monday aged 93. His approach to business and government was pure HBS. I wrote:

“One of the most famous alumni of Harvard’s MBA program is Robert McNamara, the U.S. Secretary of Defense during the Vietnam War, and member of the class of 1939. In his book In Retrospect reflecting on the war, he wrote that while at Harvard he had developed “an approach to organizing human activities.” There were three steps: “Define a clear objective…develop a plan to achieve that objective, and systematically monitor progress against the plan.” This was still the essence of the HBS method. Strategy, planning and measurement. Of course, McNamara’s methods came to seem macabre when he applied it to counting bodies in Vietnam. When asked about McNamara, a South Vietnamese officer replied: “Ah, les statistiques. Your Secretary of Defense loves statistics. We Vietnamese can give him all he wants. If you want them to go up, they will go up. If you want them to go down, they will go down.” It was a line which often passed through my mind during my time at HBS whenever I felt our calculations were missing the point. Ah, les statistiques.

The journalist David Halberstam wrote that McNamara mistrusted people who did not speak his language of statistics and hard data. If it ever came down to one person saying something “just didn’t feel right” or that it “smelled wrong”, he would always go with his facts over their feeling. Fatally, in the case of Vietnam, the data he received was not accurate and yet he trusted more in the illusion of reality generated by the faulty data, the clean, impersonal, objective facts, than the messy yet accurate eye-witness reports brought home by journalists and soldiers. Interviewed later in life about the tension between his private reputation as an honorable, modest man, devoted to public service and his professional reputation as a ruthless, data-driven boss, he said “there is no contradiction between a soft heart and hard head.”

I think that the McNamara Syndrome persists at Harvard Business School and more widely among business and economic leaders. It consists of three very dangerous elements:

1)       Excessive faith in systems, long-established networks, language, thinking and a set of assumptions which change more quickly than you do. In McNamara’s case, he trusted his brilliance in interpreting data, while ignoring the possibility that the inputs were being manipulated.  He also had no trust in or respect for other ways of reaching conclusions.

2)       An over-justified confidence in one’s methods, instilled by schools and prior success. In McNamara’s case, he assumed that what worked at HBS, Stanford and Ford would work at the DoD. This is the subject of Halberstam’s brilliant and tragic book The Best and the Brightest, about McNamara and the other men around JFK. The financial collapse is The Best and the Brightest replayed in the economic sphere, though stripped of the public service ethic in Kennedy’s generation.

3)       Brilliant people often end up working and thinking inside a bubble. Inhabitants of this bubble reinforce each other’s behavior, assuming it to be all equally brilliant. The results are moments of brilliance interspersed with horrific mutations, ranging from simple instances of the Emperor’s New Clothes to more serious beasts. Ideas which start out well quickly become grotesque – in McNamara’s case, stopping the spread of Communism in Asia –  an OK motive – became sending tens of thousands of young American men to pointless deaths. In today’s economy, the goal of increased home ownership, fine, became the mortgage meltdown and the creation of far too many credit derivatives.

One way of diagnosing an individual or institution suffering from the McNamara Syndrome is to observe how they respond to criticism. Do they accept it and try to make use of it? Or do they lash out contemptuously, sneering at those who dare criticize them? It’s a good test at which many businesses, individuals and even educational institutions do poorly.McNamara

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