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Military formations have long sought to lessen the tension between the rigidity of their organisational structures and the need for quick, decisive, imaginative leadership plus flexibility of movement on the battlefield. General George Armstrong Custer's ego, for example, blinded him to the realities of the situation at the Battle of the Little Big Horn, and it cost many men their lives in consequence. The US Cavalry of the nineteenth century seems to have lacked the organisational checks-and-balances required to halt one man's dangerous ambitions. But too much centralised control, red tape and restraint can be just as risky as too little.

During Operation Mercury, the German airborne invasion of Crete in May 1941, General Bernard Freyberg, the island's commander, and his subordinates opted for an outdated static defence in the face of aggressive, highly motivated but lightly armed paratroops. It was largely thanks to Freyberg's autocratic style of leadership and obsolete military thinking which allowed the Germans to eventually wrestle control of the island away from its Commonwealth defenders, a numerically superior force, and impel a humiliating evacuation.

Not only did the Germans employ every technological advantage available to them, but they also harnessed the esprit de corps, or fighting spirit of the Fallschirmjaeger (paratroops), a wholly new type of warrior. Unlike most of its adversaries at the time the German military machine believed in swift campaigns of strike and manoeuvre. By forming all available units into Kampfgruppen, or Battlegroups, a local commander had the tools, knowledge and freedom of action to ruthlessly exploit the slightest weakness in the enemy line without hesitation. In contrast, Freyberg's unit commanders exercised almost no freedom of control over the battles they fought and lost.

You must grasp the full purpose of every enterprise, so that if your leader be killed you can yourself fulfil it.
'Ten Commandments of the German Parachutist', The Fall of Crete by Alan Clark.

Typically, the British Army of the Second World War still believed in training its soldiers to simply obey orders without asking too many questions. Officers rarely took NCOs into their confidence about operational matters, let-alone the rank and file. Consequently, when a unit's officer was killed or badly wounded there was no one ready to take command with enough operational knowledge to complete the mission. The Germans adopted a far more enlightened and pragmatic policy, whereby every man was expected to be able to step into the shoes of his direct superior. The German Army's system encouraged and rewarded initiative, flexibility and daring. The result was a crop of fine, resolute, gifted planners and aggressive leaders, such as Erwin Rommel, Walther Model and Kurt Student. Only later, as the war progressed, did the British and other Allied armies start to gradually adopt similar methods.

Victory or defeat in the corporate sphere may not cost lives but can certainly cost livelihoods. Rigid organisational structures and strong corporate cultures can often do more to hobble talent than harness it. Instead of fast-moving, flexible organisations always ready to ruthlessly exploit a competitive advantage, many companies are hindered by their own bureaucracy and an army of timid, indecisive middle managers. For fear of making the wrong decision, and being held accountable, these people make no decisions. Instead they choose to endlessly analyse or prevaricate. For far too long UK businesses have failed to appreciate the importance of investing in professional management training, internal communications and leadership skills.

In many ways the German military approach can be likened to Charles Handy's concept of a 'doughnut organisation', as expressed in his book The Empty Raincoat. As a central organising principle Handy suggests a balance between 'core' roles, responsibilities or duties and a 'bounded space' where initiative, daring and imagination can be expressed, cultivated or tested. The major difference between a doughnut organisation and a traditional hierarchy, whether commercial or military, is one of trust.

The Allied commander of Crete saw no place for discretion or freedom of action among his line officers. Strict control of troop dispositions was supposed to ensure a predictable outcome. This proved counter-intuitive, as it simply robbed line-officers of their freedom of action; the ability to adapt to changing circumstances on the battlefield. The German system also sought to impose a regime of strict discipline and obedience within its ranks. The Germans instilled an extreme sense of duty and loyalty to the Fatherland within its troops. However, this was tempered with trust in a shared vision, values and beliefs plus a man's personal qualities, such as integrity, intelligence and courage, as well as his professional talents. Men were recognised, rewarded and quickly promoted for their daring, inventiveness or inspired leadership. It's hardly surprising to learn that many of Germany's senior commanders during the latter stages of the war had been relatively junior officers at its outbreak.

Today we see many variations of Charles Handy's doughnut organisation as numerous enterprises finally come to realise that bureaucracy tends to be cumbersome, unresponsive, costly and uncompetitive. One example of just such a transformation is the HM Treasury's National Savings and Investments agency (NS&I). Until the late 1990s NS&I employed a staff of over 4,000 to develop, promote, sell and service its wide range of government-backed saving and investment products such as ISAs and Premium Bonds.

The new shape of work will centre around small organisations, most of them in the service sector, with a small core of key people and a collection of stringers or portfolio workers in the space around the core.
Charles Handy, The Empty Raincoat.

Finding itself increasing squeezed by new web-based entrants to an already overcrowded financial services market, NS&I struck a deal with Siemens Business Services (SBS). Siemens assumed responsibility for the bulk of NS&I sales and back office operations, excluding Post Office Counters Ltd. Over 3,500 NS&I employees, mostly sales, customer service and accounts people, transferred to SBS, securing their jobs and long term futures.

The remaining NS&I 'core people' were then trusted to concentrate solely on the development, marketing, advertising and launch of new financial products to the marketplace, or enhance existing ones. SBS received a guaranteed 10-year contract to run the NS&I call-centre plus its online and mail order businesses. Having dramatically increased its sales force almost overnight, Siemens could immediately compete for additional service sector contracts. SBS also furnished NS&I with the advanced IT systems necessary for them to get closer to their customers, understand them better, explore new market opportunities, and compete more effectively.

To deliver its products and services so they consistently surpass customer expectations, its essential that a company's brands, people, suppliers and partners are carefully aligned and demonstrate a high level of interconnectedness. That same organisational structure must also be flexible enough to anticipate and adapt to changing customer needs, new opportunities and competitive threats. An organisation's people must be given trust, encouragement, focus and direction rather than rules, regulations or limitations. Modern IT, IS and CRM systems can also provide the necessary tools for quick, confident decision-making, and sharing of corporate knowledge.

The process of gathering, assessing, sharing and, most importantly, using information cannot be underestimated. The fall of Crete clearly illustrates the point. History taught General Freyberg that only a naval blockade or amphibious assault could capture his island. That meant deploying many of his men to defend the various ports, harbours or other small anchorages that punctuated the coastline. The Germans had other ideas. German strategy relied on surprise, speed and a radical new form of airborne warfare. Success or failure hinged on the paratroopers immediately seizing Crete's airfields rather than its harbours.

To secure and hold the airfields German paratroops had to be swiftly reinforced and replenished with food, ammunition and medical supplies while their wounded were evacuated. The landing strips would also provide a base from which to fly continuous fighter and dive-bomber missions against the island's defenders. Certainly Freyberg's men did defend the airfields, but both he and they seem to have totally misjudged their strategic importance. It was a simple enough equation: hold the airfields and hold the island. Do this and any seaborne element of the German invasion force would then be powerless to intervene.

However what made the loss of Crete such a bitter Allied defeat was the fact that Freyberg, his superiors and political masters knew exactly when, where and how the Germans intended to strike. Thanks to the code-breakers of ULTRA having deciphered most of the Luftwaffe's Enigma radio traffic, the secret of Operation Mercury was out. Possession of this knowledge itself created a dilemma for the Allies, or so argues historians and academics. By acting on intelligence gained by ULTRA the Germans might be alerted to its existence, and change their codes in response. Faced with a potential intelligence blackout Allied High Command had a difficult choice to make. Ultimately, they chose to sacrifice the island rather than risk ULTRA.

Today, with the benefit of hindsight, it seems a highly questionable decision not to have shared or fully exploited ULTRA-gained intelligence for the defence of Crete. So what went wrong? It seems that Allied planners no-longer trusted themselves to make fair-minded strategic assessments or recommendations based on situational analysis alone. Doubt eroded their confidence, made them unnecessarily cautious, and blinded them to the possibility of inflicting Germany's first major defeat of the war. After all, the Germans knew that airborne assaults were always hazardous adventures, and something of a gamble. Crete's garrison was a well-equipped, experienced and a numerically superior force, which should have been quite capable of repelling an attack by lightly armed infantry.

In truth, surprisingly little about the failure of Operation Mercury would have given the Germans cause to question the security of their Enigma codes. On the other hand, an Allied victory at this juncture of the war would have been an enormous boon, after so many defeats. Morale across Europe would have soared while the myth of German invincibility would have finally been dispelled. And this achieved just a month before the German invasion of the Soviet Union. Strategically, the holding of Crete would have made the Mediterranean a much more dangerous place for German and Italian convoys, and placed greater pressures on their forces in the Middle East.

The decision to protect the ULTRA secret was one thing, but the failure to apply some sound military judgement in the defence of Crete was quite another. Any Allied officer worthy of the name should have learned some stark lessons about German strategic thinking, and the tactical deployment of Special Forces like paratroops since 1939, and planned accordingly. The Fallschirmjaeger should have been completely overwhelmed when at their most vulnerable: while aboard their slow and unarmed JU52 transport aircraft; during their descent; or just after landing, before they could retrieve their weapons containers. Instead, despite suffering initial heavy losses, the Germans were able to adapt, overcome and finally win a truly stunning victory. As for the Allies, their defeat had no single or readily identifiable cause. Everything from poor communications to an inflexible command structure contributed to their eventual overthrow. Of course, the lesson to be learnt here is that if something as intangible as trust, given or withheld at critical moments, can decide the outcome of battles then think about what it can do for your business.

Source:
Battle Group! German Kampfgruppen Action of World War Two, by James Lucas, Arm & Armour, London, 1993
Changing Bureaucracies, William Antonio Medina, Marcel Dekker, 2001
Crete ' The Battle and Resistance, Anthony Beevor, John Murray Publishers, 1991
The Empty Raincoat ' Making Sense of the Future, Charles Handy, Arrow Books Ltd, 1995
The Fall of Crete, Alan Clark, cassell military paperbacks edition, 2001
The Lost Battle, Crete 1941, Callum MacDonald, MacMillan, 1993