Ford Motor Company’s development of the Edsel 60 years ago still stands as a classic corporate case study of transformative product failure. The Marine Corps, a $50 billion dollar enterprise, has introduced its own futuristic product — an explicitly defensive island-hopping “Stand-In Force” capable of reconnoitering and sinking warships in order to support naval campaigns. To pay for it, the Marine Corps intends to cut its main product line — infantry supported by artillery, armor, and air — by about 25 percent.
More than 70 percent of corporate transformations fail. The Marine Corps is not a corporation, but critical principles of change management still apply. In 1954, Ford devised the futuristic Edsel to enter the mid-range car market. Four years and $250 million later, Ford ended its disastrous experiment. But Ford had not cut production of its popular cars. The Marine Corps is in a far more precarious position. It could have used incremental dollars to test its promising fusion of targeting technologies and distributed maritime operations with a minimum viable product. Instead, the commandant, Gen. David Berger, divested current crisis response and land battle capabilities in order to fund a large-scale, hyper-optimized capability that will take eight years to build. Before the new force was designed or prototyped, Berger wrote, “We will not seek to hedge or balance our investments to account for [other] contingencies.”
The capabilities gap isn’t the only risk the Marine Corps faces. Differentiating among dozens of ships hundreds of miles away, the service will be forced to grapple with an electronic targeting engineering integration that is complex and new to them. There is also fiscal risk within Congress and the Department of Defense. In 2021, the Marine Corps did not convince Congress to fully fund its top budget priority: ground-based anti-ship missiles. In 2022, a more problematic misalignment was revealed. The Navy cut a larger amphibious ship from the Marines’ “must have” list, while dragging its feet on developing the fleet of small amphibious ships required to transport marines among remote atolls. In large corporations, product innovation is budgeted before commitments are made. In contrast, the Marine Corps divested capabilities, such as tanks and cannon artillery, up front for future funding goodwill by a more powerful Navy partner with different priorities, and an always unpredictable Congress.
Last December, Berger signaled dire consequences if the Pentagon or Congress balks:
I think this is the deciding point where, in the building and in Congress, are they willing to back an organization … that is willing to accept risk, willing to move at speed, willing to discard legacy things … Because if they don’t, then you’re in a bad place because you’ve already gotten rid of … the things you don’t think you need for the future.
The decision to divest before proving the concept and securing investment commitments by the Navy and Congress has tested the limits of the commandant’s organizational powers. In the Marine Corps, the office of the commandant is compared to the papacy, complete with a murky election, widespread worship, and the power of decree. In the private sector, it is perilous for executives to disagree with the chief executive officer. For all of these reasons, those on active duty inside the Marine Corps were likely fearful of openly challenging the commandant — who is a genuine change agent — on process or risk analysis.
The Marine Corps’ increasingly leveraged position did attract rare publicized criticism from its alarmed retired community. In an unprecedented act, many of the service’s luminaries objected to the scope of the divestment. This group included 22 four-star generals, including prior commandants. Although every organizational transformation has challenges, the resistance to Berger’s plan is unprecedented in the history of the Marine Corps.
How did this happen? Marine leaders neglected key principles of change management, repeating four organizational mistakes surrounding Ford’s Edsel and Coca Cola’s New Coke: choosing secrecy over stakeholders, testing in a closed loop, leapfrogging instead of iterating, and losing control of the narrative.
Secrecy Over Stakeholders
Undue secrecy during the design phase leaves change agents vulnerable to what corporate innovation expert Roger Martin calls the heroic leadership trap. Once a direction has been set by a small, powerful cadre, it becomes extremely difficult to stress test. “Merely adding employees to a choice-making situation does not help, as the literature on ‘groupthink’ and conformity to group norms makes clear,” Martin writes.
In 1954, Ford established a stand-alone unit called the Special Products Division to develop the Edsel in secret. Regarded as a “semi-brain trust,” the small unit operated in a secure facility that included rotating locks and lookouts. Rather than consulting internal Ford design experts from other models, the secretive team added new features that seemed sure to appeal to the modern buyer. Outside the bubble, there was no sustainable market for the futuristic Edsel.
New Coke was the Edsel of the beverage industry. Immediately after being named CEO of Coca Cola in 1981, Roberto Goizueta formed a secret unit with the code name “Kansas” to design a new formula to respond to Pepsi, which was gaining market share. The team met in off-site “bunkers.” Convinced that a sweeter formula showed promise, participants who joined Project Kansas were required to sign non-disclosure agreements. This ensured secrecy but prevented internal dissent and customer input. When brought to market, New Coke failed spectacularly.
The Marine Corps followed these secretive, self-contained examples. A small group of advocates met in secret to consider a stronger focus on China as outlined in the 2018 National Defense Strategy. The military has a formal classification system and an oath of office. Yet Marines invited into this group were compelled to sign non-disclosure agreements. Communications surrounding these signatures were uneven, sometimes heavy-handed. This was a highly unusual requirement that indicated a fear of resistance and, according to three senior officers with whom I spoke, accelerated the design process at the cost of widespread input.
The chain-of-command additionally thickened the Marines’ decision-making silo. Berger led Combat Development and Integration, the “intellectual epicenter for the evolution of the Marine Corps,” before becoming commandant in 2019. In his initial planning guidance, he emphasized the need for a decentralized force designed in centralized structure:
Force design is my number one priority. I have already initiated, and am personally leading, a future force design effort. Going forward, [Combat Development and Integration] will be the only organization authorized to publish force development guidance on my behalf.
Berger was replaced at Combat Development and Integration by Lt. Gen. Eric Smith, who was subsequently promoted to assistant commandant, the second-most senior officer in the service. It is not unusual for a hot business unit to populate the C-suite. For 20 years, Goldman Sachs was run by executives who had come up through a tiny commodities trading unit. But promoting both the commandant and the assistant commandant from Combat Development and Integration was a first for the Marine Corps, unifying the top and reducing the odds of successful dissent.
The transformation went from secrecy to scale in a few months. Signaling that it would reflect best business practices, Berger used a quote from transformation expert John Kotter of Harvard Business School as a forward to his Force Design 2030: “Transformation is a process, not an event.” Kotter, however, argued that a key part of the change process is early engagement of stakeholders. This occurs before the vision is formed, tested, and communicated. Many innovations fail because key stakeholders are bypassed in the critical formation of what Kotter calls the “guiding coalition.”
It is therefore surprising that the top experts across 50 years of Marine Corps force design and combat employment — the de facto board of advisors — report not being consulted. The force design advertising includes quotes from several retired Marine four-star generals whose expertise was in military innovation. Instead of being identified as members of the guiding coalition early in the process, they report being unnecessarily alienated, and oppose the plan.
The lack of engagement is especially puzzling because a business unit (the Marine Corps) hoping to change roles inside a larger corporation (the Defense Department) needs influencers on the management committee to join the guiding coalition. In the two years since its debut in March of 2020, Force Design 2030 has been approved by two administrations and three secretaries of the Navy. Approval, however, is not advocacy. The Navy supports the idea of Marines disrupting enemy shipping from islands, but refuses to prioritize a mixed fleet to get them there.
When the force design plan was being formulated by the small group reporting directly to Berger, the Navy should have been identified as the key enterprise stakeholder and co-leader of the guiding coalition. Force Design 2030 could have been published as a joint Navy-Marine Corps plan. Instead, it was broadly perceived on Capitol Hill and in the media as a bold initiative by the Marine Corps and an example for the other services, including the Navy, which has gradually drifted away.
Closed Loop Testing
A closed loop testing system imperils product design. The executive education school at the Massachusetts Institute of Technology teaches executives that “the biggest challenge to innovation is isolation.” Asking questions of skeptics early and often attacks the problem from multiple viewpoints.
When the Edsel was being designed by the Special Products Division, it had access to Ford’s marketing experts. Instead, the brain trust commissioned its own studies that confirmed the Edsel would open a new market.
The Marines’ organizational structure has the potential to be a closed loop. Combat Development and Integration not only designs new forces but also tests them in wargaming. This is the Wall Street equivalent of housing the risk officer inside the unit that conducts futures trading. The difference is that Combat Development and Integration has an elaborate, integrated force development process refined by Commandant Robert Neller in 2015 requiring input from an extensive list of stakeholders. Mass input from a variety of sources including operating forces and combatant commands is converted into a honed product at the cost of time and stakeholder bureaucracy.
Berger was critical of this process. He explained his perspective in War on the Rocks:
Within the Marine Corps, existing processes for force development have too often led to unimaginative results, as we tend to become prisoners of platform-based thinking, seeking incremental improvements in current capabilities and methods.
Berger further closed the loop by focusing on the Chinese maritime pacing threat identified by his civilian leadership. “He handed the force development enterprise a single course of action, which dominated the analysis and wargaming in a way that left little room for a consideration of alternatives,” according to the head of Marine wargaming.
The Marines did not follow Roger Martin’s principles of design testing: First, consider several independent options, because “if only one option is considered, there is no choice to be made.” Then have the “biggest skeptic design the test.” There is no account of dissent or even classic military Red Team feedback from the games.
In his book Blink, Malcolm Gladwell uses New Coke as a counter-argument to reactive decision-making. Coca Cola’s secretive taste tests confirmed that new ingredients, sweeter than the 99-year-old formula, were the ideal response to sugary Pepsi. The problem was that sugary drinks are superior in sips. That’s not how people usually consume soda. In 1997, Marine Commandant Charles Krulak updated the Marines’ philosophical classic Warfighting — a call for “continuous innovation” made a decade earlier by the former commandant, Gen. Al Gray — and issued a companion called Tactics “based on the probabilistic view of combat.” Krulak opposes Force Design 2030, arguing its testing did not probability-weight the opportunity costs of more likely scenarios requiring divested forces.
Leapfrogging Over Iteration
New products are even more likely to fail than organizational transformations. The former Harvard professor Clayton Christensen, a leading proponent of innovative disruption, concluded that the new product failure rate was about 80 percent. Untested distribution channels further reduce the odds.
Ford tried to do both with the Edsel. Designed by the insulated Special Products Division, the Edsel was distributed through an entirely new dealership network. This further shrank the odds of success. The basic lesson is that during innovation, the farther a company moves from its niche — which Bain calls its “core roots” — the lower the odds of success.
This is why the world’s most innovative companies commonly choose iteration over leapfrogging. Iterative companies adapt constantly but incrementally. Leapfrogs attempt to combine the latest technologies to skip ahead of dominant players. For the last decade, Apple and Microsoft have been consistently ranked among the world’s most innovative companies. They are iterative companies, enhancing their leading products while avoiding outsize risk on new ones. When they fail, they fail small.
Since World War II, the Marine Corps has followed this model, innovating via adjacencies to their top product: swiftly deployable, combined air-ground combat units built around the success of its elite infantry. Variations of this model excelled from World War II through the wars in Iraq and Afghanistan. These task units opened and closed the war in Afghanistan, were the first to topple Saddam’s statue in Baghdad, won the largest battle of the Iraq war, and provided artillery support to a special operations task force in Syria that “was the most effective fire support [we] had,” according to a Marine colonel involved in the operation with whom I spoke.
The 2018 overhaul of infantry typified Marine innovation. Secretary of Defense Jim Mattis and Neller focused investment on the core competitive advantage: “superior infantry.” Within two years, squads were more lethal. Discussing the changes he made to the squad’s size, Neller said, “Everything we want to do has to be reversible.”
Berger is following this infantry iteration today. He has increased testing of drones and loitering munitions in infantry battalions with an eye on Ukraine. This form of iteration has an embedded benefit: It is a forcing function for prototyping. Prototypes reduce the cost and speed of innovation, testing multiple independent solutions for a demand signal. The few transformative products that do survive have typically been subjected to a series of tough experiments. Bain calls this “failing fast.” Only then is the decision to scale made.
The Marine Corps flipped this sequence with its concept of stand-in forces. After limited wargames with hand-picked participants, the plan was announced, divestments were initiated to make room to scale the expensive product, and then prototyping began.
While its scope is hugely impactful across the Marine Corps, the stand-in force is rooted in maritime modernization requirements identified by Neller throughout his four-year tenure as commandant. Several exercises were conducted to spur incremental innovation at low cost.
Berger took a much more aggressive approach. He is simultaneously pushing several lines of effort, each of which is challenging. He is attempting to overhaul the Marine Corps talent management system (including convincing Marines to stay past their initial enlistment commitments), field three major product lines new to the Marines (sensors, anti-ship missiles, and MQ-9 Reaper), persuade the Navy to build an entirely new transportation fleet, and convince several Pacific nations to provide distribution sites on the eve of any conflict with China, forgoing neutrality. In aggregate, this is a leapfrog. “We cannot and will not get this wrong,” Berger wrote about the effort.
The Marines’ fiscal strategy also leapfrogs. In addition to funding stand-in forces by cutting successful product lines, Berger also took on critical funding risk in dropping the Marines’ longstanding 38-ship requirement just three months after Neller had re-endorsed its necessity. This gesture of goodwill, which gave the Navy flexibility to support the stand-in force design with a mix of smaller vessels, has not been reciprocated and is already proving costly for the Marine Corps. The service was forced to appeal to Congress to reinstate its minimum requirement of 31 large amphibious ships. The smaller vessels on which the stand-in force depends have been twice delayed by the Navy, which will not deliver the first vessel for seven years, and only a half-dozen by 2030. The Marine Corps is pouring money into a product that the Navy is not eager to distribute.
An alternative would have been to convince the Navy to co-invest in a prototype stand-in unit. A telling early test would have been a joint exercise with allies such as the Philippines and Indonesia which may be reluctant to grant landing rights for intermediate range missiles. Naval sponsorship would have had dual benefit. First, it would have united the Services in the future budgeting process. This would have been a “quick win” so critical in organizational change. Second, it would have been a superior first step in vetting the concept. If the Navy wasn’t willing to fund a small prototype, that would have been a red flag to scale the concept. Instead, while the Navy is thrilled to have the Marines purchase organic anti-ship systems, the services are already at odds on amphibious transportation. The enormous daylight between the two is a stand-in demand indicator.
Force Design 2030 and Talent Management 2030 are filled with good ideas. The service’s leadership chose incrementalism in the latter. For example, 360-degree evaluations, a favorite of idealist junior officers for decades, will be prototyped on a few marines in a few circumstances before wider adoption is considered. Force Design 2030, a far riskier proposal, cut personnel in high-performing Marine infantry task units by a quarter.
Losing Control of the Narrative
During the key communication phase of change management, Kotter’s first principle is to “Keep your messages simple and jargon-free.” Ford did not follow this advice in previewing the Edsel. For a year, Ford issued cluttered advertisements touting mysterious technologies and social-sexual benefits. The proclamations built to the point that the chief designer confided to a colleague, “When they find out it’s got four wheels and one engine … they’re liable to be disappointed.”
For a century, the Marines have demonstrated excellence in simple communications. Shifts in the role of Marines were distilled to core principles, often a single phrase or sentence. These mantras are recited at boot camp, emphasized in the field, and carried throughout life. Examples of complex concepts made simple are:
- First to Fight (1929)
- The mission of the Marine Corps rifle squad is to locate, close with and destroy the enemy by fire and maneuver, or repel the enemy assault by fire and close combat (1980s)
- Improvise, Adapt, and Overcome (1980s)
- Every Marine is a Rifleman (1990)
- A 911 Force-in-Readiness (1990s)
- The Strategic Corporal (fighting a) 3 Block War (1999)
- No Better Friend, No Worse Enemy (2004)
Force Design 2030 was well-written and ambitious. But including the series of articles and speeches preceding its publication, the core concepts took on a variety of forms, making it difficult to digest. The force design overhaul attracted criticism in May of 2020 from former Senator and Secretary of the Navy James Webb. The next day, Berger responded with the cogent but multifarious “The Case for Change.” Lacking established fora, the argument escalated in public from there.
“The Case for Change” could have introduced a formalized feedback system to augment the planning teams bound by non-disclosure agreements. A Concept for Stand-In Forces, published 21 months after Force Design 2030, could have reinforced Berger’s case before announcing sweeping divestments. Instead, the Marine Corps was caught in a reactive cycle of its own making, attempting to communicate a sprawling concept that had been neither distilled nor tested.
Lacking a tight script characteristic of the Marine Corps, much of the writing seemed to target national defense Ph.D.s more than grunts. Varying, complex descriptions of the promising but unproven force have been introduced in waves in print and in person for two years. Stand-in forces were ultimately defined as “small but lethal forces, designed to operate across the competition continuum within a contested area as the leading edge of maritime defense-in-depth. The enduring function for SIF is to help the fleet and joint force win the reconnaissance and counter-reconnaissance (RXR) battle at every point on the competition continuum.” Adding complexity, core concepts have been described multiple ways, and nuanced technical-strategic capabilities have been periodically introduced, from “deterrence by detection” to preventing “fait accompli scenarios” to a force “out there sinking ships … [and] submarines.”
When Warfighting was published in 1989, it epitomized the crawl-walk-run communications approach of the Marines. The Prussian military theorist Carl von Clausewitz is cited in its first two first pages as a philosophical underpinning for the institutional transformation. From there, the publication builds its case. Berger got the original idea for Force Design 2030 from Capt. (ret.) Wayne Hughes, author of the classic Fleet Tactics. This explains its focus on sea control and naval campaigning. However, no publication takes the reader on the philosophical journey walked by the commandant.
The net result of the narrative is confusion over whether the proposed changes will change the culture of the Marine Corps. This is risky, because even in the Fortune 500, culture eats strategy for breakfast, let alone in a fanatical military service in which every marine is a rifleman whose mission is to “locate, close with, and kill the enemy.” That’s not so clear any more. To date, every marine is first trained as a rifleman, to close with the enemy. Distance and defense expressly underpin stand-in forces. Will future marines be judged by their contribution to sinking Chinese ships a hundred miles away? Potentially, but the Marine Corps has not come to terms with this. The complex strategy has not been distilled and clearly communicated.
From New Coke to Coke Classic, From Edsel to Mustang
New Coke’s failure spurred the company to re-examine the extended soft drink market. It quickly re-issued “Coke Classic,” introduced several other products, and gobbled up market share. Today Coca Cola features the blunder prominently on its website as an example of rash risk taking that resulted in re-engineering. Similarly, the spectacular failure of the Edsel forced a second transformation in Ford: the shift from a product-centric design model to customer-led model. The resulting product line, the Mustang, catapulted the company and is still popular 60 years after its debut. Both were self-inflicted wounds that triggered positive change.
The character of war has shifted drastically in the last decade. Berger should be applauded for an ambitious goal to adapt the Marine Corps among multiple fronts. Many of the ideas about distributed operations, precision fires, and the democratization of surveillance technologies raised in Force Design 2030 will meaningfully improve the Marine Corps. The questions are, which ones, after what assessment process, at what cost, and at what scale?
The Commandant has one year remaining on his four-year appointment. Two successors will make course corrections, overseen by an increasingly inquisitive but broadly supportive Congressional board of directors. The Marines — retired and active duty — have had an honest argument resembling 19th century German philosopher G.W.F. Hegel’s Dialectics, whereby back-and-forth debate by opposing sides leads to sophisticated evolution. This could lead to a synthesis of views of how to adapt the Marine Corps to the modern battlefield, testing various roles where the Marine Corps has core competitive and comparative advantages. Recent Marine Corps communications have emphasized the potential of organic surveillance-strike technologies for the infantry battalion and de-emphasized the long-range missiles which were the “number one priority” in 2021. The argument is likely to have a familiar result: the most lethal air-ground team on the planet.
Owen West is a former marine infantry officer and retired Goldman, Sachs partner who took two leaves of absence to serve in Iraq. He was the Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict from 2017-2019.
Image: Cpl. Patrick King, U. S. Marines
https://warontherocks.com/2022/05/are-the-marines-inventing-the-edsel-or-the-mustang/ Are the Marines Inventing the Edsel or the Mustang?