Corporate Lessons From Vietnam.

When Richard Nixon became president in 1968, he inherited an America eager to continue it’s campaign as the global instigator of peace, goodwill and progress.  Yet the country seemed paralyzed between its’ apparent failure to extricate South Vietnam from Communist influence, and it’s desire to rigorously pursue a foreign policy that would preserve it’s credibility in international affairs.

The Post Second World War era saw America emerge as a global economic and political power and as the de facto champion of democratic ideals.  With Russia and China shouldering the bastion of Communistic policy and touting it’s perceived merits, the Eastern Bloc countries soon came under its influence and constituted a beachhead from which Communist thought could leak into the Democratic West.

As the Cold war conflict progressed and US-Russian relations devolved, the US government, led by President Eisenhower, felt that America needed to refine it’s foreign policy objective in light of it’s position as a global leader.  Thus was established an update on America’s foreign policy commonly referred to as Containment.

Containment saw America as the protector of democratic principles both at home and globally, and considered the promotion and implementation of those ideals necessary to global postwar prosperity.  Any hindrances to the application of those principles was anathema to that prosperity and prevented – or so the logic went - people everywhere to live their lives free from the oppression so visibly exposed during the second world war.

As Henry Kissinger relates in his historical study, Diplomacy, President Eisenhower believed that America’s foreign policy was not supposed to be like that of any other nation; it was an extension of America’s moral responsibilities to it’s democratic values both domestically and to the global theatre it perceived it was tasked to guide.[1]

Eisenhower’s successor, President Kennedy, carried this theme of America as the West’s protector by declaring in his only inaugural address that his generation was the linear descendant of the world’s first democratic revolution, and that:

“We shall pay any price, bear any burden, meet any hardship, support any friend, and oppose any foe to assure the survival and success of liberty”.[2]

By the time Lyndon Johnson succeeded Kennedy after Kennedy’s assassination, it was clear that America’s foreign commitments were considered entrenched ideologically with it’s domestic responsibilities when he championed the theme of Containment even further during his inaugural address in January 1965:

“If American lives must end, and American treasure be spilled in countries that we barely know, then that is the price that change has demanded of conviction and of our enduring covenant [to liberty]. [3]

In the 1950’s and 60’s, however,  Communism proliferated, and the rampant pace at which it was progressing combined with failed negotiation rounds designed to stay Communism’s hand justified Kennedy’s rationale that  the only way to effect Containment and prevent the apparent spread of Communism via the South China Sea would be through military intervention in Vietnam.

As time wore on, and concerned with increasing American deaths in Vietnam, constant protests about the protracted participation in a war so far from home without any viewable end, and increasing resentment within the American public and some Washington insiders, President Lyndon Johnson in 1969 attempted a pivot to alleviate America from- or at least reduce it’s involvement in-additional military involvement:

“We are not trying to wipe out North Vietnam.  We are not trying to change their government; we are there because we are trying to make the Communists of North Vietnam stop shooting at their neighbors…We want an honourable peace in Vietnam:

And then, in 1968, when leading senators joined the fray of protestors to the war, Johnson found himself unable to deal with the pressure and buckled, announcing that no further reinforcements would be sent to Vietnam.  To reverse division, and accelerate a desired settlement, he invited Hanoi’s leaders to participate in the economic development of South Vietnam, this only 6 weeks after it (Hanoi) had violated a formal cease-fire.[4]

The Johnson Presidency was the unfortunate one to be exposed to the change of American sentiment from that of idealistic democratic champion to raging dissenter against it’s leaders policy errors.  The ridicule towards Johnson in 1968 was so great that, even as an incumbent president, he did not even find it possible to appear at the 1968 national convention of his own party, let alone run for re-election.

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And so the president who had sent hundreds of thousands of troops to Southeast Asia would leave their extrication to his successor, Richard Nixon.

Unlike his predecessor, Nixon was highly sophisticated in international affairs.  Not oblivious to the national debate on Vietnam, his focus as President was to what he thought was an Executive responsibility to the country he led; a responsibility to maintain it’s position in the world as a global leader, protector and sustainer of democratic ideals and bring an end to the Vietnam conflict in a way that confirmed and facilitated those ideals.

Fortunately for Nixon and America, the Communist North was experiencing it’s own challenges brought about by a protracted war.

The cumulative depletion of it’s own supplies from mining the North Vietnamese harbors, the U.S attack on Cambodian and Laotian sanctuaries, the defeat of it’s own spring “Tet” offensive in 1972, and the lack of political support from Moscow and Beijing when the US resumed bombing served to weaken them to the point of finally accepting the Nixon Administration’s terms on October 8, 1972.

Those terms included an internationally supervised cease-fire, the return and accounting of prisoners, continuation of economic and military aid to Saigon, and leaving the political future of South Vietnam to be settled by the Vietnamese parties via free elections.

With this agreement secured, America and the Nixon administration could now look to its failures, how to learn from them and how to re-write it’s own foreign policy.

Nixon had always been convinced that it was the President’s ultimate responsibility to defend the national interest.  Yet against the visible and defiant demonstrations of his country’s dissenters and the hostility of the media, he increasingly realized that the application of Containment in Vietnam proved to tear America away from acting on the principles that berthed Containment in the first place – that of protecting it’s national interest.

By trumpeting it’s democratic ideals abroad for over 20 years and 4 presidents, and allocating an ever greater amount of financial and military resources to it’s implementation, it neglected to take care of it’s own.  The cost of asserting foreign policy abroad was the disintegration of its domestic national interests.  Nixon was the one who had to initiate a new engagement to bring America back to what it’s national interests intended it to be – a secure America first.

Upon this realization, Nixon sought to navigate America’s foreign policy directives according to a concept of America’s national interest.  Such a concept stopped short of incorporating America as the purveyor of global democracy.  Dubbed The Nixon Doctrine[5], this new approach sought to establish the national interest as the basic criterion for long-range American foreign policy, and dealt with the paradox that America’s two postwar military engagements, Korea and Vietnam, had been on behalf of countries to which America had no formal commitment.

Nixon first expressed this new direction in America’s foreign policy, and it’s relationship with global partners and adversaries alike, in his first annual report on foreign policy, dated February 18, 1970:[6]

Our objective, in the first instance, is to support our interests over the long run with a sound foreign policy.  The more that policy is based on a realistic assessment of ours and others’ interests, the more effective our role in the world can be.  We are not involved in the world because we have commitments; we have commitments because we are involved.  Our interests must shape our commitments, rather than the other way around.

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The unfortunate ramifications of overextension has corporate applications as well Although the cost is not as great as the loss of innocent lives, many corporations aspiring to take their successful formulas of wealth creation and growth to markets with which they have little or no familiarity, or which run counter to it’s foundational missions, have had to retrench into challenging and soul-searching periods of regression and eventual rebuilding.

In most - if not all - cases, these periods of acquisition and extension are innocent and sincere applications of a corporation’s executive branch to increase shareholder value and market share.

Yet the desire to grow, to build, or to extend the corporation’s offerings to other markets– however pleasing to shareholders and consistent with traditional corporate thought– may not be consistent with it’s mission.

Nixon found himself in the unfortunate position of leading a county where the adverse effects of engaging in a war that ran counter to it’s domestic mission had already manifested themselves.  And the costs were visible: declining morale, increasing levels of American wounded and dead on the battlefield, and unprecedented levels of acrimony among congressional leaders. The same thing can and does happen in corporations unwary of the costs of overextension.

So how does a large corporation increase its footprint outside of it’s local market without overextending, as did America in Vietnam?  Many companies have grown successfully outside of their local markets – and just as many have jettisoned resources in attempts to make expansions work, only to leave their local operations exposed to whither away.

The answer lies in why the company exists (mission) and how it applies that mission (strategy).  Before engaging in new projects – outside of local markets, for example - thorough assessments of whether or not a particular course of action is consistent with the corporate mission are necessary.  Careful planning, execution and continuous assessments of why the company exists, for whom they exist and whether or not a strategic course of action can facilitate the corporate mission - all play an important role in minimizing the possibility of such grave missional and strategic mistakes.

Comments are welcome.

Nicholas Kilpatrick is a partner at the accounting firm of Burgess Kilpatrick.  He leads the firm’s consulting and strategy practice and works with companies to enhance their Analytics, Forecasting , and Data Optimization functions.  The practice’s focus includes quantitative forecasting, corporate and unit strategy and planning.  Please visit our website at www.burgesskilpatrick.com or on Facebook at www.facebook.com/BurgessKilpatrick for more information on our firm.

[1] Kissinger, Henry, Diplomacy, Harvard University Press, 1994, p622.

[2] Ibid, p623

[3] Ibid, p623

[4] Ibid, p673

[5] Ibid, p674

[6] Ibid, p711