The WAY to WOW Shows
Using Deception in Business
June 10, 2025
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[0:02] Who are you? And where are you going? What do you want? [Music] Hello and welcome to Business Lessons from the Military. I'm your host, Kevin Bemmel, and we're I'm here uh every Tuesday at 10:00 a.m. Pacific time to talk about military history, doctrine, and the practices of great military leaders. All by all so we can distill lessons from that those sources that we

[0:38] can apply to our businesses and professional practices. So today my topic is using deception in business and my my source text for this yeah I have it right here is an absolutely outstanding book by uh Ben McIntyre called Operation Mincemeat. Okay, this book was written I think it was I want to say 2023. Let me here I'll look it up here real quickly. Uh should have had this ready. Oh, no. 2010. Oh, wow. Okay. So, so the book was

[1:14] written in 2010 and it is about an operation mounted by the Allies during World War II to grossly mislead, deceive um the Axis powers, specifically uh Adolf Hitler and and the Nazi regime. And it it ish textbook in terms of uh you know how to pull this kind of thing off. Now I I I I don't know if I've mentioned it on this

[1:49] show. I know I mentioned it I did a whole show on uh the TV show Hogan's Heroes on Jiggers's Place uh a number of months ago. Um but the whole premise of Hogan's Heroes is basically deceiving you know Colonel Clink and and General Boralter and and Major Hawkstead and all of them. uh you know so you know it's it's so much fun to watch you know your your enemies hoodwinkedked on a TV show. This is this is real life. Uh and and it it is an astonishing

[2:24] uh it was an astonishing you know operation. uh you know certainly on par if not exceeding the deception that was uh used um in the runup to uh D-Day which you know the anniversary of which just passed on uh last Friday where the allies built a an entire fictitious army around General George Patton and let it leak out that he was going to be uh

[3:00] launching an amphibious invasion at the Pod of Calala. Uh, and it worked well enough that when the uh when the the D-Day landings hit at Normandy and uh the the uh you know Germans in in in command called for additional forces uh to be pulled out of places like Calala in order to resist the Allied invasion. uh Hitler would not agree to release the

[3:35] the Calala forces. Now, I'm not going to say that it was only because of the deception operation centered around uh General Patton, but but that certainly uh had had an impact on it. Um and and and stands as a a very successful deception operation. So, operation uh mincemeat is is in that that same vein, if you will. And and so I'm going to talk a I'm going to sort of summarize what happened. Um and then we're going to we're going to again distill some

[4:10] lessons from it that we can apply to to running our businesses. So, the the the the book and the story basically starts out with a a a Spanish fisherman. and he's fishing for sardines um off the co coast of Hellva, Spain. Um he discovers a corpse um uh just sort of kind of floating in the in the in the water basically. Um and and then this sets this whole complex allied deception operation into motion. Now that's the

[4:48] start of the operation it uh the actual affecting of the operation but the story starts long before that uh and and and you know with with British intelligence. This was a Britishrun uh operation um and they were looking for ways to mislead the Nazis about the Allied invasion plans. I mentioned the deception um with with General Patton. Um they were look that that was not the only one. Operation Mincemeat was another. And so

[5:23] um and and by the way, interestingly enough, for those of you who are a James Bond fans, uh you you may not know Ian Fleming, the creator and author of of the James Bond books. So he was in British intelligence during World War II and he was involved in brainstorming creative ways to mislead the Nazis about the Allied invasion plan. So the the the team um came up with this idea to create this fictitious

[5:58] identity um calling him Major William Martin and fabricating a bunch of documents that would be found on the this the body of this major William Martin. And these documents would mislead the Nazis as far as what you know what the Allies intentions were. And so um the the the Allies were um planning an invasion of uh Sicily. Um, but they needed to um direct German

[6:35] attention to other locations to make sure that they would have uh success in in in the invasion. Sicily is is is the island that's kind of at the the the tip of the Italian boot if if you can picture it. Okay. And so um they this is what they decided to do. Um and um they what they they ended up acquiring the the body the corpse of uh a man by the name of Glindware Michael. He was a a a Welsh vagrant. Um and

[7:12] um he he was he was just it was just a body. Um no one claimed it, right? And I I mean it may sound a little bit distasteful to sort of take this corpse and you know use it but you know in all's fair and love and war as they say right and and so they they devised a whole backstory for this this uh you know character really it wasn't a person it was more like a character um Major Martin and they included personal letters and belongings to really enhance

[7:48] the credibility of this ruse that that they were mounting. Um, and they even um they even got a so there was an MI um MI5 secretary by the name of Jean Leslie and they took a picture of her and they made her uh Major Martin's fiance. Right. So, um, and I see I thought, where's there a picture? See if I can find the picture of her. She it's sort of a, as I recall, it's a

[8:23] seaside uh picture. Uh, so here's here's uh uh here's Jean Leslie. You can see her there. You know, very lovely uh young woman. Um, and uh, she became Pam, the fictional fiance, uh, of of Major Martin. Um, and uh, uh, you know, and they they, you know, they had a picture of her on on on the body um, that you know, this corpse that they turned into Major Martin, I

[8:58] believe, when he was found. So um um another person who was involved with it was a a butterfly collector by the name of Charles uh Chol Manderlay Chanderlay. Um and and he he was involved in creating all of the sort of intricate details um of this uh deception. And um and then they fabricated a letter from General Nye to General Alexander. General Alexander was one of the senior

[9:34] um Allied leaders in the invasion force that was designed to mislead the Germans about the Allies uh act true invasion plans. And so, um, then the, um, the the book introduces a double agent whose, um, actions essentially inadvertently support the deception of, uh, Operation Minsme. And, and so there's it's it's it's just an amazing sort of confluence of events. Um, and

[10:11] and I'm I'm I'm not going to go through all the details. you you'll want to read the book, but but basically the the the the body the the corpse that they used uh you know as Major Martin, he was transported above the uh HMS Saraf a submarine and he was released off the Spanish coast and um and then um the Spanish authorities discover the body and they begin investigating it and German intelligence gets involved um and the Spanish uh officials involved, they

[10:48] get a hold of all the documents that were on the body of this corpse, all the they were of course all forged. Um and they passed them along to German intelligence. Um and a German agent um by the name of uh Adolf uh Klouse and an Ablair officer. The Ablair was one of the German intelligence uh agencies. They were a big competitor of the Gestapo. Um, and so they they basically um they validated all of this deceptive information um thinking it was it was true, right? And um and so it it sort of

[11:28] um made its way into, you know, German uh military plans and they ended up um relocating forces uh to defend against this um this fake invasion based on you know this the Major Martin's corpse and pulling them away from SI Sicily and and as a result when the allies launched operation husky which was the invasion after the invasion of north north Africa. So the

[12:04] first time the first American combat action in World War II was operation torch the invasion of North Africa. The followon action was operation husky the invasion of sicily. And so uh that evasion that invasion went more smoothly in part because of operation mincemeat and the pulling out of some of the German forces on Sicily to defend against this uh fake invasion, right? Um and so one of the results of of this was

[12:39] British intelligence of course they monitored how well did this work and they saw that that this deception strategy was very effective. And so um you know it it it became uh uh you know a part of overall British strategy to to mount these kinds of deception operations and including as I mentioned at the beginning the deception operation u surrounding patent on on D-Day. So um postwar

[13:14] um details of operation mincemeat uh were disclosed to the public. At that point of course there was no reason not to um and and it really highlighted the the unbelievable ingenuity of of MI5. Um and and as I understand MI the British intelligence MI5 is dealings deals with foreign intelligence and MI6 is intelligence internal to uh to Great Britain. So um it it it really is a a an an amazing story and and and when you

[13:50] you know we're so used to thinking that everything we hear is either true or false. Um and and and the reality is is a lot of what we hear is probably at least somewhat am ambiguous. And so we need to make an assessment of is the information that we've gotten is it true? Is it mostly true? Is it false or mostly false? Is it too difficult to make a call as to the truth of it? Right? Uh and and and that's not just in

[14:25] a a war or combat situation like this. This is in all aspects of our lives in our personal lives. You know, we hear something about a friend uh and and and you know, gosh, is this is this true? Right? And and and if we if we accept everything we hear as true, sometimes we find out afterwards, oh my gosh, it turned out to be not not true at all. And and uh wow, and and now, you know, a relationship has been damaged. Um you know, because we accepted some information that we should not have, right? So the ambiguity of of data uh is

[15:01] is is is a problem, right? And but it but it's a it's you know it's kind of a two-edged sword in that if we're the source of the data then to a large extent we know uh the level of of veracity of that data. uh and so we have an ability to um use that against our opponents. Now, let me let me just say, you know, um you know, flatout lying, of course, uh

[15:36] is is typically speaking not a good thing. Okay? Now, certainly in in uh I I you know, I don't I don't encourage lying in in personal and business relationships and matters. You know, having said that, it's it's not an absolute. There are times when um it it it we're probably required uh to lie um rather than let somebody be harmed. So, so for example, if somebody is in a very uh delicate or vulnerable emotional state and uh we find out that you know someone

[16:13] they love very deeply or very close to was hurt um you know we probably don't want to go tell them that that person is hurt because it could it could you know so badly damage them they might never recover from it. So, if they were to ask, you know, um, you know, let's say that there was, you know, god forbid, a parent and a child in an automobile accident, the parent is very badly hurt and and and the child was killed. Um, you know, the parent may at some point say, you know what? What happened to my my child? It may not be the right

[16:48] decision to say, oh, well, I'm sorry to tell you this, but your child died. say, "Well, you know, we're doing the best we can for your child." Now, that's not a flatout lie. You know, you're just not directly answering the question. You're avoiding it. But that may be better for the person's emotional well-being at the moment. They need to recover more before they could absorb the uh the knowledge that their child was killed in the accident. Right? So, so you know this may sounds sound strange coming from somebody who is a

[17:23] military chaplain has you know or um you know ordination and all of that and um you know look every value needs to be applied appropriately for the situation. Um and I and I think that you know the the the part of the hypocratic oath right do no harm harm um is is applicable to us to all all of us in general. Um we need to be careful about um how we wield the truth. There are people who love to use the truth as a club a club like something to bang

[17:59] people with um to you know harm them as much as they can. Having said that, to just bald out, you know, baldly lie um without some kind of you know very sound justification that it's it really is for uh the well-being of the person like the example I gave with the parent and child um not not the right thing to do. So when we talk about um using deception in a business context, I think we have to be, you know, very careful

[18:35] about how we do that, right? Because um business is not war, right? One of the premise of this show is that although we are we are applying and adapting military principles uh into business war is an existential enterprise. Business is not and it should not be treated that way. However, there is a difference between outright lying and creating a situation

[19:13] where people make assumptions that turn out to be wrong. Okay? And uh you know and and there's also you know we don't we don't necessarily need to be candid in disclosing all of our plans and and and those kind of things. So, if we're planning to launch uh some kind of, you know, new product or new service or something, there's nothing that requires us to make advanced announcements about these if they would potentially damage our business. So, cander or lack of cander, which falls in the range of

[19:50] deception, is not the same thing as as lying. And so it's it's within that context that I want to uh talk about um I think I've got five thoughts. Yeah. Nope. Well, I've got I've Yeah, I've got six six thoughts on um how we might use uh deception in uh a business context. Okay. Um and so the first one is uh strategic deception as a

[20:27] competitive tool and that is and that really comes down to we don't want to reveal our full strategy to competitors right so just as the allies misled the axis about their invasion target so companies can benefit from controlling their messaging from making only selective disclosures and and and perhaps even having a decoy decoy product plan in order to outmaneuver their competition, their rivals, right? So, if you're going to

[21:02] launch a new product that you know that is your true objective, there's nothing wrong with potential with with launching another product that is is kind of a throwaway launch um that is ostensibly viable but is not what you're truly going to do in order to sort of draw your your competitor's attentions toward that. and and now they're looking over there and then bang you go with the actual major product launch, right? No nothing wrong with doing that. Okay, so

[21:39] uh um an a sort of a realworld um example of use of strategic deception as a competitive tool is the launch um of the iPhone by Apple in 2007. I I remember when that came out. But I was stationed in Okinawa, Japan at the time. And uh someone I knew who worked for Marine Corps uh family services. I went to go visit their their workspaces one day and she's showing me what was an iPhone 1. I'm like, "What

[22:14] the heck is that?" Right? It was completely novel. Right? So before Apple unveiled the original iPhone, it went to extreme lengths to prevent leaks and to mislead um uh competitors and the media about what it was building. So it used code names and dummy prototypes. It created false job roles and and and and project titles internally. So, so as so that you know people who were investigating what

[22:49] what Apple was doing would would have these sort of other you know trails to go down that were you know possibly you know viable, right? And and um multiple teams were working on unrelated projects rather than on an iPhone. And so it made it more difficult for competitors and the media to really know what was Apple actually up to. And that was instrumental in the iPhone making such a

[23:25] big splash when it came out in in 2007. Um and and why did it work? Well, competitors like Nokia and Motorola were caught offguard. They had no compatible com comp uh comparable product. um you know that that they could uh launch to compete with the iPhone. So the iPhone had absolute clear market for quite a while. Okay, number one. Number two, Apple controlled the narrative and the surprise and they they absolutely dominated the headlines and and garnered

[24:00] unbelievable public interest. And and then finally um the secrecy also built anticipation. So um people knew what a creative guy Steve Jobs was. Um and and um even though parts of what the iPhone was had been around for quite a number of years, there was there was this sort of cloud of secrecy and uncertainty surrounding Apple, you know, prior to the launch of the iPhone. And the mere existence of this cloud of secrecy piqued people's

[24:37] interest. They really want to know what is Apple up to. And so the this this strategic use of deception was uh instrumental in the successful launch of the iPhone. America is a maritime nation. Our freedom and security depend on strong sea services. The Beverly Hills Council of the Navy League stands with our Navy, Marine Corps, Coast Guard, and Merchant Marine through community support,

[25:13] education, and advocacy. For over 120 years, Americans of all walks of life have heeded our call. No prior military services required to join our mission. The Beverly Hills Council of the Navy League of the United States. Help us support those who serve at sea. visit navyleague.org. Okay, so I'm talking about uh the book um Operation Minsmeat, one of the most successful deception operations in World

[25:49] War II. Um it was it was done to support the Operation Husky, the invasion of Sicily. And I'm talking about how we can apply the how we can apply Yeah. lessons from operation mincemeat to our businesses. So I just talked about um the idea of um strategic deception as a competitive tool and using the example of Apple's launch of the iPhone in 2007. Okay. So that that's one lesson we can certainly take from operation minceme. That's that's the obvious lesson, right?

[26:24] Another lesson is that um risk is inevitable but it can be managed. Right? So um the an invasion a military invasion the invasion of Sicily there was risk to it. transporting soldiers across the Mediterranean Sea, doing an amphibious landing on Sicily uh against German and Italian forces and and and uh you know the uncertainty of the

[27:01] conditions they're going to find. Even the best intelligence is is is not going to remove um the the uncertainty and and the chances that um an operation will be hampered because something happens that wasn't anticipated and now it needs to be dealt with there on the spot, right? And so, uh operation mincemeat was risky as well. It was a it was it involved a lot of people any one of whom could have leaked something and and in the and

[27:37] there was you know a lot of resources spent and collected and and used in mounting this operation even though it was just you know one one body you know dumped off the coast of Spain. Uh and and in the end it it could have been you know look the body could have sunk and and never been found. The body could have been found and and this the Spanish could have just said, "Oh, it's just some, you know, guy who fell off a boat and buried it and that would have been the end of it." They they could have never, you know, informed the German officials or the German officials, the Avoir um the A

[28:14] um etc. might have determined that in fact, uh the uh you know, this was a ruse. It it wasn't this wasn't a genuine invasion plan, right? Lots and lots of risk. But despite the risk, taking the chance, what was to be gained by operation minceme was so important, it was worth taking this calculated risk on the chance that it would it would succeed. So um you know in in in a in a business

[28:50] setting look sometimes we're we're you know we want to launch a new initiative let's say there's risk in that right I've talked about uh the the whole new Coke debacle right where where Coke felt like in order to maintain its its lead in the cola wars it needed to shift the taste of its product closer to Pepsi right big risk because People liked Coca-Cola because it tastes like Coca-Cola, right? And so to change that formula which would have been around for decades and decades was a big risk. And in the event it did this was a risk that

[29:27] did not pay off, right? Um now you one could argue KO never should have done that. On the other hand, look, they they took a risk. Okay, it didn't pay off. They recovered from it and KO still remains the number one cola, right? So um I think it's a mistake in business to decide that uh that that we should never take any risk. What we want to do is take calculated risks knowing that sometimes they will work out and sometimes they won't pay off. So an anam

[30:02] an example of a company that took a calculated risk is Netflix. So, you know, if you if you're an older guy like me, I remember Netflix when it was a service that you signed up for and you you um you went online and you chose the DVDs that you wanted mailed to your house and they would be mailed to your house and you'd you'd have a certain amount of time to watch them and then there was a return envelope and you'd put them in the return envelope and you'd mail them back. That was that was

[30:39] what Netflix started out doing. It was it was a delivery service for DVDs and it was um it was com competing with with Blockbuster and other uh uh you know um video uh stores um with you know delivering movies to you. The difference was Netflix had a much larger selection than any blockbuster could hope to have, right? And so that was initially their competitive advantage. Um um but um at

[31:15] at one point um Netflix decided that they needed to shift from a DVD delivery service to a streaming service. and they were in many ways ahead of really ahead of their time. So, um, internet speeds were were oftentimes too slow for high quality streaming. Um, nonetheless, uh, Netflix invested heavily in building a streaming platform, knowing that it might alienate their existing customers

[31:51] um, and cannibalize, you know, their DVD by mail business. uh and and this was this was a risk that was by no means sure to pay off. And I remember I I I even back then I read the Wall Street Journal on a daily basis. There was a lot of, you know, sort of nashing of teeth over what is Netflix doing? Oh my gosh, they're crazy. Blah blah blah blah blah. Right? In the event Netflix is the biggest streaming service in the world, right? I think Disney Plus is

[32:27] number two, but Netflix is is the biggest. Okay. And and why? Well, so there were some key calculations that Netflix made and one of them was that consumer internet speeds were improving and they were improving quickly, right? And so although the um streaming speeds were not where they needed to be when Netflix first decided to launch a streaming service, they were confident that as they sort of worked this transition, they would improve enough uh in in in order to make the service not

[33:04] just viable but highly profitable. Um so that was number one. Number two, um content costs were were high, but they were manageable at at first, right? And so, um by, you know, being the first to enter the market, um Netflix could, um you know, get a jump on negotiating for uh you know, ex exploiting um all of the content of the the film libraries that the various studios and other companies had. and

[33:39] since they weren't dealing with a physical product anymore, having to press DVDs and all that kind of stuff, um that that that they would, you know, be able to pay um more in in licensing fees and still come out ahead. Okay, so that was another thing. Um another issue was um that um you know they that that that that competitor bec by being the first in competitors were slow to adopt to this this new reality. And in fact

[34:14] Blockbuster they tried but they they manifestly failed in competing with Netflix. Cable networks um tried as well. Um, but you know, back then cable networks were were like linear TV. They had their regular schedules as they still do. And so they couldn't they also found it hard to compete with this with the idea that Netflix was a service where people could go and watch whatever it was they wanted to watch whenever it was they wanted to watch it. And so the the the freedom

[34:49] that it gave consumers uh was was a was a powerful competitive edge that Netflix calculated would help them prevail. And then um they they figured that they had very strong brand loyalty. People really liked Netflix. I know again I I was an early user of Netflix. I thought it was a really cool service. Um, and I remember you could you could stack up the movies you wanted delivered um for your, you know, your monthly fee um in your uh watch list, I

[35:28] think it was. And and so, you know, I I loved old movies and and and so, you know, I I would get my old movie and watch it and send it back and and the next one would come out and, you know, I would just continually add new movies to my list. It was kind it was really cool, right? So they had brand loyalty and they also had the subscription infrastructure from their DVD by mail business and so they were relying on being able to convert that into streaming services. So so um you know what what happened this was this was sort of the the late uh 2000s that this shift to streaming

[36:05] began. So what happened by by 2010 streaming had overtaken DVDs as Netflix core business, right? That's I mean it really was amazing and it was it was a heck of a risk that they took that ended up paying off. The company grew from 10 million subscribers in 2009 to 230 million subscribers by 2024. Uh 23 times increase in subscribers, phenomenal

[36:41] growth, right? Um Blockbuster went bankrupt, you know, and and Netflix became, you know, the global media giant that it is. They produce content now. Um, I think they've had they've won some Academy Awards if I'm not mistaken or or some Emmys or whatever. So, you know, Netflix is indeed a force to be reckoned with and in many ways they've they've been more successful than the legacy studios like like Disney, like Paramount, etc. So again, it was a

[37:16] calculated risk that that paid off. Okay, so risk is inevitable but it can be managed. That's another lesson from Operation Minsnney. Next, psychological insight is a strategic asset. So, understanding how people think can shape their behavior. And um so the the the team that put together Operation Minsmeat um they they figured out to a certain extent how German analysts would

[37:51] interpret the the you know cooked up evidence um that was found on on the body. Excuse me. So by having insight in into their the psychology of the Avare Advare analysts etc they were able to design operation mincemeat in a way that would be most enticing for these German analysts to buy into. Right? And

[38:28] businesses can do the same thing. we can invest in understanding the psychology of our customers, of our clients, of the people we deal with. Right? One of the things that um I spend quite a bit of time on discussing with my various colleagues is the mindset and perspective of the judges before whom we appear and how trying to get some insight into why do they make the decisions they make? What is their basis for doing so? And how can we tailor

[39:05] our presentations to them in order to get the outcome that we're looking to get, right? Um and and it's it's a psychological exercise, right? But these conversations are are well worthwhile. Um, and it's it is it is one of the fascinating parts of of my business is is to have those conversations and often times they they lead to steps that we can take that

[39:41] will potentially dramatically increase the effectiveness of what we're doing on an estate or you know for the heirs of the estate etc. Okay. So a another uh business application of this a a well-known one was uh Amazon of course you know the originally the you know the online bookstore so Amazon um I I don't know for sure that they were the absolute first but they were among the first to start and promote one-click ordering where you

[40:17] could go on their site you found the book that you wanted and with one click orders done and it's, you know, in it's already into fulfillment and being shipped out. So, uh it was a very fast way of of allowing customers to get the things that they wanted to order uh on on Amazon. And it it came out of uh a recognition on Amazon's part that that friction even just having even just tiny

[40:52] ones like okay click ordered now I've got to go into enter my payment information and my shipping information. It reduced conversions meaning actual sales. So, if people could set up their payment information and shipping information once and then anytime they wanted to buy something, all they had to do was click and and and it was the sale was done, that increased the actual orders that were made on Amazon. And and it makes sense, right?

[41:28] Because if you've got to go through three or four steps before an order is actually placed, that's three or four times one can think, do I really want to buy this? Okay. Now, you may argue it's it's, you know, one click is not good because it encourages impo impulse buying. I I wouldn't necessarily I wouldn't, you know, necessarily disagree with you on that. Um, but we're talking about how we c we can climb into our customers and clients psychology uh to improve the performance of our business, right? And and and and so this decision to create uh one-click ordering

[42:05] in 1999 by Amazon, it was really based on the consumer psychology of of ease and speed and forming habits in order to increase purchases. Right? So that's number one. Number two, there is a fatigue that comes from making decisions. Okay, it's called decision fatigue. And so the more uh the the easier and the more spontaneous uh the buying process could be made, the more likely it was that people were going to buy. Okay. And um

[42:44] Amazon patented the feature. Okay. blocking competitors from it. Um, and eventually, for example, Apple licensed it for its iTunes stores, right? So, by by being the like I said, I I don't know for sure that Amazon was the first to develop it, but they were the first to develop and patent it, which is what's important. So, then they also blocked out um their their competitors, right? They understood they understood customer psychology. they implemented something that that took advantage of it and then they blocked out competitors. So again

[43:20] this is another lesson that can be learned from operation mincemeat is we really need to spend time understanding the psychology of our customers and clients. Okay. Um number four agility within a rigid system. Right. So, um, bureaucracies are notoriously slowm moving and rigid, even intelligence bureaucracies. And that may sound counterintuitive, but you know, aren't they supposed to be gathering data and making sure it gets where it needs to go so that wars and

[43:56] battles can be fought most effectively? Well, the answer is that's what they're supposed to do. Yes. But that's not necessarily the way it happens. So the the one of the key lessons of operation mincemeat was despite MI5 being a very rigid hierarchy uh within the British military, they were able to mount this very creative operation um using very using small highly agile teams within the larger system, right?

[44:31] Um and you know an another example of this kind of still in the military world although in this case it's it's it's sort of military procurement is skunk works. So um Lockheed was and still is one of the largest defense contractors not just in the United States but in the world and because it's so big it's bound by bureaucracy and regulations and hierarchal decisionmaking all these things right that make that that that impede innovation and so in 1943

[45:10] an engineer by the name of Kelly Johnson created ated skunk works which was a semi-aututonomous unit within locked that could operate with a a minimum of red tape and be very innovative, right? And so um and skunk works uh turned out to be a very effective uh agile component within an otherwise large rigid system. Okay. And so what

[45:46] did they do? So they had a a small group of elite engineers and science and scientists that worked at skunk works. they had a minimal um minimum uh requirements for documentation and oversight even though they were within the larger locked structure. So the people who were working at at Skunk Works could focus on coming up with ideas and seeing if there was any way that the ideas were workable rather than doing all kinds of reports and all that sort of stuff. And then they believed in fast iteration and secrecy and freedom

[46:23] to challenge conventional thinking, conventional processes, conventional approaches to the development of Lockheed was was a military aircraft manufacturer. So to two military aircraft. So what are some of the key achievements of skunk works? Well, it designed the U2 in eight months under budget. the U2 was a a type of spy plane. I mean, it's it's it's unheard of for such a complex aircraft to be uh to be

[46:58] uh designed and built in eight months. It it could never happen today. Not a chance. And for it to happen under budget again, it just it just would not happen. I'm if you've been following the news with the building of the uh 747 for uh for the president um to be designated as Air Force One, right? This the contracts were were originally let back when President Trump was in office the first time. Here it is, you know, eight years almost eight years later and they're not even close to being done. They're wildly over budget and and the

[47:35] actual structure of the aircraft is nothing new. Of course, it's all the avionics and the all the high-tech electronics in it. I mean, eight months, forget it. You know, eight years, it hasn't been enough to do it, right? Skunk Works got the YouTube done uh in in eight months. And and another uh famous spy spy spy plane, the SR71 Blackbird, um which is still the fastest ever air breathing earth uh aircraft. it was uh designed and built or developed in 20 months. Okay, so not even two

[48:12] years. Again, it that that's an enormous achievement especially within the highbound bureaucratic uh you know nature of military procurement. So um the SR71 and for that matter the U2 they were really gamechanging aircraft with respect to uh surveilling the Soviet Union and they really altered uh geopolitical dynamics right and so skunk works was enormously successful um you know as being this

[48:47] agile unit uh within a very structured uh bureaucratic uh large organization locked right so we may we may have a company that that is very highly bureaucratic maybe we have a health care business where there's a lot of regulation right that doesn't prevent us from developing something inside of it that's smaller that works without most of the constraints and that can innovate uh you know much more quickly for the good of of our business okay so that

[49:22] that was number four number five uh ethics and manipulation. So I talked about this a little bit uh at the beginning of the show um and that is uh manipulation can serve noble ends but it does have to be handled responsibly. So you know the use of a corpse it did raise moral questions at the time there were people who thought this is not the right thing to do. it's not it's not right to essentially deface the the dead body of a human being in this way. Um but in the

[49:57] end the the lives that would be saved in the invasion of Sicily overrode the concern about the potential defacing or or improper treatment of a corpse. That was the decision they made. I'm I I wouldn't I wouldn't second guess that decision. You know, I'm sure the the the soldiers who who who did not get killed on Sicily were were glad that that was the decision. So, in a business context, we really need to be careful about how we use deception and and make sure that

[50:34] we're we're we're doing so ethically and in a way that's not going to backfire and cause uh cause our business to be looked at um in in a bad way. Um and so, you know, we need to be aware that there's a difference between legal and moral. And just because something is legal does not mean that it's moral. So the the example that I'll cite for this is uh Facebook did an emotional contagion study in in 2014 where they secretly altered the news

[51:10] feeds of nearly 700,000 users um to study whether positive or negative content influenced the emotional expressions of these users in their own posts. And they found out that the more users were exposed to negative content, um they were slightly more likely to post negative uh material themselves and vice versa with respect to uh the positive. Right? And now was this a case of

[51:46] manipulation used for a noble goal? Well, you know, uh I I I assume Facebook thought so. Okay. Um but you know, the users were nobody there was no informed consent. So the users didn't know they were part of the study. Uh and and so when when it became known that Facebook had done this um they faced a a widespread backlash in in in the media and in academia. They were uh Facebook

[52:22] was criticized for invi for violating informed consent and for manipulating users without their permission. Um and the the incident fostered a a a broader mistrust of so-called big tech um be you know for for for doing this and being so opaque about it right and so this is this is where I think we need to be very very careful about how we use deception uh and and it really I think you know in business maybe decoy and secrecy are are

[52:58] fine time, but outright deception is is is probably not I shouldn't say probably not. It's not the right way to go. Okay. Now, if you're dealing with something that involves national security, okay, that that's that's a separate issue. But in general, just lying to the public, our customers and clients, not the right way to go. Decoying them, being secretive, yeah, okay, for sure. But, but outright deception, not a good idea. And then finally, operation mincemeat teaches us to measure impact by results, not activity.

[53:37] Right? And so in the end, uh, mincemeat should be judged al although it's a fascinating story as I've said a number of times now and it and a highly complex plan, the real merit or not of mincemeat was Did it work? Did it help? Right. And and the fact of the matter is the Germans redeployed forces off of Sicily in in order to repel the supposed invasion of the mincemeat deception. And so that so

[54:13] that that's really where uh the operation needs to be judged. And and that's the same is true of of our businesses. So you know that we have a lot of activity and do all this stuff it doesn't mean anything unless the actual goals of the business are being met. Are we you know gaining devoted customers? Are are sales increasing? Is profit increasing? These are the things. Are we providing a valuable service? These are the metrics of success. Not that, you

[54:51] know, we spent a hundred million dollars on advertising or we we got, you know, 10,000 impressions in the first hour of a particular online ad. That that stuff doesn't mean anything. Um, what matters is results. Okay? And a a good example of that is Slack. Slack is is a a service for sharing information inside of a company. It was launched in 2013 and the the the founders of the team that launched Slack um they deliberately

[55:28] deliberately ignored media buzz and the number of downloads and the website traffic. They focused on one key question. Are teams actually using Slack every day to get work done? I.e. Is this product successful for the reason that we created it? Okay, so they had um they had what they what they call two north stars, if you will. So DAW and WAW, daily active users and weekly active users. Those those were

[56:04] the metrics that they were looking at. Are people actually using it and are they using it on a regular basis? Right? And um they really tracked whether teams were staying engaged with using Slack, not just signing up for it. Signing up for it didn't matter. It was were people actually using it. And I I have a friend who works in the tech business and they have Slack and and and it's used daily for communicating among teams, right? That's what Slack is trying to do. And so um really what they were looking at is um

[56:41] how to develop Slack so it would be come there would be long-term customer use of the product and and um and and therefore really be a basis for success. And so they focused on retention on usability on team workflows. Okay. And within two years they had 500,000 daily users. Now you may say 500,000 that doesn't sound a lot. I mean Facebook has got a billion users and blah blah blah blah blah. Yeah, they weren't after the the the big banner numbers. They were after

[57:19] creating a product that would be used daily and really increase team productivity. And I think that's why Slack has become the the app that's that's used by uh tech teams, right? And so as a result um the valuation of the company soared and it wasn't due to PR. It was due be it was due to the fact that the the the product really uh really worked for its users, right? And so what really matters is results, not a lot of activity um that that that swirls

[57:56] around it. Right? That's the final lesson that we can you we can learn from operation mincemeat. So real quickly just reviewing um the lessons. So um using uh strategic deception as a competitive tool number one risk is inevitable but it can be managed. Number two. Number three, psychological insight is a strategic asset. Number four, build agility within an otherwise rigid system. Number five, recognize that there's an ethical dilemma in manipulation and avoid it.

[58:32] And number six, measure impact by results, not activity. So, I thank you very much for joining me on this episode of Business Lessons from the Military, especially my live viewers. And tomorrow at 10:00 a.m. Pacific time is my show, Business Lessons, I'm sorry, my show, People Making Money. We're going to talk about how you can learn to start a business, right? And you may think, "Oh, I'm just going to go out and get NBA." No, probably not the right way to go. We're going to talk about that tomorrow again. Wednesday at 10:00 a.m. Pacific time on people making money. And then

[59:08] next week on Monday at 10 a.m. Pacific time is my show Trust and Estates Weekly. And uh my guest is going to be Chris Johnson. And um Chris is going to talk about some stories from court. We're going to have a little kind of like a sea stories day on on on Trust and Estates Weekly next week. And then a week from today, we'll be back for the next edition of Business Lessons from the Military. By the way, next week on Thursday at 5:00 PM is my every other week show, Jiggers's Place. So, please

[59:44] consider joining me for a cocktail and a discussion about something that does not have to do with our financial and business lives. So, again, thanks so much for joining me. Deeply appreciated. Wishing you a wonderful rest of the day and signing off as I always do. Marie darling, you are my bell.