Is China's new business ops model a clever take on US military operational ethos?

The Digitally Enhanced Directed Autonomy (DEDA) approach

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Again with the business models based on my work with John Clay Elliot Johnson on the second MOOC (massive open online course) in the quasi-America’s New Map series on edX via U Maryland!

Recall this sub-post (Sunday Cutdown) from a bit back:

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#) Our NCOs are better than your flags

WAPO: The U.S. military’s true advantage against any adversary

Universally acknowledged within the national security community but almost completely unknown outside it, the strength of the US Military is not so much our weaponry and tactics but those who wield it — specifically, non-commissioned officers (NCOs) who serve as the key bridge between enlisted personnel below and officers above.

More specifically, our military’s nimbleness and speed are most enabled by the fact that our NCOs can make decisions on the battlefield that, in virtually every other military around the world (but particularly those of authoritarian regimes), would require the coordination and approval from far higher-ups in the ranks. In effect, our NCOs can act and command at the level of other nations’ flag officers (generals, admirals).

Seriously.

That means our average OODA Loop (observe, orient, decide, act) tends to be radically faster in execution, which is a huge advantage in any fight. We just adjust faster by pushing decision-making power down lower in the ranks.

So it’s like this: we have that many more brains processing decisions than the other side, and the bulk of those decisions are made far closer (shorter loops) to the pointy end of the spear within our ranks.

More brains thinking faster beats fewer brains thinking slower. Duh!

We make that system of trust work — and work well — because of the time and money the Defense Department spends on training and educating its NCOs, who today are more and more likely to be armed with a BA or BS to boot (surpassing the old dividing line of HS grad-NCOs and college grad-officers).

The op-ed cited here makes the proximity point nicely:

Leadership that’s local is often just better. And lately, technology has been working to empower the noncommissioned officers even more. The drone and satellite driven conflict in Ukraine has underscored the extent to which sensors will be feeding intelligence directly to small units on the front line, forcing NCOs to think and work even faster.

That’s a key point: our approach swims in the same direction as technology’s tide — not against it.

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Now consider what China is doing with its DEDA business model:

Digitally Enhanced Directed Autonomy (DEDA) is a management approach primarily adopted by Chinese companies, designed to leverage digital platforms for enhancing employee autonomy while maintaining organizational oversight. This model addresses the challenges of traditional management structures, particularly in rapidly evolving business environments.

Key features of DEDA:

• Autonomy at scale, particularly for employees in customer-facing roles.

• Heavy reliance on digital platforms that provide teams with access to shared corporate resources and capabilities, allowing for self-organization around specific business opportunities without direct managerial intervention, thus reducing bureaucratic hurdles.

• Bounded objectives set from above that fosters a a competitive environment — within the firm — that encourages innovation and responsiveness.

Two examples cited by many experts are the Handu Group (e-commerce) and ever-more omnipresent Haier (home appliances and consumer electronics).

Now, understand: The Chinese firms don’t yet call their approach DEDA. Much like the situations with Western firm proposing names for Chinese strategies (“string of pearls” by Booz Allen, BRIC by Goldman Sachs), this one was proposed by a trio of authors in the Harvard Business Review:

It’s a solid read.

This is how they compare it to Western ways:

DEDA uses digital platforms to give frontline employees direct access to shared corporate resources and capabilities, making it possible for them to organize themselves around specific business opportunities without managerial intervention. Autonomy is not complete, nor is it given to everyone. Rather, it is directed exactly where it is needed, and what employees do with their autonomy is carefully tracked. The approach contrasts with the Western model of empowerment, which gives employees broad autonomy through reduced supervision.

Haier is the trio’s favorite example:

The company is organized not as a top-down pyramid but as a platform of 4,500 self-managing businesses that use shared resources, including back-end resources and the capabilities of other microenterprises, to adjust to market shifts. In fact, Haier is really run by 4,500 intrapreneurs who have a laser-sharp focus on their specific projects. They have neither cumbersome vertical reporting duties nor the burden of aligning across departments. The only focus is on a 12-person (on average) business with a clear objective.

The article’s closing warning:

Many Western companies have spent millions of dollars trying to turn themselves into agile organizations. By contrast, thanks to DEDA, many Chinese companies have management approaches that make them inherently agile. In fact, when consultants introduce lean and agile approaches to Chinese executives, the typical response is “We have always done that.” Moreover, most Chinese companies lack the hardwired legacy processes that the agile movement is now trying to overcome. Don’t be misled by memories of slow-moving state-owned enterprises. Many of today’s Chinese companies, especially non-state-owned ones, are lean and mean and going for global markets.