Lessons in bad decision-making - Vietnam

Gordon Goldstein provides a fresh inside look at the decision processes conducted prior to the entry of ground troops in Vietnam. He focuses on the key role of the national security advisor, McGeorge Bundy. 

Bundy was known as one of the best and brightest during the Kennedy and Johnson Administrations, yet he may have been the key to the poor decisions made to engage combat forces in the Vietnam war. There are clear lessons for US decision-making with respect to Afghanistan, but that discussion is for a different blog.

I found the book provides a good alternative perspective to any decision-making process. There are some great take-aways from this book as evidenced by the chapter headings. Counselors like Bundy are supposed to advice, but the president decides. The role of an advisor is simple. Provide the best possible advice of all alternatives and not be advocate. Once advisers provide advocacy, they are subverting their role and harming the decision-maker. No one can be completely objective, but providing balance and all perspectives is critical to good decision-making. Analysts have to provide an opinion, but the form and context is critical.

Goldstein suggests that governments should never trust bureaucracies to get it right and that politics is the enemy of strategy. These same problems exist even for portfolio management decisions. The politics of marketing can get in the way of the right decision. Clarity on the objective for the front-line workers is critical to making decisions that have focus.

Th most important tragedy of the Vietnam decision was the fact that so many advisers had convictions without rigor in their thought process. The facts have to be presented. Alternative scenarios have to be described and discussed.

This issue circles around the problem that the military should not be deployed for indeterminate ends. For portfolio management, funds should not be committed to an investment unless there is an end goal or exit strategy. Isn't this the true focus of risk management?

Finally, no decision is inevitable, so no decision has to be made. Of course, not making a decision is an action; however, there is no reason why an action has to be taken. The best trades may be those that are not made.