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Published on 2025-03-18 23:00:00 | words: 1960
Everybody is entitled to an opinion.
You are entitled to your opinion, but not to your data.
Yes, that quip from a USA politician long ago is often quoted, but, as I wrote in a book a decade ago, the choice of which data are relevant is never neutral.
Actually, when, as management consultant, worked on negotiations (for whatever purpose- commercial, organizational, etc), one of the first steps was to agree on "framing" the negotiation.
So, I prefer to say that each person is entitled to a qualified opinion- in my case, I have the advantage of having worked across multiple industries since the 1980s, in past decades often interacting directly with senior management and experts- and of course picking up something from each one of them.
It is puzzling how many voices instead in these times apparently, even when surrounded by experts and staff, seem to be tinkering and adjusting on a day-by-day basis.
This article has been on the back burner really since January- yes, after the article published on 2025-01-07, European Industrial policy by crash-landing.
The title? Yes, it is from "a long journey begins with a first step"- but I prefer to refer to something else (you probably know where I stand- I quote often Rawls, Schmitt, in this case in 2014 quoted Kang) Great Unity Datong (note: the link to the essay on Kang's book "Datong Shu" is now dead, but you can find the essay here).
And I will adopt my pre-2012 perspective (2012 is when I was made to return to work in Italy- with sometimes puzzling attempts to make me convert into a IT and organizational factotum).
Or: cultural and organizational change, and data for managerial decision support.
Which implies looking at resources, capabilities, logistics, and associated organizational culture: you can produce "fiat" money, but you cannot have instantaneous new organizations working from the day after you declare that they are needed- it takes time.
And it all starts with assessments: which, to make sense, have to be done not just by management consultants, but with them- they have the approach, but the knowledge required and relevant to the specific context has to be provided by internal resources from the customer, as otherwise the risk is of getting a paper strategy that cannot be implemented.
It is the difference between "savoir faire" and "savoir être"- to know how to do vs, know how to be.
This article will be for now quite short, more a collection of pointers than a discussion- as I will not have time now to complete the article that I had planned- but you can look at the EP2024 series that started publishing in March 2024, plus articles in January and February 2025.
I already wrote long ago about how the way the war in Ukraine was evolving, including the proposals for a Dardanelles-agreements.
Despite all the sabre-rattling from Brussels, our weak position during President Biden mandate has only weakened.
And I am not referring just to today's phone call (reported to be 2.5h) between President Trump and President Putin- and the reports of USA-Russia this, that, and defining the future.
Before this call, there was another sign that was heading toward what I wrote in the past, i.e. an arrangement made without involving the EU.
I am referring to when President Putin said that he would consider European "boots on the ground" as an act of war.
Note: European- also if both the EU and the USA provided weapons.
Or: we could actually end up having a Korean situation, but with USA troops (e.g. those shuttled from Germany to Hungary) used as a "peacekeeping" force.
Today Mario Draghi was in Rome at the Italian Senate to present his report, but could not avoid discussing also about ReArmEU.
Tomorrow some more information about the ReArmEU initiative will be presented by the President of the European Commission, but frankly what today newspapers reported as a statement ("we are to prepare to war", not "for"), does not sound a good omen.
If we go on war footing, the obvious consequence would be (it seems trendy) not to change the leadership- but, considering the scenario and that we keep getting a continuous stream of strategic announces piling up billions of EUR more on tinkering path than Grand Strategy design, probably Mario Draghi would be a better replacement.
Also because, while at the beginning of his mandate as President of the Council of Ministers in Italy sounded still too much as a central banker, eventually got used to the political side and the need to have a wider perspective- a central banker can say that money is not a problem, a Prime Minister (or President of the European Commission) has to balance priorities.
Today some Italian newspapers said that what Mario Draghi said at the Senate sounded as an endorsement of the proposal from the Partito Democratico, i.e. considering short-sighted and a waste (as many countries will not be able to provide their share of the resources for the new "defense national debt" and, anyway, if they were to, currently this would imply just buying USA weapons).
As NATO Membership overlaps with EU Membership, part of the interoperability that would be needed to have shared operations is already in place.
Anyway, as for the previous proposals to shift computer chip production within the EU, or another one to differentiate energy sources (shifting to the more expensive source as the only one available immediately), talking is fast, execution takes time.
The name ReArmEU is generating a lot of dissent: but, frankly, it is just another sign of the distinctive approach adopted by this Commission (also in the previous term): reactive initiatives presented as strategies, but piling up.
In this case, ReArmEU is frankly an appropriate name: like or not (I wrote in the past what I think about transferring weaponry stock and funding without having a say in the strategy), after the invasion of Ukraine EU Member States did not just transfer to Ukraine what was just holding place in warehouses- but also resources that would be part of their own individual defense posture.
Recently, Italy tried to restock materiel that had transferred to Ukraine, but newspapers reported that USA refused to provide.
So, we have anyway a short-term need (ReArm), but we need to build our own industry and posture (and restock), to be able to have independent capabilities.
I wrote above that NATO+EU have already in place bits of what is needed- but if we until recently talked about the Franco-German European brigade, and not division or army corp, and we are currently discussing to have a French-British nuclear deterrent, it means that we are still a long way from any of that.
Maybe you do not remember- but when UK decided for Brexit, then there were announced that they would leave also Euratom- to which the local (UK) industry reminded that
a) yes, it is EU-ratom, but it is not EU
b) UK long ago de facto "outsourced" its own capability to do controls etc both on civilian and military nuclear side of the nuclear industry (the latter through an agreement with France).
Again, other bits of interoperability already in place.
Long ago said to some local contacts in Turin that, considering that the automotive industry (which used to be the main industry of my birthplace, Turin) is not just having a crisis, but evolving toward a different model, and considering that we are expected to move past 2% of GDP in military budget, we have to make choices.
Either we keep buying and subsidizing the USA military-industrial complex (that needs a war every decade or so to replenish and refurbish new equipment: as somebody said, the model of the Founding Fathers wasn't really Athens, but Sparta), or we start building local capabilities (not just production on license, but also R&D).
Which implies creating a continuous demand, and reducing the number of options.
Somebody in Rome reminded me almost two decades ago that, during the WWII war, one of the distinctive disadvantages of the German invading force in Russia was logistics- including having too many different types of equipment with too many different types of spare parts.
And one of the distinctive advantages of WWII USSR (despite the self-damaging done by Stalin on his own army) was, again, logistics: closer home, yes, but also the possibility of having capabilities far enough to avoid attacks, but close enough to resupply; moreover, had less variety, which, in turn, implies a lesser logistical nightmare.
Within the European Union, NATO Members still have too often a national obsession that would squander resources.
A couple of movies that watched again recently that could be useful to have a quick reminder are Pentagon Wars (a tru-ish story about procurement: look the movie, not the IMDB page that is misleading) and Deterrence (which probably some misunderstood: launching missiles without a strategic aim to prove that have deterrent capabilities is the negation of the deterrence concept- deterrence is about predictability).
Anyway, at last I saw that locally somebody is starting to think about converting existing automotive facilities and supply chain for defense purposes.
And when I write "thinking", I mean that: not just making announces, but starting first from an assessment of the differences in content (e.g. mass-production vs. project-based or other options) and in processes (including retraining personnel).
In Italy, we already messed up long ago with Industry 4.0, initially forgetting that to benefit from the ability of those new machines to allow flexibility and a competitive advantage, you needed
a) data- and integration with the information systems of companies purchasing that equipment
b) human capital development- to have personnel able to both use the machines and the data.
I am curious to see how the debate will evolve, but I think that also if I dislike the European Commission approach:
a) ReArmEU is adequate for the task at hand- restocking and starting to integrate
b) we need to plan short- medium- long-term, as reality will not wait for us to catch up
c) we need to serious reconsider shrinking down and integrating better our decision-making capabilities.
I wrote in the past, and was reminded in workshops and webinar from the industry, as in more recent political speeches, that within the EU we have way too many decision points.
It looks as if all our organizational architecture is designed to produce frameworks and Weltanschauung, but always forgetting the operational needs and timeline.
So, I look forward to see what will happens over the next few months.
For now...
... stay tuned!