Terrorist groups take a lesson from corporations

Most financial advisers might not see parallels between running an advisory firm and running a global terror organization, but there are lessons to be learned from even the worst actors.

The MarketCounsel Summit kicked off Tuesday in Miami with an inside look at how Al Qaeda and ISIS survived and even thrived by operating like a lot of traditional corporations.

Citing the emergence and growth of ISIS, beginning in 2003, Princeton University political and international affairs professor Jacob Shapiro said much of the terror organization’s stability can be attributed to a strict and detailed organizational structure.

“You learn from the documents (that have been seized by U.S. intelligence) that they have organizational charts and they have debates about what those charts should look like,” he said. “It is organized like a standard big company.”

Mr. Shapiro, author of “The Terrorist’s Dilemma: Managing violent covert organizations,”(Princeton University Press, 2013), said there are business management takeaways to be gleaned from an organization with low pay and a 50% mortality rate.

The fact that ISIS members are paid about $41 a month, which is less than a low-wage worker would earn doing odd jobs, “screens out anyone who is not committed to the cause,” Mr. Shapiro said.

“You’re making sure there’s a certain set of values baked into the system,” he added. “This means you want to think about building in a set of values that people will be able to follow in the event of leadership disruption.”

Another example of a shrewd business strategy is the fact that the ISIS data specific to explosives show lot of information about how and where to place bombs for maximum impact, but there is virtually nothing related to the making of explosives.

The lesson here, Mr. Shapiro said, is the benefit of guarding certain valuable information.

“That was about them trying to maintain a monopoly on terrorism,” he said.

Former CIA director John Brennan, who was also part of the MarketCounsel’s morning one-two punch, concurred that successful terror organizations are not just rag-tag groups of hooligans trying to wreak havoc.

“Many terror organizations have been flashes in the pan,” Mr. Brennan said. “But the terror organizations that have been most successful have been able to carry out their missions and goals.”

Mr. Brennan added that C-suite executives could learn a few things from the practices of some of the world’s terror organizations.

“There needs to be redundancy and backups, and those redundancies need to be constantly reviewed and constantly updated and refined,” he said. “If the C-suite managers are not familiar with what to do in the event of a catastrophe, there is no way they will be able to implement it on D-Day.”