When the stakes are really high, most people do not know what to do or see fuzzy pictures. In these situations, single-minded "idealists" become most convincing because they appear to have an answer for everything. In contrast, "pragmatists" would prefer to wait for clarity and are painted as fools by the idealists. The idealists are prepared to do anything, literally anything, including deception or worse, because these are all small things in the face of the "big picture," a phrase used by Pyles. Losses do not distract the idealists and may even spur greater investments because "it is just a matter of time" or because the "one-off" losses are simply due to poor execution. Everything old — business models or institutions — is shattered so that a brand new world can be created in the idealists' vision. Eventually, losses pile up, but it is someone else who has to pick up the cost.

The stakes in the three situations were indeed high: the defeat of communism (Vietnam), remaking the world of trade (Enron with its e-markets) and reshaping the entire Middle East. Those who dwell on human greed as motivation — "money" in case of Enron and "oil" in case of Iraq — cannot explain the intensity of the idealists. Greed may explain the luxuries of Tyco's ex-boss and GE's ex-boss's retirement package, but it would not explain how the losses were ignored in Vietnam and Enron.

Enron was not a few greedy people who got together to dupe investors. I remember from my consulting days that other companies and competitors felt that Enron was indeed revolutionizing business by creating new electronic markets. Despite their current disgrace, I believe that the people at Enron were motivated to create a new level of efficiency in commerce. Webvan also burnt a billion dollars, but George Shaheen, who had walked away from the CEO position at Andersen Consulting and a comfortable retirement to lead Webvan, was trying to control the "last mile," not just deliver groceries. For Enron, to keep going when losses started piling up meant deceiving, and they found an auditor willing to play ball. Again, the idealists would have made this deception seem worthwhile.

Likewise, the war in Vietnam was not the result of power-hungry or greedy people. Communism was spreading and was perceived to be a threat to the United States. Instead of auditors, a flawed character, General Thé, was found and sponsored to wage the war at first. Deception regarding Cambodia followed. Eventually too many of those who were to be "saved" and too many of those who were doing this "saving" were killed to keep going.

Iraq is no different at this stage, but one hopes that this story turns out to have a happy ending. Like many Internet business cases, the costs were underestimated and the benefits brought forward, perhaps unintentionally, to sell to the investors, in this case, the taxpayers. The threat, like that of the communists, weapons of mass destruction or "disintermediation" in case of the Internet, was exaggerated in retrospect. Maybe the idealists really believed the threat at the time, or maybe it was part of the selling. General Thé's equivalent here is Ahmad Chalabi, another flawed character if one goes by the CIA's and the State Department's assessment as reported in the papers. The costs are already more than $112 billion according to www.costofwar.com, which claims its computation is based on Congressional Budget Office. Compare this with the $150 billion spent on the Vietnam War (www.pbs.org). There is the public relations cost: Like the Napalm pictures from Vietnam, there are pictures of torture from Iraq. Large numbers of civilians have been killed (Falluja) as have been soldiers. Still, the numbers for both are minuscule in comparison to Vietnam, and there appears to be greater cost consciousness in Iraq than there was in Vietnam or in Enron.

There are lessons here: If something is worth doing, it is worth doing well. This means putting enough resources if you are going to do it. Do not underestimate your resources just to get approval because you might start believing in your estimates. Listen to those with experience. Think of the possibility that costs may be much higher and that you may have to exit. Although the word "impossible" is found only in the dictionary of fools, the phrase "too expensive" is known to taxpayers and to those who pay with their lives.

These lessons must be repeated because we forget them. Before the Internet boom was tulip mania and the biotech stocks. And Graham Greene's novel was written before the real mess in Vietnam.



ManMohan S. Sodhi is a faculty member at Cass Business School. He can be reached at m.sodhi@city.ac.uk.

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