Posts Tagged Toyota

Books: My Review Of Civilian Warriors

I finally got a chance to read this book and I was not disappointed. Much of the book went over material that I was already familiar with because I have been blogging about this industry for quite awhile now. But it is cool to finally hear Erik Prince’s version of events and his thoughts on the industry.

So what I did with the book is make footnotes on things that I thought were interesting that I was not aware of. Like did you know that the guy that threw a shoe at President Bush during a press meeting, was tackled by a Blackwater guy and not the Secret Service? Or that it was BW that rescued Vice President Joe Biden, Secretary of Defense Chuck Hagel and Secretary of State John Kerry on a snowy mountain top in Afghanistan? That is crazy, and it is stuff like that, that I will bring up in my notes. I will also mention the books that Prince was influenced by or thought important enough to mention in his book.

The first book mentioned by Prince that inspired him for building Blackwater was called Entrepreneurs Are Made, Not Born–By Lloyd Shefsky. Prince read this book while posted on the ship USS America, and the ideas that came from this book helped him to formulate a plan on what he wanted to do when got out of the Navy. He was a businessman/entrepreneur at heart, just like his father, and he wanted to be closer to his family–hence why he wanted out of the Navy. This is where he got the idea for building a world class training facility that could fill a need for the government, and especially his Navy SEALs, whom were constantly on the road for training. What Prince wanted to do was get a centralized training facility in Moyock, North Carolina for multiple government and private clients that would have everything they needed to train. The courage and drive to take the risk to do this, came from the motivation Prince got from reading this book.

As to the name of the company, did you know that the original names being thrown around were the ‘Tidewater Institute for Tactical Shooting’ or the ‘Hampton Roads Tactical Shooting Center’? They went with Blackwater because as they built the ranges on their new property, they were constantly slogging through the peat stained black water mud. It had a better ring and meaning for them at the time I guess.

In the beginning of their business, training was not their big money maker. It was their targets they constructed and they used a tougher steel combined with a pop up mechanism to make targets that folks all over the US wanted. These targets accounted for 50 percent of their revenue in the early days of the company.

He also makes mention of the pride he had in his contractors and employees. One story he mentioned was about a wounded contractor in his company that I did not know about, but thought was really cool. His name is Derrick and his blog is called Small Victories, and it is about the process he has gone through as a severely wounded contractor.

The second book mentioned was Unrestricted Warfare, written by a couple of Chinese colonels back in 1999. This book documented the coming future of terrorism, and it is what woke up defense insiders–to include Prince, as to what was coming. What happened on 9/11 was not surprising to those who foresaw this type of unrestricted warfare or terrorism.

Prince made mention of Frank Gallagher as the first detail leader BW assigned for the task of guarding Bremmer in Iraq. That 36 man detail later grew to a massive operation protecting a multitude of DoS folks in Iraq and later Afghanistan. What is interesting though is that Frank and company were the guys making the innovations on the ground in Iraq when it came to close protection in war zones. (Frank is also coming out with a book)

Frank’s group were so good that their protection schemes would later be adopted by the US Government for protecting it’s highest risk personnel. Not only that, but Osama Bin Laden at the time was extremely frustrated that none of his clowns were able to get a shot at Bremmer. So OBL fired up some offense industry, and put a bounty out on Bremmer and his protective detail. Bremmer was worth 22 pounds of gold, and anyone on the PSD team was worth $30,000 dollars according to the book.

Another interesting aspect of the way Prince did business was in order to show capability, he would build it first with the hopes that clients would see how useful or important it is, and then contract it out. Prince would put his own money down on the venture as well.

A good example of this is Presidential Airways and the advent of using smaller scale paracargo in Afghanistan. In the early days of the war, the Air Force did not have a small scale paracargo capability. They would use large aircraft to drop 600 lb pallets, and do it way too high up in the air. It was Presidential Airways that recognized a deficiency–that the military needed small scale paracargo, and lots of it in order to meet the demand out there. They would go on to do a proof of concept and supply outposts, and then the government later set up a contract to continue using this service. This would later be called LCLA or Low Cost, Low Altitude and I have talked about this on the blog in the past. Thanks to Presidential Airways, I am sure many outposts received life saving ammunition supply drops or food drops. (Cofer Black’s son was actually resupplied by Presidential Airways when he was at an outpost, serving in the military in Afghanistan)

Then there are the other projects that Prince funded that did not get off the ground. Like the armored vehicle called the Grizzly or their blimp. Or the 1700 man peace keeping force called Greystone.

According to Prince, Greystone would have had it’s own air force, helicopters, cargo ships, aerial surveillance, medical supply chain, and combat group. It was Prince’s alternative to the ineffectual UN peacekeepers that we continue to see deployed all over the world. I remember he was wanting to send these guys to Darfur, Sudan if DoS was ok with it. They were not, and this project never got off the ground.

According to the book, Prince spent about 100 million dollars on various BW projects that never went anywhere. He had the attitude of if you build it, they will come. With his creations, he felt eventually someone in the government or in private industry would want this stuff, and he mentioned that if he threw enough darts at the board, they were bound to hit the bull’s eye. He said this is the price of continually innovating. Whatever the government needed, or what they might suddenly realize they needed, Prince would provide it. (kind of reminds me of Steve Jobs with his drive to create products that people didn’t know they wanted, but when made, they absolutely wanted and needed them)

And really, this is at the heart of what he was all about. His father was the same way, and I kind of got the impression that Prince was constantly trying to live up to what his father was all about. His father was very successful and had the same attitude of seeing a need or potential need, and filling it. He is the one that invented lighted mirrors in vehicle sun visors. But his father also had a lot of failures before that lighted mirror took off as a viable concept. Both men were visionaries and risk takers, and that is what you need in order to create something new. To create something that people want, or didn’t know they wanted, but do now.

In the book, Prince also talked about Executive Outcomes and how successful they were. So EO was an inspiration and it is always cool to hear about visionaries getting inspired by other visionaries and their creations.

Prince also made mention of his Libertarian roots and his ideas on contracting and free markets. He was a big fan of fixed cost contracts, versus cost-based or cost-plus. He felt that a contractor should be able to put their money where their mouth is when they say they can deliver something for a certain price. With cost based or cost plus, you are basically giving a contractor an open check to spend whatever they want to get the job done.

You see this theme throughout the book, and that Prince was all about funding a project in order to show proof of concept and viability, or that BW was interested in providing a good value for the tax payer’s dollar.

Speaking of which, BW funded their own rescue operation of folks off of roofs during the Katrina Hurricane disaster back in 2005!  BW also went on to provide effective security in the region after that disaster.

Another business unit that Prince mentioned was Total Intelligence Solutions. TIS was BW’s private intelligence firm that offered services to not only the government, but to private institutions. The Walt Disney Company was mentioned as one of those institutions.

TIS also had Cofer Black in it, and he was very much impressed with the way it operated compared to the government. Black mentioned that ‘every mid-level government official should spend a two-year sabbatical there to learn about efficiency and effectiveness’. My opinion on that is duh, private industry can be very efficient and effective compared to the government.

The third book mentioned was On War by Carl von Clausewitz. Prince’s father was the one that recommended this book to him before he joined the Navy. As to what lessons he learned from this book is hard to say. He mentioned a Clausewitz quote on courage and that is about it.

Moving along through the book, he mentioned stuff about the An Najaf attack. Travis Haley was mentioned multiple times in regards to this attack and it is cool getting some info on what happened during that deal. Travis was brought in by little bird after the attack began, and he was definitely a force multiplier during the fight. The video he and his team posted of the event has received many views over the years. One thing mentioned that I did not know is that his team did receive mortar fire that day. Accurate mortar fire, as we saw with the Benghazzi attack, can be very bad for the defense.

It is also interesting that General Sanchez did not want to acknowledge that Blackwater was so heavily involved with the defense of this facility. The reality is that if it wasn’t for the actions of BW, they would have lost that consulate in An Najaf. It would have been very embarrassing to Sanchez’s command, for it to get out that a contractor did so well, and in his AO.  Or that the US military was not in a position to defend it because it had so many other things going on at the time. This incident was also unique because there were military folks there, but BW was running the show.

It was interesting to find out how much WPS made for BW. Prince quoted well over a billion dollars. At the peak, BW had over a thousand men on the ground in Iraq performing the WPS mission. I am sure Frank Gallagher and others were pretty amazed at how big this thing got.

There was mention of BW’s perfect record of protection, and the most significant injury of a principal at the time was a ruptured ear drum. BW used Mamba armored vehicles in Iraq, which were manufactured in South Africa. An EFP was used by the enemy against one of BW’s Mambas, and everyone survived, to include that principal mentioned. A BW guy lost his arm in the deal as well. I have to say that is some serious luck and EFPs are no joke. I actually drove these same vehicles in Iraq and I can attest to the protective qualities of it–and that is awesome that these guys actually survived an EFP.

Prince also wrote a lot about the CPA’s Order 17, which was the 16 page document that outlined the rules and laws that folks were to follow in Iraq. In absence of a working country, the CPA had to come up with some rules to operate by until Iraq got itself in order. Contractors were often charged with having immunity in Iraq or not having any accountability for their actions because of what was in Order 17. Prince argues just the opposite, and that Order 17 did provide legal accountability.

Many critics of BW pointed to this so called lack of accountability, and because of the non-disclosure agreements BW signed with DoS and other clients, that they could not defend their position or correct the record. So Prince dedicated some space in this book to explaining why they were legally accountable.

The myth of pay rates was also dispelled in the book. You often heard about this $1,000 dollar a day contractor pay that everyone was getting in the company, in various books and articles. But that was not true with this company. According to Prince, the pay ranged from $450 a day to $650 a day, and averaged about $500 per day across the entire contractor force. He also goes on to compare the military’s ‘total military benefit’, which adds up to about $99,000 dollars a year for an enlisted member. The point here was to compare the compensation of soldiers versus contractors, and I have seen the same CBO stuff that he is talking about. Matter of fact, I blogged about it awhile back.

After the Nisour Square deal, Prince had to do a congressional hearing and that thing is floating around on youtube. What is interesting is that according to the book, Prince actually got advice from Oliver North on the whole process. North had to go through 45 hearings back in the day during the Iran Contra deal.

Prince made mention of the company’s process for growth. Gary Jackson was quoted as saying that they were always searching for the 80 percent solution now, as opposed to the 100 percent solution later. This is interesting to me because it is about being faster to market than the other guy. Get it out now and own that business, despite it not being perfect. Then work to continuously improve it later. Or something like that. Jackson was actually named by Harvard Business Review and Fast Company for his leadership and for the growth of the company. The 80/100 solution scheme is part of the reason for that rise.

Finally, at the end of the book Prince talked about the future of the industry, which I really liked. He also talked about another inspirational book that is significant for a number of reasons.

The book’s name is The Machine That Changed The World, By James Womack, Daniel Jones, and Daniel Roos. Prince was very much inspired by this book and he was in awe of Toyota’s managerial system of lean production. He referred to BW as a sort of factory that produced security specialists, much like how factories produced cars. The client requests ‘X’ amount of contractors, and the BW factory provides that amount just in time. Their ability to get the job done and deliver that product–be it a human or weapon or aircraft, to where the client needed it, and on time, was what made them successful.

Which is cool because I too am heavily influenced by Toyota and it’s concepts. I have a category called Kaizen, in honor of the continuous improvement principals that Toyota was so famous for. Kaizen is also mentioned in my Jundism page.

All in all, I really enjoyed the book and highly recommend it. My one take away with this is that Prince was a visionary and had the courage to go forth and make Blackwater happen. It is also a tragic story, because he basically had to let go of that in which he built and loved so much–all because of politics… Check it out and you will find his book in my book store on Amazon here. –Matt

Edit: 04/04/2014- Travis Haley just wrote about his experiences during the Battle of Najaf and you can read this story over at OAF Nation. Pretty cool and it expands upon what was said in Prince’s book. Especially the part about General Sanchez not sending a relief force to help, and how Ambassador Bremmer instructed Frank Gallagher to assemble a relief force to come to the rescue. Here is a quote from Travis’ story.

There was heated discussion between Ambassador Bremmer and General Sanchez, Commander of Coalition Ground Forces in Iraq. In the end, the Army was unwilling to dispatch a relief force to the Najaf compound. Bremmer then instructed Frank, “I am authorizing you, by any means necessary, to get our people out.”  With that, Frank sent me to round up the air team and to start pulling together weapons and munitions to bring on the flight. I hit the ready room and started pulling kit. My M4, magazines and a CS Rifle. The Counter Sniper Rifle was more of a moment of opportunity thing than a plan and Terry, one of our detail’s Counter Snipers, quickly fished through his gear to give me his dope card as I headed down to the air strip where the Little Birds were spooling up.

Edit: 04/07/2014- A blog named CIMSEC did a podcast with Prince that was interesting. Prince mentioned two more books that he has read recently and recommends. The first is Invisible Armies by Max Boot. The other is To Dare And To Conquer by Derek Leebaert.


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Leadership: Dealing With Crisis–A Look At Toyota, Tiger Woods, And The Secret Service

     The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.-Martin Luther King Jr.


    I wanted to look outside of the industry today, and see what I could learn from other companies or organizations that are going through crisis.  Specifically, organizations that have typically been looked at as solid performers and highly dependable.  I talk about Toyota a lot on this blog, and Kaizen is an immensely inspirational concept here.  Tiger Woods and the Secret Service are also leaders in their industries, and have been held up to a high standard as well.  What they all have in common is that they have all faced ‘problems’ that have negatively impacted their reputations.

   What I wanted to highlight with all cases, is that the actions of the CEO or leaders of these organizations during times of crisis, is absolutely vital.  And in all cases, minus maybe the Secret Service, these groups are taking some serious hits because the leaders are not doing enough to either apologize or to make amends for the actions of their organizations. Perception is everything, and all of these groups listed below are taking some big hits for their actions, or lack there of.

   So what can we learn from them?  Well for Toyota and Tiger Woods, the verdict is still out.  But at the very least, we can deduct that the media and public want some honesty and they want some apologies for not living up to their ideals.  The public has a vision of what these companies are supposed to be, and it is up to those companies to live up to that image.  After all, these guys did not start off with bad reputations and in fact have sterling reputations.  These two companies have mad a lot of money off of that reputation, so it is up to them to do what they can to live up to it.

   It’s the same with the Secret Service, but Mr. Sullivan had to answer to congress for the actions of the Secret Service and the Secret Service does not work for profit.  But they do work for the tax payers and the President, and they are accountable.  With the Iraqi shoe incident under President Bush, and with the Salahi incident with President Obama, these two incidents were very public embarrassments that the USSS had to deal with. There were some in the media that were calling for Mr. Sullivan’s resignation even.  Although I think some public trust has been diminished with these incidents, for the most part, the USSS has recovered and are out of the limelight.  What took the edge off, in my opinion, was Mr. Sullivan getting out front about it all and taking full blame.

    Which begs the question? Why wasn’t there dismissals or reprimands for this incident?  I suspect that because this is government, that firing people or reprimands are just ‘too stern’ and harsh for the Secret Service. Firing some folks would have added some action to the apology given, but in today’s touchy feely government, probably too extreme.

     Or maybe it was because Mr. Sullivan was up front and took the blame right off the bat, that the public really didn’t apply the pressure necessary to force a punishment?  He is still in that position, and still tasked with the protection of the President.  I also don’t see a push for his removal from any kind of massive outrage from the taxpayers.

   So what can we learn from this? Having some humility in the face of crisis, is something that leaders need think about when it comes to dealing with the public.  Of course you also want to be a source of strength and stability for your company, but you also want to show that you care what the public thinks.

     Maybe all of these groups got too comfortable with their position, and maybe bleeding a little was good for them?Maybe the leaders will get humble again, and try to redeem themselves? A lot depends upon the leader, and how they deal with crisis, and this industry certainly has had it’s fair share of that.  Learning from other companies, and how they deal with crisis, is an excellent idea if you care about ‘being prepared’ for future incidents. Interesting stuff, and I would like to hear what you guys think are the lessons learned? –Matt


Toyota and Tiger Woods: Kindred spirits

By Alex Taylor III

February 11, 2010

NEW YORK (Fortune) — The question is being raised more and more: Can Toyota recover its reputation?

There is no simple answer. The automaker once enjoyed exceptional renown. In addition to being the largest and most profitable auto company on the planet, Toyota was the most studied and copied. Its production system became a benchmark and a model for competitors to emulate around the world.

On top of that, Toyota was known for always putting the customer first, hence its passion for building cars with the highest quality and reliability. The automaker obsessively studied car buyers to find out what they wanted and then provided it for them. It became a leader in new vehicle segments like crossovers, and new technologies like gas-electric hybrids.

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Law Enforcement: The Heroin Road–A Lethal Business Model Targets Middle America

   Fascinating.  These guys have definitely tapped into a drug dealing business model that is far more superior than the major cartels. Small de-centralized  businesses, all getting their heroin from one region in Mexico, and distributing it ‘pizza delivery style’. lol And get this, they are focused on customer service and satisfaction.  Did the Xalisco Boys read the Toyota Way or something?

   So how do you defeat this is my question? You could create doubt about the product they sell, kind of like how the fuel peddle issue is really tweaking Toyota right now. But eventually the product issues will be hashed out, and rumors squashed and business would crank up again.

    Another way, is to decentralize the drug war.  If you want to eradicate small groups, you need small groups who have the incentive to go after them.  A team of bounty hunters, if given sufficient authority necessary to go after these folks, could do the job just fine.  And if you attach a sizable bounty that makes this profitable for the hunters, or implement an awards system based on seized assets, then you could create an industry out of capturing these small time thugs. To really amp up the effectiveness of bounty hunters, they need to be able cross state lines.  Issuing Letters of Marque could be one way to give them that authority, or having some federal agency deputize these hunters. Perhaps some federal and state laws could be modified in order to make bounty hunting more effective?  In either case, you need to give bounty hunters protections that will give them sufficient authority to really go after these dealers.

   Like with the military and issuing Letters of Marque to individuals, law enforcement can have problems relinquishing authority to bounty hunters. It’s one part Max Webber, and one part ego. I happen to think that both groups can exist just fine, much like the Post Office and Fedex exist in the same market, and I think it is an excellent idea to create industries out of killing or capturing terrorists and pirates, or create industry out of capturing drug dealers. What bothers me about what the Xaliscos are doing, is they have decentralized the drug trade and have a business model that is scary efficient. Decentralizing the drug war against these folks is something that should be looked at if we want to keep pace with this business model. –Matt



A lethal business model targets Middle America

Sugar cane farmers from a tiny Mexican county use savvy marketing and low prices to push black-tar heroin in the United States.

By Sam Quinones

First Of Three Parts

February 14, 2010

Immigrants from an obscure corner of Mexico are changing heroin use in many parts of America.Farm boys from a tiny county that once depended on sugar cane have perfected an ingenious business model for selling a semi-processed form of Mexican heroin known as black tar.Using convenient delivery by car and aggressive marketing, they have moved into cities and small towns across the United States, often creating demand for heroin where there was little or none. In many of those places, authorities report increases in overdoses and deaths.Immigrants from Xalisco in the Pacific Coast state of Nayarit, Mexico, they have brought an audacious entrepreneurial spirit to the heroin trade. Their success stems from both their product, which is cheaper and more potent than Colombian heroin, and their business model, which places a premium on customer convenience and satisfaction.Users need not venture into dangerous neighborhoods for their fix. Instead, they phone in their orders and drivers take the drug to them. Crew bosses sometimes call users after a delivery to check on the quality of service. They encourage users to bring in new customers, rewarding them with free heroin if they do. Read the rest of this entry »

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Kaizen: People Will Support What They Help To Create

    Hey everyone, this is a treat. I wanted to expand on a interesting conversation in the comments section, that I think deserves it’s own home.  This is from the article called The Importance of Shared Reality. –Matt



     Been thinking about your post while hiking the Laotian trail–more about that later.  Since we are using the auto industry as a source of metaphor for organizational best practices, I thought we might hyper-link to another–the Saturn Car Company concept.  Remember the original GM logic for creating Saturn–they realized that they had gotten too big, and too bueracratic to compete with the smaller more nimble company’s–like Toyota.  So GM selected 99 people (“the Group of 99”) and turned them loose to identify key founding principles for a new organization (Saturn) and to search the world for the best ideas in all key areas. The group consisted of a functional cross-section of people, including plant managers, superintendents, union committee members, production workers, and skilled tradesmen, as well as 41 UAW locals(which is fascinating because one of their findings was to scrap the Union model) and GM staff from 55 GM plants. 

     The group split into seven coss-functional teams to explore stamping; metal fabrication and body work; paint and corrosion; trim and hardware; heating, ventilation, and air conditioning; and powertrain and chassis. In all, the Group of 99 visited 49 GM plants and 60 other companies around the world (shared reality). They made 170 contacts, traveled two million miles, and put in 50,000 hours of interviews and visits (listening to the guys on the ground). 

     The group’s findings were presented in April 1984. The keys to success identified included ownership by all employees, the assumption of responsibility by all, equality and trust among employees, the elimination of barriers to doing a good job including the union, giving staff the authority to do their jobs, and the existence of common goals. Specific recommendations included the formation of consensus-driven partnerships within work teams as well as between the union and company management. 

     Although initially a mega-success, Higher Headquarters eventually reigned Saturn back in and squashed their entrepenuerial decision-making and management methods, the lesson still stands as a precient model for how a large organization can reinvent itself to stary nimble, and stay competitive.  

     I believe that the Saturn Car Company model is what USSOCOM needs to follow in order to stay nimble and meet the challenges of modern day–I hate to use the word but I have to–assymetrical warfare.

 What think you? –Pete 




    Laos would be a cool country to check out, and I certainly would like to hear those stories. As for your question, I hope I can do it some justice.  It is something that all companies in my industry can learn from, and any ideas about how to better organize and manage a company should be listened to and studied.  The concept of Group 99 is intriguing, and it has certainly kicked in the thought machine within my head. I also wanted to make this answer for you, more reader friendly, and include a historical base as well.  So you will have to pardon the beginning here, because this is me just priming the pump for the reader.   

     The United States Special Operations Command (USSOCOM) or what I will call SOCOM was originally created out of the ashes of Operation Eagle Claw(the failed Iran hostage rescue mission), and I think it is important to look at this first.  The investigation of this incident, chaired by Admiral James L. Holloway III, cited lack of command and control and inter-service coordination as significant factors in the failure of that mission. So this is one side of the story. 

     The other side of the story, is the reality of what the Special Operations Forces (SOF) were up against. Whereas my belief is that the SOF community was getting the short end of the stick well before Operation Eagle Claw, and certainly were aware of these command and control issues. The guy on the ground was not being listened to, which is too bad.  It was classic conventional versus unconventional mindsets, and of course the bigger of the two will win.  So no one of importance or influence was really sold on the concept, and looked upon SOF with skepticism, all while gobbling up budget money for their projects.  “All of my forces are special” was the mindset, “and money needs to go to my tanks, jets, and large scale infantry forces”.  

     And Carter, when confronted with a situation that required a clean and sharp scalpel, to cut those hostages loose from Iranian control, looked to the military to solve his problem. Did they have a developed Special Operations capability, or were they too focused on tanks and planes?  No wonder things failed, but I put that responsibility on the top leaders who were not forward thinking enough to even acknowledge the potential for a situation like what happened in Iran. So this is where SOCOM came from, and what it’s purpose in life is–to prevent another Operation Eagle Claw and effectively manage today’s Special Operations community.

    Then over the years, they have done much to work on the command and control issues and inter-service coordination, and have conducted numerous missions all the way up to the present wars.  But really, the current wars are the true test of the effectiveness of SOCOM, and I think this is why a conversation like this even takes place.  The true test of an organization’s strengths is not when all is well, but when they are tested and pushed to it’s limits.  Much like how does a company like Toyota weather the storm during a bad economy?  

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