For a sound decision‑making strategy, companies need to identify and assess in advance, at the highest level, who would be willing, at each turn, to ‘pull the trigger’ and what their true motivations might be
The First World War occurred because of a calamitous pan‑European failure in decision‑making following the assassination of Archduke Franz Ferdinand in Serbia. Pedro Castro Caldas argues that there are some serious lessons to be learned about risk‑based decision‑making from the way in which governments and diplomats allowed themselves to ‘pull the trigger’ in the Summer of 1914.
On a summer morning in Sarajevo a hundred years ago, a young man of nineteen drew his revolver and fired not just the opening shots of the First World War but the starting gun for modern history.1
History has it that, whether by chance or by fate, Archduke Franz Ferdinand, heir to the Austro‑Hungarian Empire, had escaped unscathed from that day’s first attempt on his life. A tossed grenade apparently bounced off the top of the royal limousine and exploded under the next vehicle in his entourage, wounding its occupants.
Disregarding the dangerous situation he found himself in, and without adopting any emergency plan, the Archduke continued on his official visit to Sarajevo to be welcomed at the City Hall.
Once the reception was over, the motorcade resumed. But at one point the driver took a wrong turn and had to stop the car and reverse. He did so right where the leader of the conspirators, the student Gavrilo Princip, was standing outside a café on that fateful summer day, June 28th, 1914.
Seeing the Archduke halt right in front of him, only a few feet away, Princip took a few steps forward, revolver in hand, and shot. By some stroke of good fortune for him, the shot dealt a mortal blow to the Archduke. The second bullet, aimed at the governor of Bosnia, inflicted a fatal wound on the Archduke’s wife, the duchess of Hohenberg.
In the aftermath of these dramatic events, the Austro‑Hungarian authorities launched a wave of repression and initiated a crackdown on the Bosnian Serbs by assault squads formed by Austrian loyalists, ransacking their properties in Sarajevo and elsewhere.
This came to a head a month later with an ultimatum to Serbia by the government in Vienna that demanded an immediate halt to the alleged anti‑Austrian activities by Serbia.
Although Serbia accepted the Austrian demands in general terms, mother Russia, an ally of Serbia, ordered its armies to mobilise. This led Germany to issue an ultimatum to Russia to call off the mobilisation. Russia did not and so Germany declared a state of war. This sparked an unstoppable general mobilisation.
In this mobilisation scenario, Germany then delivered an ultimatum to neutral Belgium, demanding passage through Belgian territory to France, and declared war on France. In defence of Belgium’s neutrality, Great Britain declared war on Germany, and Austria‑Hungary declared war on Russia.
War thus spread across Europe. The general European populace and governments were bewildered by the rapid development of events but they did not really strive to avoid it.
Indeed, this catastrophe2, generated by a succession of unwise and irreversible decisions by capricious statesmen and diplomats taken from the comfort of their offices, leaves one with the impression that such decisions were based on erroneous and preconceived ideas on the true motivations of the student Gavrilo Princip.
Despite evidence to the contrary, the warmongering decisions taken were based on the erroneous belief that Princip, whose intention was to free all Southern Slavs from foreign rule, had acted in the interests of Serbia as he pulled the trigger of his pocket revolver, having hit the target, often the failure of the previous attempt with the grenade.
The key issue in similar decision‑taking contexts is to avoid accidental or premeditated risk assessment mistakes when identifying the motivations of those who are willing to ‘throw the warning grenade’ and persist in "pulling the trigger”, so as to prevent catastrophes both at country and organisation level.
There was, and there will be, no shortage of opportunities for such an assessment. Just as one hundred years ago in the Summer of 1914 and, later, throughout the 20th century, we are now experiencing troubling events.
Pro‑Russian separatist forces, supported by mother Russia, are by military occupation claiming ancient Russian land that is currently an integral part of a formerly fast‑developing independent Ukraine.
Islamic terrorists are occupying parts of Syria and Iraq, invoking the recreation of an Islamic State once ruled by the Ottoman Caliphate.
Regions of European nations are claiming their independence from the sovereign states that are struggling with protracted growth problems and sovereign debt management crises.
In the East, China and its neighbours have ongoing territorial disputes in the Sea of China. In many regions of the world, dysfunctional states are emerging which spawn genocide and widespread kleptocracy.
In a setting of fragmented relocation of global companies, all these events are potential issues of geopolitical risk which, hard as it is to identify and predict, tends to be overlooked, given the difficulty of the quantification of political and social instability.
To ensure their survival, companies, particularly those relocating services and production and with diversified raw material sourcing and export markets, must be prepared to face not only economic crises, but also geopolitical shock.
They must identify relevant risks to their operations, evaluate the potential impact of such risks and incorporate their analyses into decision‑making strategies.
In other words, for a sound decision‑making strategy, companies need to identify and assess in advance, at the highest level, who would be willing, at each turn, to ‘pull the trigger’ and what their true motivations might be.
By Pedro Castro Caldas, Risk Management Consultant
By Pedro Castro Caldas, Risk Management Consultant
1 Tim Butcher: original title "The Trigger: Hunting the Assassin Who Brought the World War”.
2 "The war that started with the invasion of Belgium by Germany, in the belief of a short‑lived campaign, came to a stop only 51 months later, leaving eight and a half million dead, twenty million wounded, several thousand imprisoned and missing persons, and only ending when resources had been depleted, cities had been destroyed, fields had been left barren and immense suffering had been wreaked…” (A. Afonso "1914‑1918 Grande Guerra”)
