What Western Business Can Learn from Somali Pirates

The Economist writes (November 5):

“The threat to life and liberty aside, Somali pirates’ business model is impressive…. According to Professor James at the Henley Business School, each raid costs the pirates around 30,000 USD. On average one raid in three is successful. The reward for a triumphant venture, however, can be in the millions.

“The organization behind the pirates would be familiar to many ordinary businesses. For a start, they have a similar backend – including the kind of streamlined logistics and operations controls that would be the envy of most companies. Their success has even prompted one village to open a pirate ‘stock exchange,’ where locals can buy shares in up to 70 maritime companies planning raids.

“But Professor James believes that the most important lesson firms can learn is one of strategy. He teaches his MBA class that one reason for the pirates’ success is that they avoid ‘symmetrical’ conflict – challenging their targets head on by, for example, lining up against the Western navies patrolling the waters – battles they would surely lose. Instead, they use stealth and surprise, attacking targets at their weakest point.”

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3 responses to “What Western Business Can Learn from Somali Pirates

  1. David Schatzky

    Having just seen Inside Job, the brilliant documentary about the 2008 global economic meltdown, the problem is that a large part of the business sector already conducts itself too much like pirates. Pirates are the last models the world of commerce and finance should emulate. And, as the film reveals, top academics contributed to the economic chaos. I can’t recommend Inside Job highly enough. A chilling, gripping must-see documentary!

  2. Was it Balzac who said, “Behind every fortune is a crime”?