ISIS: The Internet's Biggest Disruptor

03/25/2015 08:07 am ET | Updated May 25, 2015

For the U.S. to combat the terrorist organization, officials will need to think digitally.

In an age where nearly every industry is being disrupted by the Internet, the world's established political order faces a disruptor like no other: the former al-Qaeda in Iraq, now repackaged as the Islamic State or ISIS. While the terrorist organization's ambiguous branding -- IS, ISIS, ISIL, Daesh -- lends an edge to its sinister identity and goals, its journey to notoriety seems to have followed the path of other disruptors.

Most plans offered today to counter and combat this group focus exclusively on military or geopolitical solutions. While important, these plans lack a key understanding of the other forces that contributed to ISIS's rise: a strategy for scaling up an entrepreneurial niche venture along with a sophisticated branding and digital marketing campaign. To sufficiently combat ISIS, the U.S. and the rest of the world must fully understand the branding, digital marketing and start-up mentality that facilitated the spread of ISIS's influence across the globe.

ISIS's rapid ascent can be attributed to three factors. First, the group found a market niche ignored by the incumbent players: al-Qaeda HQ, the Maliki administration in Iraq, the brutal Assad administration in Syria and even the U.S. The door was open for a digitally adept entrant to scale up from an early toehold. It was willing to go to extremely violent lengths to differentiate itself. It also manipulated technology to build an outsized global brand in the quest to expand its reach across the Internet.

Second, the U.S. administration and its allies acted as classic incumbents. Just as Blockbuster and Kodak were late to catch on to video streaming services and digital photography, respectively, the U.S. administration and its allies underestimated ISIS's skill at promoting its propaganda and expanding its organization into the digital world, especially through social media. Beyond propaganda, this expansion gives ISIS the capability to recruit and deliver its "product" in the home markets of the U.S. and its allies. And as a result, the competitive threat has spread closer to the strategic core, and now the U.S. has a disruptive attack on its hands.

In the context of ISIS, the question to ask is: What are some of the lessons for the U.S. and its allies as they consider their options?

The first lesson is to recognize that ISIS is a classic disruptive actor, which is what makes it even more dangerous than how it comes across on its videos. Consider the key elements of ISIS:

ISIS has built its strategy using a sharply differentiated and compelling vision of the endgame: a return to the glory days of a caliphate. En route, it acquires early customers with offers of very basic services in the territories it occupies. Its funding for each new phase is secured by its earlier phases of growth -- through extortion, selling electricity and oil from captured power plants and occupied oil fields. ISIS's brand-building and recruiting strategy applies lean startup methods that reach global audiences at low cost using a mix of media, including horrific videos, e-magazines and state-of-the-art digital direct-mail tactics, replete with over 46,000 affiliated Twitter accounts, with an average of 1,000 followers apiece, along with smartphone apps.

Organizationally, the ISIS management structure is an efficient, simple and market-focused hierarchy. It has begun to reach new markets by encouraging global franchising through pledges of "allegiance" -- whether it is by individual actors in Paris, Brussels or Sydney or by violent insurgency groups in countries ranging from Yemen to Nigeria.

The second lesson is that the U.S.'s war room on ISIS needs business strategists and digital marketers, preferably under 25 of age, at the table along with the veteran political scientists, military and security studies experts. A legacy portfolio of top-down Cold War counter-communications technologies comprising radio broadcasts, embassies, propaganda films and static websites is no way to counter a narrative and messaging machine that can give BuzzFeed a run for its money. More than just a war room, the U.S. government needs to develop innovative ways to counter ISIS's influence ahead of its next big move. Unfortunately, the U.S. has a track record of incubating such ventures only to have them later become the enemy -- al-Qaeda being a case in point. The venture should be held close even while being given the freedom to be nimble and focused on keeping the real enemy in check.

The third lesson for the U.S. government is the need to gain deeper insight into the disruptor's leadership model. What happens when you eliminate the top management in ISIS? Do not assume that it could end the campaign. In a digitally sourced organization, the initiative may have been crowdsourced and distributed worldwide to continue as a self-organizing system. Never assume that the present generation of enemies is organized as a traditional hierarchical pyramid.

There's no question that ISIS is a repugnant and vicious enemy. Military experts have commented that it presents a bigger threat than did al-Qaeda. I agree. And this is not just because of the shocking lengths to which ISIS will go to signal its willingness to indulge in extreme violence. It is also because the history of competitive business has shown that digitally enabled disruptive entrants are notoriously hard to dislodge once they get a foothold. To be disrupted in business is all part of the game of creative destruction, but for the civilized world to be disrupted by an ultraviolent, medievalist insurgency would be an outright destructive outcome for humanity.

This post first appeared as an op-ed in Fortune.

Bhaskar Chakravorti is Senior Associate Dean of International Business and Finance at the Fletcher School at Tufts University and the founding executive director of Fletcher's Institute for Business in the Global Context.