Nathan Jones

AS A MARINE and entrepreneur, Douglas Stone, Sloan '92, has never shied away from risk. But taking over the U.S. military's detainee detention system in Iraq in April 2007 was a big one. The prison system, which holds about 22,000 detainees, was known to most Americans primarily for the horrifying treatment of prisoners at Abu Ghraib.

"I had great concern about the impact of detention operations on the Multi-National Force's initiatives," admits Major Gen. Stone. When he took charge of detention, Abu Ghraib was closed, but the system still had significant problems. Insurgents were using its two main camps, Cropper and Bucca, to strengthen the loyalties of their members, and riots were frequent. Stone came in, according to Gen. David Petraeus, commander of U.S. forces in Iraq, and "revolutionized the way we perform detainee operations in Iraq."

Stone has spent his career moving between the military and civilian worlds, alternately leading Marines and software engineers. He sees many parallels between these two spheres and often draws on lessons learned in one place when he's in the other.

High-level management in either business or the military "calls for creative and much more generalist thinking," Stone said in a recent interview with Stanford Business. Both are "organizations with a clear mission who often function in a very ambiguous and uncertain world."

Understanding culture also is critical to both, he said. "If you don't want to speak the language of the software engineer, you will not get a solution that works, just as if you walk into Iraq and speak the language of an American in an Arab nation, you will not come to a reasonable solution."

The holder of advanced degrees from Pepperdine University, the U.S. Naval War College, and the University of Southern California in addition to Stanford, Stone quotes with equal facility from the Quran and the Declaration of Independence. He is a man of "big ideas," Petraeus said during a June ceremony in which Stone handed over responsibility for the detainee system to his deputy commander. Stone's "biggest idea," Petraeus said, "was counterinsurgency inside the wire [of the detention facilities], because that was where the enemy was conducting its insurgency as well."

Stone's reforms included review panels with detainee participation, which informed detainees why they were being held and expedited the release of those no longer deemed security threats. He instituted education and job training with the goal of offering classes to every detainee before release, though not all are taking them yet. Religious education by moderate religious leaders is also a key component. Stone told the Financial Times that religious discussion groups were helpful in identifying the true extremists, who were then separated from the rest of the detainees.

Interrogations also helped clarify motivations of detainees believed to be involved in insurgent activity. Mostly, as it turned out, the motivations were economic or related to intimidation by others. And the communication was not just one way. "These conversations are remarkably important, because they give our country an opportunity to express what we're doing and why we're doing it," Stone said.

At the June ceremony, Stone pointed out the detention system is not intended to punish. "What we do here in Detainee Operations is not perfect. But we are building toward long-term security. It is not simply detention; it is engagement. It is not retribution; it is reconciliation."

He likens detention to the way police in the United States quell riots: They bring in many people for questioning; ultimately many are released without charges, but the system allows the police to stop the disturbance, and determine who the leaders are and what caused the problem in the first place. "On the battlefield, when nobody's wearing a uniform, you don't know who is identified with a counterinsurgency. And in Iraq there are multiple insurgencies—it's not just one thing."

There is a key difference between the detention system in Iraq and the U.S. system, of course: Those held in Iraq can be detained indefinitely without a trial. A U.N. mandate gives coalition forces the right to detain people who are security threats, which means they don't have to be charged with a crime. This is a frequent criticism from human rights organizations, though according to press reports, human rights watchers say conditions in the camps have improved significantly.

STONE GRADUATED FROM the U.S. Naval Academy in 1973 and served five years' active duty with the Marines. He then served in the reserves while working for tech companies and nonprofits.

His corporate career included heading PCAD, a software engineering company he sold to IBM in 1990. He was president of California Leadership, a nonprofit leadership development organization, before entering the Sloan Master's Program with the Class of '91.

"He was a very impressive applicant," said Jenifer Renzel, the Sloan director at the time. "He had a wonderful 'can-do' attitude and, it seemed to me, a commitment to the broader good." Midway through the year, Stone was called to active duty in the first Persian Gulf War. He returned to complete the program with the Class of '92 and afterward became president and CEO of GammaLink, a fax technology company that merged with Dialogic in a public offering.

Stone returned to active duty in 2003 as a brigadier general and served as senior U.S. defense representative to Pakistan for 14 months. It was a "very interesting assignment," he said, which involved frequent conversations with then-President Pervez Musharraf. While in Pakistan, Stone learned Arabic as a way to help himself learn Urdu, which he was finding difficult. He is now able to read the Quran in Arabic.

In 2007, Petraeus chose Stone to serve as his deputy commander with responsibility for U.S. interrogation and detention. The timing made him a key member of the "surge" team in Iraq. The surge doubled the prison population, making the situation even more challenging.

To turn the U.S. detainee operations into something that would help rather than hinder U.S. efforts in the country, Stone looked for an ethical approach that would use group dynamics to his advantage.

"At the feet of the United States is a very serious burden to still comply with our own beliefs about confinement," he said. His goal was "to find a pragmatic solution that still honored the values of our nation and achieved the objectives of the force": to gather intelligence, keep the bad guys off the streets, and not engender more insurgency.

He drew on the Declaration of Independence to help make his point: "What are the grievances that our forefathers had? These guys said, "We don't want our citizens taken offshore and confined without any charges.'"

These principles cannot be violated to serve the United States' short-term goals, he said. "It's really hard in a counterinsurgency, when your friends are being killed. But at the end of the day, many things in life are very hard. We just have to make sure we don't violate the fundamental principles on which we stand."

Stone used the detention of Iraqis as an opportunity to find out why they were motivated to act against U.S. and Iraqi security forces. "Counterinsurgency mandates that you engage with citizens," he said. "If they had other alternatives, they would find a different solution." In the end, he said, "some prior al-Qaida members were working with me to come up with other techniques."

This mirrors how he approached problems in the business world: He might come up with what seemed like a good idea, but he would discuss it with customers so that "by the time it got produced, it was not my idea."

If detainees are treated with respect, he said, and "if they genuinely believe that good civic behavior is consistent with their belief structure and their self-interest, they are likely to change their behavior."

It's not clear how easy it will be to change the values of large numbers of Iraqis. Some academics are skeptical, but research shows that people are very susceptible to the values of the group they belong to. Stone said he thinks both arguments are correct—societal norms can change, but only if the leaders adopt the new norms and incorporate them into the value structure so that people who want to go along with the group will follow them.

In the end, Stone said, just as a business leader cannot say with certainty that he has found the best or only way to reduce costs for a customer, it may not be possible to predict how widespread the changes in Iraqi society will be due to the reform of the prisons. Military statistics indicate that re-arrests have been reduced in the past year, but in the short term the best measure of success may be this: "It works at the moment, it is better than it was, it is consistent with our belief structure, and it is pragmatic," Stone said. "My strong belief is that you comply with those fundamental human rights laws, with the precepts of our nation, the freedoms under which we live. If you don't, if you aren't cautious, you will change your own nation."

Stone's new challenge is leading the Marine Forces Reserve and Marine Forces North. The position is responsible for almost 100,000 reservists and for the Marines' response to incidents inside the United States. Marine Forces North was created after the attacks of Sept. 11, 2001, to handle terrorist threats inside the country, though it also responds to natural disasters.

Stone said he is approaching the new challenge as he did the detention system in Iraq: "You walk in, find out what's not working, and then change the pieces. Or find what is working and improve on it."

Because of his move to his new job with the Marines, Stone has not yet had a chance to test how the corporate world will view his service in Iraq. But he said he no longer fears that people will view his work with the detention system as a negative: "I think it's been just the opposite," he said.