Set goals, make plans, act, review the results. This is the eternal formula that governs the life of individuals and organizations. At its essence, strategy can be defined as “plans that become actions.” It can be thought of as a black box, a middle ground between objectives and results. Let us leave the box black for a moment and look what at comes before and after.

As management expert Peter Drucker pointed out in his 1993 essay, The Ecological Vision: Reflections on the American Condition, social institutions such as hospitals, civil services, and the military have all come to business to see how to improve their own efficiency. Because they are not motivated by profit, they must find other yardsticks by which to measure themselves. “Management begins with objectives,” he wrote.

In any field, setting obtainable objectives may be considered the primary art, with all else secondary. The final step is to review and assess the results. If history is a judge, this may be the hardest part of all, because human beings seem to have a genius for learning the wrong lessons. Most times, hindsight is far from 20/20. Those who cannot anticipate the future have rarely learned much from the past.

More often than not, the secret to strategy is not how to craft a plan but rather how to assess how well it is working. Even the best-laid plans will need adjusting. In a complex situation, key elements may be misguided and ineffective but perversely persist long after they should have been identified as a waste of resources.

In observing results, relentless honesty is needed. The greatest asset, in fact, may be the ability to observe, to learn, and to change course. Too often, strategic imperatives are a reaction to past, not present, circumstances—generals fighting the last war, so to speak. As is so often the case, military history teaches strategic lessons that can be applied anywhere.

It is generally not appreciated that in World War I, most of the senior commanders had been trained as cavalry officers; for them, warfare was inherently a mobile affair. Yet by 1914, weaponry had trumped mobility. The troops were pinned down in trenches, and the equestrian-oriented generals on both sides were unable to think their way out. In the 1930s, the British war office responded to the growing Nazi threat by ordering a build-up of bombers. They didn’t want a coming war to be fought on the ground, in trenches. They had learned that lesson.

Yet one of the many tragedies of World War II was the prolonged Allied bombing of German cities. In a recent essay in the MIT Technology Review, physicist Freeman Dyson recalls his work as a young analyst for the British Bomber Command, whose task was to develop more effective methods of hitting German targets. As he discovered, the bombing raids consumed a quarter of the British war effort yet did little to win the war. Dyson argues that the bombers were used because they were there, and to assuage the ego of Sir Arthur Traves Harris, the leader of the Royal Air Force Bomber Command, “who wanted to win the war by himself.” A better option, Dyson argues, would have been to build ships that could have made the invasion of Normandy possible a year earlier, in 1943 as opposed to 1944.

“From my viewpoint, the [air attacks were] a meatgrinder, slaughtering German civilians and British airmen with equal mindlessness, paying little attention to moral principles or to strategic needs,” Dyson writes. “In that war, as in the present one, secrecy was used to conceal our failures and mistakes, not so much from our enemies as from our own citizens.”

Indeed, the Iraq war has turned out to be the worst nightmare of the Bush administration, consuming more than $350 billion of the U.S. budget and thousands of lives and driving a wedge between Sunnis and Shiites that is destabilizing the entire region. Until recently, the official line, despite all evidence to the contrary, had been that the Iraq strategy was working. The dismissal of hard-line former Secretary of Defence Donald Rumsfeld was the first admission that it was not.

Going back to Drucker’s dictum that “management begins with objectives,” we are reminded that the original aim, after 9/11, was to make the U.S. safe from attack by rooting out Al Qaeda terrorists and their Taliban supporters in Afghanistan. The Iraq war is a throwback to the first Gulf War, when, for some reason, George Bush Sr. let Saddam Hussein escape at the last moment. It is a diversion, a monstrous sideshow, while as far as we know, Osama bin Laden cavorts in the hills.

With a third of a trillion dollars spent, the war in Iraq has become a nightmare where the best strategy, if there is one, will be the lesser of many evils. Whether in chess, warfare, or business, strategy is an art that demands honesty. It’s time to call a spade a spade.