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Strategy for a Complex World

Strategy Matters[su_dropcap style=”flat”]L[/su_dropcap]EADERSHIP, mission, and strategy: Few things surpass the ability to organize, direct, and execute closely orchestrated tasks on a massive scale than what the U.S. military does in times of peace and conflict. This paper addresses leadership strategy, not war or international politics. It describes what General Stanley McChrystal (U.S. Army, retired) did in leading the Joint Special Operations Command (JSOC) in Iraq in the mid-2000s. For what General McChrystal did in developing tightly integrated teams – held together by mutual trust and common purpose—also applies to the business sector. As a key takeaway, business leaders can learn from how McChrystal dealt with complex situations that involved tradeoffs between being efficient versus effective. As management expert Peter Drucker said, “efficiency is doing things right, effectiveness is doing the right things.” It is the later that this paper addresses.

We begin with McChrystal’s New York Times Bestseller book “Team of Teams: New Rules of Engagement for a Complex World” (2015). It is a fascinating read that reflects on organizational strategy and how McChrystal had to adapt his command structure to more effective ways, how it had to function differently in order to do the right things to counter a new kind of adversary, one that could run circles around a traditional, command-and-control structure. Whereas the U.S. forces in Iraq had superiority in size, resources, and skills, it was losing street skirmishes to a fluid, unpredictable, and under-resourced opponent.

To understand why the military command struggled, one needs to realize the role that traditional management practices had in shaping how organizations function. A brief lesson on management theory starts with Adam Smith and his “Wealth of Nations” (1776), which introduced division of labor through specialized tasks for individuals to perform. According to Smith, it was only necessary for the owner (or foreman) to understand how all the pieces came together. Fast forward to the early 20th century when the “Father of Scientific Management,” Frederick Winslow Taylor, came up with “the one best way” to perform tasks based on detailed procedures that took on rigid and inflexible standards. This type of top-down hierarchy of command and control structure with specialized functions, division of labor, organizational stovepipes, and information silos is what had been taught at military schools and practiced during campaigns, according to McChrystal. Mainstream business had also adopted this approach in what was believed to be the best, most efficient way to organize and direct operations.

One major problem with this top-down approach is that no one leader can comprehend all the moving parts of a large enterprise, to keep up with the fast pace of change and ongoing threats and opportunities. A sobering example of organizational paralysis is given at the expense of General Motors. Recall how GM took close to 10 years to approve a two dollar part to fix the faulty ignition switch for its Chevrolet Cobalt car model. During this time the “relatively easy-to-fix ignition issue passed through an astonishing number of committees without ever being addressed,” as cited in McChrystal’s book. We see how a rigid and vertical organizational design can constrain the organization from functioning effectively. In this case with GM, mid-level managers and engineers were apparently not able to pull together the required stakeholders across verticals to promptly fix the switch. The consequences that followed involved 104 lost lives, a US$ 900 million fine, and a PR disaster for GM. Though no one at GM went to jail, 15 employees were dismissed, including at least five lawyers and the engineer who designed the switch. It seemed as if GM’s executive leadership was unaware of the crisis for several years; leadership had not empowered its teams to work across the organization to own and promptly resolve problems like the faulty ignition switch. Instead, the primary emphasis was on cost efficiency.

Six thousand miles away in Iraq, a rapidly changing and complex adversary was creating a far more serious crisis for another large organization—the U.S. Joint Special Operations Command— where the “one best way” approach imbedded into a highly-efficient and specialized military structure was proving to be ineffective. A more adaptive and resourceful adversary was able to exploit the predictable nature of JSOC actions. Soon after taking command, McChrystal conducted daily briefings among wide circles of participants. He shared classified information so that others were aware and could offer insight to complex situations. More minds from different perspectives across various organizations helped understand an otherwise complex situation in Iraq. While McChrystal was ultimately accountable for the decisions made, his overriding objective was to defeat the adversary by fully leveraging the collective abilities of his assets. This involved a network of interdependent teams across multiple organizations (e.g., State Department, CIA, and other military services) to act in a coordinated fashion to do the right things to win. Key elements to the team-of-teams approach included:

  • Shared Consciousness: Enlarging the “tent” to include ALL stakeholders needed to achieve a goal. McChrystal grew his daily Operations and Intelligence (O&I) briefings to close to 7,000 participants across multiple organizations worldwide, including the various U.S. armed services, State Department, CIA, and allied forces. This act fostered a culture of togetherness, trust, and shared consciousness. It created a common mindset among all those that participated in the O&I briefings; they shared a connection in being part of the overall solution.
  • Empowered Execution: Pushing decision making down and out to those trained to deal with dynamic issues that required timely action. Trust was bestowed onto teams with direction to do the right thing. McChrystal claimed that the quality of decisions increased when authority was pushed down to front line staff (e.g., Infantry, Navy Seals, & Rangers) when faced with timely matters as compared to a centralized approach with formal approvals. His highly trained teams knew why action was needed, who needed to be involved, what to do, how to do it, and when to begin.
  • Speed: Removing the “command and control” road blocks to achieve swift responses under tight time conditions. Whereas all eyes were on the operation, McChrystal was hands off when it came to teams doing what they were trained to do. By decentralizing the power to execute, team leaders had the authority to coordinate and take swift action to achieve closure. What McChrystal discovered was that a “70% solution” now was better than a “90% solution” tomorrow when dealing real-time issues, while realizing that leaders never had enough information to support a perfect solution. This is what the economist Herbert Simon refers to as “satisficing,” when the decision maker is bound by limits that prevent perfect decisions yet has “good enough” information to support action.
  • Interdependence: To enable cross functionality, McChrystal implemented a strategy where individuals with unique skills were reassigned to other teams, including those outside of his purview (e.g., Embassy posts). This type of fusion strengthened the bond across a wide network of organizations, fostered greater trust and cooperation, and enabled more “we” in shared pursuits. Teams with highly specialized skills had to be defined and aligned to established goals. They needed to mix with other specialized teams to provide an overall tactical solution. This required an environment where individuals could ask for and receive help without repercussions.

These bulleted elements came together to form a team-of-teams approach that embodied trust and common purpose among those involved in JSOC’s mission in Iraq. What McChrystal did so well in the book is describe his rationale to adjust strategy to make it real and more effective in dealing with adversarial threats. In doing so, he explained why it was necessary to restructure organizations, share information among many, break down hierarchical walls, and create a team-of-teams approach. These were not just empty slogans:

Almost everything we did ran against the grain of military tradition and general organizational practice. We abandoned many of the precepts that had helped establish our efficacy in the twentieth century, because the twenty-first century is a different game with different rules[su_spacer]

     —General McChrystal

McChrystal and his team of teams had to unlearn a great deal of what they thought they knew about how war worked and what it took to defeat the adversary. The “one best way” approach used in conventional settings proved ineffective in complex situations. One measure of how well McChrystal’s strategy worked is by the number of raids per month while fighting in Baghdad. This number went from 10 to 18 raids per month in 2004 to approximately 300 raids per month in 2006. Much of this improvement was due to the JSOC adopting a team-of-teams strategy, according to McChrystal.

Here is the key question for business leaders: What can be learned from what McChrystal did in the field of battle that required a new leadership strategy, one that transformed the organization to an effective, more adaptive operation from its traditional focus on efficiency? How does this approach apply to your organizational structure and its ability to quickly adapt and do the right thing? One can argue that what McChrystal encountered in Iraq is analogous to a new start-up with disruptive ideas taking on a large competitor too slow and cumbersome to react to threats. Think back to when Google was a small company that took on the industry giant Microsoft. Though it took several years to do so, Microsoft had reorganized and aligned its strategies to a new vision (i.e., cloud and mobility). While a new start-up is clearly not a terrorist threat, at an abstract level, this is about being able to quickly adapt to emerging situations while using trust and common purpose to energize the organization, to empower teams of trained staff to do the right things in a timely manner.

One can argue that what McChrystal experienced in Iraq had more in common with a Fortune 500 company trying to fight off a swarm of start-ups than the more conventional war paradigm with calculated moves and responses. It reasons that leadership sometimes puts too much emphasis on the “one best way” approach at the expense of the bigger prize by putting efficiency over effectiveness when building organizations. Put differently, what distinguishes success from mediocracy, or worse, failure, is a strategy that is closer to Stanley McChrystal than Frederick Taylor’s belief in how organizational capabilities and assets get fully utilized. Leadership needs to enlighten the organization with a shared consciousness on what needs to be done and the means to do so through smart strategy. As McChrystal demonstrated, strategy is dynamic, fast, and real … it’s a constant act of motion. We cannot lose site of the end game when executing strategy.

While this article purposely avoids international politics, its goal is to apply the lessons learned in Iraq specific to strategy as a basis to help large organizations become more effective in dealing with complex situations. In business settings, complexity can increase due to competitive threats, new technologies, and shifting customer trends. Adopting a team-of-teams approach to deal with complexities can prove more effective as compared to a traditional command-and-control style. For instance, opportunities and threats to an organization could be acted in a timely manner if a team of researchers could monitor the market and interpret findings with actionable recommendations. Taking this further, spinning up an innovation team and involving the organization through “shared consciousness,” as McChrystal did in Iraq, could allow the organization to act on good ideas from which to create new products as a competitive advantage. As a catalyst to change, lessons from this book may best be suited for organizations burdened with ineffective strategies, where opportunities and threats go largely unnoticed or run against a culture tied down with outdated ways of doing business. Many of these legacy organizations are unable to motivate employees and leverage integrated teams to do the right things in a timely manner.

Today’s competitive environment is obviously more complex, fast moving than when Adam Smith made pins and Frederick Taylor produced steel in the 18th and early 20th century, respectively. Leadership needs to think differently in how it disseminates information beyond a need-to-know mindset; how to foster more of a common purpose and buy in among its staff than currently done. Clearly this book would provoke some interesting and overdue questions for the executive suite.

The Greek general and philosopher Thucydides said it best when drawing parallels between scholars and warriors:

The Nation that makes a great distinction between its scholars and its warriors will have its thinking done by cowards and its fighting done by fools [su_spacer]

        –Thucydides

One can argue that there is no great distinction between scholars and warriors when it came to the JSOC executing an effective strategy in Iraq. Much can be learned from what General McChrystal captured in his “Team of Teams” book, for it took swift action among a highly trustworthy and capable network of teams to take on a formidable adversary.

Listed below are several of the General’s quotations as an added inducement to read his book. As a teaser, they capture the essence of his message on leadership strategy.

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Shared Consciousness
  • “As the world grows faster and more interdependent, we need to figure out ways to scale the fluidity of teams across entire organizations: groups with thousands of members that span continents, like our Task Force. But this is easier said than done.”
  • “In place of maps, whiteboards began to appear in our headquarters. Soon they were everywhere. Standing around them, markers in hand, we thought out loud, diagramming what we knew, what we suspected, and what we did not know. We covered the bright white surfaces with multicolored words and drawings, erased, and then covered again. We did not draw static geographic features; we drew mutable relationships—the connections between things rather than the things themselves.”
  • “The two major determinants of idea flow, Pentland has found, are “engagement” within a small group like a team, a department, or a neighborhood, and “exploration”—frequent contact with other units. In other words: a team of teams.”
  • “We dubbed this goal—this state of emergent, adaptive organizational intelligence—shared consciousness, and it became the cornerstone of our transformation.”
  • “Efficiency, once the sole icon on the hill, must make room for adaptability in structures, processes, and mind-sets that is often uncomfortable.”
Empowered Execution
  • “We nurtured holistic awareness and tried to give everyone a stake in the fight. When we stopped holding them back—when we gave them the order simply to place their ship alongside that of the enemy—they thrived.”
  • “The temptation to lead as a chess master, controlling each move of the organization, must give way to an approach as a gardener, enabling rather than directing. The leader acts as an “Eyes-On, Hands-Off” enabler who creates and maintains an ecosystem in which the organization operates.”
  • “Complex systems are fickle and volatile, presenting a broad range of possible outcomes; the type and sheer number of interactions prevent us from making accurate predictions.”
  • “Specifically, we restructured our force from the ground up on principles of extremely transparent information sharing (what we call “shared consciousness”) and decentralized decision-making authority (“empowered execution”).”
  • “If I told you that you weren’t going home until we win—what would you do differently?”
  • “Although we intuitively know the world has changed, most leaders reflect a model and leader development process that are sorely out of date. We often demand unrealistic levels of knowledge in leaders and force them into ineffective attempts to micromanage.”
Team Interdependence
  • “Great teams consist of individuals who have learned to trust each other. Over time, they have discovered each other’s strengths and weaknesses, enabling them to play as a coordinated whole” — Harvard Business School teams expert Amy Edmondson
  • “Purpose affirms trust, trust affirms purpose, and together they forge individuals into a working
Speed
  • “The heroic “hands-on” leader whose personal competence and force of will dominated battlefields and boardrooms for generations has been overwhelmed by accelerating speed, swelling complexity, and interdependence. Even the most successful of today’s heroic leaders appear uneasy in the saddle, all too aware that their ability to understand and control is a chimera.”
  • “In battle, refusal or hesitation to follow orders can spell disaster. But at the same time, the rigid hierarchy and absolute power of officers slows down execution and stifles rapid adaptation by the soldiers closest to the fight.”[/message][su_spacer]

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Dr. Robert Bornhofen
Dr. Robert Bornhofenhttp://bornhofen.weebly.com/
Dr. Robert Bornhofen is a scholar-practitioner with over 25 years of experience. As a scholar, he currently teaches strategy at Cornell University and the University of Maryland Global Campus. As a practitioner, his corporate career includes a variety of leadership roles at Fortune 500 companies IBM, Delta Air Lines, & Citibank. Dr. Bornhofen earned his Doctorate degree at the University of Maryland, a Master of Science degree from Colorado State University, and a Bachelor of Science degree from the University of Minnesota. As a conference speaker, Dr. Bornhofen presents at various industry forums. His current focus is on innovation within the water utility sector. As a researcher and author, Dr. Bornhofen published over 20 papers on topics related to innovation strategy. Passionate about change, Dr. Bornhofen embraces the creative spirit that goes into problem-solving, where smart people come together to transform great ideas into extraordinary outcomes. His articles reflect this passion and desire for continuous learning.

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