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January 26 - February 2, 2022
Adaptability, not efficiency, must become our central competency.
Adam Nicolson’s Seize the Fire: Heroism, Duty, and the Battle of Trafalgar,
Nelson crafted an organizational culture that rewarded individual initiative and critical thinking, as opposed to simple execution of commands.
He argued that national economies, unlike industrial production, could never be transformed into mechanical systems with reductionist solutions: their behavior results from the decision making of millions of people, and all these decisions influence one another, making it impossible to forecast how markets will move—as in a game of chess, there are just too many possibilities for a prescriptive instruction card.
The average forecasting error in the U.S. analyst community between 2001 and 2006 was 47 percent over twelve months and 93 percent over twenty-four months. As writer and investor James Montier puts it, “The evidence on the folly of forecasting is overwhelming . . . frankly the three blind mice have more credibility than any macro-forecaster at seeing what is coming.”
In November 2007, economists in the Survey of Professional Forecasters—examining some forty-five thousand economic-data series—foresaw less than a one-in-five-hundred chance of an economic meltdown as severe as the one that would begin one month later.
In a resilience paradigm, managers accept the reality that they will inevitably confront unpredicted threats; rather than erecting strong, specialized defenses, they create systems that aim to roll with the punches, or even benefit from them. Resilient systems are those that can encounter unforeseen threats and, when necessary, put themselves back together again.
“Get a swim buddy”
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.”
There is no med school course on removing a human face from a dog’s stomach,
The connectivity of trust and purpose imbues teams with an ability to solve problems that could never be foreseen by a single manager—their solutions often emerge as the bottom-up result of interactions, rather than from top-down orders.
As on Flight 173, everybody was doing his or her job, but nobody was checking the fuel gauge.
The NSA, for instance, initially refused to provide us with raw signal intercepts, insisting that they had to process their intelligence and send us summaries, often a process of several days. They weren’t being intentionally difficult; their internal doctrine held that only they could effectively interpret their collections.
In a response to rising tactical complexity, many organizations in many domains have replaced small commands with teams. But the vast majority of these organizations have to be much larger than a single team; they consist of multiple teams, and these teams are wired together just like a traditional command.
“The squad is the point at which everyone else sucks. That other squadron sucks, the other SEAL teams suck, and our Army counterparts definitely suck.” Of course, every other squad thought the same thing.
The goal becomes to accomplish missions better than the team that bunks on the other side of the base, rather than to win the war.
“Brook’s Law”: the adage that adding staff to speed up a behind-schedule project “has no better chance of working . . . than would a scheme to produce a baby quickly by assigning nine women to be pregnant for one month each . . . adding manpower to a late software project makes it later.”
But on a team of teams, every individual does not have to have a relationship with every other individual; instead, the relationships between the constituent teams need to resemble those between individuals on a given team: we needed the SEALs to trust Army Special Forces, and for them to trust the CIA, and for them all to be bound by a sense of common purpose: winning the war, rather than outperforming the other unit. And that could be effectively accomplished through representation.
We didn’t need every member of the Task Force to know everyone else; we just needed everyone to know someone on every team, so that when they thought about, or had to work with, the unit that bunked next door or their intelligence counterparts in D.C., they envisioned a friendly face rather than a competitive rival.
Our players could only see the ball once it entered their immediate territory, by which time it would likely be too late to react.
The appreciation for serendipitous encounters embodied by Bloomberg’s bullpen and Silicon Valley’s open plans is a way of saying, “We don’t know what connections and conversations will prove valuable.”
The structure and symbolism of the Task Force’s new nonhierarchical space was critical, but our organization would not be reborn by just moving furniture around. We needed to renovate our organizational culture as well.
my command team and I added people to the “cc” line of e-mails whenever it seemed that even the second- or third-order consequence of the operation discussed might impact them. We had to acknowledge that we often could not predict who would and would not benefit from access to certain information.
Incentivizing collaboration, however, is easier said than done. For starters, both prisoners must be shown the entire decision-making system, not just their own choices. If shown only his own fate, each prisoner will choose to betray the other. It is only when they are shown the decision-making stakes of the accomplice that they understand the consequences.
The stronger the ties between our teams—as with the prisoners—the higher the likelihood we would achieve the level of cooperation we needed.
One of our most controversial moves was our embedding program, an exchange system we began in late 2003 in which we would take an individual from one team—say, an Army Special Forces operator—and assign him to a different part of our force for six months—a team of SEALs, for example, or a group of analysts. Our hope was that, by allowing our operators to see how the war looked from inside other groups, and by building personal relationships, we could build between teams some of the fluency that traditionally exists within teams.
Although it was a “forced” initiative, once the mandate was in place, elite units were naturally incentivized to send their best operators and leaders. These individuals would be representing their organization, so unit pride would drive them to select the best examples from an already highly selective sample set.
When asking for LNO nominations to fill critical positions, we used two criteria: (1) if it doesn’t pain you to give the person up, pick someone else; (2) if it’s not someone whose voice you’ll recognize when they call you at home at 2:00 a.m., pick someone else.
So we armed our LNOs with a constant stream of intelligence, and empowered them to share it as they felt appropriate.
Before, these decisions took place behind closed doors. Now, the resourcing conversations sometimes occurred right in front of them during an O&I.
With that awareness came a faith that when theirs was the priority mission, they would get what they needed when they needed it.
“seeing the system” is essentially a macro version of the “purpose” that gives our operators the context and commitment to persevere in volatile situations, and the interteam bonds we used to beat the Prisoner’s Dilemma are akin to the trust between team members.
At a Chicago-area IT consultancy, he collected a billion measurements in one month—1,900 hours of data—and found that engagement was the central predictor of productivity, exceeding individual intelligence, personality, and skill.
At a German bank, Pentland examined five teams in the company’s marketing division for one month, collecting 2,200 hours of data and sequencing 880 e-mails. The teams that had the highest levels of internal engagement and external exploration had much higher levels of creative output—something that was reinforced by an internal study of his labs at MIT.
Together, these two elements completed the establishment of shared consciousness, something that was vital to our success.
Use good judgment in all situations.
Eventually a rule of thumb emerged: “If something supports our effort, as long as it is not immoral or illegal,” you could do it. Soon, I found that the question I most often asked my force was “What do you need?” We decentralized until it made us uncomfortable, and it was right there—on the brink of instability—that we found our sweet spot.
More important, and more surprising, we found that, even as speed increased and we pushed authority further down, the quality of decisions actually went up.
We had decentralized on the belief that the 70 percent solution today would be better than the 90 percent solution tomorrow. But we found our estimates were backward—we were getting the 90 percent solution today instead of the 70 percent solution tomorrow. This took us by surprise and upended a lot of conventional assumptions about the superior wisdom of those at the top. Understanding the underlying causes of this unexpected outcome proved essential to sustaining and enhancing it.
Though I never caught anyone, I suspect that eye rolling was common when I referred time and again to the Visible Man during the Task Force video teleconferences. I told subordinates that if they provided me with sufficient, clear information about their operations, I would be content to watch from a distance. If they did not, I would describe in graphic terms the “exploratory surgery” necessary to gain the situational awareness I needed. They were free to make all the decisions they wanted—as long as they provided the visibility that, under shared consciousness, had become the standard.
“Eyes On—Hands Off.”
the senior leader was no longer that of controlling puppet master, but rather that of an empathetic crafter of culture.
We felt responsible, and harbored a corresponding need to be in control, but as we were learning, we actually needed to let go.
If adequately informed, I expected myself to have the right answers and deliver them to my force with assurance. Failure to do that would reflect weakness and invite doubts about my relevance. I felt intense pressure to fulfill the role of chess master for which I had spent a lifetime preparing.
Experience had taught me that nothing was heard until it had been said several times. Only when I heard my own words echoed or paraphrased back to me by subordinates as essential “truths” did I know they had been fully received.
If I looked bored or was seen sending e-mails or talking, I signaled lack of interest. If I appeared irritated or angry, notes such as “What’s bothering the boss?” would flash across the chat rooms that functioned in parallel to the video teleconference.
“Thank you” became my most important phrase, interest and enthusiasm my most powerful behaviors.
I adopted a practice I called “thinking out loud,” in which I would summarize what I’d heard, describe how I processed the information, and outline my first thoughts on what we should consider doing about it. It allowed the entire command to follow (and correct where appropriate) my logic trail, and to understand how I was thinking.
I found, however, that asking seemingly stupid questions or admitting openly “I don’t know” was accepted, even appreciated. Asking for opinions and advice showed respect.
Gardeners plant and harvest, but more than anything, they tend. Plants are watered, beds are fertilized, and weeds are removed. Long days are spent walking humid pathways or on sore knees examining fragile stalks. Regular visits by good gardeners are not pro forma gestures of concern—they leave the crop stronger. So it is with leaders.