Navigating Leadership Challenges: General McChrystal on Trust, Teams, and Transformation

Dan Farkas: General McChrystal, you asked me to call you Stan, so I’ll go ahead with Stan. I just wanted to say what an honor to have you on our podcast, Aspire to Inspire. I’ll proceed with the first question, which is that in your career, which has spanned over three decades in the military and now in leadership consulting, could you share a bit about your journey and what led you to transition from military service to founding the McChrystal Group?

General McChrystal: Dan, thanks very much for having me and congratulations on the direction of these podcasts. I think they’re going to be very valuable to people and I look forward to the conversation.

To go to your question, I spent 34 years as an army officer, but I’ve now spent 14 years in business. I founded a business right after we left service. So I’ve been a business leader for 14 years. The way I think of myself now is I think of myself as a leader who was in the military, not as a soldier who now is trying to act like a business person, because I think it’s important to identify to ourselves who we are and what we’re trying to do because I think that helps define how your leadership style is going to be. I think it has for me and there’s been quite a transition. 

To briefly describe my military career, I went into West Point, our military academy at age 17. It was the first thing I did. I came out at 21 and became a young army officer. I had normal developmental experiences as a platoon leader and a company commander and a battalion commander and so on where I was taught leadership and management as well as the skills of soldiering. And I found that my own leadership style evolved during that period. Now, I don’t think it evolved completely differently from every other soldier, but I think it was still unique based on my experiences. Early in my career, I was very focused on being technically and tactically competent. I think most of us are when we start work. Then I learned that I really got the job done by getting other people to be technically and tactically competent in the organization of function and I became a micromanager. I was able — up through the time I was a company commander, I literally could control every chess piece in my organization through force of will. Many of us have that experience.

Then I hit a point in my career where that didn’t work anymore because the span of control was too great. And I was lucky enough to work with people at that point who helped me make a transition to where I became much more decentralized. I became much more based upon influencing people and trusting people. 

When I got into the civilian world, I thought it was going to be completely different because I thought that they don’t wear uniforms, they don’t have the same values. In fact, I thought people were godless, greedy, business types. What I found is they aren’t that way at all. They’re remarkably the same. The military and the civilian world, except the way we look and the words we use, are very similar. 

But the mistake I made when I came out and started McChrystal Group was I thought that some of what I’d learned in the military was not appropriate. Really high standards, demanding standards for people in an organization, very clearly defined. We didn’t implement those in my company when we started because I thought civilians wouldn’t like that. We had to go back. As the company evolved, we found, no, no, we needed to do that. And it’s harder to do it later, but we did that. But then the other part we found was communicating with people, really the core of what we’re talking about here is very similar. Soldiers need to know what they’re doing. They need to know why they’re doing it. They need to know what to do when the plan that you gave them doesn’t work because it never works. It always works in the briefing and it never works on the battlefield.

And so what you learn is you have to be able to explain to them, “This is the way I want it to go, but when this goes badly, this is what I want you to accomplish and you’re going to have to do it because I won’t be standing next to you to answer your question at that point.” That’s the same in the civilian world. It unlocks the motivation and the innovation and all of the initiative, all the things we want from bright young people. But we as leaders — it took me a while to realize the same basics applied in the civilian world that they did in the military.

Dan Farkas: That’s amazing. Would you be actually able to find a memorable experience from your military career which actually shaped that principle that you were just talking about?

General McChrystal: Yes, it’s interesting. It was fairly late in my career. I had a number of times, but this was the most impactful. I had taken command of our counter-terrorist forces, which are the most elite counter-terrorist forces that the United States has. They’re an extraordinary organization called Joint Special Operations Command. If you think of the killing of Osama bin Laden or Abu Musab al-Zarqawi, the rescue of Captain Phillips off Somalia, that’s all JSOC. So I take command of that organization and what I find is we are extraordinarily proficient at what we do, the actual nuts and bolts of raids and hostage rescue. The people are well-trained. The small teams are cohesive. We are remarkably motivated as individuals, professional, elite. 

But the reality is, we have two problems. We are so elite that we don’t want to work with anybody else. We’re arrogant. And inside our organization, which is really a community of organizations, SEALs and Delta Force and Rangers, inside that ecosystem that I commanded, people didn’t want to work together. They didn’t even want to talk to each other. Then the wider community that we had to work with, our Department of State, our Central Intelligence Agency, our Federal Bureau of Investigation, nobody wanted to work with anybody outside of JSOC either. And so you have all this capability, but it’s less than the sum of its parts because it won’t work as a whole. And there’s no bad people involved. As I used to tell people, there’s no evil people or stupid people. It’s well-motivated. But what we’ve done is we are holding ourselves back. In fact, in the war in Iraq, that became a potentially fatal mistake and we had to change that. 

So the most impactful experience of my career, I commanded that for five years, it was wrestling with that organization and the wider community to try to get us into better alignment. We made a lot of success doing that. I learned some hard lessons of what doesn’t work, but I also learned that if you stay at it can work. And the outcome of that is so positive that it’s worth the effort.

Dan Farkas: That’s amazing. I actually remember there was a chapter in your book, the Team of Teams, where you were describing bringing the best from other teams, merging them across different teams so that they could learn from each other and get to know each other, that on the other side, there was not an enemy. There was someone we should be working with.

General McChrystal: It’s easy to say. You can put it on a whiteboard and it’s remarkably difficult to do because it takes the will of senior leaders, but it takes more than that. It takes the buy-in of people across the organization because it’s really a group effort to culturally change. That’s the core of it. 

Dan Farkas: I think it’s also human to a side. We trust people we know. On the other end, you’ve got people you don’t know, so it’s hard to build that trust easily. It’s a fantastic experience and a great solution as well, by the way.

You mentioned communications. At Staffbase, we aim to help organizations achieve their business goals and objectives through the power of communications. Communication is very important to us. It’s a core of our business. Would you be able to share your experience with us with respect to communications, how important it was for you and how you would apply those learnings to the concept of modern management?

General McChrystal: Absolutely, and I think you are focused on the most important thing. But I view communications very broadly, and I’ll describe it. When I was a captain, I left one military unit, and I joined the US Army Rangers. The Rangers are an elite light infantry unit. The difference between the Rangers, I expected everybody would be taller and stronger and smarter because they were an elite force than in other forces. And that wasn’t the case. The quality of people was the same. The difference was the culture of the organization. There was an expectation on the part of every Ranger that they would be better than they would otherwise be in another organization. And there was an expectation on the part of the organization that they would hold each other to account.

What happened is you communicate through many, many subtle ways how you wear your uniforms, between how you address people, between how you stand when a junior person talks to a senior person, the level of discipline, the level of respect, the level of commitment.

Those are all things that we wouldn’t say are direct communication, but they are indirect communication because if they see me wear my uniform correctly and stand proudly and with discipline, I’m sending a message to every Ranger that sees me, and actually everybody outside the Rangers, what the standard is. 

And so the most powerful communication, in my experience, is example. Leaders have to lead. Leaders have to embody the standards and the values that we espouse because if a leader says one thing and then people know them to live another, we call it a say-do gap, a gap between what you say and what you do. As soon as you have that gap, you get cynicism because people down in the organization — so that’s the first kind of communication. Some organizations do it brilliantly, and some do it very poorly, and they don’t even understand that they do. They don’t understand that they are creating this level of dissatisfaction among junior people because they think they’re being part of a lie. It’s just not true. 

The next part of communication is that we used to say the rule of threes in the Army, and that means until you tell the troops something three times, it doesn’t count. You have to tell the same troops three times. I don’t think it’s true. I think it’s the rule of 300. You have to say it 300 times. 

When I was commanding the Ranger Regiment after a number of years working my way up, my sergeant major and I, the regimental sergeant major and I were very close friends, and we developed what we call the Big Four. Those were the four priorities of the organization that we wanted people to focus on. When we went and talked to Rangers around the regiment, almost all we ever talked about was the Big Four. Now, there were many other things that they had to think about and do, and we wanted leaders to do, but we didn’t want people to hear us talking about those other things. We would talk to leaders and say address these problems. When they saw us, we wanted them to immediately go, “Oh-oh, we’re going to hear the Big Four again.” Pretty soon they started saying it back to you, and it became the core of the regiment. They became just almost like they were brought down on high on tablets and put in front of people and say the Big Four have always been and always will be. That’s exactly what we wanted because we knew that would form something that really guided where the direction went. That kind of communication has got to be intentional. It’s got to be forceful and constant.

And then the other part of communication is it has to be two-way, and it has to be perceived to be two-way. One of the things I learned as a leader was: If you go down as a senior leader and you ask a young soldier or young employee, “How’s it going?” when they start to answer, you immediately turn your head and start looking at something else. They know that that was just a gesture. You didn’t really want the answer. If you ask them their opinion, you have to look at them, you have to write it down if they give you a substantive recommendation, and you have to follow up on it. If you think about it, most senior leaders can have somebody with them that writes it down and helps you follow up because nothing’s more powerful than going back to a junior person and say “You asked this question or made this recommendation, and we either can or can’t do it but we didn’t ignore what you said.” 

I think that the communications part, that’s what senior leaders do. The reality is we think that senior leaders set strategy and make decisions. What I found is you’ve got good staffs to develop the strategy for your approval, and most decisions should be made far below you. What senior leaders do is communicate, and they ensure that communication is occurring.

Dan Farkas: I 100% agree. Stan, would you be able to draw any parallel between or maybe even actually differences between your experience from the military to your business experience? What I believe our audience might be asking is whether in military, your audience listens because they have to perhaps. 

In business, we’re dealing with a lot of millennials, and we’re dealing with a slightly different generation now perhaps that might not necessarily feel like they have to listen. They want to be inspired. They want to be driven. Is there any difference between the two communications that you’ve experienced?

General McChrystal: It’s a great question, Dan. There’s much less difference than you would think. People think that soldiers say yes, sir, no, sir, yes, sergeant, no, sergeant, and have to do what you order them. On a parade ground, that is true because on a parade ground, they are scared of the sergeant. On the battlefield, they’re scared of the enemy. You have to convince soldiers to do what you want them to do, not order them.

In fact, in the years of combat that I had, I don’t remember ever giving anybody an order. I remember asking them to do things. Now, they may say, “Well, okay, if the general asked me to do something, that is, in fact, an order.” You could say that but you really want to get them to accept that the order I’m giving them is rational, it’s the best thing I could come up with, that I’ve listened to other inputs. And If they think it just doesn’t make sense, they can come back and go, “This doesn’t make sense.” You’re really convincing them. In the civilian world, you do sometimes, particularly with young people today, because I’ll be honest, they are more sensitive than we were and so you’ve got to couch things. You’ve got to express things sometimes a little differently. You’ve got to be a little less forceful. 

What we do in my organization now is I don’t give many orders, but I’m very transparent. I will show them the financial status of the company in detail. And I’ll say, “Okay, I think we need to do this. The numbers tell me we need to do this. If you think I’m wrong, somebody read the numbers differently.” That works pretty well. And you do — as I say, I think we’re a little too sensitive right now, to be honest.

Dan Farkas: It might be.

General McChrystal: But I think it’s still very, very similar.

Dan Farkas: In fact, I’m going to touch on another book that you wrote, Leaders: Myth and Reality. In that book, you’ve challenged conventional thinking about leadership. You’ve examined a number of historical personas. What would be the three actionable steps that C-level leaders can take today to improve their leadership and risk management practices in these challenging times?

General McChrystal: If I could actually get that right, I’d be a zillionaire because I could sell that answer. But I’ll tell you what I think, Dan.

When I studied leadership to write that book, because I didn’t write it because I figured leadership out. I wrote it because what I had been taught about leadership was not what my experience told me actually worked. And it was a little different. What we are taught about leadership is the great woman or man theory. That is if you find the right leader, you put him on a pedestal, you pay him enough money. Your corporation is going to be wildly successful or you’re going to win the war or your country is going to be effective politically. And we hold on to that. And so we’re in this constant search for genius and perfection.

What I found is leaders do matter. They are hugely important, but they matter differently in almost every situation. When you say, what are the attributes of a great leader? I can list some things that I value like integrity and courage and resolve. But the reality is it’s so contextual. The right leader, for the moment and for the people that they’re working with, the followers that they have, is so different. What we find, if you study this in corporate leadership, when they take a successful CEO out of one company, and they go move them in another, their success rate is lower than when you promote somebody from inside the company. 

You say, “Now, wait a minute, I’m getting a person. They’re already a proven great leader.” No, they’re a proven great leader there. And they’re also at a different phase of their life. It’s an intersection, leadership is this intersection between leader follower in the context of the moment, that’s almost like a chemical reaction. Those things come together. If you’re lucky enough, and if people are focused, and it gets right, you get this great outcome. If you don’t, if any one of those is enough different, you don’t, which is one of the reasons why I have a problem with when nowadays, when we want to look at success of a corporation, and we want to say it is that CEO, so therefore, we should give them $500 million because it’s all them, they may have been a factor. But the reality is I’m not convinced in most cases, that it’s not a much broader set of contributing factors to include the team around them.

I think companies and organizations should look first at their culture, and all of those factors, and then they should try to find and develop the right leaders to fit in for that particular set of circumstances.

Dan Farkas: I love that. I have to say this is what I found extremely valuable in the book, where you describe certain historical personalities and leaders from different perspectives, from the perspective they’re known for, where they’ve been successful, but also show the other sides of the leaders that we might not be talking about, which are not have been always as positive as you would like them to be.

It leads me to a thought, whether you would agree that a lot of the leadership has to do with what the person might stand for, what we believe they are, that inspires people to do something like that. They might not be always 100% exact to that. In fact, in the Sapiens book by Yuval Harari, he talked about humanity differentiating itself because of the stories that we can tell each other. Sometimes we perhaps imagine a little bit about certain people, and we follow that example. That makes us perhaps better performers or better leaders as well. Would you believe that maybe the aura around the leader that might not always be 100% accurate, perhaps also inspires others to lead in a certain way, and maybe that alone is valuable?

General McChrystal: I think it is. I think of in the United States, George Washington is the penultimate leader because we really can’t find a lot of things bad about him. There are things about him that don’t match with current standards. But in most cases, if we go to Abraham Lincoln, he was not always honest in his political dealings. If we go to Franklin Roosevelt, same way, or we go to John F. Kennedy, he was a philanderer. Almost every leader that we want to raise up as a standard has some aspect of their character that can be found wanting. I think it was Frederick Douglass who said, and he was talking about the Scottish poet, Robert Browning, he goes, we have got to be able to separate the good in a person from the bad, and accept the good. If we just discard that person, we’ll throw out so much good.

I think that what we have to do is, and there are societies struggling with this right now. We are struggling with this idea that there’s a duality in everyone and the negative part of us does matter, but shouldn’t always define. We should be able to focus on those good things. Now, to go back to the beginning, here’s a problem, because when I look at a leader, and even if they are very successful financially, or politically, or militarily, if they are too flawed in their character, if they do things that cross a line with me, I have a difficult time with that. I can’t respect them, I can’t follow them. I’m making a personal judgment that — I think that’s important, to be honest. I think character is just dramatically important. But we can’t expect everybody to be perfect all the time, or have been perfect all the time.

Dan Farkas: Yes. I think you even described that situation with your relationship towards General Lee. I think you mentioned you had a picture in your study, and at some point, you learned more about his historic role and decided that it’s not the kind of a leader you would like to aspire to be as well. Is that correct?

General McChrystal: Robert E. Lee, I live right now about 75 feet from his childhood home. I went to Washington Lee High School. I went to the same college he did, West Point. I took the same oath he did, was slightly modified later. I lived in Lee Barracks at West Point. For the US military, Robert E. Lee was considered the penultimate idealistic ideal leader. He was courageous, he was effective, he was personally disciplined and all these things. We just ignored the fact that he also ran an insurrection against the United States. And in fact, as a general, he killed more American soldiers than any other general in history. Any foreign general never killed as many United States soldiers as Robert E. Lee did. That’s a huge tension. It took me until about 2017, before I took down a painting that my wife had given me of Robert E. Lee. I don’t think he’s evil now. I don’t. I think he was just wrong. He hit a point in his life where he got to make an incredibly important decision, and he got it wrong.

I think there are a lot of people in life who’ve gone back, we look at other movements in other countries where either a dictator or somebody and people decide to follow that person or become a part of that. And in the sweep of history, it looks wrong, but in the moment, it’s probably more understandable than it might be when we look from a distance.

Dan Farkas: That’s right. In fact, we could talk about leaders for a very long time. I’m going to shift a little bit from leaders to leadership. In your book, Team of Teams, you emphasize the importance of agile, decentralized decision making, which I think, as you mentioned earlier, is not as easy to be done. Easily said, perhaps difficult to do. How can leaders in corporate settings implement this approach effectively? Would you have an example where you have seen it done well?

General McChrystal: Yes, I would say first, when we talk about agile, decentralized leadership, the two are pretty close because you need to decentralize to get fast enough. The problem is, if you decentralize leadership across your organization, usually it’s not coordinated enough so you’re not all contributing to the same outcome, and it is often not informed by the real situation.

In the military, we call it a common operating picture. In the book, Team of Teams, we refer to it as shared consciousness. You go back to the blind men and the elephant, the story of the five blind men, and one sees the tail, one sees the trunk. They aren’t incorrect in their description. They are describing what they have touched. But none of them are correct about the elephant. Yet the problem is almost always the elephant. The challenge of this is not telling people at the lowest level to make decisions because you can do that and then go off to the golf course. The problem is they will all act on their narrow perspective with their narrow capabilities. The art is having everybody have this shared consciousness, this common understanding and operating towards a common goal with a unified strategy. Here’s this tension point.

Traditionally, armies, which wanted to have mass, they wanted to get their bulk of their forces to attack the enemy at a point of weakness altogether at the same moment, had to get people lined up shoulder to shoulder, had to have huge discipline because otherwise you couldn’t get everybody at the right spot at the right time. Of course, you give up tremendous amount of agility, you give up tremendous amount of initiative to achieve that. For years, that was the tradeoff. In fact, to a great degree, it still is the tradeoff.

What we are trying to do now is to leverage technology, to leverage training of junior leaders, so that you can connect people using this miracle of modern information technology to give them this constant awareness, have ability to constantly shape what they are doing and adjust it to what’s happening maybe hundreds of miles from where they are, and to make the relevantly correct decision. 

During the Apollo program, where the United States put the man on the moon in 1969, the guy they put in charge was a systems engineer. And what he did was he created — there were 80 universities. There were hundreds of thousands of people involved, all spread out geographically. He connected with a big radio link because every time you changed one part of this program, it affected every other part of the program. And there was no Internet. So they communicated constantly, so that if I added a pound of weight here, somebody else knew that’s an issue. I got to do that. It’s that discipline. 

This gets back to decentralized agility requires extraordinary discipline. People say, “Now, wait a minute, those two are in opposition.” They are not. You are disciplined to stay focused on the strategy, disciplined to follow the need to communicate to where they are. And this is where I think people sometimes get confused. 

There was an idea that came out a decade ago, holacracy. It basically says that everybody in the organization do what they think is best. To my mind, that’s just chaos.

Dan Farkas: I agree. How do you find the right balance between the two? You certainly want to give your people space where they can be creative and innovative and add to this agility. At the same time, you don’t want to create this chaos where everyone now decides that actually my day job is no longer what I want to do here. I want to go and do something entirely different. How do we find the balance so we can still inspire people to be fully vested into it, have their heart in it, in the same time they contribute to the common goal?

General McChrystal: It is a constant effort because the conditions change every single day. 

It’s like a sailing ship. You can’t leave the sails and the rudder the same way. It’s got to be constantly adjusted to sea state and all the different things with the wind and whatnot. You are sailing an organization now and it takes constant attention and everybody’s got to be adjusting things as they go.

HMS Victory, Admiral Nelson’s flagship, had 850 soldiers or sailors. They had to constantly be doing their job. All coordinated, but doing their job individually to get that thing right.

If you think of your organization that way, you can’t have an annual planning process in January, put out a plan, and then expect everybody to follow that because the conditions change. I think in the modern environment, you need to have a much more organic system, much more frequent adjustments to what you’re doing, constant communication. I also like to term it in terms of variables and constants. Certain things need to be constant. The training of your people needs to be. You have to have a level of competence. You have to have a level of values and culture that you have to be able to count on. What people are committed to, what they won’t do in terms of legal or moral and whatnot. You have a number of constants that are a foundation. Then the things above that are variables that must constantly be adjusted. But if you can’t count on that bedrock foundation, then you’ve got a real problem.

Dan Farkas: I remember in your book, Team of Teams, you were mentioning Admiral Nelson and after his death, The Battle of Trafalgar. You mentioned that the entire British fleet was consisting of captains who were the Admiral Nelson in the way they approached the battle. 

How do we achieve this in the modern management? How do we get to a point where, as you’re describing it, the approach, the methodology is so clear that, not just the top leader, but every leader across the organization is so clear on the way to go? Would you have any good recommendations for leaders out there?

General McChrystal: Yeah. A few facts first.

The French and Spanish fleet that Admiral Nelson defeated at The Battle of Trafalgar, the captains of those ships were competent, but they were typically upper class or lower nobility leaders. 

British captains had grown up at sea. Many of them had gone to sea at age 12 and had worked their way up as midshipmen through. They were masters of their craft in terms of technically and tactically competent. They were also middle class people. And that’s important because the way it worked was if you captured an enemy ship, the crew of the ship that captured it got the prize money with the largest part going to the captain and then down. That was the captain’s retirement account. They were incentivized to capture ships. They were trained through this. They’d grown up in it.

Now, after The Battle of Trafalgar, the number of seamen in Admiral Nelson’s fleet that were whipped, flogged for petty offenses stayed high. You say, “Now, wait a minute, they just had this great victory, a very loyal thing.” The point I make is the level of discipline that was accepted by the crews, they just accepted this way of life, was a constant. There was an absolute understanding that this is the way this ship’s going to operate and you will not violate that. At the captain level, he viewed them as the entrepreneurs of battle. What he sought to do was create a situation where those entrepreneurs, with the understanding that they had competent crews that they could count on, they could then go outside the norm and they could exercise initiative. And it gave an ability for the British Navy to thrive in the wild melee that The Battle of Trafalgar and some of the others turned into.

Dan Farkas: That’s amazing. We talk a lot about accountability and responsibility down to throughout the entire organization. Would you have any recommendations how to think about those? You did mention discipline. That a lot comes to it as well. Would you have any experience from your military career where you had to maybe impact or influence the way that accountability and responsibility all the way down to individual truth has been perceived?

General McChrystal: It’s something that we talk about and we confuse ourselves about a lot. What I mean is we typically say accountability and we want to hold people accountable for the outcome. If they don’t make enough money or they don’t have success in this particular project, they are accountable and therefore that’s going to affect them.

We need to be careful with that because the reason we have to be careful is no one will ever take risks if they are accountable entirely for outcomes because they will be incentivized to do what’s safe and get a limited outcome because the chances of a failure, the cost is pretty high.

You’ve got to explain to people, “Okay, what are you looking for?” If you are looking for people to put the right kind of effort, accept an appropriate amount of risk with the right due diligence and go at it, meaning that if they fail, but they have done things that were responsible and effective, you’re going to underwrite that, then you’ll get people to make those kinds of decisions and take those risks. If you don’t, then they will typically be very, very conservative. They’ll wait for you to tell them exactly what they do and whatnot.

I deal with a tremendous number of business leaders who complain that they want their subordinates to take more responsibility and make more decisions. But if you look back at the organization, how is failure greeted? Meaning when a person does that and fails, what happens? They may not be fired, but if they aren’t promoted or if they’re shunned or criticized, nobody else is going to want to take that chance. And so we build a culture of risk aversion. We don’t do it intentionally. We do it.

And the bigger the organization, the more this tends to come, because in a small startup, everybody’s freewheeling. You don’t have as much to lose because, you got to do big bets to survive and everyone knows that. When you get a big organization, it’s different and you start to be very careful and process starts to come in. We call it analysis paralysis, it comes around and people are very safe because they follow the formula, the process. If it fails, they go, “Look, I followed the process. Don’t hold me accountable.” We’ve got to be more flexible than that to do that.

Dan Farkas: Stan, how can I go around this? There are a few concepts that come to mind. I believe it’s Amy Edmondson’s, The Fearless Organization, which all of us want to build an organization where everyone feels empowered to make a decision, perhaps make a mistake, be innovative. If they fail, they move on. But then also, we don’t want to be in a place where people start taking risks, which are inappropriate or not sizable towards the size of their role, and then they impact many other teams around them.

Have you been able to work out in your leadership and organizations, how do we fine-tune the amount of risk we are willing to take all the way down to individual and any framework principles that you would teach them to do?

General McChrystal: We do, but I will start at the beginning to go back. This is very organic. You can’t do this and then set it out and lock it in concrete and expect it to do. It’s constantly adjusted, but here’s what we’ve learned to do, one is to look at what decisions people are responsible for. We typically start at the CEO level and they say, “What decisions do you make?” The CEO will typically say, “I approved the budget. I developed the strategy. I make key hires.” Then they’ll often add, “And I do anything else that’s very important.” And when they do that, I erase that from the board. I say, “No.” There are certain things that only you can and should do, and they should be literally about three.

Then there’s a responsibility you have for — those are decisions you make that you withhold for yourself. Every other decision in the organization is made below you. Then we go to the next level and we do the same thing. Then the next level. The idea is that any decision that’s not lifted up there high is automatically allowed to be made at a lower level. And people sometimes look at that and they lookand they go, “Wow, nobody made that. I can actually make that.” You go, “And we expect you to.” That’s the mechanical part of that.

Then the next part is the discussion of risk in the situation because in the military, you learned that people couldn’t and wouldn’t take battlefield risks if they didn’t understand what was happening wider in the battle because it may not make sense. And so giving them that common operating picture. That’s why I think in organizations now, the key is don’t let people get tunnel vision in their part of it.

There’s the famous story of the insurance company, and I think it’s true. They sold a number of policies, thousands of policies, and they lost money on every policy. And so the CEO went to the guy in charge of selling them and goes, “Whoa, did you know this?” And the guy goes, “Yeah.” And he goes, “Why’d you do it?” He goes, “You pay me to sell policies.” Okay? And so this is where it’s a constant communication between different levels and not just at the very top of the organization, it’s got to be across and diagonally. That information that creates a shared consciousness has got to breathe through it because otherwise all of your decisions are made in a vacuum. You just don’t know enough.

The problem nowadays is you can have so many meetings to try to align stuff, to kill yourself. You’ve got to develop newer ways to collaborate quickly on very specific things and keep moving.

Dan Farkas: That’s amazing. I think we go back to our communications piece we were talking about earlier about clarity, explaining the wide, the bigger picture so that people can tie their individual roles into that. Is that correct?

General McChrystal: Yes, exactly right. The other thing I’d come back to is there’s a leadership part of this that in really good organizations is different from what you can write on a piece of paper. There’s a connection between senior leaders and junior people that involves loyalty, involves respect. 

A lot of times in the military, a senior leader would tell me to do something. I would want to accomplish it because they asked me to do it. It wasn’t because I want to get promoted or something, but because I felt tremendous loyalty to them. I didn’t want to let them down. And that’s really true at all levels in an organization. That’s a responsibility of leaders to create that dynamic. It means you have to be loyal down to them. I am going to take care of you, but when I need you to do something, I’m going to ask you not to ask a lot of questions, I’m going to ask you to do it. And that’s an almost magical connection that you can create. It’s not limited to the military. It could be created anywhere, bonds between people and up and down, but it takes effort and it takes values. I would not do that for a senior leader I didn’t respect.

Dan Farkas: Yes, a hundred percent. In fact, when I asked you about recommendations you would give to modern leaders, you did mention technology as well. I’m going to ask you about technology now. You have released an article on artificial intelligence. You emphasize the importance of early adoption, despite the risk of embracing new technologies, particularly related to artificial intelligence. Can you elaborate on how business leaders can balance the need for innovation with the potential pitfalls of early AI implementation

General McChrystal: Yes. It’s a great one that everybody’s wrestling with and we’ve seen it in some other things because there’s often a slow payoff on when we first brought computers in or the military struggle with tanks or things like that. You don’t get an immediate payoff often from technology, but you get a payoff that you don’t know you got. That is when personal computers first became available, the US Army didn’t have any and wasn’t going to buy any. They’re too cheap. I went and bought my own and put it in my armored vehicle. I was a company commander and it cost me a ton of money. It cost me like $5,000 for this RadioShack computer didn’t even have a hard drive, but it worked and it did basic things for us. The real payoff was I learned about technology. I learned what the options were.

Instead of having to suddenly make a quantum leap where I’m not using technology at all, and then jumping up to something big, my personal growth was more like this, and I think organizations need to do the same. I think with AI now, what organizations need to do is spend a little bit of money, put some talent and bring AI in and experiment it. We use it for very narrow things that aren’t highly risky for dealing with customers or something, but start to build the muscle. And if you don’t start to build the muscle, then you won’t be able to move forward.

Also, our younger employees, they’re using it in their personal lives. If you aren’t giving them the opportunity to work with things there, then they are going to get frustrated like I did and I went and bought my own computer. They can’t go buy their own AI, but, I think you need to give them the ability and it’s amazing what they’ll come up with. It costs some resources to do this, but allowing the organization to breathe and exercise that I think is essential.

Dan Farkas: I think it’s an excellent point of view. You did mention the hype around artificial intelligence right now, and number of perhaps businesses being built on the basis of we also do AI, and it’s important to think about how the AI is going to be used and the use cases around it, how applicable it is to day to day life, which we have not yet entirely figured out.

I know from my own personal experience, when I go away and I’ve got my cameras inside of the house and it tells me that there is a person in the house and it shows me, I don’t know, my barbecue outside, where it was a little bit of wind and it moved or a bulb. I know we still have some way to go to actually identify objects and logic, but I think it’s the applicability to day to day. As you say, exactly to deploy AI to specific process where we can get value and slowly build up the muscle makes total sense. 

General McChrystal: I think just like I’m having the same experience as you are, if we extrapolate some of that forward, pretty soon AI is going to recommend which employee candidate we should hire. 

The problem is we won’t be able to understand exactly how AI did it. They will have used so many data sources, so many out, and we’re going to have to make really impactful decisions, looking at a box or a feed and going, “Wow, do I trust that? Is that right?” 

Already military systems are firing weapons based upon AI because the speed they have to. Pretty soon you’re going to have a case where very big political or economic decisions are about to be made. The one I would use is suppose the leader of country A has AI tell them that country B is about to invade you. Are you going to preempt based upon AI or are you going to wait? Of course, if you wait, there’s a huge cost to that.

I think leaders, particularly, are going to find themselves challenged to develop how they think about it and how they respond.

Dan Farkas: In fact, I believe in your book, Risk, you were describing a situation during the Cold War, where satellite imagery was alluding to rockets being fired from the United States and fortunately someone had the presence there to decide not to respond because it was a wrong imagery that probably nowadays if AI was involved might have ended up entirely differently.

General McChrystal: That’s a great story. A Russian lieutenant colonel made the personal decision not to respond. Now, if we go back to December 7th, 1941 radar operators, and radar was brand new saw an approach of aircraft coming to Pearl Harbor on the morning of December 7th, they saw the Japanese attack coming but they didn’t have enough faith that what they were seeing and they thought it was American planes being ferried and so they didn’t yet have enough faith to take action with huge consequences. There’s always a story where it worked out great and where it didn’t. 

Dan Farkas: And so it didn’t. How do you make the decision?

General McChrystal: Exactly.

Dan Farkas: I hear you. I’ll ask one last question. For those of us who love reading your books, I know one of those people. I heard that there’s another one potentially coming up. I don’t know if you can share with us anything about it and perhaps, if you can, also what inspired you to write that book?

General McChrystal: Dan, thanks so much. One of the themes of my books is I don’t write what I’m an expert in. I write what I realize I don’t know enough about. Leadership: Myth and Reality was that. I didn’t write Risk because I’m a risk expert. I wrote it because every organization, me included, have never gotten risk right. So my question was: Why do we always screw it up? We’ve got all this study. 

The next book is called On Character. Particularly in the United States, we’ve had a real tough time deciding what character we want in ourselves, what character we want in our leaders, and what we want our national character to be. We throw the word around and we say that person has good character, bad character, no character. But we haven’t agreed upon what character actually is and what would right look like. And so I wrote a very personal book. It’s a series of reflections on a whole range of subjects that examine the question: What do I believe in and why do I believe that? And I offer that to readers. And I don’t say that I want you to agree with me. What I’m saying is this is the span of issues that I have pondered now that I’ve gotten to this point in life. 

And I would suggest that all of us ought to have a view on each of these. We ought to think, “What do we actually think about that?” I don’t think I could have written this book even 10 years ago. I’ve turned 70 this summer. I’ve got a lot of light behind me, not so much in front of me. And I think that I’ve come around to believe that the single most important thing in individuals and in organizations is character. That’s what I’m thinking and writing about.

Dan Farkas: Stan, thank you so much. I look forward to the book. Would we have any date for when you think it’s going to come?

General McChrystal: It’s going to be released May 13th.

Dan Farkas: May 13th, next year. I look forward to this. Thank you so much for your time. Thank you so much for this amazing interview. A lot of learnings in here for me and for our audience and we look forward to the next books. And perhaps, we’ll come across you very soon again.

General McChrystal: I look forward to it, Dan and thank you so much.

Dan Farkas: Thank you.