LJD: First, I think we're going to have to talk about Stan McChrystal. Were you there in 2009 when 60 Minutes delivered its report on him?
CF: No. I was in graduate school actually, at the naval school in Monterey. I had worked for then-Lieutenant General McChrystal when he was in his final year overseeing Joint Special Operations Command. I was his aide-de-camp, sort of like a chief of staff function. That job wrapped up in May of 2008 and for the next eighteen months I was in Monterey.
How did you plunge into the McChrystal universe and then go on to help corporations?
I started in the US Navy Special Operations component. In 1997 I graduated college and was in active duty for fifteen years. About five or six years into that, I screened into the unit's Joint Special Operations Command which is comprised of all the military units. That was 2003, the year that General McChrystal took over the entire organization, a position he held for five years, much longer than most.
He was making phenomenal headway in how he was redesigning the organization. I was many levels below him but got to know him a little bit. I had tours in Iraq and Afghanistan and in 2007 had the opportunity to be his aide-de-camp. I didn't understand it at the time, but I was fascinated by the organizational changes that were taking place clearly under his and the other senior leaders' guidance.
At the lower levels of the organization you could feel that something was changing. We were just moving much more quickly and effectively and becoming a different type of organization. We were a lot more efficient in how we shared information and how quickly we were able to break through traditional barriers in a big, hierarchical system. Even a mid-grade or more junior officer had a certain amount of empowerment that was really unprecedented in military structures.
All this just seemed fascinating to me. Normally, the job of an aide is brutal. You're just overseas for an entire year as the right-hand, take-care-of-all-the-stuff person. Not a lot of folks with a special operations background would jump at that sort of opportunity but this one was really unique. McChrystal was doing something unprecedented, so I couldn't pass up the opportunity to go observe it firsthand. Between the spring of 2007 and 2008, which turned out to be his final year in that five-year tour, I got to know him really well. That solidified for me that this was indeed an entirely new way of running a global organization.
I went from there to grad school and then I went back into the force for a few years. In 2012 I left active duty and joined the McChrystal Group. Stan and I stayed relatively close that whole time, and when he decided after retirement he was going to spread these lessons from the military to other organizations, I couldn't miss that opportunity. That's where I've been for the last three years.
I haven't come across another blueprint that is as powerful as what's depicted by Stan McChrystal. I don't want to elaborate too much on that since it's already been pretty well documented (in My Share of the Task and most recently in Team of Teams), so tell me more about the McChrystal Group and its approach.
We'd be the first to admit, the only reason we reached this point was because of the events of 9/11. We suddenly got thrust into a network-based fight which no military had done on that scale. Suddenly we had these dispersed networks that could connect in real time. Information flow is just a really cheap commodity now. We certainly believed that the problems we faced in Iraq on a global scale didn't happen because we were fighting an army of geniuses.
We thought at the time, who else is going through this sort of change process? As we started talking to other business leaders we realized it wasn't just us. Our basic approach now is to go in and spend time with companies—from technology, finance, and consumer goods organizations—and look for leaders who are open to the idea of change.
We get to know them in a one- or two-person team for a few weeks or months, whatever it takes to be able to get a theory of their company: how they're structured, how they communicate and share information, and how they're dealing with this global shift. We ask, “What are the leadership behaviors, the cultural norms that currently drive your organization? Are you a fast, agile tech start-up personality? Or are you a very traditional hierarchy?" Most are somewhere in the middle leaning towards traditional big bureaucracy, because we tend to work with bigger organizations.
If you are going to change the culture of an organization, which ultimately is what this is all about, there are two major levers you can pull: what are the systems and processes that drive things, and what are the leadership behaviors that create the culture from very senior leadership all the way down?
Within a relatively brief period of time you can come up with a pretty good view on what needs to be addressed in those two areas. And then we'll spend anywhere from eighteen months to two to three years overseeing those changes in some of the bigger organizations.
Do you embed yourself in the organization?
We do. Ideally, we can put a team of two or three on the small end and six to eight for a bigger organization. We really integrate inside the organization. Then our goal is to slowly unwind our presence and have a new operating framework available to them, what we call “cross lead.” That becomes the DNA of the organization and then our people can just pull themselves back from it.
Most of us in traditional bureaucracies, when asked how fast you need to move in the market, will start naming competitors. "Our big competitor down the street, they do it like this.” The military is the same way. It would always look at big competitors and say, "We got better fighter jets and better aircraft carriers than them." Now suddenly the problem exists in this middle space and the speed of things is just radically different from what it was fifteen or twenty years ago.
We move companies towards transparency, broader inclusion, and more regular senior level communication with the entire organization. That way more information flows throughout the organization at nearly real-time speeds. Then you can decentralize execution authorities way down into the guts of the organization. It's a totally different sort of leadership behavior.
In the military the organization is hardworking and committed. There's a sense of purpose, soldiers are ready to die for a cause. But business is different. Tell me more about that transition from the military and how you're learning to work with other types of organizations.
I've been working for three years with the McChrystal Group and I can say the parallels and similarities between the military and business leadership are much more similar than different, which is perhaps surprising for some people to hear.
In the military, you don't wake up every day thinking, “Today is the day I'm going to put my life on the line in the battlefield.” Sometimes that's the truth, but mostly you're thinking, "This is a really multi-dimensional problem, how do I solve it? How do I get the organization communicating?" When you go into business you see the same thing: the same types of focused leaders dealing with equally complex problem sets, and the same levels of stress and sleep loss. It's just good leaders trying to do the right thing.
There are differences of course in the types of resources and the utilization of these resources inside the military. Ultimately, it's not a for-profit thing. It exists for a different reason. There are constraints just like there are in any business but they tend to manifest differently. You have to be conscious of that.
You have to ask, “What's the shift that took place to change how militaries operated and what's the history of that shift? It goes all the way back to the industrial revolution and the development of the assembly line mentality. This same idea bled into the business world.
Decentralizing authority and decision-making down to much lower levels is what allowed us to move so fast in the special operations community. And that's really what all organizations today are craving.
How is this mandate framed to clients?
With the writing of Team of Teams, we've had folks circling back to us or finding us for the first time saying, "I get your argument, it's really interesting. Now I understand what the military went through.” That starts the conversation and it branches out to whatever people are trying to figure out in their own organization.
Is it C-suite executives or people in HR?
It's a mix. CFOs, HR, and CEOs all have a different perspective on this problem. All of them are fascinating. Ultimately engagements are a C-suite sort of thing. You have to have CEO awareness and support. We've worked with companies from Fortune 10 to the low Fortune 1000s.
There is a sweet spot in the middle somewhere. If you are in the Fortune 20 realm you want CEO awareness but they're running a country essentially. If it's a mid-cap company it's the CEO that says, "I am running a three-billion-dollar company and here is how I currently see it functioning. My leadership team works like this. Here's what I want to change. In twelve months can we get there?"
What we say to organizations is somebody has to really own it at the C-grade level. If it's one level down, that individual has to own their ecosystem. It's a culture change, so you're pulling some heavy levers. Ultimately it's a pretty senior-level engagement.
The situation in Iraq was becoming pretty desperate and it allowed someone like Stanley McChrystal, I guess, to come in and take personal risk. Do you think it's a condition for CEOs that they need to have the courage to take risks, even if it means they may have to leave the organization down the line?
I think the whole system doesn't give senior leaders—good ones—enough time to really make substantive changes. It's challenging, especially after the tipping point of a crisis. To be able to execute radical systemic change is extremely hard.
The best leaders, I think, are the ones that can anticipate and say, "Hey look, here's what's going to radically change about our space within the next six months, three years, whatever the time horizon is.” What we ignored in the military was the rise of this different type of network fighter. It could have been our complete downfall. We found ourselves two or three years into the fight realizing this is a totally different type of warfare. We had to redesign this thing in flight.
Organizations are often operating at the edge of chaos and leaders don't always have all the answers. They have to be able to admit that to people.
The people at the bottom are the ones that are closest to the state of chaos, and when they hear that message they're generally saying, "Thank you. That's what I've been trying to tell you for the last five years. Everything is upside down right now. We need to be able to move so much faster.” The senior leadership has all the other variables to consider like their salary, quarterly reports, and outside pressures. If they can get through all that, ultimately what most of them want to be is a strategic thinker in the organization. They can get very energized because they're seeing how they want to redesign the organization.
Is your approach mainly grounded in long-term change or have you faced situations where a business was in a downfall or at a turning point and required swift intervention?
We've worked the whole spectrum, but I would argue it’s the primary thing you should be looking at, because if the primary motivation is short-term remedy that's putting a long-term solution against improving next month's numbers. Collectively, we're not quite there yet. But that's definitely what you are looking for, that deeper-thinking leader that understands their space multidimensionally and can say, "I can see outside of my building, outside of my space, and set us up for ten years of success."
I would have thought your approach would be more suited for occasions where as the proverb goes “desperate times call for desperate measures”. In my experience doing turnaround for corporations, I kind of like the fact that even though a company is challenged beyond repair, and you may not be able to save it, at least it forces people to say, "Look, the mandate is fix it however you can."
That's why it's exciting to meet folks like you and other thinkers in the space. Because the more accepted this idea becomes, the more common it will be inside organizations. If it's not happening inside the organization then there's going to be equal pressure from the outside saying, "Why are you static?”
Is the McChrystal Group as well organized and open as you're advocating? I am running an organization of forty people, and even though we had all this knowledge and awareness, people complain of silos…
The straight answer is yes, we always strive toward that. We're eighty people distributed around the country and overseas. We try to be very transparent in our internal communications and have systems in place to try to emulate the right types of behaviors. The more interesting, broad argument is that this happens because humans are flawed, right? We're always going to create allegiances and start rumors and create silos and it's just how we are designed. We are all very tribal and small-team oriented. What was interesting about writing the book was that it made me realize the hierarchical system was designed to control for that:
"I want to create silos so I can keep you from talking to this person over here because whatever happens between you is just going to make my life harder. I just want you to make your widget and I will figure out how they all go together. I want to separate you in office spaces, in cubicles and on the assembly line. Then I can pull the levers from the top in a very controlled manner." It's fighting human nature.
Now, on the other extreme, humans are humans. We used to kid around in the special operations community and say, "Take a picture today because it will be all wrong tomorrow." You're constantly moving towards overarching ideas of shared consciousness and empowerment. I think that's the best organizations can do. If they set that as their mentality, they're definitely going to be moving faster than their competitors for now.