December 23, 2015 | by Steve Lawrence

A New Model for Leadership

Managing effectively in a disruptive economy

Retired General Stanley McChrystal learned under fire—literally—how to manage effectively when conditions change constantly and the old rules disappear. The former commander of U.S. troops in Afghanistan told the MSCI Annual Meeting in May that “you, as successful and responsible leaders must recognize that there are new rules of engagement for a complex world.”

Fighting Al Queda in the cities and mountains of Afghanistan, General McChrystal realized “we were using an old system to go after a new threat. We were corseted by habits and structures, but complexity changes everything.” The complexity in this case was the inability of the then-modern military command and control structure to effectively respond to the entirely new and innovative way Al Qaeda was fighting. It was a loose network, with often autonomous cells that made their own combat decisions quickly and often without regard for any overall regional strategy. “They were a loosely connected and highly effective network,” McChrystal said. “It takes a network to defeat a network. But we were still working within the same hierarchical structure that did not allow the kind of fast and powerful responses we needed.”

The general explained that in this case, our military had to break down its silos, communicate constantly and effectively and give more operational authority to the smaller combat units on the firing lines. “I began to think leadership in these circumstances was a lot like being a gardener,” he said. “It was creating an environment so that the elements can work. I found myself doing a lot of different things—visiting village leaders for instance, besides just moving military pieces around.”

The modern business economy is turning out to be very similar to the enemy he was fighting, McChrystal said. Complex, changing unexpectedly, requiring tactics and strategies that shift all the time. “Some say big data will change everything, but by itself it won’t,” he said. “We can’t manage with data coming at us so fast using traditional corporate structures.”

“We need to create new environments for working, allowing more decisions at lower levels, increasing communications and transparency in our organizations,” McChrystal said. “We need to resist the temptation to micro-manage and instead pump data down to lower levels in the company so they have the confidence to operate effectively.”

McChrystal calls this process, creating a “Team of Teams,” which also happens to be the title of his latest book. He recommends that companies institute an “iron-like discipline” in communicating clearly and continually throughout the enterprise. This means critical information moves up as well as down in the organization and broadens and deepens its ability to adapt to changing circumstances. “This is the new role for leadership in a complex world,” General McChrystal said. “This kind of team building enables leaders to stay flexible and alert, to constantly adjust their sails, and to realize that in this new environment the answer to the same problem can be different on different days.”