Corporate America: Time to Adapt or Die

CORPORATE AMERICA: TIME TO ADAPT OR DIE

By General Stan McChrystal (RET), David Silverman and Chris Fussell

The 20th century was a massive drive for efficiency – from the military to industry to government systems. Unfortunately for those comfortable in the world of bureaucratic efficiency…the world has changed, and 20th century solutions are proving incapable of solving 21st century problems.

Ask yourself these questions:

Is your industry adapting to the new realities of an interconnected world, or is it still assuming that size and industriousness will prevail in any situation?

Is your organization able to share information and make decisions as quickly as the external environment shifts, or do silos and bureaucratic dysfunction get in the way?

Is your organization willing to make changes to the system, or is it still leveraging ad hoc solutions to mute the symptoms of a much larger problem?

We address these questions in our new book, Team of Teams: New Rules of Engagement for a Complex World , which hits bookstores today. We were driven to write a book that bridges our experience defeating networked insurgents in an asymmetrical battle against Al Qaeda to the business world, drawing out lessons that are strikingly relevant to today’s corporate environment.

The world is shifting from structured and knowable systems to networked and unpredictable environments. We saw this firsthand in the Joint Special Operations Task Force in Iraq. We expected to face off against a traditional enemy with a hierarchical structure much like our own, allowing us to identify key leaders and dismantle the organization from the top down. However, Al Qaeda in Iraq operated like nothing we had ever seen before: like the multi-headed Hydra, for every individual we removed from the network, a new one sprang up in its place, quickly outpacing our ability to control the situation. Despite all of our advantages in resources, training, and size, we were losing to a decentralized, dispersed network of terrorists. We learned that we had to make a dramatic change if we were going to win the fight.

It may not be immediately clear how these experiences are relevant to corporate leaders. But from the battlefield to the boardroom, organizations of all kinds are struggling to keep up with the pace of today’s world. The speed of the information age is overwhelming our ability to operate; from a terrorist group’s global distribution of propaganda videos to an inter-connected consumer base’s use of social media, individuals have a dramatic ability to impact the world at a scale never seen before. The only things that have remained static are the organizational models that we use to run large institutions, and they’re being outpaced as a result.

The line and block chart and the hyper-efficient supply chain were innovations of the 20th century that drove a tremendous amount of value. But in the 21st century, they are limitations, constraints on our ability to adapt to ever changing circumstances.

When first confronted with the potential for failure in Iraq, our instinctive reaction was to pull every traditional lever—more resources, more people, more technology. This was driven by organizational hubris and the assumption that doing more of what has always worked will eventually win the day. It was also tied to a dependency on technology as the solution, instead of seeing technology as an enabler, with people being the true solution. The external environment has shifted from complicated but structured to complex and networked, and we learned through our early struggles that the levers afforded by a traditional bureaucratic system couldn’t solve for this new reality. On the brink of defeat, we drove a fundamental culture change in how our organization communicated, shared, and led itself, transforming from a command of teams into a team of teams.

That change is grounded in the relentless pursuit of scaling the effective drivers of small teams to the enterprise level. The high levels of trust and common purpose found in small teams were the critical cornerstones that ultimately allowed for the creation of Shared Consciousness and Empowered Execution at the organizational level. Once we realized that this model would allow us to match, and ultimately exceed, the speed and interconnectedness of the external environment, our leaders became hyper focused on driving the culture change, knowing that effective execution would take care of itself. If the cultural core was optimized, those closest to the fight could adapt in real time. The networks that are today’s reality are never static. They are unpredictable by their very nature. Organizations that leave behind static operating models, and allow for and encourage constant adaptation will excel in this new reality. We, at McChrystal Group, have developed CrossLead, a leadership and management system to unlock latent agility in an organization. Team of Teams is our contribution to the conversation.

The best way to start this transformation is by creating an accurate map of an organization’s current capabilities and hidden internal networks. When organizations begin to see the cultural norms and internal networks that actually drive execution (as opposed to the self-generated organizational chart that we’d like to believe drives functionality), they can also see the gaps that are blocking their ability to create a truly adaptable system. The silos of the traditional org chart need to be broken down; organizations need to unlock their internal networks to tackle multifaceted problems as a team. These gaps took us years to identify in our own system, and refining our ability to identify and close these gaps for other organizations is our true passion.

Once the way in which an organization actually functions is base-lined, the CrossLead operating framework drives organizational change along two main lines of effort—the organizational systems that underpin communication, information, and strategic alignment—and the leadership behaviors that support a more inclusive and transparent culture of communication. To move from a traditional, bureaucratic model of knowledge is power to an adaptive system of sharing is power, leaders must have the right operating framework in place, and must set the tone in how they present themselves to the organization. A change like this is neither an overnight fix nor a plug-in widget; it takes committed and disciplined leaders. The alternative to not changing, however, is irrelevance in the modern environment.

As technology continues to scale, organizations are being outpaced at an ever-increasing rate. The answer, we believe, lies in people. It is unimaginable that organizations will operate in fundamentally the same way in twenty years as they are today. The world is changing at a pace that is almost incomprehensible—the way we lead and manage needs to be just as dynamic. It is the calling of today’s generation of leaders to make this change. We felt this need on the battlefield, and the call was answered. It is now an incredible honor to be part of the conversation, and in some small way, part of the solution.

General Stan McChrystal (RET) co-wrote Team of Teams: New Rules of Engagement for a Complex World with with his colleagues at McChrystal Group, CEO Dave Silverman and CGO Chris Fussell (former US Navy SEALs) along with Teddy Collins (current Marshall Fellow at Cambridge University). The book is available at your preferred bookseller or visit www.crosslead.com/teamofteams