Summary

A look at the changes required for modern organizations to succeed in terms of how they are structured and managed.

The story is told through the lens of McChrystal's command of JSOC (Joint Special Operations Command) in the early/mid 2000s, and many of the lessons are drawn from that experience.

I found the principles useful, but the stories a bit scattered and the principles not as clearly laid out as they could have been. Worthwhile principles to absorb, but not the easiest read.

Key Takeaways

• Two keys for success in building teams in a modern world:
• Extremely transparent information sharing ("shared consciousness")
• Decentralized decision-making authority ("empowered execution")
• Management (and by extension, structure) has become a limfac (limiting factor) in the success of modern organizations.
• The world has become less predictable, despite us having much more data.

This is the result of two factors:

• High interconnectedness
• Instantaneous communication

As a result, the world has become much more complex (in many different areas), and impossible to predict.

• "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."

Yeah We can quantify our predictions and whether things are complex by attaching a time frame.

• Example: we can know the weather for the next 2 hours with reliability, but cannot accurately predict 7 days away.
• We have moved from data-poor but fairly predictable to data-rich but uncertain.
• To build resilience (or antifragility), we must build organizations that can reconfigure or adapt in response to change or damage (like a coral reef instead of a pyramid).
• To build a team driven by purpose, put them through an unpleasant experience together–only the most committed with persevere.
• Trust and purpose are inefficient: getting to know your colleagues intimately and acquiring a whole-system overview are big time sinks. But these are precisely what make teams adaptable and effective.
• In big groups, where knowing everyone isn't possible, instead, the relationships between the constituent teams need to resemble those between individuals on a given team.
• In other words, every team member does not need to know everyone else; instead, every team needs to know one person on every other team. Then they envision a friendly face.
• They key to increasing "idea flow" is building engagement within teams, and frequent contact with other teams.

This can be improved by doing two things:

• Building workspaces and forums that are open to all
• Embedding of team members within other teams, or cross-team squads

Leadership is most powerful by example:

• Leaders must realize every action is interpreted.
• Must be consistent example and message.
• Show themselves "in the trenches".
• Solve problems that hinder goals or communication (ex: ensuring video conferencing bandwidth for smooth conversations).
• Small gestures (like greeting by first name) can have a big impact.
• In public forums, be kind and complimentary; correct actions or provide feedback later.
• "Think out loud" by summarizing, describing how you process the information, and outline first thoughts on what we should consider doing. Allows everyone to follow your logic.
• Don't forget that your actions always have consequences, even if unintended ("dinosaur's tail" knocking things over as you turn).
• Empowerment requires context and shared consciousness; an understanding of "the right thing".
• Mental models are valuable, but break down when they no longer represent reality.

Notes

Part I - The Proteus Problem

Chapter 1: Sons of Proteus

• We restructured our force from the ground up on principles of extremely transparent information sharing (what we call "shared consciousness") and decentralized decision-making authority ("empowered execution").
• We became what we called a "team of teams": a large command that captured at scale the traits of agility normally limited to small teams.

Actor and Environment

• Interconnectedness and the ability to transmit information instantly can endow small groups with unprecedented influence: the garage band, the dorm-room start-up, the viral blogger, and the terrorist cell.

Limfac

• A limfac (limiting factor): the one element in a situation that holds you back.

Chapter 2: Clockwork

• One of the most compelling of these [principles] states that commanders should mass the effects of overwhelming combat power at the decisive place and time.
• Just as the road to mastering calculus begins with learning basic addition, the mechanized fastidiousness that ensures that all chute straps are in the right place starts with obsessive attention to small things like the knots that secure entrenching tools.
• Small habits make big habits.
• Historians attribute to Taylorism the advent of modern time consciousness, the transformation of leisure from unstructured free time to organized recreation, and the approach to managing the federal bureaucracy championed by the Reagan administration.

Chapter 3: From Complicated to Complex

• Though we know far more about everything in it, the world has in many respects become less predictable.
• Such unpredictability has happened not in spite of technological progress, but because of it.
• Things that are complex—living organisms, ecosystems, national economies—have a diverse array of connected elements that interact frequently.
• Because of this density of linkages, complex systems fluctuate extremely and exhibit unpredictability. In the case of weather, a small disturbance in one place could trigger a series of responses that build into unexpected and severe outcomes in another place, because of the billions of tiny interactions that link the origin and the outcome.
• Being complex is different from being complicated. Things that are complicated may have many parts, but those parts are joined, one to the next, in relatively simple ways: one cog turns, causing the next one to turn as well, and so on.
• Complexity, on the other hand, occurs when the number of interactions between components increases dramatically—the interdependencies that allow viruses and bank runs to spread; this is where things quickly become unpredictable.
• Because of these dense interactions, complex systems exhibit nonlinear change.
• Recently minted military acronym: VUCA (volatility, uncertainty, complexity, and ambiguity).

Square Peg, Round Hole

• In other words, the real world is full of the knotted interdependencies of complexity, and science was not equipped to deal with this—indeed, science actively avoided these unpleasant truths, preferring to simplify things to fit the clockwork universe. Such efforts, Weaver maintained, are futile. You cannot force a square peg in a round hole, and you cannot force the complex to conform to rules meant for the merely complicated.
• Complex systems are fickle and volatile, presenting a broad range of possible outcomes; the type and sheer number of interactions prevent us from making accurate predictions.
• As a result, treating an ecosystem as though it were a machine with predictable trajectories from input to output is a dangerous folly.
• 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."
• It is helpful to frame things in terms of timescale: for our purposes, we can think of a phenomenon as exhibiting complexity over a given time frame if there are so many interactions that one cannot reasonably forecast the outputs based on the inputs.
• Data-rich records can be wonderful for explaining how complex phenomena happened and how they might happen, but they can’t tell us when and where they will happen.
• We have moved from data-poor but fairly predictable settings to data-rich, uncertain ones.

Chapter 4: Doing the Right Thing

• Scientist Brian Walker and writer David Salt, in their book on the subject, describe resilience as "the capacity of a system to absorb disturbance and still retain its basic function and structure." In a complex world, disturbances are inevitable, making such a capacity to absorb shocks increasingly important.
• Investor and writer Nassim Taleb captures a similar concept with the term "antifragile systems." Fragile systems, he argues, are those that are damaged by shocks; robust systems weather shocks; and antifragile systems, like immune systems, can benefit from shocks.
• Robustness is achieved by strengthening parts of the system (the pyramid); resilience is the result of linking elements that allow them to reconfigure or adapt in response to change or damage (the coral reef).

Part II - From Many, One

Chapter 5: From Command to Team

"Get a Swim Buddy"

• The purpose of BUD/S is not to produce supersoldiers. It is to build superteams. The first step of this is constructing a strong lattice of trusting relationships.

"The Believer Will Put His Life on the Line"

• While building trust gives teams the ability to reconfigure and "do the right thing," it is also necessary to make sure that team members know what the right thing is. Team members must all work toward the same goal, and in volatile, complex environments that goal is changeable.
• Testing for a sense of purpose at its broadest and most visceral is simple: make the experience unpleasant enough and only the truly committed will persevere. The physical hardship of BUD/S is a test, not of strength, but of commitment.

Emergent Intelligence

• The field of “emergence" examines how complex patterns and forms can arise from a multiplicity of simple, low-level interactions.
• Adam Smith’s "invisible hand" of the market—the notion that order best arises not from centralized design but through the decentralized interactivity of buyers and sellers—is an example of “emergence" avant la lettre.
• Parallel computing, joint cognition, and the oneness of a team all work toward the same goal: building a network that allows you to solve larger, more complex problems.
• Champions of the iconic Mission Control room where hundreds of experts crowded into one space to facilitate real-time communication and adaptation (which we will investigate further in later chapters), they concluded that building trust and communication between crew members was more important than further honing specific technical skills.
• 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.

Chapter 6: Team of Teams

• Trust and purpose are inefficient: getting to know your colleagues intimately and acquiring a whole-system overview are big time sinks; the sharing of responsibilities generates redundancy. But this overlap and redundancy—these inefficiencies—are precisely what imbues teams with high-level adaptability and efficacy.

"The Point at Which Everyone Else Sucks"

• How many “cooks" is too many? It depends. In a small kitchen or office, four might be the ideal number. For a company with operations the size of Walmart, the break point is much higher.
• For teams, this range is considerably narrower. Athletic teams, for instance, usually consist of fifteen to thirty people. Army Ranger platoons are composed of forty-two soldiers. SEAL squads contain between sixteen and twenty people. Beyond such numbers, teams begin to lose the “oneness" that makes them adaptable.
• "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."

Team of Teams

• On a single team, every individual needs to know every other individual in order to build trust, and they need to maintain comprehensive awareness at all times in order to maintain common purpose—easy with a group of twenty-five, doable with a group of fifty, tricky above one hundred, and definitely impossible across a task force of seven thousand. 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 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.
• We didn’t need everybody to follow every single operation in real time (something just as impossible as building lifelong friendships with seven thousand people). We needed to enable a team operating in an interdependent environment to understand the butterfly-effect ramifications of their work and make them aware of the other teams with whom they would have to cooperate in order to achieve strategic—not just tactical—success.

Part III - Sharing

Chapter 7: Seeing the System

• What Mueller instituted was known as “systems engineering” or “systems management,” an approach built on the foundation of “systems thinking.” This approach, contrary to reductionism, believes that one cannot understand a part of a system without having at least a rudimentary understanding of the whole.

Chapter 8: Brains Out of the Footlocker

• Bloomberg says, "I’ve always believed that management’s ability to influence work habits through edict is limited. Ordering something gets it done, perhaps. When you turn your back, though, employees tend to regress to the same old ways. Physical plant, however, has a much more lasting impact...I issue proclamations telling everyone to work together, but it’s the lack of walls that really makes them do it."

The O&I

• As the scope of the Task Force’s global activities increased and we integrated more players into our network, the O&I became a bona fide institution. The meeting ran six days a week and was never canceled. We conducted it by video teleconference at 9:00 a.m. Eastern Standard Time.

Chapter 9: Beating the Prisoner's Dilemma

• 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.

Decentralized Operations with Coordinated Control

• Mulally eschewed internal competitiveness, and demanded honesty and transparency. He saw that there were too many small meetings that fractured the organization. He replaced them with a single weekly corporate-level meeting—the "business plan review" (BPR). He allowed no side discussions, secrets, BlackBerry use, or even jokes at others’ expense.
• “Idea flow” is the ease with which new thoughts can permeate a group.
• The key to increasing the “contagion” is trust and connectivity between otherwise separate elements of an establishment. The two major determinants of idea flow, Pentland has found, are “engagement” within a small group like a team, a department, or a neighborhood, and “exploration”—frequent contact with other units. In other words: a team of teams.
• Engagement was the central predictor of productivity, exceeding individual intelligence, personality, and skill.
• In the more than two dozen organizations he has studied, Pentland found that interaction patterns typically account for almost half of all the performance variation between high- and low-performing groups.
• But fostering such engagement is more easily said than done. Almost every company has posters and slogans urging employees to "work together," but simply telling people to “communicate" is the equivalent of Taylor’s telling his workers to "do things faster," and stopping there.
• It is necessary, we found, to forcibly dismantle the old system and replace it with an entirely new managerial architecture.
• Our new architecture was shared consciousness, and it consisted of two elements.
• The first was extreme, participatory transparency—the "systems management" of NASA that we mimicked with our O&I forums and our open physical space. This allowed all participants to have a holistic awareness equivalent to the contextual awareness of purpose we already knew at a team level.
• The second was the creation of strong internal connectivity across teams—something we achieved with our embedding and liaison programs. This mirrored the trust that enabled our small teams to function.

Part IV - Letting Go

Chapter 10: Hands Off

• In short, when they can see what’s going on, leaders understandably want to control what’s going on. Empowerment tends to be a tool of last resort. We can call this tethering of visibility to control the "Perry Principle."

"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?"

Chapter 11: Leading Like a Gardener

• It was impossible to separate my words and my actions, because the force naturally listened to what I said, but measured the importance of my message by observing what I actually did. If the two were incongruent, my words would be seen as meaningless pontifications.
• As a leader, however, my most powerful instrument of communication was my own behavior.
• Instead, I sought to maintain a consistent example and message. Our daily Operations and Intelligence (O&I) video teleconference became key to my overall communications effort.
• Early in the fight I recognized that although I could theoretically command from any location, remaining deployed and appearing at the O&I while wearing my combat uniform against an austere plywood backdrop communicated my focus and commitment.
• I also demonstrated this new paradigm of leadership by demanding free-flowing conversation across the force during the O&I. The technical hurdles of creating a video teleconference for more than seventy locations, many of them isolated, bandwidth-starved bases, were huge, but the meetings had to be seamless. In the early days I saw that interruptions in connection or other glitches undercut the perceived importance of the forum, and I could not allow that.
• For the same reasons, the O&I was never canceled and attendance was mandatory. I felt that if the O&I was seen as an occasional event not always attended by key leaders, it would unravel.
• Although the O&I had to be a briefing to the entire force, my role as commander remained central. Our system worked such that the person giving the brief was shown on the screen from wherever he or she was located, but the default returned to me when the brief finished. As a result, I was on live TV in front of my entire force and countless interagency partners every day for an hour and a half. 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. Critical words were magnified in impact and could be crushing to a young member of the force. I learned that simply removing my reading glasses and rubbing my temple was an action that was interpreted on several continents.
• When their turns came and their faces suddenly filled the screen I made it a point to greet them by their first name, which often caused them to smile in evident surprise. They were eight levels down the chain of command and many miles away—how did the commanding general know their name? Simple: I had my team prepare a "cheat sheet" of the day’s planned briefers so I could make one small gesture to put them at ease.
• For a young member of the command, even if the brief had been terrible, I would compliment the report. Others would later offer them advice on how to improve—but it didn’t need to come from me in front of thousands of people.
• "Thank you" became my most important phrase, interest and enthusiasm my most powerful behaviors.
• More than anything else, the O&I demanded self-discipline, and I found it exhausting. But it was an extraordinary opportunity to lead by example.
• 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. After I did that, in a pointed effort to reinforce empowered execution, I would often ask the subordinate to consider what action might be appropriate and tell me what he or she planned to do.
• Thinking out loud can be a frightening prospect for a senior leader. Ignorance on a subject is quickly obvious, and efforts to fake expertise are embarrassingly ineffective. 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. The overall message reinforced by the O&I was that we have a problem that only we can understand and solve.
• I later used a specific question when talking to junior officers and sergeants in small bases in Afghanistan: "If I told you that you weren’t going home until we win—what would you do differently?"
• I would tell my staff about the "dinosaur’s tail": As a leader grows more senior, his bulk and tail become huge, but like the brontosaurus, his brain remains modestly small. When plans are changed and the huge beast turns, its tail often thoughtlessly knocks over people and things. That the destruction was unintentional doesn’t make it any better.

Part V - Looking Ahead

Chapter 12: Symmetries

• Tocqueville recognized that empowerment without context will lead to havoc. This is the risk run if traditional, hierarchical organizations just push authority down, ceteris paribus (think of the 2008 financial crisis, largely sparked by young, uninformed finance professionals being given far too much leeway and far too little guidance). An organization should empower its people, but only after it has done the heavy lifting of creating shared consciousness.
• Shared consciousness is a carefully maintained set of centralized forums for bringing people together.

A World Without Stop Signs

• Mental models can be very helpful—they can provide shortcuts and keep us from reinventing the wheel.
• Problems arise when these models no longer reflect reality and when they inhibit creative thinking. We have to recognize that a mental model is not reality, it is just a representation of reality, and there are a near-infinite number of equally valid representations, almost all of which also leave something out in the interests of simplification.
• When we urge people to think "outside of the box," we are generally asking them to discard mental models.