Lessons from the generals: Decisive action amid the chaos of crisis

Lessons from the generals: Decisive action amid the chaos of crisis

[Article Source: McKinsey & Company ]

In the midst of chaos, there is also opportunity.
Sun Tzu

The world today can make us feel like we are living under occupation. The coronavirus pandemic has resulted in lockdowns in many communities, taking away our freedom of movement and assembly. It threatens our lives and is destroying our economies. In these warlike conditions, the battlefront is moving fast from safeguarding our lives to safeguarding our livelihoods. These are two massive fronts, evolving at exponential speed, and no one has more experience in responding to such conditions than professional military leaders do. Military commanders are accustomed to operating under a fog of uncertainty and great time pressure and to making myriad decisions with fateful consequences—some tactical, for winning a battle, and some strategic, for winning a war.

In a time of crisis, there is a premium on bold leadership and decisive action. Military-command structure—the management system used by armed forces during major conflicts—is a framework explicitly set up to handle issues that represent true danger and that escalate at an enormous and unpredictable pace. Developed over millennia to handle the most demanding emergencies in human history, it is a system of response that goes well beyond the crisis team you have likely already established in your organization. The current pandemic, with its unparalleled scale, complexity, and severity, requires a unique playbook and new operating models. At the same time, you need to plan ahead for the structural changes it will trigger in many industries, which will present both significant challenges and opportunities.

If there is one big takeaway from the world’s response to the COVID-19 outbreak so far, it is that we have been too slow: too slow in preparing for the virus, too slow in reacting to its spread, and too slow in putting in place lockdowns. The one exception has been the economic-policy response—many countries moved with unprecedented speed to approve funds to cushion the grave impact of the lockdowns on communities and businesses.

Nevertheless, the number of issues hitting companies today is escalating rapidly as the economic impact spreads. After overwhelming healthcare systems, the pandemic is overwhelming businesses. We are heading for an economic shock bigger than any since World War II—and business leaders struggling to respond can learn a great deal from military generals.

There are three main insights we can draw from military crisis management:

  • A military-command structure can help reduce confusion and enable faster, better decision making in your organization.
  • Managing simultaneously across all time horizons based on an integrated, strategic crisis-action plan is fundamental to reducing chaos and accelerating decisions.
  • Age-old principles of war can help keep your organization focused and motivated, improving its chances of achieving objectives.

Many business leaders have already taken decisive actions in responding to the current crisis with speed and resourcefulness. Now they are increasingly shifting their attention to planning not just for the days ahead but also for an extended period of uncertainty—and potentially a very different world—after COVID-19. We have interviewed a number of generals on the subject and learned that the practices and mindsets of military organizations can provide valuable guidance for all those time horizons.

Military-command structure: Divide and conquer

Military organizations are obsessed with achieving clarity on who does what and who makes which decisions. The reason is simple: in chaotic situations, it is essential to focus everybody on what they do best and delineate their fields of responsibility clearly.

Unlike businesses, which tend to assign crisis response to a single war room or management group, a wartime command establishes several teams charged with distinct tasks (Exhibit 1).

While the specific names and roles differ among military organizations, they usually cover four areas:

  • Insights team.
    This team focuses on finding the truth by collecting intelligence, analyzing internal and external conditions, and testing hypotheses.
  • Operations team.
    This team concentrates on delivering results by coordinating urgent activities and driving the execution of command orders.
  • Plan-ahead team.
    This team is responsible for creating scenarios and recommending strategies and actions. It often operates as multiple subteams, each of which addresses a different time frame or challenge. Together with the relevant decision-making groups, these teams facilitate analysis and debate and then make decisions that become orders for the operations team to execute.
  • Communication team.
    This team focuses on providing timely information to a broad set of external and internal stakeholders in a cohesive way.

Although military organizations are inherently hierarchical, their decision-making structure is very flat. Subordinate commanders always have a direct line to their chains of command, and while they make numerous decisions themselves, the command structure is there to support one ultimate decision maker with the information needed to move quickly. The commander sets a direction, transmits their intent to the organization, and then relies on subordinates to make the right judgments based on the information they have. This level of delegation goes beyond most corporate leaders’ usual comfort level, but in a crisis, they have to be willing to act based on incomplete information. They also must accept that some of the decisions (both theirs and their subordinates’) will be wrong but that acting is less risky than inertia.

As former US secretary of defense General James Mattis has said, “Operate at the speed of relevance” by encouraging simpler approval chains and higher willingness to adapt quickly. Especially during crises, the type and frequency of reporting must be managed in an agile way. Understanding what information is relevant, for whom and by when (as facts are constantly changing), is a big part of winning the battle.

Accordingly, the structure of military-command teams is modular and scalable. As new issues arise, fresh teams are formed to focus on solving the emerging problems. For instance, each plan-ahead team is charged with addressing a specific task or requirement on a single event horizon, such as how to ensure a continuous supply of equipment, ammunition, fuel, and food under a given scenario that presents unique logistical challenges. Each team brings together the cross-functional expertise needed to map and stress-test options rapidly and is dissolved once that task is complete.

Make no mistake: while this structure provides an effective division of labor and improves clarity about accountability, it is constructed in a lean and efficient way, with a vigorous bias for action. These teams conduct analyses rapidly. They reserve significant time for regular, high-quality updates and dialogue with top leaders to build and maintain organizational trust and to support a shared understanding of evolving conditions.

… continue reading the rest of the article here.

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