Leading as Commander in Chief

Originally posted on Harvard’s Center for Public Leadership Forum

Our next President’s role as Commander in Chief will entail at least four unique leadership contexts and responsibilities.

Balanced application of the elements of national power. All Presidents balance the elements of national power to execute strategy in an international context. Among the government agencies that represent elements of power, the military is among the most responsive and broadly capable. Yet such responsiveness and capability makes the military tempting to employ in place of other governmental agencies whose role is required, but whose capability may fall short. An example of this is the current situation in Iraq, where the development of economic, political, and social stability is being aggressively pursued by military forces in addition to their traditional security mission. There are tough questions to be answered about how the next President will reform the ability of the United States to apply multiple elements of power to avoid open ended military engagement.

Leadership of defense principals. The President of the United States bets the future of our Nation on the competence and candor of senior defense officials and flag officers. Although four star decision makers are top tier leaders in their own right, only the President can develop and maintain the climate that ensures honest and forthright assessments about defense strategy and capability. In such a leadership climate, no general or admiral should fear that an honest professional assessment will be interpreted as disloyalty by the President or senior defense officials. Likewise, the President must not tolerate those whose military assessments are based on popularity, partisanship, hope, false assumptions, servility, or other inappropriate foundations.

Leadership in contexts where lives will be lost. Our military is uniquely responsible for operating in settings where the loss of life is not only imminent, but virtually guaranteed. The ability to lead in such contexts moves beyond international relations and defense management into authentic leadership that spans social and political boundaries. Presidents must be able to confidently task the Joint Chiefs to commit forces on the same day that he/she grieves one-on-one with bereaved families. Questions about such capacity are very challenging to answer. Candidates must somehow demonstrate their capability to make life or death decisions, and must be careful not to be caught in embellishments because of the dishonor that accompanies public perceptions of false valor. In the context of the 2004 Presidential election, an editorial in the February 15th 2004 New York Times cited the need for candidates to demonstrate the capacity to operate in extremis: “People need to feel that the President is not going to be fazed by life-and-death situations. And the only way you can demonstrate that is by showing that you’ve made some.” Such capacity is even more important in 2008 than it was four years ago.

Stewardship of our capacity for national defense. Ongoing operations have extended our ground forces well beyond a sustainable pace. Even if every Soldier and Marine returned from the Middle East today, it would be a long, expensive, and arduous task to restore our volunteer military to its former capability. Casualties and departures due to the stress of repeated deployments have created a context where the next President will be the principal steward of restoring our force. The task will require a long term vision because of the extended time it takes to develop excellence in human capital. A jet fighter or a ship can be replaced in a day—as soon as the equipment can be produced, the replacement is made. In contrast, it takes 22 years to build a Colonel-level commander, assuming that the right person is retained as they progress up the ranks. Military human capital has to be recruited, developed, educated, inspired, and retained over time. The President has to be able to lead the American people to the commitment to rebuild a tired military in its most valuable (and expensive) commodity—the human dimension.

Thomas A. Kolditz, PhD
Colonel, U.S. Army

The views expressed herein are those of the author and do not purport to reflect the position of the US Military Academy, the Department of the Army, or the Department of Defense

Mention: Wall Street Journal

That ’70s Show: Detroit

There’s a story about a man who encountered financial setbacks and went to see his priest. The priest advised him to seek guidance in scripture, and a year later the man was rolling in money. The priest asked what specific words from the Bible gave him guidance, and the man replied: “Chapter 11.”

Nobody seems to be laughing at bankruptcy jokes in Detroit right now, especially after Merrill Lynch used the “B word” publicly last week to describe what might happen to General Motors. Nor was it particularly reassuring when a GM official replied that the company has enough cash to last at least through the end of the year. It was like a doctor trying to assuage a sick man’s family by saying he’s sure to last until the end of the week.

Chad Crowe

Is the demise of GM, along with Ford and Chrysler, inevitable?

The answer is no, but neither is their survival. It all comes down to whether they’ll run out of money before they run out of time, and it’s going to be a close race.

Predicting the future of car companies can be about as accurate as political prognostication. Remember all of seven months ago, when Rudy and Hillary were their parties’ sure-fire nominees for president? While Detroit’s current picture looks incredibly bleak, history holds a slew of dramatic automotive turnarounds: Chrysler in 1982, Nissan in 1999, Fiat in 2006 and more. GM and Ford have large and profitable foreign operations, and also had cash kitties of around $25 billion at the end of the first quarter.

All three companies will benefit from new union contracts that relieve them of their crushing pension and health-care obligations to retirees. But these cost savings won’t start flowing until 2010. The Detroit companies’ challenge will be to survive until then, while also revamping their product lineups.

“It’s 1973 all over again,” says an executive at one Japanese car company. That was the year of America’s first oil shock, of course, when Detroit’s product lineups were burdened with gas-guzzling big cars that had been hugely profitable until, suddenly, nobody wanted to buy them.

So here we are in 2008, proof positive that history does repeat itself. GM, Ford and Chrysler were blinded by the huge profits from their SUVs and pickup trucks between 1995 and 2005, and not entirely without reason. These were the only vehicles on which they could make profits, thanks to the benefits owed to legions of retirees (three for every active employee in GM’s case) and their overall bloated cost structures.

Earlier in this decade, Ford even considered dropping cars and shifting its business entirely to trucks. The result: product lineups skewed toward an era of cheap gasoline, which might be compared to investment portfolios consisting mostly of Enron stock. The price of oil is far from the only issue. Steel, which car companies must buy in abundance, has doubled in price since the beginning of this year.

In last week’s report declaring that a GM bankruptcy is “not impossible,” Merrill Lynch analyst John Murphy also wrote that the company might need as much as $15 billion in new capital. To put that in perspective, consider that GM’s market capitalization, or total value, on the New York Stock Exchange now stands at only about $5.7 billion. So General Motors might have to raise an amount between two and three times the entire value of the company. Even more conservative estimates say GM must raise an additional $8 billion to $10 billion.

Just how is this supposed to happen? Banks have enough troubled loans on their books just now. It’s difficult to imagine investors wanting to buy much newly issued stock from GM, considering the track record of current management. GM shares have tumbled more than 80%, and its U.S. market share has dropped by more than 25% since CEO Rick Wagoner took over in 2000. In fairness to Mr. Wagoner, GM has been notably successful overseas, though that success has been eclipsed by tens of billions of dollars of losses in North America.

If GM can’t sell shares it will have to sell assets. The company recently announced that its Hummer brand will undergo a “strategic review,” which is French for an attempted sale. Better late than never. Former GM board member Jerome B. York, who oversees automotive strategy for investor Kirk Kerkorian, suggested selling Hummer more than two years ago, adding that without drastic action, “the unthinkable could happen.”

With eight brands and just over 20% of the U.S. market, GM should sell some other marques as well – starting with Saab, where sales are anemic. Kia – yes, Kia – sold as many cars in America as Pontiac last month. So Pontiac, too, might best be put on the block, along with ever-struggling Saturn.

Ford already has shed two of its biggest millstone brands: Jaguar and Land Rover. CEO Alan Mulally, who came to Ford from Boeing nearly two years ago, wasn’t bound by the emotional attachments that have handcuffed longtime Detroit executives. Such relative alacrity recently attracted a sizeable investment from Mr. Kerkorian, though he has lost nearly half the value of his investment in just a few months’ time. The stock plunged after Mr. Mulally, having declared that Ford would regain profitability in 2009, announced in May that all bets are off.

Ford has some spiffy, fuel-efficient cars overseas that would be ideal for the U.S. market just now, but the trick is how to get them here. Shipping in cars from Europe won’t work, because the strong euro would make their cost prohibitive. But Ford might be able to import some small cars from its Latin American operations. Better yet would be accelerating plans to build cars that Ford developed in Europe in the company’s U.S. factories, which isn’t supposed to happen until 2010. Stay tuned.

Then there’s poor Chrysler, acquired a decade ago by Germany’s Daimler, which then sold it last year to private-equity firm Cerberus for less than a quarter of the original purchase price. Amazingly, the fire sale now looks like a better deal for Daimler than for Cerberus – which also has the misfortune of owning 51% of GM’s loss-laden financial arm, GMAC.

Courtesy of Daimler, Chrysler has an outdated product lineup that won’t include any hybrid vehicles until late this year. Even those will be big SUVs that are falling out of favor. But Jeep is a viable, valuable global brand, as are Chrysler’s minivans and Dodge trucks – which can be sold in smaller volumes even with high gas prices. Chrysler likely will wind up as a subsidiary of another foreign car company, hopefully with better results this time around.

Detroit executives might drop by their favorite bookstore before their summer vacation and pick up a book published last year by Col. Thomas A. Koldtiz, head of the department of behavioral sciences at West Point. It’s titled “In Extremis Leadership: Leading as if Your Life Depended on It.” There are bound to be some applicable lessons.

Mr. Ingrassia won a Pulitzer Prize for coverage of GM’s management crisis in 1993. He is a retired Dow Jones executive who writes regularly on automotive matters.

Write to Paul Ingrassia at paul.ingrassia@dowjones.com¹

Review: Perdido Magazine

Bill Farley, an Oklahoma City police officer, had just settled himself down for a well-earned vacation when he received news of a bombing. He grabbed his gear and rushed to the scene. What met his eyes was horrifying. Rescue personnel worked frantically to retrieve the dead and injured from the smoking rubble, but their efforts were painfully disorganized despite the presence of top officials.

Bill’s supervisor, a lieutenant on the Emergency Response Team, arrived minutes later and walked into the chaos. “He is a big, tough guy, a cop’s cop who always worked alongside his men,” Bill recalls. “Though self-effacing, he commanded respect not only because he was capable but because he cared about his subordinates.” The change at the scene was dramatic as he began issuing orders and organizing teams.

“People gravitated toward him immediately,” says Bill. “They understood that he knew what he was doing.”

When Thomas Kolditz began his study of leaders like this Oklahoma City lieutenant, he thought he was researching a unique form of leadership. However, in his book In Extremis Leadership: Leading As If Your Life Depended on It (Jossey-Bass, 2007, $27.95) he says, “The more I study leadership, the more it is apparent that thinking like a life-or-death leader can be a useful form of introspection for almost any leader.” He discovered that people in leadership deal with risk, pressures, strong emotions, opposition and loss in many arenas, including the business world. So instead of directing his findings to a select few—soldiers, firefighters, police officers, medical personnel, etc—he addresses a much broader audience.

Kolditz defines in extremis leaders as confident, optimistic people “who are high in character and aware of their own thoughts, behaviors, abilities and values.” They bring these characteristics to life-threatening contexts, recognizing that they “are fatemakers in the sense that their purpose and function are to continue to value the lives of others who are at the point of death.” When these leaders “live out” their character, they are able to provide their followers with purpose, motivation and direction.

Developing in extremis leaders requires training in a variety of areas, according to Kolditz. He discusses the required competency, illustrates with vivid, sometimes riveting examples and then shows why that competency is important for all leaders. Areas of training include personal competence in the job at hand, capacity to assess and manage levels of follower excitement, dedication to life-long learning, sense of shared risk, willingness to share the lifestyle of the followers, and commitment to truth, to name a few. The author even includes a section on the physical development of in extremis leaders and shows how this can benefit leaders in general.

However, In Extremis Leadership is not a detailed, how-to manual. Kolditz offers the facts about successful leadership he has discovered through research and illustrates liberally with stories he has collected from a long list of strong leaders in a variety of professions.

For instance, he tells the story of a 24-year-old Marine corporal who commanded eight infantrymen during the march toward Baghdad in the current war in Iraq. His squad had learned to respect him because he was an superb rifleman who fought shoulder to shoulder with them for 30 days of intense combat and little sleep. His consistency had earned their complete trust and loyalty.

Squad members told the author of a period of four days they were forced to share one MRE prepackaged meal per day among the nine of them. The soldiers soon discovered that their leader was meticulously giving each man his fair share while he ate only the coffee creamer. Needless to say, Kolditz notes, “The eight Marine infantrymen, some of the toughest people on the planet, would have walked through fire for their leader.”

The author also devotes an entire chapter to the dynamics of dealing with strong emotion in high-pressure or life-threatening situations. He describes the power of fear, one of the most prevalent in high risk situations. Through stories, he illustrates this phenomenon and discusses how leaders have overcome it by an outward focus.

Kolditz further explores the personal element with a chapter on coping with loss. While in extremis leaders may face death more often than leaders in other fields, these experiences offer the leader an important occasion to influence his or her organization for good. This is true, Kolditz believes, because handling death is about celebrating a life that was and caring for the living who remain.

Readers will find In Extremis Leadership a compelling argument for competence and sterling character in leaders—two abilities that are honed with practice and a steady focus on the benefit of followers.

Taken from PerdidoMagazine.com