BY RAY ODIERNO, RETIRED FOUR-STAR GENERAL AND FORMER CHIEF OF STAFF OF THE U.S. ARMY, SENIOR ADVISOR AT JPMORGAN CHASE & CO.
Any leader’s success regardless of environment, whether it be leading men and women in combat or working in the financial industry is based on their ability to manage risk. Every leader must understand risk know how to mitigate risk and be willing at times to make bold decisions to exploit success. It is my experience that one of the key characteristics of great leaders is the ability to make a decisive decision at the right time. Understanding risk is a big part of that process.
Depending on personality and experience, leaders can often act in extremes. For example, I've observed commanders who were risk adverse. They were reluctant to take any risks whatsoever. They not only failed in accomplishing their mission, but they lost their subordinates respect and confidence and ultimately destroyed the team they led. They were often defined as careerists, only concerned for their own survival, not necessarily concerned about mission accomplishment. I've also observed leaders who take wild uncalculated risks, putting the mission the team and its people at risk. Many of them not only ended up with missions’ unaccomplished, but also wasted valuable time and resources.
So the key to successful leadership is the ability to strike a balance between the two extremes. There is no perfect formula. But I do know by effectively assessing each situation, understanding the problem or dilemma you face, understanding and communicating your goals and objectives throughout your organization, and develop processes to gather timely and accurate information all contribute to making bold decisions based on opportunity and timing.
A Holistic View Guides Bold Decisions
Data is key to taking advantage of opportunities that present themselves, but evaluating that data requires confidence in your sources and experiences. Despite today's sophisticated technology, assessing any situation is trickier than ever before. Interconnectivity has made the world a smaller place than it was even ten years ago. But while we are able to receive a lot of data quickly, the information highway demands a more comprehensive outlook from leadership.
In other words, it's not enough to simply be an expert in a particular field. A military leader needs to be cognizant of more than just strategy; a leader in the financial world has to focus on more than just economics. The political atmosphere, diplomatic relations, security, and public policy all come into play for any given market, and each can significantly affect the others. An effective leader is able to discern how each factor interacts and discern risk and appropriate ways to mitigate risk
But, as with assessing risk, leaders can lean toward an extreme when forced to make a decision. I've seen those who demand every scrap of data before making a final determination, and I've witnessed others jump in before all of the information is in place. Sometimes when you make a decision is just as important if not more than the information available. Great leaders understand this dynamic.
Fostering an Atmosphere of Trust
Knowing your organization and its culture, understanding its strengths and weaknesses and participating in shaping that culture are the keys to correctly assessing how much risk your company or organization can tolerate and when to act boldly based on what you know. Leaders must watch, listen and ask the necessary questions. Is senior leadership all on the same page in terms of company direction and goals? Where do your own strengths and weaknesses lie? What kind of risks are you well positioned to take, and which should you avoid?
The foundation of any organization is trust. Trust between peers, subordinates and your leaders. Establishing and communicating right and left limits. Empowering subordinates and decentralizing decision making within those limits. Treating everyone within the organization with dignity and respect. All of this contributes to an atmosphere of trust and pride.
I've been very fortunate to work for leaders who mentored and developed me, tolerated mistakes and allowed me to grow all while providing me an opportunity for increased responsibility. Although the world may be changing rapidly, its challenges remain the same. Bold leaders adapt to their environment, address risk with confidence and parity, and then seize the moment when it comes along.
About the Author: General Ray Odierno is a retired four-star General and former Chief of Staff of the U.S. Army. He was recently appointed as a senior adviser at JPMorgan Chase & Co. The firm is a co-founder of the Veteran Jobs Mission, a coalition of over 200 companies, which recently announced a commitment to hire a total of one million veterans. Learn more