#535: General Stanley McChrystal — Mastering Risk: A User’s Guide | The Tim Ferriss Show

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Key Takeaways

  • Risk = Treat * Vulnerability
    • When we are fixated solely on the outcome, we don’t properly assess and improve risk management
    • We have a habit of only holding the person who makes the decision accountable; we don’t often hold the person who refrained from decision making accountable
    • Mitigating risks to zero before decision making is common and costly
    • We can’t control threats well but we can control vulnerabilities
  • General McChrystal believes that the way we handled Afghanistan is bad for our international confidence and credibility
    • “There is a temptation to oversimplify, to find out the critical mistake or the wrong decision” – General Stanley McChrystal
    • When we try to label one thing as the root cause, we let ourselves off the hook
  • “Covid was the perfect enemy. It was inanimate, so it was ok to hate Covid. You didn’t have to have any sympathy for Covid” – General Stanley McChrystal
    • The one-sidedness of having a common enemy should have united us in theory, but it did quite the opposite
    • General McChrystal states that our ability to sustain business digitally throughout the pandemic is actually bad for risk management. The fixation of outcome distracts us from proper risk evaluation when it comes to this type of systemic failure.
      • “If something isn’t bad enough, you often don’t fix the problem” – General Stanley McChrystal
  • Other societal risks/threats include: Propaganda/Disinformation/Misinformation, Cyber Security, Climate Change, US International Education Deficit

Intro

  • General Stanley McChrystal (@StanMcChrystal) is a retired General from the United States Army, best known for commanding the Joint Special Operations Command in the mid-2000’s. He is also the co-founder of McChrystal Group, an advisory firm for organizational management and team building. In this episode, Tim and General McChrystal analyze strategies and insights on risk management and also discuss potential threats to society.
  • Host: Tim Ferriss (@tferriss)

Risk: A User’s Guide

  • Risk: A User’s Guide by Stanley McChrystal
    • Motive for writing: We have never been good at assessing risk, strategies have been too subjective and ignorant of data
    • “The greatest risk we face is ourselves. Most of the other risks you can’t do anything about; they are external, inevitable, and impossible to predict with clarity. But, we do know they will show up” – General Stanley McChrystal
    • Not making or delaying a decision is a decision in itself
      • We have a habit of only holding the person who makes the decision accountable; we don’t often hold the person who refrained from decision making accountable
      • Mitigating risks to zero before decision making is common and costly
  • What is risk? The probability that an event will happen and the consequences that it does
    • We can’t control threats well, but we can control vulnerabilities
      • Threat * Vulnerability = Risk
    • Risk control Factors: communication, narrative, timing, action, bias, diversity
    • When we are fixated solely on the outcome, we don’t properly assess and improve our risk management
      • Many failures lead to improvements
  • Red Teaming – a contracted 3rd party team that actively challenges and serves as an advisory to a current strategy
    • Great pressure test to evaluate business strategy and risk assessment

Prominent Leaders in Risk

  • Coco Chanel
    • Grew up as a de facto orphan with zero opportunity
    • She transformed herself into the walking embodiment of what her brand is designed to communicate
      • She risked being viewed as a commodity in the industry but forced her business venture to the top
  • Dr. Martin Luther King Jr.
    • He realized that inaction was a bigger risk than action itself
    • He campaigned to political figures to take on risk, which is incredibly challenging
  • Walt Disney
    • “He mortgaged Mikey Mouse to fund Snow White” – General Stanley McChrystal
      • The intellectual property of Mikey Mouse was actually risked to fund Snow White

Communication

  • If you don’t pass these four tests, you don’t have effective communication
    • Technical – can I get my message to the recipient?
    • Willingness – will I communicate the message?
    • Reception – can the person properly receive the message?
    • Accuracy – is the message appropriate and timely?

Afghanistan

  • “There is a temptation to oversimplify, to find out the critical mistake or the wrong decision” – General Stanley McChrystal
    • When we try to label one thing as the root cause, we let ourselves off the hook
    • “Many of the things that failed us, was because of us” – General Stanley McChrystal
  • The future implications of how things played out are massive
    • Undermined our confidence to take on international efforts – even though there are many that we shouldn’t
    • The world will view us differently, the US’s capability and credibility has worn thin in McChrystal’s eyes

Threats to Society

  • Propaganda, misinformation, and disinformation
    • Biggest threat to the United States society according to General McChrystal
    • We are very susceptible to advertising and strong messaging
  • COVID-19
    • “Covid was the perfect enemy. It was inanimate, so it was ok to hate Covid. You didn’t have to have any sympathy for Covid” – General Stanley McChrystal
      • The one-sidedness of having a common enemy should have united us in theory, but it did quite the opposite
      • Seeing our system fail should be concerning for future threats. Systems are designed to protect us from ourselves…
      • Many businesses were able to survive Covid due to their digital nature
        • McCrystal argues that this was actually bad, the fixation of outcome distracts us from proper risk evaluation when it comes to this type of systemic failure
        • “If something isn’t bad enough, you often don’t fix the problem” – General Stanley McChrystal
  • Cyber Security
    • Many companies look at other companies that have cyber security issues and are just glad it’s not them rather than properly preparing for a potential cyber security threat
    • More Cyber Security threats are inevitable
  • Climate Change
    • If your neighbor’s house was on fire, you go help out. The gradual threat fails to get the reaction that an immediate threat receives.
  • US Education Deficit
    • Lack of proper education leads to ignorance. When we are societally ignorant, we are vulnerable as a society.
    • Our ability to learn is hindered by our tribalism and tendency to not consider opposing viewpoints
      • Diverse dialogue promotes effective education
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Notes By Drew Waterstreet

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