How veteran organizations can compete and win
How veteran organizations can compete and win

GUTS: How Veteran-led Organizations can Compete and Win

GUTS, perseverance, bouncing back, enduring hardship – these are concepts familiar to veterans. They are useful in combat. How about in the business and nonprofit worlds?

Veteran-led businesses and nonprofits can face an uphill battle.

Veteran-led businesses and nonprofits can face an uphill battle. Digital technology has expanded the scale and scope of competitive interaction in the marketplace. A single Google search reveals ratings and reviews that can make or break small organizations. Digital technology has enabled giants such as Amazon, Wal-Mart, and others to compete in places where small companies used to dominate. After so many recent nonprofit scandals, donors are likewise favoring big nonprofits with long track records. This intense competition is placing enormous pressure on small business and nonprofit leaders.

Many post-9/11 veterans start a new business or nonprofit because they want to make a difference. Business entrepreneurs imagine products or services that will improve the lives of others. Social and political entrepreneurs rally others to a cause or mission they believe will make America and the world a better place.

Once you have a product or service

Once you have a product or service that others want to buy or a cause that others want to support, you have made a critical first step. That’s not enough to grow sustainably. Roughly half of small companies are out of business within the first five years. Only 28 percent of nonprofits created in 2005 still report financial activity 10 years later. At the heart of these problems tend to be failures in Leadership, Culture, and Strategy.

Nearly half the leaders in America are considered to be incompetent. Nearly 70% of Americans, according to a Gallup, report being unengaged at work. One slacker or jerk reportedly can reduce performance in a group by 30 percent. McKinsey, a consulting firm, says that most business executives are not satisfied with their strategic planning processes. Of those organizations with a strategy, an estimated 90 percent fail to execute them successfully.

Look at Jawbone. They were once the leaders in Bluetooth-enabled music devices. Then they shifted emphasis to personal fitness devices. This strategic decision brought about the failure of the company. Toys-R-Us, the world’s largest seller of toys, likewise succumbed to poor strategy. Uber, once the highest valued start-up in history, went to the brink of collapse due to poor leadership and a toxic culture. Oxfam International’s recent problems stem from bad leadership and culture problems, too. All of these organizations have or had great products and causes. Their failures resulted from issues in Leadership, Culture, and/or Strategy.

How to achieve lasting success?

How to achieve lasting success? Decades of personal experience and over 20,000 hours of research and writing suggest that organizations grow sustainably when they get right with 3 BIG things: Leadership, Culture, and Strategy. Organizations that are failing have major problems in one or more of these three areas. In a dynamic marketplace, it is not good enough to get these elements right once – organizations must keep them on track.

Lead with GUTS

To make all this simple, memorable, and meaningful for small business and nonprofit leaders, we use the term GUTS to describe what organizations need to succeed.

GUTS has a three-fold meaning:
• A synonym for Radical Courage – practicing the four main types of courage leaders need: physical, moral, emotional, and intellectual.
• A metaphor for your Core — management, values, and systems – i.e., the guts of your organization.
• A memory aid: Greatness (your goal) = U (you as a leader) x T (teams in the thriving culture) x S (strategy to compete and win).

Small businesses and nonprofits that get the 3 BIG things right have a decided advantage in a competitive marketplace. Solid leadership keeps the company agile and creates believers among employees and customers. A healthy organizational culture improves employee engagement and reduces turnover. A winning strategy enables organizations to determine how to best focus their efforts and succeed. Together, they create an organization that is able to fend off serious threats, seize fleeting opportunities, and grow sustainably.

Motivated Reasoning: is it undermining your business?

How well does your organization “see itself” and understand the potential perverse incentives for “motivated reasoning”?

Motivated Reasoning: is it undermining your business?

Motivated Reasoning: is it undermining your business?

The New America Foundation’s recent challenges with alleged research conflicts of interest should motivate all think tanks and research organizations to take a hard look at themselves.

Businesses are at high risk of this problem, too. Confirmation bias results in leaders over-emphasizing the importance of information that aligns with their pre-existing beliefs while discounting disconfirming evidence.

How well does your organization “see itself” and understand the potential perverse incentives for “motivated reasoning”?

How often does your organization have an independent assessment of your levels of risk for this problem?

Intellectual courage among think tank leaders is growing in importance as corporate donors and foreign governments increasingly provide funding for research. Think tanks have become reliant on such funding for survival.

This, in turn, can create incentives for “motivated reasoning” — conclusions designed to advance donor interests. These expectations are more often implicit than explicit.

Think tanks can be very opaque about their funding, so it is difficult to tell how closely their reports align with donor interests.

An independent audit is a great way to understand the potential scale of this problem and to take steps to address it.

Failure to “see themselves” places even the best organizations at high risk of a blindside or major credibility melt-down.

Radical Courage

Radical Courage: How Leaders Maintain the Balance to Win

Digital technology intensifies competition for small businesses and nonprofits. This, in turn, places extraordinary demands on leaders and teams.

Sadly, many leaders fail under the pressure. We see the news stories every day, from Uber to United to Oxfam — the list goes on. These are only the most visible examples.

What do leaders need to thrive in the digital age? Radical Courage.

Radical Courage is the integration of the four main types of courage: physical, moral, emotional, and intellectual. I use the descriptor “Radical” to express an idea both basic and profound — leaders require multiple forms of courage.

“Courage,” Winston Churchill argued, “is rightly esteemed the first of human qualities because it has been said, it is the quality which guarantees all others.”

Ancient Greek philosopher Aristotle described virtues such as courage as the mean between extremes. This golden mean, he argued, exists between excess and deficiency. In the case of courage, it is a mean between recklessness and cowardice

The U.S. Army identifies two types of courage: physical and moral. Physical courage means doing one’s duty despite fear of death or harm. Bravery on the battlefield, for instance, is a necessity for soldiers. Without it, units and armies could collapse when engaged with the enemy.

Many small businesses and nonprofits are engaged in tough and demanding work, too. Some operate in dangerous situations. A leader’s willingness to share hardship and difficulty — to set the example — is an important aspect of physical courage.

Moral courage, on the other hand, means to stand up for what is morally and/or ethically right despite pressure to do otherwise. Such pressure can come from leaders or peers; it can also come from wanting to avoid responsibility for mistakes or errors. Moral courage within an organization’s leadership is essential for building internal trust. It also builds public trust in the organization.

The decision by some Volkswagen managers to falsify emissions test results, compounded by senior executive decisions to cover up the cheating, are examples of poor moral courage. Small business and nonprofit leaders face these kinds of challenges all the time, particularly over accounting, regulations, and reports. Leaders must set the right example here, as well.

The third strand of courage is emotional. In Aristotelian terms, emotional courage can be seen as a mean between the extremes of cold-heartedness and excessive passion. Maintaining a balance between ignoring or avoiding emotionally difficult situations and being carried away by them is important for leaders.

Leaders may face emotionally challenging situations with customers, colleagues, or the public that create high levels of anxiety and trepidation. Such situations carry the risk of professional harm or damage to the business if not handled right. Leaders with emotional courage tackle these high anxiety situations rather than pawning them off on others.

A powerful example of emotional courage comes from my former executive officer in Afghanistan, Major Chris Doneski. An explosion during a July 2007 firefight killed a beloved officer, Captain Tom Bostick. The blast inflicted horrific damage. When Tom’s remains were evacuated to the field hospital at our main base, Chris Doneski was the senior leader on site. Someone needed to identify Tom’s remains for the doctor’s report. Chris could have directed a junior officer or senior noncommissioned officer to perform the gruesome task. Chris knew that he needed to do it himself. He will never unsee what he saw that day.

Intellectual courage is the final type — and the least understood. The U.S. Army fails to include intellectual courage in its concept of courage. The U.S. Marine Corps, however, describes “mental” courage as the ability “to make tough decisions under stress and pressure.”

This is an important addition, but the definition is not necessarily helpful. How does a leader know if the decision in a tough situation is the right one? How do leaders know when to stick to their guns and when to make changes?

Intellectual courage is the willingness to make sound decisions in an uncertain and complex situation when the best choice is not obvious.

Like other virtues, intellectual courage is a balance. This balance can take on many dimensions. The one depicted on the picture below is a balance between strength of conviction one side and open-mindedness on the other.

Intellectual courage

Think about it. If a leader is imbalanced on strength of conviction, they can become obstinate, bull-headed, and believe in their own propaganda — hubris, the ancient Greeks said, precedes a fall.

On the other hand, leaders can become so open-minded and flexible that they lose the courage to act in the face of uncertainty and complexity. Others create hyperactivity by reacting to every conflicting or contradictory point. Both problems can be fatal.

Another balance is between decisiveness and deliberation. Impulsive leaders make decisions on instinct and insufficient information, which can lead organization in the wrong direction very rapidly.

Excessively deliberative leaders, on the other hand, delay decision-making by constantly seeking more data and analysis — even if more information is not needed for the decision. This process goes on until the bad and less bad options become obvious. The leader decides for the less bad and brags about making the right choice. The incessant deliberating, however, has resulted in many lost opportunities to shape more positive outcomes.

Sustaining balance between these kinds of extremes is the foundation of good judgment. Such balance does not come naturally to most people, so it must be developed and nurtured.

Radical Courage is the integration of these four types of courage. Imagine a hashtag. It has two vertical lines and two horizontal lines. Each line represents a type of courage: physical, moral, emotional, and intellectual. Radical Courage occupies the space in the center.

Radical Courage

This depiction is more useful than the intersection of four lines. That description implies an unrealistic and inflexible point of perfect balance.

Leaders often grapple with situations requiring more than one aspect of courage. The center space of the hashtag allows for movement, for judgment, and for finding different points of balance.

Leaders who can do this move from good to great.