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0:16 >> Hello and welcome to business lessons from the military. I'm your host Kevin Bemel, and I'm here every Tuesday at 10:00 a.m. Pacific time to talk about military history, doctrine, and the prac- and leadership practices, and then distill from them lessons that we can apply to our businesses and professional practices. So, today I am on the second episode of the third part of our 24-episode campaign uh talking about culture and long-term uh oops, I just clicked the wrong thing. And long-term
0:52 survival. And um I'm going to be talking about discipline under stress. So, the the reality is we we we tend to think that um people sort of rise to the level of of a crisis. Um but the fact of the matter is crisis doesn't really create character. What it does is it reveals whatever character and discipline has been built up prior to the crisis. And this is why
1:29 in the military, we train so hard and we do our best to train so realistically. It's It's to embed in us in each and every service member the responses that are necessary when the proverbial, you'll excuse the expression, fit hits the shan, as they say. So,
1:53 >> [clears throat]
1:54 >> the Yeah, know, you think about it, pretty much anyone can appear competent uh when when conditions are easy, right? There's not a lot of pressure, they can take time to think things through. Um you know, there's there's there's probably nothing potentially uh cataclysmic at stake. And so, you know, no big deal. But But, the real test of culture comes when when a a team or a you know, a a military unit or a business team, they're under pressure, there's fear,
2:31 there's uncertainty, there's exhaustion, and and then you pile on top of that public scrutiny, and it creates a cauldron in which it's very, very difficult to perform uh it it you know, at at at at top capacity, uh let let alone um be creative. So, the strongest organizations are not the ones that are most charismatic or innovative. Those qualities are fine, but the strongest organizations are the ones that remain
3:07 disciplined under pressure. So, in in the military, discipline matters in combat. I'm I'm sure that's no surprise to anybody, right? So, uh operations happen um when or when an operation is happening, I should say. So, confusion spreads often times quickly. There There fear distorts people's judgment. Sometimes communication breaks down. And then fatigue weakens decision-making. So, I remember when I was deployed, um our our the fighter pilots in our air wing
3:44 were flying very long missions from our ship in the Indian Ocean into Afghanistan. And the only way they could stay awake uh was to take a drug basically that kept them awake. I I don't remember which one it was. And at the time I was thinking, "Wow, I mean that must just be incredibly difficult because you're being kept artificially awake but are and in in in theory it was also keeping our pilots alert but just, you know, how that works in their systems was was not optimal. It's what
4:21 we had to do but it certainly was not optimal. And and so under conditions like that, discipline really becomes operational survival. So discipline ensures that procedures are followed, that ethical boundaries hold, that coordination continues, and that panic does not spread. So if one individual loses control, the other individuals remain disciplined, they they they deal with the person who's panicking, and
4:56 they can still execute the mission. And and so in the military you'll hear this sometimes in in in the Marine Corps you'll hear you'll hear this more often is you fall to the level of your training. Right? So under stress, right? People don't rise to the occasion. They they fall back on sort of instinct, if you will. And that's because stress reduces the ability to be creative, it reduces patience, and and it it it also reduces cognitive flexibility, and in
5:33 fact it can create cognitive overload. And so people revert to habits. And so if if training has disciplined them into certain habits, like standing fast even as fear rises, so that's what they'll do. If if training has has not been properly done, then discipline may not hold, and so the flight instinct may take hold, and now, you know, there's a route in the battle. Uh and and and indeed, if we look at a
6:10 an example from military history, I'm going farther back than I usually do, but I uh talk about a you know, a different uh a different time period. So, um during the Battle of Cannae, during the Second uh Punic War uh in 216 um BCE, so the Romans were fighting the Carthaginians, uh who were generaled by the famous uh Hannibal uh Barca, and Rome had a massive army. They outnumbered Hannibal's forces significantly, and and they just
6:45 believed they would overwhelm the Carthaginians and just slaughter them, basically. But, Roman leadership became impatient, overly aggressive, and overly confident. And the emotional aggression replaced controlled, disciplined execution. So, Roman commanders pushed their infantry forward very aggressively, seeking a decisive breakthrough, instead of remaining instead of maintaining discipline of formation and tactical flexibility and
7:21 controlled spacing. And so, the Romans compressed themselves into a dense mass, and this made maneuver much more difficult, it made communication actually harder, and command control weaker. So, you might think that by compressing forces together, communication could um be done more quickly, but but no, because because they couldn't flow through quickly and and units got intermixed and such, it it became essentially impossible for the Roman commanders to
7:56 continue to lead the forces. And so, the army became essentially a mob rather than a disciplined fighting force, which is what Rome had been known for. And so, then command unity failed. So, Rome operated under a dual console system at that time, and the commanders didn't always share the same philosophy. So, one console, Gaius Terentius Varro, favored aggressive action, and and and the other console did not, and the result was this sort of inconsistent strategic and
8:32 operational thinking, and the pressure for rapid victory, and so then there was weakened restraint. And because of the mixed message, the troops lost their cohesion, and and Hannibal he basically deliberately allowed the Romans to advance into his forces, and then he enveloped enveloped them on their flanks, and essentially just almost wiped them out. So, as the as the
9:09 Romans the Roman soldiers started to realize they were being encircled, panic spread, formations deteriorated, and they lost the ability to maneuver coherently. And and and then once the once discipline collapsed, so the the Romans numerical advantage became essentially useless. And the result was the Roman army suffered catastrophic losses. 10,000 10,000 tens of thousands I should say were killed in a single day. It was one of the worst defeats in
9:44 Roman history. Hannibal and Hannibal's victory is still studied today as a masterpiece of of battlefield control, of psychological um manipulation, but most importantly for at least for our subject today, of disciplined execution. He held his troops in a disciplined way, allowing the Romans to advance into them, which had to have been a frightening experience. I mean, we're talking about the Roman legions, but but his troops stayed disciplined in this enveloping uh maneuver, and they essentially wiped
10:20 the Romans out. So, you know, it And And this is like again, this is an an example from, you know, 2,200 years ago, um but it is by no means a a unique example um in in military history, right? This is why the American military trains so hard, so frequently, right, to to to instill the the discipline that comes from, you know, falling from from from habit,
10:56 really. Okay? And so, in business, I think sometimes businesses misunderstand discipline. So, many organizational scandals emerge during stressful times. So, financial downturns, operational crises, public, you know, some sort of uh you know, public scrutiny is happening, um you know, because of perhaps some kind of political issue, right? And And this pressure exposes in these companies whether ethics and discipline are truly
11:31 embedded in the company's culture in what we were talking about last week, the the command climate, or they're just sort of, you know, merely something that's done when, you know, there's stable conditions, but the minute things start heating up, it all falls apart. So, what hap- what sometimes happens is there's falsified reporting, so that units still look like they're performing well even though they're not. They they'll conceal losses. They'll they'll take shortcuts on safety, and they'll start shifting blame. Oh, it's not our fault. It's It's another part of the
12:07 company. Or, well, this is really just the economy, or it's it's the government, or it's this, or it's that, right? Stress reveals the real corporate culture. Just as truly as it does on the battlefield. And And so, while corporate culture often times celebrates disruption and speed and improvisation and constant reinvention, um and and these qualities, of course, are important, without discipline, execution becomes inconsistent, ethical lines blur, or
12:44 or disappear in some cases, decision-making deteriorates, and then organizations fall into panic, and in some cases, they almost virtually fall apart, not unlike the Romans at Cannae. So, many companies appear successful until adversity arrives, and then the underlying culture becomes visible, and and we really know, you know, what what is what is the true strength? What is the true discipline of this company? So, when you have a flashy organization
13:19 where they're doing all kinds of press releases and, you know, and all kinds of fancy stuff on social media, you know, they they can look very innovative, they they seem to communicate with confidence, and they may be growing rapidly, but internally where it really matters, right? The standards are applied inconsistently, accountability is weak, processes are ignored, and ethics become situational. And so then these systems they they seem to perform well as long as things in
13:54 general are are okay, but then under pressure they fracture, and all of a sudden the flashiness is gone, and the company falters. So, I'll take a quick break, and we're going to look at some specifics with respect to this issue.
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14:58 >> Okay, so let's translate this idea now this military doctrinal idea into into business doctrine, okay? So, first of all, just like in the military where we need to train in order to build essentially habits that will come forth during times of stress, We need to build habits in a business before crisis arrives. So, discipline can't be improvised, okay? It has to be built up
15:34 in the same way that we build up muscles. So, if you think about exercising, like weightlifting, you know, we don't start out bench pressing, you know, 200 lb or even 150 lb. We start lighter and we do repetitions. And those repetitions, they build up our muscles. They actually build up our muscles by breaking down some of the muscle tissue that then when it when it when it repairs, it becomes stronger, right? And so, this is we have to do the same thing in terms of discipline. In that sense, discipline is just like a
16:10 muscle. We need to challenge our people so that they can so that they can experience some failures of discipline and have the opportunity to build back strong more strongly, right? And then we during those, you know, we during those trainings, so we need to reinforce standards consistently. I mean, we need to do that, of course, throughout throughout all the time in our business. Whatever the standards are, they they need to be reinforced consistently. But especially when we're training, we need
16:45 to pay take extra care because that's when we're building that memory muscle. And then we we need, as I've been saying, to train teams under as realistic conditions as possible, okay? Now, that can be more difficult in a business setting than it might be in the military, where in the military you can even do live fire exercises, okay? You're not going to, you know, do something like that with your business, but we we we've got to give our teams the opportunity to to practice under crises so that they
17:21 can build habits, the right habits for responding. Okay? So, that's number one. Number two, we need to maintain ethical standards under pressure. Okay? There can be no equivocating on this issue, right? And and the fact of the matter is pressure does test integrity. We we see it throughout society in in all sections. I think this is one of the reasons why people have such low faith in in many of our societal institutions is these
17:57 institutions come under stress and the next thing you know, there's been some kind of egregious ethical lapse, right? So, it's not the institutions per se that are experiencing the ethical lapses, of course. It's the people because organizations are just made up of people. So, individuals need to be they they need to have reinforced for them the ethical standards, okay? Not not by, you know, doing um some kind of maybe online course every six or 12
18:33 months, but on a daily basis, okay? Whenever a a decision is it needs to be made, it needs to be couched as being made within the ethical lens of the company. And that's that's hard to do. Sometimes it's exhausting, but it has to happen. That's how we maintain ethical standards under pressure because it just becomes, again, muscle memory. It becomes habit. So, we need to define what are the non-negotiable
19:08 behaviors, okay? We do not do these things, okay? So, for example, in one of the companies that I oversee, one of the non-negotiable non-negotiable behaviors is we do not raise our voices. Even when things are stressful, even when we're tired, even when we're under a lot of pressure, we do not raise our voices. We speak calmly. And we we do that all the time, whether it's in a stressful situation or not. Even and if if we're getting kind of excited about something, okay, maybe there's a little enthusiasm a little enthusiasm
19:44 going on, that's fine, of course. Uh but there's no shouting, especially directed at another person. Not allowed. That's a non-negotiable standard, okay? And there by the way, there are lots of companies where I think they they purport to have that standard, but it is not enforced. And and there are, you know, screamers, it you know, among you know, among supervisors. It's incredibly damaging to the morale of employees. And in a time of crisis, someone who's used to getting screamed at by his supervisor
20:20 is very likely to exhibit that same behavior, because that's what's been modeled, and so that's what he will do, right? So, we need to absolutely reject so-called, you know, temporary ethical shortcuts. No. No. Ethics are immutable. No shortcuts allowed, even if the company has to take a hit. They should take the hit in order to stand by their ethics, right? And [snorts] accountability should be reinforced during times of stress, so
20:57 people know that the expectation is that ethical standards will be maintained, must be maintained, even when there things are going wrong, there's a great deal of public scrutiny. No shortcuts allowed. Full stop, right? So, ethical flexibility leads to cultural decay, and we don't want that, right? We want our companies to be ethical organizations, and so we need to reinforce that. Next, and I I alluded to this or I not
21:34 alluded to it, but I I I mentioned this just just a moment ago. Number three, we need to create calm communication systems, okay? So, panic spreads through leadership behavior. So, if if if the company is blindsided with some sort of crisis, the first things lead The first thing leadership should do, especially senior leadership, is calmly address the other members of the team, the other other employees,
22:09 acknowledge the crisis, and then reassure that a a plan is going to be developed or hopefully there's a plan already at least uh format formatted in some way for dealing with with with crises, and the plan is going that plan is going to be implemented and adapted for the specifics of the current crisis, right? That needs to be communicated clearly, calmly, and consistently. Especially when leadership is faced with someone in the company who is panicking,
22:45 okay? That person should not be screamed at because they're panicking. First of all, that's only going to exacerbate their panic, number one, and number two, it's going to show to the other employees, "Oh gosh, leadership doesn't have a grip on this." Um you know, and then and the pr- panic will spread. So, if someone's panicking, let's say you're in a meeting, okay? There's there you know, meeting maybe you're in the conference room or whatever, and somebody exhibits panicky behavior, if you're leading the meeting, have one of your trusted associates
23:20 um take the person out of the room, get them a glass of water, calm them down, assure them that everything's going to be fine, let them have a few moments to get control of themselves again, and then re-enter the meeting, right? And that may sound a little bit, I don't know, silly or childish. It's not, okay? We We don't always know what's going on with other team members. They may have a lot of other things going on in their personal life that we don't know about, and and the and the pressure of the crisis may be the the
23:55 straw that broke the camel's back, so to speak, and and they they temporarily lost their discipline, and what they need is is just a a a moment of grace, as we say, an opportunity to to pull back, to reset themselves, okay? And then they can re-engage. Or maybe it's just they're not they're not going to be able to be effective in helping to address the crises the crisis. That's Look, that just may be the case. Sometimes that happens, okay? Uh and so in that case,
24:31 again, we we we need to give We need to give that member of our team some some some latitude, and and and and pull together to make up uh or to pick up the slack where, you know, for whatever reason, they just can't handle it themselves, right? So, i- i- i- i- in in general terms, we want we need to avoid emotional volatility, right? But if we can't avoid it, we need to be very smart about how we handle it, okay? And and then we need to establish reliable reporting
25:08 structures so that people who are handling the the front lines of the crisis know, you know, to to whom do I need to report, how frequently, and and then set the expectations so that no matter what they're reporting, they're not going to get exploded on, which is only going to make the situation worse because what you want, of course, is accurate information being sent up the chain of command so that uh if if the plan needs to be adapted, it can be done so based on reality and and
25:44 not uh information that has been um uh tainted by people's fear of the response they're going to get or the reaction they're going to get from leadership, right? So, calm leadership stabilizes an organization and it shows people that, you know, leaders are intent on getting through this crisis successfully. Okay. And then I mentioned this a a a little bit in the first one. We need to train for realistic scenarios, okay? So, what are the types of crises that are
26:21 liable to hit your business, okay? So, I know for for my business, one of the crises that may hit it is unexpected litigation, right? People just, you know, um look, people are volatile, they get mad, um or they think, you know, that there's some uh strategic or or operational or tactical advantage they can get by filing a lawsuit and then having it served on on, you know, somebody, um and and that'll, you know, push them back on their heels and get them panicking,
26:56 right? So, I I learned this very early on in in, you know, this phase of of of my professional life that there are just some people out there that they think, you know, having a process server show up at my door and handing me papers, you know, is is I don't know, it it's going to scare me and and it's going to help them obtain the objective that they weren't able to get through negotiations and principled behavior, right? And and, you know, I I talked to my lawyer about this and I'm kind of like,
27:32 whatever, you know, I mean, fine, you know, I'll I take the documents, scan them onto my computer, email them to my lawyer and say, "Hey, I got served with these today. Please advise how you think we should respond." Go on with my day. There's no reason to lose sleep over it. It's It's just a tactic. Um, you know, if but but that but that also comes from the ethical standards. So, um, when when I'm working on a case, one of the questions I'm always asking my team members is, "Where might we be
28:09 doing something wrong that could make us vulnerable to a successful to to to a to litigation, to somebody being successful in litigation?" And so, [snorts] since it's part of our ethical standards and part of our ethos to examine those issues always when we're considering an action, if somebody's suing us, the chances that there's any grounds for the suit are very very minimal. And so, there's no reason for panic, right? Well, that comes from some of the points that I mentioned
28:44 earlier. So, for example, maintaining ethical standards under pressure, creating calm communication systems, okay? And and so, this is all part of building up training for realistic scenarios. What are what what are the avenues through which crisis can hit your business, hit your organization? What are those? And then, how do you create uh systems to deal with them effect calmly and effectively? And then, conduct simulations for for enacting
29:19 those systems, right? So, in my case, I could, you know, have a friend say, "Okay, let's let's let's let's let's just practice here. Um you know, you be a process server, come and serve me with legal papers, and and and let's let's see how this whole thing works, okay? I mean, I don't have to do that because many of the people I work with I've worked with a long, long time, and so, we know each other, we know you we know each other's backgrounds and and and how we respond, etc. But, you can you can build a scenario around the processes that you created for handling a
29:54 particular type of crisis, and then see, how does it work? How does it stress test? And make maybe make some alterations so it'll work more smoothly, right? And expose your team members to some ambiguity, okay? How is this I mean, is what's going to happen here? We don't know, okay? Let them experience some of that, right? And then, rehearse the crisis decision-making, the the gathering in the conference room, or everybody getting on a virtual meeting, or whatever you're going to do. Whatever the plan is, rehearse that plan, okay?
30:30 And you're going to need to rehearse it more than once if you want to habituate it, so make regular times when that will be practiced, okay? If it's something small and you have a, you know, a weekly or a monthly staff meeting, maybe take a few minutes each each staff meeting and practice it. Okay, whatever works within the context of your business. And then finally, number five, reward reliability, not just talent. So, high talent without discipline often times creates instability. Okay,
31:05 because the person feels that somehow because they they have high talent, they are entitled to certain um certain perks or or to perform certain to behave in a particular way within the company because of their high talent. But, high talent without discipline becomes essentially destructive to the business. So, recognize consistent high-quality execution. Now, of course, consistently bad execution, you don't want to recognize. But, but for people
31:41 who are day in, day out doing the high-quality work, it's not flashy, but it's there and it's happening, recognize those people. Make sure that other other their their team members, other people in the company know that that consistent high-quality performance is appreciated and valued in the company, right? Show that that that accountability and dependability are also valued, right? So, I I I do my best every day to look for some example among
32:18 my team members where they've shown accountability and dependability, whether it's you know, we something had to happen, we had to get a a check out by, you know, FedEx so it was delivered the next day because there was a strict deadline to avoid, you know, a foreclosure or something like that. When the team member gets it done, make sure to to say, "Hey, thank you very much for getting this done. You knew it was important. I I I appreciate, you know, your diligence, right?" It It It doesn't need to be big, high-flying, but just you know, recognize the person and and preferably recognize them in the way
32:54 that that that the other team members see that they're being recognized as well. Um it can be something as as simple as uh saying so in a meeting or, you know, doing an email, you know, to to all the team members. And then finally, avoid excusing uh destructive behavior from high performers. Okay? So, there is a tendency, especially if someone's a rainmaker, to kind of overlook. Maybe they they're a yeller and screamer or whatever. Or maybe they have a uh a a a bad habit of of of sort of ew kind
33:30 of interactions with other employees. Cannot let that go on. It will absolutely corrode the culture of your company. And and and and it's a challenge, right? Because look, the person is bringing in, you know, the the revenue, and you don't you don't want them to leave. On the other hand, you you can bring in a lot of revenue and the business can still fail because everybody else on the team is put off by the fact that this rainmaker gets all the special treatment, and they're held to a different standard, right? So, sustainable organizations, they
34:07 prioritize reliability because especially in a crisis, that's what's going to get them through, right? So, um organizations that survive organizations survive long-term because standards endure, trust holds under stress, and teams remain coordinated, and ethical boundaries remain intact, okay? So, as a result, discipline builds. It compounds over time, okay? And that's important because that's what we want.
34:42 We want We want to We want to build discipline. We want to build that discipline muscle over time, right? So, leaders have to remain composed during a crisis. They have to model ethical consistency. They have to enforce standards equally. And they need to resist reactive decision-making and and and be deliberative. They may need to be deliberative deliberative more quickly and actually during a crisis, but they still need to be deliberative, right?
35:19 And so, stress is going to magnify leadership behavior throughout an organization. And so, leaders really This is the test of leadership. They really need to be on their toes, right? So, businesses today, they face economic volatility, which we've seen of late. They face cybersecurity threats cybersecurity threats. They face reputational risk, technological disruption, and political and social pressure. It just Now, this is This has always been the case
35:55 for for for businesses. It may be it's coming faster today because, you know, the the rapidity of of technological change has increased, but whether it's it's similar today or as as in the past or not, these are the the the the kinds of forces acting on businesses today. And under these conditions, weak cultures fracture quickly and disciplined cultures, they adapt and they endure. And that's why we
36:32 want to we want to build up that discipline. So, organizations that survive, they're rarely the loudest. They're really They're really the ones The ones that survive are the ones who are stable under pressure in a crisis, okay? So, anyone can perform when the conditions are favorable. This is where we began. Uh the true test of culture is what happens when fear rises, pressure mounts, and uncertainty spreads. And this is, I think, a misnomer that many of us hold.
37:08 We think discipline is restrictive. It is not. Discipline is not restrictive. Discipline allows us is what allows us to be flexible and at the same time productive. Okay? If If we are afraid, our options shrink because our our cognition tends to shrink. So, discipline is really what keeps our breadth of responses intact. So, discipline is not restrictive. It is
37:43 the opposite, okay? So, it is what allows organizations to function when everything else seems to be unstable, right? So, in Warren Buffett's pressure does not build character, but it certainly does reveal it. So, I thank you very much for joining me today. If you have any questions, comments, criticisms, look right down below you in the show notes. Links to uh social media are there. Feel free to post your comments or send me an email. And my slate of shows, Mondays at 10:00
38:18 a.m. Pacific Time, Trusts and Estates Weekly. Tuesdays, like today, at 10:00 a.m. Pacific time, business lessons from the military. Wednesdays at 10:00 a.m. Pacific time, people making money. And then, every other Thursday at 5:00 p.m. Pacific time is my show Jiggers His Place, where we sit back, have a cocktail, and schmooze, and talk about all kinds of topics not related to uh finances. So, once again, I thank you very much for joining me. Wishing you a wonderful rest of the day, and signing off as I always do. Marie darling, you
38:53 are my bell. Courage at all times, my friends.