What can business learn from the military about strategy?

In 2004, one of the greatest war machines of all time, the US military, was struggling to beat back Al Queda in Iraq (AQI). Whilst the allied forces had huge advantage in numbers, equipment and training, the commander of the Joint Special Operations Task Force, General Stanley McChrystal, realised that conventional military tactics and command structures were failing. Team of Teams: New Rules for Engagement in a Complex World gives McChrystal’s account of how he and his colleagues discarded a century of conventional wisdom to create a faster, flatter and more flexible organisation that ultimately proved successful in defeating AQI.

But Team of Teams isn’t only a military book, it’s packed full of lessons about strategy for businesses as well. If you are a seasoned business executive struggling to come to terms with new ways of working, or a startup entrepreneur scaling a business, whilst at the same time grappling with how to keep a startup culture alive, then you should give it a read.

Team of Teams

AQI was an organisation native to the information-rich, densely interconnected world of the twenty-first century. It operated in ways that diverged radically from those we thought of as ‘correct’ and effective’. But it worked.

[In consequence] we had to unlearn a great deal of what we thought we knew about how war – and the world – worked. We had to tear down familiar organisational structures and rebuild them along different lines, swapping our sturdy architecture for organic fluidity. Specifically, we restructured our force from the ground up on principles of extremely transparent information sharing (what we call ‘shared consciousness’) and decentralised decision-making authority (’empowered execution’). We became what we called a ‘team of teams’: a large command that captured at scale the traits of agility normally limited to small teams.

Our struggle in Iraq [was] not an exception – it is the new norm. The models of organisational success that dominated the twentieth century have their roots in the industrial revolution and, simply put, the world has changed… but being effective in today’s world is less a question of optimising for a known (and relatively stable) set of variables than responsiveness to constantly shifting environment. Adaptability, not efficiency, must become our central competency.

McChrystal notes that the team challenge is applicable not just to large organisations trying to manage down but also small organisations trying to manage up.

Thousands of fledgling business have sunk because of an inability to scale their teamwork. Joel Peterson, a professor at Stanford, says the rigidity that sets in with scale is one of the main causes of startup failure. And the late J. Richard Hackman, a Harvard sociology professor, found that teams are much trickier to maintain and build than we like to think. The issue is not that teams never work, but that team dynamics are powerful but delicate, and expansion is a surefire way to break them.

Lessons in strategy from Nelson

Early on in the book is a story about how Nelson combined strategy and culture to defeat a superior Franco-Spanish fleet at the Battle of Trafalgar in 1805 (adapted from the account by Adam Nicolson in Seize the Fire: Heroism, Duty, and the Battle of Trafalgar). Richard Rumelt also opens with the same story in Good Strategy / Bad Strategy: The difference and why it matters, one of the most succinct books on strategy there is.

Traditionally, admirals fought naval battles by arranging their ships in a line parallel to those of the enemy. Both sides would fire volley after volley until one fleet, sufficiently weakened due to loss of life, ships, and ammunition, surrendered. This arrangement maximised use of the cannon arrayed along the length of the warships. It also facilitated centralised control: admirals, positioned toward the middle of their line, could monitor the battle and issue orders with relative clarity. Nelson, however [with only twenty seven ships, to the enemy’s thirty three], planned to approach from the side with two columns at a perpendicular angle and punch through the Franco-Spanish line, breaking it into three parts. He hoped to catch the fleet off guard, scatter both sides’ ships, and create such chaos that the enemy’s commanders would be unable to issue coherent orders.

At the very core of his plan was what he later termed ‘the Nelson touch’: the idea that individual commanders should act on their own initiative once the melee had developed. Noting his plan could be easily foiled, he gave a final, simple piece of advice: ‘No captain can do very wrong if he places his ship alongside that of the enemy.’ As historian and archaeologist Roy Adkins wrote: ‘the plan of attack was settled, and every commander in the fleet knew what he would be doing.’ Nelson ‘had patiently instilled the idea in his commanders during many tactical discussions in the days before the battle. He allowed and, indeed, expected his subordinates to use their own initiative.’

Nelson’s maneuver had actually been used before: the very same strategy had been used many times to great success, in the British navy no less. That said:

While Nelson’s tactics echoed those of great admirals before him, his unique innovation lay in his managerial style and culture he had cultivated among his forces. At its heart, Nelson crafted an organisational culture that rewarded individual initiative and critical thinking, as opposed to simple execution of commands.

As Nicolson explains it, “Nelson created the market, but once it was created he would depend on their enterprise. His captains were to see themselves as the entrepreneurs of battle.” The development of these ‘entrepreneurs’ took years of training and experience, but as a result of that investment, Nelson knew his force could emerge victorious from a situation of chaos.

The military means business

The story of Nelson at Trafalgar sets the scene for the book. Nelson’s genius as a leader had been his nurturing of the independent decision-making abilities of his subordinates, which McChrystal and his team sort to replicate. It also resonates with the writings of John Boyd, another great military strategist. Drawing on German Blitzkreig tactics, Boyd focused on Schwerpunkt (the main focus of effort and underlying goal) and Fingerspitzengefuhl (a leader’s instinctive and intuitive sense of what’s going on and what is needed in a battle or conflict). Says Boyd:

The commander is able to maintain a high operational tempo and rapidly exploit opportunity because he makes sure his subordinates know his intent, his Schwerpunkt. They are not micromanaged; instead they are given “mission orders”. This means that they understand their commander’s overall intent and they know their job is to do whatever is necessary to fulfill that intent… This gives the subordinate greater freedom of action.

In a business context, developing the independent decision-making skills of teams should be of great importance to leaders. So too should be the relationship between the development of superior strategy and the culture of the business in which it is executed. Whether you’re a seasoned executive leading a FTSE 100 organisation or an entrepreneur rapidly scaling business, the imperative is the same.


My name is Richard Hughes-Jones. I am a Coach, Consultant & Lecturer who works with the businesses and leaders of tomorrow. My clients are entrepreneurs and high potential executives.

After being diagnosed and successfully treated for cancer in 2015, I decided to learn more about the world and how it works. I read read voraciously and, inspired by what I read, I write high quality blog posts intended to challenge the way you think and make decisions in life and in business. Enter your email address below to join almost 1,000 other subscribers to my mailing list and connect with me on Twitter and LinkedIn.