View the original interview found in the High-Stakes Leadership: Business Insights from Pcubed

Jack Jacobs is, by any standard, a modern-day all-American hero. His notions about leadership have been forged by a long history of action and achievement in multiple fields – the military, business, television, and publishing.

Jacobs served two tours in Vietnam with the United States Army. The first earned him the esteemed Medal of Honor, the highest military decoration awarded by the U.S. government, when, during a brutal skirmish with the Viet Cong, he risked his life to save a fellow advisor and 13 soldiers even as he himself was wounded in battle. His military efforts also earned him three Bronze Stars and Two Silver Stars. Before his retirement from the Army as a colonel, he became a faculty member at the U.S. Military Academy in West Point, teaching international relations and comparative politics, and the National War College in Washington, D.C.
After his military career, Jacobs moved into investment banking, where he worked as a chief operating officer for AutoFinance Group and managing director of Bankers Trust. Currently, he acts as an on-air military analyst for NBC and MSNBC. In 2008 his memoir, If Not Now, When?: Duty and Sacrifice In America’s Time of Need, was published. And in 2010, he appeared on The Colbert Report in a segment titled, “Doom Bunker.”
Recently, Jacobs joined the Pcubed Board of Directors.
In this interview, Jacobs shares his thoughts about where the most effective leading is done, how to make the best decisions even when resources and information are scarce, and how to know when it’s time to shift to a backup plan because the direction you’re going is wrong.

You’ve talked about how leaders don’t get the perspective they really need to make effective decisions because they’re too far from the trenches. Do you find it’s as true in business as it is in military actions?

Jack Jacobs: It’s just as big a problem. I remember when I was at Bankers Trust, and I was made a managing director, they said, “Because you’re a managing director, you get a nice office.” They showed me a nice office. I said I didn’t want it, couldn’t use it. They said, “But you’re a managing director.” I said, “The only way you can understand what’s going on is to be in the middle of it. [With that other office] you won’t get the information you get from being in the middle of it. And the decisions you’re going to make have just as good a chance of being wrong as they do of being right.” I kept my spot in the middle of the 350-person trading floor.
Meetings are also always a huge time-waster. When I was a battalion commander, I almost never went to meetings. My boss, the brigade commander, didn’t like it very much. But I ran a very good battalion as a result of being in the jungle with my troops as much as I could.
And it’s not enough to just sit there. You’ve got to walk around and find out what’s going on. Everybody has gotta know you. In an exceedingly large organization, this becomes difficult to do, but you’ve got to make the effort. You’d be astonished how much information you’d glean that you would otherwise not.
This does not mean you jump the chain of command. There’s nothing wrong with being a very high ranking guy talking with a very low ranking guy to find out what’s going on, and then you pass on the information to the person who this low ranking person works for.
What leaders are supposed to be doing is, among other things, hanging around the people who work for them and mentoring them. So if you’re sitting in an office, you’re mentoring absolutely nobody. If you’re involved in a company that actually makes something, everybody on the production line has to see you all the time. And if you can’t get your paperwork done because you’re down there finding out what’s going on and mentoring the younger leaders, that’s tough. You do it when everybody has gone to sleep. That’s why you get paid more money.

As a recipient of the Medal of Honor, you above all others must be able to appreciate the difference a single individual can make. Has that kind of selfless dedication to a cause ever had a place in business?

I’m reminded of the observation of a Medal of Honor recipient named Brian Thacker. Of his actions, he said there are three grieving mothers still whose sons were every bit as brave. Every Medal of Honor recipient will say the same thing. He doesn’t wear the award for himself. He wears it for everybody else.
In the business world-when we recognize people, those people who get the recognition have to realize and I think make public the notion that they’re very thankful, but, in fact, they accept it on behalf of all those other people who weren’t named.

You’ve had to go into jobs where you’ve been ill-prepared. You don’t have much time and you don’t have all the information you need to decide the best course of action. Any advice to share there?

There have been plenty of circumstances in which, when I look back, in retrospect, the decision was a bad one. But the decision I made was calculated the best I possibly could, and I made a mistake. That happens all the time.
I think the solution to making mistakes obviously is to decide that you’re not going to make them again. Not just the individual mistakes. Recognize the process that went into making the mistake.
We frequently forget our experiences too. I’ve made plenty of errors. Unfortunately, the errors I’ve made in combat have resulted sometimes in people being killed and wounded as a result of my professional error. That happens, particularly in the heat of battle, when there’s a very short time in which to make a decision for which you’re ill prepared, and you’re under duress yourself. You have at least a 50-50 chance of being wrong. The way to avoid that happening is to be as well trained as possible.
That’s why I think education and training are so important. We can’t neglect it. We need to try not to put people into situations for which they’re so ill-prepared that they have just as good a chance of making the wrong decision as the right one. That’s no good. That’s not going to help anybody. That’s the responsibility of people in charge, to make sure everybody is properly trained. That’s the first thing.
The second thing revolves around teaching the notion of remembering what the objective is. At the end of the day, we often make errors. Our country does. People in business do all the time. We make errors because we have not articulated the objective. I think for every human endeavor, but particularly for business, it needs to be articulated by the boss what the specific objective is. Only then can subordinates determine what the tasks are to achieve it.
If you throw resources around, without changing what it is you’re trying to accomplish, you’re going to find yourself down a road you don’t want to be. You’re going to make large-scale errors, and it’ll be too late to go back down that road and find out where you made the mistake.
So I think being very specific and very focused on what the objective is – if we do that, we’ll make far fewer mistakes.

Do fallback plans have a place in business? When it isn’t a situation where people are dying because of your decisions, how do you know when it’s time to shift to a backup plan?

In the military it’s easier in many respects. The objective is clear, and what you’re doing is managing the scarce resources. You keep a reserve because you can’t run the tape forward and predict the future. When you start attacking the objective, you realize the objective cannot be attacked from this direction – it has to go that direction. You can’t use two platoons – you have to use three – so you commit your reserve.
When you’re talking about large-scale organizations with multifarious objectives, it becomes difficult. That’s why you have to surround yourself with good people. You can’t surround yourself with “yes men.” “Well, what we’re going to do is go and buy XYZ company…” “Yes, boss! It sounds like a great idea.” The next thing you know, you’re declaring Chapter 11.
So it’s important to have people with diverging views around you, people whose views you respect, whose intellect you respect, and who may even be perceived by you to be a threat to you but you’ve got to have them around you anyway. Surround yourself with people who are better than you are, and you’ll do a lot better.
Also, some of it is instinctive, to be honest with you. But don’t forget, it’s instinct that’s honed by experience. If everybody were equally talented, then we wouldn’t have one guy in charge. We wouldn’t have a unitary command. It would be pure anarchy, and everybody would do what he wanted, and it would still work out. That’s not the way it is.
People can sense when it’s time to call it quits on trying to achieve an objective. “We have 12 business lines, and eight of them are doing real well, two are on probation, and I’m tired of the other two – let’s cut ’em.”
That brings up another interesting thing you didn’t ask. That has to do with lightening up. This is a broad generality, but we don’t make a mistake hiring somebody or starting something. But we make mistakes all the time waiting too long to divest ourselves of investments that are not productive, people who are dysfunctional and not productive. There are lots of psychological studies that demonstrate that human beings are loss-averse. They will hold on longer than they should to losing investments and unproductive people and unprofitable business lines. It’s human nature. That’s why a leader has to have a little more instinct than the average guy.

How do you sort out when it’s time to cut your losses and when it’s time to let somebody learn from their failures?

Certainly we can’t have a zero tolerance for failure, because otherwise, we’d fire ourselves. We make mistakes every single day. But I think that there are two things about this. The first is again, there’s a certain amount of gut instinct involved here. There’s an opinion by United States Supreme Court Justice Potter Stewart in a famous case. He said about hard-core pornography that even though he couldn’t define it, “I know it when I see it.” He’s absolutely right about that.
Real life is much more difficult and incremental. But there’s a certain amount of skill, experience, native intelligence, and gut instinct that a leader has. When he’s got a high degree of confidence that this isn’t going to work out, whoever’s making the mistake needs to go. We need to put him to doing something else. We need to stop whatever he’s doing – he’s good but whatever he’s doing is not good.
It brings up a very interesting thing I’ve been thinking about for some time. We do this all the time and it’s wrong: You should not promote somebody for what he’s done. It’s not a reward for having done something. You promote him for what he’s going to do.
Frequently, we promote people because they’ve done a good job, but we don’t consider whether or not doing that job is a good predictor of doing a job with more authority and responsibility. That’s the real question. “I recommend we promote Mary.” “Why?” “We should promote Mary because she did these 10 things.” That’s not the right answer. Mary should only be promoted because she would be a better supervisor than any of the other people. For example, you should not necessarily promote your best salesman to sales manager. You should promote the best potential manager to be the sales manager for a wide variety of reasons. I want the best salesman out there selling. I want the best manager to be managing and to take from the best salesman the tips and techniques that he can pass onto his other salesmen. But we make that mistake all the time.

You said before how nothing in your life could compare to going off to war. Once you were retired from the military, what gave you pleasure in the work you were doing?

First of all, I was using all the techniques I learned as a young soldier in business, and they proved to be the perfect ones – focusing on the objectives, making use of scarce resources, making sure the people who worked for me were trained. All the stuff we do in the military turned out to be great tools on Wall Street. It gave me pleasure to realize that while life is difficult, it’s not all that complicated. So I felt comfortable.
Plus, I was lucky enough to stay in touch with the military. I hold an endowed chair at West Point. Every week I’m up there teaching. That’s enjoyable. I do not claim responsibility for this. But the guy who is the current Chief of Staff of the United States Army, Ray Odiemo, was a student of mine when I was a captain at West Point teaching international relations. Marty Dempsey, current Chairman of the Joint Chiefs of Staff for the Department of Defense – he was also a student of mine. There are lots of others who grew up to be very, very successful. I’ve lived long enough to see people who were students of mine do well on their own. I enjoy watching that.

You have four grandchildren, all teenagers. What do they think is cooler, seeing you on MSNBC, knowing that you’ve written a well received book, or being on The Colbert Report?

They don’t care what my opinion is. They’re in a world of their own. But being on The Colbert Report, now that’s an achievement.