The Value Perspective Podcast episode – with General Sir Nick Carter

Hi everyone. This week we are delighted to have retired general Sir Nick Carter joining us on The Value Perspective. Nick served as Chief of the Defence Staff from 2018 to 2021 – the culmination of an illustrious military career spanning more than four decades, including commanding 55,000 NATO troops during the Afghan surge and, in his last tour, leading the transition process with former president Ashraf Ghani as the deputy commander of the NATO mission. He is now a senior advisor at Schroders. Juan Torres Rodriguez and Andrew Williams were looking forward to this discussion with Nick as a continuation of conversations we have had with other military guests, such as Sir Graham Stacey, Marshall Elliott, Nics Wetherill and Sophie Montagne. In this episode, they discuss decision-making in the heat of military action; how to process mistakes – both past and potential; what gambling means in decision-making, especially in the context of war; and, finally, Nick’s thoughts on the current geopolitical landscape, especially in Eastern Europe. Enjoy!



Juan Torres Rodriguez
Fund Manager, Equity Value
Andrew Williams
Investment Director

Chapter headings for Nick Carter on The Value Perspective Podcast

Please click on the link below to jump straight to a chapter

* General Nick Carter, welcome ...

* Empowerment through ‘mission command’

* From a bipolar world to a multipolar one

* Learning from mistakes; celebrating failure

* Russia’s invasion and other geopolitical uncertainties

* A book recommendation

JTR: General Nick Carter, welcome to The Value Perspective podcast. It is a pleasure to have you here. How are you?

NC: Very well, thank you. It is a great privilege to be with you.

JTR: General, could you please provide our listeners with a brief introduction about yourself?

NC: I am Nick Carter and I have been with Schroders now since November last year. A year prior to that, I finished as the UK’s Chief of Defence Staff, in which role I was the prime minister’s adviser on military matters as well as the leader of our armed forces. I am now starting afresh and I’ve thoroughly enjoyed the experience so far – particularly the Schroders part of it.

AW: This podcast is all about decision making in uncertain environments and I am going to start with quite a broad question – could you just discuss how decision-making is processed in the military and how, from a very high level, the military tackle making difficult decisions.

NC: I think one does have to recognise that it is different at different levels. The same principles apply at every level but the level of granularity adjusts as you go from the tactical to what we call the strategic level. The basis of it, though, is what I would call the ‘planning interrogatives’, which are relatively straightforward. There are three of them. The first one is, you ask yourself, What have I got to do? The second question is, How am I going to do it? And the third question, which is fundamental in any environment, is How am I going to command and control it?

Now, you will find at the tactical level, those three planning interrogatives get expanded to cover a range of different factors and then, of course, at the strategic level, the factors are probably even broader. And although that framework gets expanded, ultimately, it is a framework that gets populated with the relevant factors. So what we try and encourage people to do – when they have time to do so – is to be very systematic, in terms of making sure they look at all relevant factors to what they are trying to achieve. Of course, that becomes harder, the more urgently the decision is required – but, again, it is still the same procedure. It still requires you to be systematic in your thinking – you just may have to be more rapid in your thinking and you may have to take a bit of a punt on some of the factors that are going to inform that decision-making.

The other point about decision-making in the military, and in uncertainty, is it is really important to know when you have to make a decision by – and on a battlefield that is particularly important. So often, on a battlefield, it will be about when you commit your reserve to the battle, or whatever else it might be – there will be two or three quite big decisions you will have to take. The key thing is, first of all, to know when you have to make that decision by – ‘no later than’ – and the factors that affect the influence of that decision. And then the other one is working out where you should best be to make the decision – because not always will you be in the right place, which means the information may not be available to you in a timely fashion. So working out when you have to make a decision and then where you have to be to make it are a really important set of issues you need to wrestle with – certainly on battlefields.

JTR: We have had a number of people from the military on the programme – for example, both Air Marshall Sir Graham Stacey and former captain Marshal Elliott almost exactly three years ago and the latter explained to us a framework of ‘seven questions’. I don’t know if that is still in use in the military but, if it is, is it something you expand into after you have approached the three items you mentioned before? And how do you think about best evolving a framework that has been in place for many years?

NC: The seven questions is a technique that is applied at the tactical level. As I was explaining earlier, between the tactical and strategic level, the framework will probably change because you will be asking yourself slightly different questions to inform the process – but the seven questions are still relevant and are still applied at the lower level, at the tactical level. And of course, they are applied to what we call a ‘combat estimate’ – and we use the word estimate because it is the process of analysis you do in order to get to a decision or a plan, perhaps more importantly. And the seven questions are still entirely pertinent when it comes to what you do at the tactical level. It’s just that, as one moves further up the levels of command towards the strategic level, one’ analysis perhaps becomes informed by other questions.

Empowerment through ‘mission command’

JTR: These frameworks may have been in place for many years, but presumably they evolve over time and through different conflicts?

NC: That’s right – but I go back to my planning interrogatives. You are essentially talking about three big questions. And when you talk about that first planning interrogative – ‘What have I got to do?’ – that is really important. Because we believe in the military – as I think a lot of successful businesses probably do – in the idea of empowerment. In the military – and in the British military, particularly – we call that sense of empowerment ‘mission command’ and what that tries to do is to decentralise command as far as possible.

A battlefield – as I guess people are probably learning from what is happening in Ukraine at the moment – is an incredibly dynamic environment and it is full of friction. It is brutal, it is violent, it is visceral and decision-making – let alone the acquisition of information – becomes phenomenally difficult. Now, if you have an overly-centralised system, that is compounded – so what we want to try and do is delegate down to a much lower level within our organisations and structures, so the people who are delegated to can seize fleeting opportunities based upon what becomes available in terms of information at their level.

If they are forever having to revert to a centralised hierarchy, by the time they make a decision, it will be too late and the enemy will have prevailed. Interestingly, we see that very much playing out in Ukraine at the moment where the Russians, traditionally, have had a very centralised system of command. And of course, what we are seeing with the Ukrainians – given their Western training – is they no longer apply Soviet principles to the way they exercise command and control on the battlefield. They are happy to decentralise.

Now, decentralising will only work if certain things are put in place, the first of which is you must understand the bigger picture – the context – in which you are going to act because, if you don’t, you won’t know what the parameters are when you try and seize an opportunity. Of course, that is a two-way process. So, if you are a leader seeking to empower people, the first thing you need, fundamentally, is you need to know those you’re leading – because not everybody will be suitable to be empowered. And, with those you cannot empower, you have to work on training and educating them to make it possible for them, therefore, to receive empowerment. Some people you will never be able to do that with and you will have to rely on obedience to orders but, in general, if you know people well enough, you should be able to get the right balance between how much empowerment you can offer one individual, and perhaps how much you don’t offer another.

The next thing you have to do is make sure the individual you are empowering really understands the bigger picture. You have a responsibility, as a leader, to make sure they understand the freedoms and constraints that apply to the task you’re giving them as then, essentially, you are in a position perhaps to allow them to seize an opportunity. So on a battlefield, if we wish to empower a subordinate, we give them a task and a purpose – and it is the purpose that explains the bigger picture, while their part in that bigger picture is the task. So if, having concluded their task, they see an opportunity to realise some of the purpose, then they will go on and do that. That is classically how we enable decision-making, at low levels, in chaotic environments.

Now, I think that is very relevant to the world of asset management at the moment. The global strategic context – and you might want to come back to this – has never been more dynamic and complex and unstable in our lifetime. Indeed, I think you have to go back to the 1930s to see when it was like this And the effect of that geopolitical instability on markets is striking and therefore, if one is going to prevail in this environment, the ability to empower people to seize opportunities is probably going to be decisive.

From a bipolar world to a multipolar one

JTR: We recently had historian Simon Sebag Montefiore as a guest and he argued the period of broad global peace and stability seen from the end of the Second World War to the outbreak of Covid was something of an anomaly – a mirage even – in the context of human history. Would you agree?

NC: I would, actually. I think the period that followed World War Two – so from 1945 to, let’s say, 1990/91 – was a period of unprecedented global stability. And that was, of course, because the world was divided into two blocks – it was a bipolar world. And both blocks eventually came to an understanding of where each other’s red lines were – where each other’s freedom of movement was, if you like – and the upshot of that, I think, was that we had an unprecedented period of stability, underpinned to a degree, of course, by nuclear deterrence and the notion of ‘mutually assured destruction’.

I think historians will look back on that as a period of unprecedented stability because having, from the end of the Cold War onwards, gravitated through a period of a unipolar world where the United States was all-powerful, we are now, increasingly, in a multipolar world where great powers – and their allies or client states – are competing for opportunity, which leads into the point I was making a moment ago about inherent instability. I think you probably have to go back to the 1930s when that was last the case in global terms, where you saw Russia, you saw Germany, you saw the United States increasing as a rising power, you saw the British Empire, you saw what France was up to – these were great powers who became competitors in a way that is increasingly the case in the world we now find ourselves in.

AW: Coming back to decision-making, there is obviously a lot of ambiguity and uncertainty in military environments but there is in business environments as well. When you are dealing with that at the strategic decision-making level, do you have a grading system for how sure you are about information – or how else do you communicate uncertainty and ambiguities in decision-making forums?

NC: I think I’ve explained how we try and deal with that at the tactical level but, at the strategic level, you first of all need to realise, the more senior you become, the less powerful you are – and the less likely it is your decisions will be implemented easily. So leaders at the strategic level need to understand that, if they’re going to make something happen, they have to invest a significant amount of time in shaping the environment for that decision to be received – because, if they don’t do that, the complexity of the organisation at the level at which they’re operating will undoubtedly divide into tribal groupings, who all have their own stakes and own personal interests in all of this, and they will discover their decisions never really gets executed.

So that is really important for strategic leaders to understand ‘ab initio’ – you have to shape the environment for the decision to be received. The next thing you need to realise is you are going to have to work hard to make sure the rationale behind the decision is understood at every level in your organisation. You will do that partly by identifying advocates who are loyal and supportive of what you are trying to achieve, but you are also going to do it by constant communication – constantly explaining what you’re trying to achieve and constantly explaining why there is advantage to the organisation in achieving that effect. So much of the execution of strategy these days is about storytelling – particularly given the pervasiveness of information.

You then need to recognise, given the world is increasingly dynamic and complex – and that is going to get even worse as the pace of change gets faster and faster and faster, which is what we’re finding with technology, isn’t it? – that, of course, your plan may not survive contact with the rubber hitting the road. And the reality of that, therefore, is you have to accept you need to have the humility to listen to a range of different people, to accept challenge, to acknowledge you may have to change the plan and you have got to become inherently adaptable. Indeed, adaptability is probably the key criteria to success these days – recognising that adaptability only comes from leaders who are prepared to be humble enough to listen to what is going on around them and to adapt their plan when they realise it needs adaptation.

AW: What you say about telling stories is incredibly interesting because we think about narratives a lot in investment, though usually from the opposite angle – we are very cautious about narratives driving an investment case precisely because they can be so powerful. So how do think about that? Also, when you receive feedback or new information that suggests your current strategy may not be working, how do you tread the line between putting that information to one side or trying to measure its efficacy to update your plan? You just spoke about the importance of being adaptable but we live in a very noisy world and, if we were to react to every piece of noise, we could end up with no strategy at all. So how do you tune out the noise but execute based on the information you are receiving from the ground?

NC: There is a great quote, to your point, by General Omar Bradley – the first chairman of the US Joint Chiefs of Staff back in the 1950s – who said: “Set your course by the stars, not by the lights of every passing ship.” So there is an importance, of course, to setting a consistent strategy over a decent period of time and then adhering to it. But I think we are not always terribly good at working out what the indicators are to progress and what the measurement of performance is – so it is quite important you do that.

The next thing that is really important – and we talk a lot about this in the military – is having some really clear, what we call, ‘commander’s critical information requirements’. If you are going to execute a plan, there will be a series of quite important factors that will need to fall into place for the plan to be successful. And having the right set of questions to make sure you are always keeping an eye on those factors is something you want to do deliberately and in a determined way before you set off on it. That, I think, will help you maintain your course by the stars and not by the lights of every passing ship.

Learning from mistakes; celebrating failure

JTR: In the investment world, we are prone to make mistakes all the time so we were wondering how you set about learning the right lessons from the mistakes you might have made in the past or that you have seen from a historical perspective? And what do you think about ‘psychological safety’ – the idea people should feel able to bring up concerns and fears about a proposed course of action?

NC: In the military, we do have one big advantage over many other professions and that is, if we are not actually operating, we are probably training. And, of course, the great thing about training is you can design it in such a way that you genuinely find people out and enable them to make mistakes. And many of the best lessons I have learned have come through making mistakes when I have been training. I think that is a really helpful advantage the military have over other professions because there is no doubt about it – by making mistakes, you are far more likely to learn lessons. There is an important distinction, of course, between learning a lesson and then applying the learning, which one has to keep an eye on.

A second related point, in a way, is we do have a culture of trying to celebrate failure. If you celebrate failure – and all worlds could perhaps benefit from this, I think – then I think actually you will help people take some risk. And in the world I have described we need people to take risk – not ill-considered risk or reckless risk but sensibly-judged risk. Of course, it won’t always come off but what leaders need is the confidence to be able to take account of when somebody has taken a very sensible, considered risk and has failed – and celebrate that failure. I believe doing that will encourage people actually to use their initiative and potentially seize the fleeting opportunities that might make the difference between profitability and loss.

That is an important ingredient but so much of this is about the culture a leader sets within his or her organisation – because, ultimately, if you are on top of what is going on in your organisation, you know the people who are working for you properly. If you are a ‘downwardly-looking’ leader – rather than one who is forever worrying about what your boss might think – then I think you will be able to create a culture in which you can celebrate failure on the basis of enabling people to take informed judgments about risk.

JTR: General, you reached the highest rank in the military – how did you encourage people in the lower ranks, where appropriate to do so, to challenge those above them?

NC: First of all, I would say you reach the top of the military probably by being the last man standing! But I think it goes back to what I was saying earlier in the conversation about having humility – and certainly you need to have the culture of listening to people and giving them the opportunity to tell you what they really think. It is also about getting out and about – you know, if you’re wedded to your desk, you’re not actually going to learn a great deal. So you have to encourage people to get out and about and talk to people at every level. And I think it’s about communication and trying to get the people who are working for you to realise you want to listen to them – and that, in listening to them, you might take note of what they have told you.

So there is a two-way process there, which is fundamental. And, again, we are fortunate in the military in that we do fundamentally believe in giving people the opportunity to prevail and the opportunity to speak out – we encourage challenge. And I think, when you assemble a team, you want to make sure you do not assemble a team that becomes – as I suspect Mr Putin has discovered – an echo-chamber of sycophants. You want people who are prepared to speak truth to power and you need to be thinking about that when you bring your team together. You want some people who will be disruptive because, if you don’t have any, you will end up being guilty of groupthink – and we all know where that leads to. It will be a ‘Kodak moment’.

Russia’s invasion and other geopolitical uncertainties

JTR: We cannot pass up this opportunity to ask you about the Russian invasion of Ukraine. When we spoke to Simon Sebag Montefiore, he offered Hitler’s invasion of Russia as a candidate for the biggest military gamble in history. You mentioned Putin so where would he fit on that measure?

NC: Well, I think that will probably be a question for history, which means you have to wind the clock forward a few years – because, of course, the jury is still out on who is going to be able to declare victory in this war we are watching. And I think that will take time to play out. So I don’t know – I mean, Putin is undoubtedly an opportunist and we saw that in his invasion of Georgia. We saw that in his invasion of Crimea. We saw that in the way he encouraged renegades to start the war in the eastern Donbass in 2014.

So he is an opportunist but, whether he is a gambler, it’s too early to say. It may well be he finds himself in a position where he can declare victory – and then history, I suspect, will judge him differently. It is always dangerous, as history has shown, to invade Russia – Napoleon discovered that and Hitler discovered that and, yes, they probably did take a gamble. And history is able to look back and judge it as a gamble. So let’s see what the historians say in 10 or 15 or 20 years on what we see playing out in Eastern Europe at the moment.

JTR: We like to make the point that, while people may think of this period of time as being very uncertain, uncertainty is a historical constant and it is actually our perception of uncertainty that changes. So, from a geopolitical perspective, how do you see the world today – for example, the relationships between the Chinese and the Americans, China and Taiwan, Russia and Europe, China and India, Pakistan and India, China and Europe ...?

NC: I think there are three themes, really, that probably explain why we are in this peculiar moment of ever-increasing instability. The first theme, which we touched on earlier in the conversation, is we are now in a world that is multipolar and where the great powers and their allies and client states are competing for power. And Ukraine has brought this very sharply into focus because what we are seeing now is, I think, the world breaking down into three distinct groupings: a grouping that is pro-West; a grouping that is anti-West; and then, of course, a group of non-aligned.

The anti-Western group is obvious. It is really the axis between China and Russia – and they are probably only held together by their dislike of the West and the United States of America – along with perhaps Venezuela, Nicaragua, Iran and those sorts of countries. The non-aligned bit, I think, is also really interesting because these are countries like India, Brazil, Mexico, Vietnam, Indonesia and Malaysia, who undoubtedly don’t want to be obliged to make a choice between pro-West and anti-West, for all sorts of reasons – not least, they can see great advantage in still being part of a globalised world. Whereas the anti-West grouping and the pro-West grouping are probably going to be in more of a regionalised world – and the opportunities that will come with the former are going to be greater than the latter.

The second phenomenon we are watching, I think, is the rules-based order or the global multilateral system, which began to be put in place from the late-1940s onwards and we have all grown up with, arguably no longer being fit-for-purpose. When you think that the last truly global gathering that achieved something was arguably the G20 summit in London in 2010 after the global financial crisis, you can see what I mean – because, even during Covid, we didn’t have any sense of global unanimity about what the answer was and how we should try to solve it. For one thing, China wants more of a say but does not necessarily believe the current situation is ideal for its future – even though it has actually profited hugely from the framework that was put in place, post the 1940s – so the decline of that rules-based order is a really important factor here.

And then the third phenomenon we are seeing, I think, is the very rapid pace of technological change and the pervasiveness of information and data. What that has done – and is doing exponentially – is changing the character of politics and also the character of warfare. It provides that anti-West group with new tools, tactics and techniques to be able to undermine our way of life – and that is a feature of instability. So those are the themes I focus on when I think about the way in which the world is now headed – and I don’t necessarily see an answer to the first two phenomena or, for that matter, probably to the third.

JTR: Many analysts worry about China’s intentions towards Taiwan. Professor Russell Napier, when he was a guest on this podcast, made the point that invading an island – as the history of the UK would attest – is very challenging. Do you see this as a significant threat and what could be done to counter it?

NC: I don’t see it as an imminent threat – for a number of reasons. First and foremost, I think China will have learned a number of lessons from the Western response to Putin’s invasion of Ukraine – in relation to the global economy and sanctions and everything associated with financial reserves held overseas – and, second, I think they will be entirely cognisant of the significant risk associated with invading Taiwan.

From a military perspective, it is an extraordinarily difficult operation – and, if the Taiwanese were to fight, I think it would be very risky for China to try and do this. Indeed, if you look at the way the United States planned for taking back the Indo-Pacific from the Japanese in 1943/44, they looked at Taiwan and instead chose to take Okinawa – and Okinawa was a very bloody and difficult fight. So that is an indication of how much harder Taiwan perhaps would have been. So, from a military perspective, I think it is pretty clear.

The third observation I would make is that China studies Sun Tzu – and Sun Tzu’s observation has always been that the supreme art of strategy is to subdue your opponent without fighting. And, given what I have just been saying about the new tools, tactics and techniques that are available, political warfare is right at the heart of the Chinese approach to achieving that effect. So what we are more likely to see in the case of Taiwan over the next three or four years is an upsurge of political warfare and a much more sophisticated way of prevailing without actually physically going to war.

That is what we should be alert to and that would be a much less risky way for China to go. China cannot afford to lose lots of human beings. They have real demographic challenges – you know, when you think that the working-age population is going to shrink by 10%, between now and 2035, and by nearly 30% by 2050, they do not need a war in which lots of people die. They do not have the luxury of lots of human beings to be able to fight that sort of war. So I think there are all sorts of important reasons why it would be unlikely for China to do a military invasion of Taiwan in the next few years.

JTR: But does that demographic issue not also apply to Russia?

NC: Yes, it does. The Russian population has similar issues.

A book recommendation

AW: General Sir Nick Carter, thank you so much for your time today. It has been a fascinating conversation. Before we let you go, though, we ask all our guests a signature question, which is for a recommendation for a book or indeed anything else you would like to pass on to our listeners?

NC: The best book I’ve read – almost in the last 10 years – is a short novel called Small Things Like These by Claire Keegan. She is an Irish writer, who won the biggest Irish literary prize last year for this book. And what she does is get into the question of the Magdalene laundries, which was a very interesting political question in relation to the Catholic Church in Ireland and perhaps the Catholic Church more broadly. But it is a really interesting story because it is about somebody having an epiphany in relation to this. It is short but she doesn’t waste a single word and it is one of those books that, once you have finished it, you will almost certainly go back and reread it because so much of what she says is so true and it is so beautifully written.

AW: Thank you – we will check it out.

JTR: Thank you very much.

NC: My pleasure. Thank you very much indeed.



Juan Torres Rodriguez
Fund Manager, Equity Value
Andrew Williams
Investment Director


The Value Perspective
Follow us

Please remember that the value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

This marketing material is for professional clients or advisers only. This site is not suitable for retail clients.

Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 4191730 England.

For illustrative purposes only and does not constitute a recommendation to invest in the above-mentioned security / sector / country.

Schroder Unit Trusts Limited is an authorised corporate director, authorised unit trust manager and an ISA plan manager, and is authorised and regulated by the Financial Conduct Authority.

On 17 September 2018 our remaining dual priced funds converted to single pricing and a list of the funds affected can be found in our Changes to Funds. To view historic dual prices from the launch date to 14 September 2018 click on Historic prices.