Petraeus tells CFOs strategic judgment is the key leadership quality

Retired general emphasizes ‘slowbalization’ and great-power rivalries

Retired Gen. David Petraeus used a Wall Street Journal appearance this week to deliver a pointed leadership thesis: strategic judgment is the one quality that matters in effective leadership, and other admirable traits cannot compensate for getting the big ideas wrong.

Petraeus served more than 37 years in the U.S. Army, including commands during the Iraq War surge and overseeing coalition forces in Afghanistan. He also served as director of the Central Intelligence Agency. He has been with KKR since 2013, advising on geopolitical and strategic risk, and today chairs the KKR Global Institute and KKR Middle East.

He spoke at the Journal House event held on the sidelines of the United Nations General Assembly, then followed the appearance with remarks at a dinner hosted by the WSJ Leadership Institute CFO and COO Council. The dinner drew chief sustainability officers and finance chiefs. Several CFOs in attendance told the WSJ CFO Journal that Petraeus’s framing on leadership and managing geopolitical risk was a highlight of the Journal House programming.

Petraeus framed the leadership thesis bluntly. “Look, it’s one quality: It is strategic judgment,” he said. “If you don’t have that, I don’t care how good your communication skills are, how inspirational you are, what a fine measure of a man you are, big jaw, 6’2”. We’ve had people like that who failed to get the big ideas right.”

He cited the U.S. military’s war in Vietnam as the cautionary example. “Thirteen years in Vietnam we had the wrong big ideas,” Petraeus said.

He also laid out a broader framework for the exercise of strategic leadership. “At the end of the day, remember that there’s an intellectual construct for the exercise of strategic leadership,” he said. “You’ve got to get the big ideas right, craft the right strategy. You have to really understand, obviously, the situation. You have to communicate them effectively through the breadth and depth of the organization and to all who have a stake in the outcome of that endeavor.”

On execution, Petraeus was direct. “You have to oversee the implementation of the big ideas, hire the best and brightest, provide example, energy, inspiration,” he said.

Petraeus emphasized why companies need to keep an eye on geopolitics, framing the current operating environment as one of structural change. “We’re in an era of renewed great power rivalries,” he said. “All these barriers have been going up in a variety of different forms, also a lot of uncertainty and volatility.”

He argued that the operating environment for multinational business had changed structurally. “Globalization has become ‘slowbalization’ and regionalization, and we can’t do just-in-time logistics anymore,” he said. “Now we do just-in-case logistics.”

WSJ CFO Journal’s Walden Siew, who reported on the events, wrote that several chief financial officers singled out Petraeus’s strategic-judgment formulation as the best takeaway from the Journal House panels they attended.