Leadership Economics

Aaron and Spencer talk with COL(R) Mike Yankovich, a vice president at Ramapo College and a former West Point economics and mathematics professor, about public goods, the value of a college education, and the cost of leaning too hard on a team's best performers.

Mike Yankovich and Spencer taught economics together in West Point's Department of Social Sciences in the mid-2000s and won a couple of intramural championships along the way. Mike graduated from West Point in 1994, served as an Army engineer officer and operations research analyst, and earned a PhD in economics at MIT. He later became an Academy Professor in the Department of Mathematical Sciences and Vice Dean for Operations at West Point. Since 2023 he has been Vice President for Operational and Administrative Integration at Ramapo College of New Jersey, a public liberal arts college.

The first half of the conversation is about public goods, which Mike taught for years in a West Point course called Public Finance. A public good is one that costs essentially nothing to extend to one more person once it is provided, such as national defense. Education is a different kind of market failure because it produces positive externalities: an educated person is healthier and more likely to take part in civic life, and those benefits go to society as well as to the student. Mike argues that colleges have lost sight of that value by competing on climbing walls, lazy rivers, and dining halls, and that at a public college every dollar is a choice between marketing to applicants and fixing the electrical feeder cables under the campus. Spencer and Aaron connect this to the Leadership Economics idea that outside a market, information has to come from somewhere other than prices. Reputation, the word of a trusted coach, and visible sacrifice for students are what Spencer calls the currency of commitment.

The conversation then turns to how communities decide what to fund. Mike points to Adam Grant's advice to approach contested questions as a scientist rather than a preacher, prosecutor, or politician, and he describes five years as West Point's liaison to the Highland Falls-Fort Montgomery school board, where members of both parties made decisions based on data, the mission, and marginal analysis. Mike then turns the questions on Aaron, asking why he came to West Point and how he squares studying leadership as an academic with the practice of it.

The last segment covers the topic Mike asked to discuss, which he calls the time value of time. As a young Army leader he leaned on his high performers because they got things done and always said yes, and he now asks how many junior officers and NCOs he burned out. Aaron describes burnout as a leader's failure to allocate a subordinate's time correctly, because the long-run costs never show up in the moment. Mike's advice for tomorrow is the old Social Sciences Department motto, "Be kind," which he defines as treating everyone with respect, telling the truth even when it is hard, sharing information promptly, and taking care of yourself.

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Aaron and Spencer talk with COL(R) Jay Powers, former commander of 5th Special Forces Group and now a Scaling Up coach and high school wrestling coach, about why leadership is simple but difficult and why a leader's priorities so rarely reach the last person in the organization.

Jay Powers and Spencer were West Point classmates. Jay went into the infantry, then Special Forces, and spent most of his 26-year career in 5th Special Forces Group, where he led at every level from a 12-soldier team to command of the entire Group. Since retiring in 2022 he has taught leadership through the University of South Florida, coached business owners through Scaling Up at his firm, Legion Consulting, opened a D1 Training facility, and become the head wrestling coach at Plant High School.

Jay's central idea is what he calls the paradox of leadership: it is simple but difficult. He teaches four foundations of leadership, integrity, respect for others, accepting responsibility, and setting the example, and he says they are necessary but do not make anyone a good leader. Something like six thousand leadership books are written each year, so the challenge is not knowing what to do but doing it. People are influenced most by what a leader does, then by what the leader measures and decides, and last by what the leader says.

Two stories from Jay's own career show how hard the doing gets as an organization grows. As Group commander he had three priorities. He talked about them constantly and walked the Group every Wednesday to see how the work was going. On one of those walks he met a junior leader in a key position who had no idea what the three priorities were. In Iraq in 2009 his headquarters made building local relationships the number one priority, with a written order, weekly briefings, and metrics. The team doing it best did not know what the program was. His explanation is that the number of connections in an organization grows much faster than the number of people. His answer is fewer priorities, as when Admiral McRaven took over SOCOM and named three things for 70,000 people, and his rule is that you only prioritize when you say what is not important.

The conversation also covers September 11, when Jay's team received deployment orders marked "indefinite" where the return date belonged. It covers why time is a person's most important resource and people are an organization's, so that a leader who spends time developing other leaders is investing the one in the other, and it covers Scaling Up's four areas of people, strategy, execution, and cash. Jay's advice for tomorrow is to build feedback loops that tell you how you are actually affecting people, because the more senior you get, the more likely your impact differs from what you think it is.

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Aaron and Spencer ask A. Todd Howard, MetLife Investment Management's Head of Fixed Income - EMEA and a former Army Black Hawk pilot, whether an AI could ever be a good leader. His answer turns on accountability, soft information, and why commitment only counts when it costs something.

Spencer opens this episode with thirty years of history. He and Todd Howard met as cadets, colliding on the sprint football field at West Point. They flew Black Hawks together as sister platoon leaders at Fort Bragg, then deployed to Bosnia. In the decades since, they have been close friends that help keep each other accountable. After the Army, Todd earned an MBA at Auburn and the CFA designation, and built a twenty-year career in fixed income that now has him leading MetLife Investment Management's fixed income business in EMEA from London.

The conversation starts with a translation between his two careers. The helicopter pilot who has planned well stays in front of the aircraft, so navigation and radio calls never set him back. The portfolio manager does the same thing with information, anticipating the sequence of events, breaking the world into chunks where his team has a competitive advantage, and synthesizing more input than any one person could hold. Todd is candid that managing informational input, and knowing when it is biased, has become the hardest part of modern life, for portfolio managers and for parents alike.

From there the episode turns to developing people. Todd's approach to younger teammates is to empower and then challenge, giving them rope, real problems with lead time, and commander's intent rather than an answer key. He makes the case for patience, noting that he did not start in investment management until he was 32, and argues that leaders who delegate development to HR undermine the very trust they are trying to build, because people notice quickly what their leaders' choices actually prioritize.

The AI thread runs through the whole conversation and sharpens as it goes. Aaron argues that AI cannot lead because leadership is an act of creation under ambiguity, and the fuzziness in how humans imagine the future is precisely what the models lack. The three of them work through soft information, the kind of character judgment a regional banker makes across a table, and through whether AI helps leaders frame trade-offs. Todd brings a portfolio manager's eye to the AI CapEx cycle, laying out why the day is coming when CFOs ask what all that spending actually returned.

Then Aaron asks the question the episode is named for by inviting Todd to imagine an AI as his boss. Todd's answer arrives immediately. He would know it is fake. The accountability you feel toward a person, the friend already outside your door for the morning run, cannot be manufactured by something you know has nothing at stake. Spencer names the underlying economics as the currency of commitment, valuable precisely because it is costly, and Aaron traces the question back to Adam Smith's Theory of Moral Sentiments. Todd's parting advice is the most basic leadership principle that people do not actually do: lead by example, staying in it with your people regardless of rank or title, so they see your commitment rather than hear about it.

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Aaron and Spencer draw the line between uncertainty, which the brain treats like a game, and ambiguity, which it treats like a threat, then introduce DICAO, the five failure modes ambiguity can produce in leaders and teams.

In this episode, Spencer and Aaron expand on the Leadership Economics framework. Spencer opens by reviewing the show so far: scarcity, the production function, the AIME framework of allocation, information, motivation, and execution, and the six-principle playbook. This episode is the next layer down, what happens when you try to run the playbook and it does not work the way it should.

The core distinction is between uncertainty and ambiguity. Uncertainty is a die you know: six sides, equal odds, you just do not know this roll. Ambiguity is a bag of dice you do not know: you cannot even say what the distribution of outcomes is, so you cannot connect what you do to what you get. Aaron walks through what two decades of neuroscience since the MRI has shown, that the two are processed by different systems in the brain. Uncertainty can raise dopamine and motivate, the anticipation of a piano competition where you know how you prepared but not where you will place. Ambiguity does the opposite: it suppresses dopamine, raises cortisol, and reads as threat, and a high intolerance for it shows up alongside anxiety, depression, and OCD.

The good news is that tolerance for ambiguity is trainable. Spencer takes it to special operations, where you train across enough scenarios that whatever comes through the door has an answer, and where a great teammate is the best insurance policy against ambiguity. Aaron takes it to ordinary life, the first busted car door you ever have to get repaired versus the tenth.

From there the episode lays out the three layers of the Leadership Economics model. AIME is what you are always already doing. The playbook is the principles that make those tasks go well. DICAO is why we do not run the playbook even when we know it. Along the way they name marginal value uncertainty, the mathematical way of defining ambiguity, and Spencer tells the story of the boat he and Jill bought for the Great Loop, a marginal analysis that looked right, turned out wrong, and ended the right way because they were willing to experiment and willing to pull the plug.

Then they walk through DICAO, symptom by symptom. Discord: allocations drift toward the low-ambiguity option, the way teachers under high-stakes test incentives drill test problems instead of using the teaching methods they trained in, or the way whole Army companies train for the fitness test by only practicing the fitness test. Inconsequence: effort collapses when people cannot see how their input connects to any outcome, from a daughter who cannot study for a test with no defined material, to academia, to the soldiers of Black Hearts. Complexity: paralysis by analysis, decoy pricing, 187 salad dressings, and why the military always briefs three courses of action. Absence: failing to keep learning the production function as the world changes, from Blockbuster and Kodak to Uber watching Waymo, and the harder version closer to home, aging parents who are not aware that they are not aware. Overconfidence: the one failure mode that sometimes pays, because acting under ambiguity generates information, until refusing to look back turns confidence into bias.

They close on the point of the whole exercise: you cannot eliminate ambiguity, but you can always reduce it and raise your tolerance for it. These are principles for diagnosing why the playbook is not working, not another task list.

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Ben Summers, head of Vanguard UK and one of the original authors of the economic ideas behind this show, on shutting down a business without abandoning the people in it, what a booby-trapped weapons cache taught him about letting success validate your own decisions, and why leadership comes down to how others feel when you're in the room.

Ben Summers is Head of Vanguard UK. He served nearly 13 years as an Army officer, deploying twice to Afghanistan with the 101st Airborne Division as an aviation officer, and finished his service as an assistant professor of economics at West Point, where he taught leadership, economics, and finance and led the Academy's Scholar Programme. While he was teaching there he was one of the people who first wrote down the simple but powerful economic ideas that became the Leadership Economics playbook, which makes him a plank holder of this show's framework rather than a guest being introduced to it. Spencer mentored him as a cadet.

The conversation opens with his own definition of the job: leadership is how others feel when you're in the room. He describes threading the needle between challenge and support with the image of running a hill at West Point, where a leader can sprint ahead and shout, call the whole thing off, or sweat it out beside the team.

From there, Ben walks through shutting down Vanguard's German business, where the sunk cost logic was clear as day and the human dimension was not, and where he concluded that the most caring thing available to him was helping the organization be honest. He admits he then held the people at arm's length until a leader on the ground told him, "Ben, that wasn't your best visit." He talks about designing off-ramps before you need them, staging capital on a new offer until it earned the next tranche, and firing bullets before cannonballs.

The hardest part of the episode is a mission he planned in Afghanistan in 2012. A campaign against weapons caches along the Pakistan border worked so well, so fast, that the team kept extending it, until a cache was booby trapped and ten people were killed. His reading of it is unsparing: there was no room for healthy divergence, and the unit was using its success to validate its decision-making process. That leads into the case for diverging before you converge, and for leaders secure enough to absorb the friction that divergence creates.

The last third is about trust. Ben separates trust from warmth, splits it into credibility and the humility to be convinced you are wrong, and tells the story of watching dashboards that were green on the surface and red underneath. His team now hunts for the brutal facts on purpose. Aaron argues that trust is finally about alignment, and Ben closes on the hedgehog: passion, unique talent, and what the organization actually needs, aligned so that the motivation is intrinsic rather than bolted on.

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Rob Shaw, founding President and CEO of Echelon Bank and a 27-year Tampa Bay banker, on the soft information behind every good loan, the culture of a brand-new bank, and why character is the only hard no.

Rob Shaw has spent 27 years in Tampa Bay banking, from AmSouth's management training program through leadership roles at Northern Trust, Signature Bank, USAmeriBank, NorthStar Bank, and Flagship Community Bank. In April 2026 he opened Echelon Bank, the first new bank in Tampa Bay in five years, with a founding team of bankers he has known for decades and his West Point classmate Jonathan Field as board chair.

The conversation starts in physics and works its way to banking as a way of getting at the truth about a borrower. Rob walks through the five C's of credit, why character is the only hard no, and the soft information that is hard to discern just from a FICO score. The few loans he regrets, he says, all trace back to ignoring his gut, or that "hard-to-define" information. He also explains why he tells his team they are in the manufacturing business, turning their neighbors' deposits into loans, and why he wants problems on the table early rather than handled quietly. Spencer extends the currency of commitment idea from earlier episodes, and Rob explains the echelon formation that gave the bank its name. He closes with the advice he wishes he had taken sooner, in his own words: it's later than you think.

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West Point economist Dean Dudley on how the best leaders reduce ambiguity, shape who their people become, and turn conflict into a problem disciplined thinking can actually solve.

Dr. Dean Dudley retires from West Point this month after 33 years teaching economics and game theory to more than 33,000 cadets. He returns to the show to trace one thread from identity to game theory to the beaches of Normandy: what a leader actually does when the models stop working.

The conversation runs from George Akerlof's identity economics, the idea that leaders and institutions can move the "bliss point" people measure themselves against, through the currency of commitment, to a working definition of the job itself: good leaders reduce ambiguity. Dean closes with the two case studies he teaches, D-Day and Gettysburg, showing how the side with the better model, not the bigger army, wins. Both anchor his forthcoming book, Game Theory and the Art of War, out in August. Along the way: why your team plays rock-paper-scissors against you and already knows you play rock, why a marriage is a harder allocation problem than a trip to Walmart, and why the most useful thing a leader can do is listen down.

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Aaron and Spencer explore Andrew "Drew" Barnes's path from the job site to the classroom within the Leadership Economics framework, from why his students are paid from the neck up to negotiation as a master skill and why your unit of reward shifts from dollars to minutes.

Most construction management programs are built around contracts, scheduling, and cost control. Drew Barnes built his around negotiation, communication, and the soft skills that firms say they need most. Drew is an Assistant Professor of Construction Management at the University of North Florida. Before academia, he spent five years with Dan Ryan Builders, where he developed a complete curriculum for preparing new hires to operate and lead well.

We follow Drew's path from the job site to the classroom and explore the ideas he teaches: why construction management is a management degree and his students are paid from the neck up, why Getting to Yes anchors his graduate labor course, how your unit of reward shifts from dollars to minutes, what the scroll is really costing his students, and why the leaders who perform best have mastered their inner experience.

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• Andrew "Drew" Barnes — Andrew Barnes is an Assistant Professor in the Department of Construction Management at the University of North Florida (UNF). After receiving his bachelor's degree in Construction Management from Brigham Young University in 2013, he spent five years working in Raleigh, North Carolina for the mid-Atlantic homebuilder, Dan Ryan Builders (now DRB Group) as a senior purchasing agent and later as the corporate instructional designer. In 2018, he left the workforce to attend graduate school at Virginia Tech where he received his Ph.D. in Environmental Design and Planning. Drew loves teaching young men and women how to build homes, bridges, buildings, hospitals, roads, and, most of all, themselves. His research focuses on construction management education, managerial workforce development, and residential construction with an emphasis on offsite delivery methods. (UNF Faculty Profile, LinkedIn)

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Aaron and Spencer explore LTC (R) Josh Richardson's experiences and leadership lessons within the Leadership Economics framework, from the pace of trust to knowing when to stay the course or pivot, and why great is just good over time.

Episode three of Leadership Economics, and our first guest. Retired Army Lieutenant Colonel Josh Richardson is a West Point graduate, a Ranger, and a 75th Ranger Regiment veteran who now directs the General Wayne A. Downing Scholarship Program and helps build cultures of safety in American plants and factories with DEKRA. He joins Aaron and Spencer to put the playbook to work on a real career, from pickup basketball as a market to the pace of trust, the explore-versus-exploit problem of when to stay the course or pivot, and his closing philosophy that great is just good over time.

What we cover

• Pickup basketball as a market: coordination, reading people, and being the role player who makes the team better
• The pace of trust: why trust between strangers cannot be rushed, and why it is built in drips and lost in buckets
• Trust and lived experience: the Antonio story, and why "trust the system" is a harder hurdle for some than for others
• West Point as a pressure cooker: preparation as the muscle to keep going, and why time and experience make the leader
• Explore versus exploit: when to stay the course and when to pivot, a problem with no clean mathematical answer, and the place of free will
• Rules of the game: why leaders should expect people to test the rules, Douglas North, and the 1982 Ewing goaltending call
• Tactical patience at scale: why large organizations struggle to mentor person to person, and the tension between moving fast and pacing yourself
• A different lens on leadership: building a culture of safety so everyone goes home, and why great is good over time

Mentioned

• Jonathan Haidt, The Coddling of the American Mind
• Douglas North, on institutions and the rules of the game
• Kevin Plank (Under Armour), "trust is built in drips and lost in buckets"
• The 1982 NCAA championship, Patrick Ewing's goaltending and Michael Jordan's game-winner
• The General Wayne A. Downing Scholarship Program
• DEKRA Strategic Consulting

Featured guest:

• Josh Richardson — Josh retired in 2023 after 23 years of Army service including assignments leading units in the 75th Ranger Regiment, 82nd Airborne Division, and NATO Allied Rapid Reaction Corps based out of Innsworth, England. He currently divides his time between two ventures: he is a Principal Consultant with DEKRA Strategic Consulting where he develops leaders to drive success through a culture of safety excellence; he also serves as the Director (Operations) for the General Wayne A. Downing Scholarship Program where he deploys a non-profit investment to build leaders to serve at the highest level of U.S. national security and defense. (DEKRA Organizational Safety and Reliability, General Wayne A. Downing Scholarship Program, Madison Policy Forum, Combating Terrorism Center at West Point, CTC Sentinel)

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Aaron and Spencer turn the AIME framework into a working playbook, walking through the six economic principles every leader actually uses: opportunity cost, marginal thinking, incentives, trade and trust, information, and command and control.

Episode two of Leadership Economics. Aaron and Spencer build on the AIME framework from the pilot and lay out the six economic principles that turn it into a working playbook — the tools every leader actually reaches for. The episode walks through each principle with examples ranging from the sunk-cost trap of a deteriorating boat to a randomized Army recruitment experiment that saved tens of millions of dollars.

What we cover

Mentioned

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