Split Decisions and Strategic Risk with Lt. Gen. Darcy Molstad - RIMScast | Lyssna här

Welcome to RIMScast. Your host is Justin Smulison, Business Content Manager at RIMS, the Risk and Insurance Management Society.

In this episode, Justin interviews Lt. Gen. Darcy Molstad, Commander, Canadian Joint Forces Command, about similarities between the Armed Forces and risk managers, what the Canadian Armed Forces have taught him about uncertainty, gathering as much information as needed, and making the good enough decision. Gen. Molstad describes what qualities are needed in a leader or a risk manager. The discussion includes making decisions objectively, not emotionally, and the OODA Loop. They discuss the interconnectedness of risks, including geopolitical scenarios.

Listen for Lt. Gen. Darcy Molstad's insight into three characteristics a good leader needs to have.

Key Takeaways:

[:01] About RIMS and RIMScast.

[:16] About this episode of RIMScast. I am interviewing Lt. Gen. Darcy Molstad, Commander of the Canadian Joint Forces Command. We will talk about strategic and split-decision risk-making ahead of his Keynote at the RIMS Canada Conference on October 19th. But first…

[:52] Webinars: On Oct. 22nd, Zurich returns to tell us all about "Cybercrime, Fraud and AI: Real-World Threats and Practical Defenses for Business Leaders."

[1:03] On Nov. 5th, Riskonnect returns to deliver the session "Signal Over Noise: Smarter Risk Analytics."

[1:10] Origami Risk returns on December 10th to present "Managing Insurance Programs at Scale: What Complex Portfolios Require." This session was rescheduled from October, and if you were registered for that one, you are automatically registered for the new date in December.

[1:26] We will close out the year with two webinars from the RIMS Advocacy and External Affairs Committees. On November 10th, we will host a session about the "Terrorism Risk Insurance Act and Program: an update on Federal Developments."

[1:42] On December 3rd, we've got "Third-Party Litigation Funding: What Nuclear and Other Verdicts Mean for the Industry and Your Bottom Line." Find all webinars at RIMS.org/webinars.

[1:52] RIMS on YouTube! RIMS is back on YouTube. Our handle is @RIMSOfficialChannel. We've got plenty of videos there, including RIMScast, RIMScast Canada video podcasts, and other informative and entertaining content from RIMS. Subscribe to the channel today!

[2:10] On with the Show! If you follow RIMScast Canada, you may recognize this interview. It's available at RIMS.org/Canada, but I was so happy with the final product that I decided to take the audio and deliver it to the world via RIMScast.

[2:28] Our guest is Lt. Gen. Darcy Molstad, Commander of the Canadian Joint Forces Command. Gen. Molstad joined the Canadian Armed Forces more than 30 years ago, and he has completed operational tours in Bagotville, Cold Lake, and Beaufort, South Carolina.

[2:45] Gen. Molstad has commanded at the Squadron Air Task Force and Wing Levels. He conducted extensive post-9/11 alert duties across Canada and has deployed on operations in Asia, Iceland, Romania, and the Middle East.

[2:59] Gen. Molstad has served in senior exec. roles, including Special Advisor to the Minister of National Defense, Director General in the Strategic Joint Staff, and Chief of Force Development.

[3:11] On Mon., Oct. 19th, at 9:00 a.m., Gen. Molstad will kick off the RIMS Canada Conference 2026 with a fireside chat. We'll learn about his career, how risk management played a role, and the wisdom and knowledge that he imparts to risk managers and business professionals.

[3:20] We'll learn about his career, how risk management has played a role, the sort of wisdom and knowledge that he imparts to corporate risk managers and business professionals, and get a preview of the sorts of risk philosophies that he'll share at the RIMS Canada Conference, 2026.

[3:40] If you're on the fence about attending, we hope this interview will give you the extra incentive you need to register at RIMSCanadaConference.ca. I'm so proud to present this interview!

[3:52] Interview! Lt. Gen. Darcy Molstad, Welcome to RIMScast!

[3:58] Justin mentions the crossover between the armed services and risk management. They make strategic decisions and split-second decisions. There's the long view and the short view.

Gen. Molstad says our day-to-day in the military is all about risk management.

[4:16] Gen. Molstad says it's about mitigating risk to the extent possible, accepting a certain amount of risk, understanding what the ramifications are in accepting those risks, and how you deal if something happens, ensuring you arrive at your objectives, through risk management.

[4:44] Justin asks about Gen. Molstad's comfort with uncertainty being inevitable. Gen. Molstad says you learn to get comfortable with it over time. Gen. Molstad joined the Canadian Armed Forces not to be a three-star general and a strategic leader but to be a fighter pilot.

[5:03] Gen. Molstad found himself being promoted over the years into these positions of leadership where risk management was his bread and butter. As a commander and as a business leader, it is your responsibility to manage that risk and understand it.

[5:19] Uncertainty is not the exception; it's the norm. We have to be comfortable in that uncertain space. We have to understand what information we are seeking.

[5:30] We have a bias toward accessing information that's simply available to us and is easy to get, rather than the information we need to make the best decision. We have to make decisions without the full amount of information.

[5:45] We say in the military, perfect is the enemy of good enough. A good enough decision faster, with the ability to adapt in an agile manner, is in many ways better than the perfect decision that takes forever to get to. You'll never get to that perfect decision.

[6:04] Justin asks: How do you build an organization that is prepared for the unexpected without trying to prepare for every possible scenario?

[6:17] Gen. Molstad says the military approach is to look at scenarios. The two most important scenarios the military considers are the most likely course of action and the most dangerous course of action. They will look at other subscenarios.

[6:38] Gen. Molstad says that when he was a fighter pilot and was leading large force employment missions, and he was briefing 100 different formation members the next day, he woke up in the night thinking about a contingency that he had never thought of.

[6:53] Then he wrote down a few notes about what he would do in that contingency, in order to brief the formation to execute the mission successfully.

[7:02] Gen. Molstad says the best plans rarely survive contact with the enemy (and your competitors). You can build the best plan in the world, but it's likely never going to be executed as you planned, so you have to have a level of agility built into your system to be able to adapt.

[7:19] Gen. Molstad says that comes with two things. One is experience. The more experienced the leader you are, the more situations you've seen; you've got a repository of scenarios you can draw back into to determine what's the best course of action very quickly.

[7:37] Gen. Molstad says there's another aspect that's not well-studied: fluid intelligence, or the ability to take an abstract situation you've never seen, and process this complex set of information to come to an abstract idea of the best course of action.

[7:59] It's a combination of experience and fluid intelligence. When people talk about intuition, it's just a fancy word for experience. Intuition is drawing on your previous experience.

[8:14] It's a combination of things: perfect is the enemy of good enough, and we've got to be ready to adapt with the good, rough decisions.

[8:25] Gen. Molstad is looking forward to that fireside chat. One Important thing, thinking about risk management, is that we have to think about it from the bigger picture. Many times, people look at the nearest alligator to the boat, the immediate crisis. There's always a bigger picture.

[8:52] Gen. Molstad says in the military we have different levels of operations: the tactical level where the engagement happens, the operational level with Army, Navy, and Air Force working together, and the strategic and political levels where there's a bigger picture to all of it.

[9:12] Gen. Molstad says there's a tendency to react quickly to immediate risks and urgencies. You cannot become a heat seeker in a room full of candles without thinking about how that impacts everything else. State actors, in world political situations, are playing 3D chess.

[9:41] Gen. Molstad says many activities are linked. Countries approach things from a whole-society approach where all instruments of national power are being used in concert with each other, and complementary to each other.

[9:55] Gen. Molstad says it's the same thing in the corporate world. In many cases, risks are related to other risks and opportunities. We have to be able to take a step back and see what the bigger picture is.

[10:08] Justin refers to interconnected risks. Gen. Molstad says they are interconnected, and these are complex problems. There are no easy solutions. Whatever solutions you develop are probably not going to be perfect solutions.

[10:31] You have to build resilience and agility into your organization to react quickly. It's very important to challenge your assumptions. We have to do that constantly. Our assumptions can change gradually and insidiously. Follow a rigorous cycle of reassessing your assumptions.

[11:00] Some assumptions change drastically. Think of the geopolitical assumptions that have been made in the last couple of years.

[11:08] A Quick Break! Many fantastic RIMS events are coming up in 2026 and 2027. The RIMS ERM Conference 2026 will be held on November 19th and 20th in Columbus, Ohio. The agenda is live, and registration is open. Visit RIMS.org/ERM2026.

[11:28] We're already looking to RISKWORLD 2027, which will be held over four days in New Orleans, Louisiana, from April 18th through the 21st. Member-only registration will open on November 4th, and general registration will open on December 2nd.

[11:46] Get first access to the hotel block! Hotel reservations open on October 28th, ahead of public registration. Sitting this out is the real risk. The registration link is in this episode's show notes.

[11:59] Let's Return to Our Interview with Lt. Gen. Darcy Molstad!

[12:07] Gen. Molstad will have his 30th anniversary in the Canadian Armed Forces in December. He says it's an honor to serve, and it has been an incredible career.

[12:27] Gen. Molstad is in a position, as one of 12 three-star generals in the Canadian Armed Forces, to help advance and use the investments the government is making in the Canadian Armed Forces to give our military the tools they need to deter, defend, and defeat, if required.

[12:52] Gen. Molstad says the level of geopolitical risk is higher than he has ever seen in his career and in his lifetime. We need to be prepared for that.

[13:01] Gen. Molstad started as a fighter pilot, and now he's flying a desk. It's a really high-performance desk!

[13:13] Justin asks about the interconnectedness of risks when Gen. Molstad joined the Canadian Armed Forces 30 years ago, compared to today. Gen. Molstad says he would call it below the threshold. For decades after the Cold War, we were living within a peace dividend.

[13:44] Gen. Molstad says there was a degree of taking our eyes off of the great power competition and potential for major combat operations that we're now seeing occurring in Eastern Europe and other places.

[13:54] Gen. Molstad says we ended up in a very important counter-insurgency fight, a counter-violent-extremist-organization fight after 9/11. He lived viscerally through 9/11 on duty in Northeastern Canada, when so many planes came across and landed in Canadian airports.

[14:16] Gen. Molstad says we entered into that phase on counter-violent-extremist organizations, and we took our eyes off the state activities that were occurring from potential adversaries and competitors.

[14:26] That was below the threshold, but in the last several years, after the full-scale invasion of Ukraine by Russia, it is now elevated above the threshold.

[14:38] Everyone is seeing the state interconnectedness where things don't happen in isolation. Things are connected, and we have to be able to tie those connections together.

[14:44] Justin asks about silos. Gen. Molstad says silos are very dangerous in all organizations. Silos increase your risk surface area. Breaking down silos is about finding synergies and efficiencies, so we're not duplicating efforts.

[15:27] We're getting better outcomes by assigning resources where they best fit. Gen. Molstad says in a military context, silos prevent the right information from getting to the right person at the right time.

[15:36] In simple terms, command and control is getting the right information to the right person at the right time to make the best decision possible. There are many cases in military history where silos have been very dangerous and have potentially cost lives in dangerous situations.

[15:56] Gen. Molstad says it's really important to ensure that those silos are broken down, that we understand what is happening across organizations and what is happening across governments.

[16:07] The importance of breaking down silos is about decision superiority and making the best decisions. Gen. Molstad explains the OODA Loop: observe, orient, decide, act, and continuously iterate on that.

[16:33] You've got to have the right information to observe, to orient yourself. You can't orient yourself if silos exist. If silos exist, your decisions are going to be limited. They're not going to be as high quality as they could be.

[16:50] Gen. Molstad says it's really important to break down the silos and ensure that you're getting the right information to the right people at the right time.

[16:56] One More Quick Break! RIMS, The Foundation for Risk Management™, is dedicated to shaping the future of the profession. By making a contribution, you are strengthening the global risk management community and investing in the future of the industry.

[17:17] The Foundation also supports the Spencer Educational Foundation but has a different mission. The Foundation focuses on providing opportunities for those professionals who have already decided to enter risk management and are just getting started.

[17:31] You can learn more about the Foundation by visiting www.RIMS.org/FRM.

While you're there, be sure to check out information about the Susan Meltzer Scholarship Fund, which was established to honor Ms. Meltzer, who was RIMS President in 1999 and 2000.

[17:49] Susan Meltzer was a cherished RIMS President and contributed so much to RIMS and the greater risk community. Learn more at RIMS.org/FRM.

[17:58] Let's Return to Our Interview with Lt. Gen. Darcy Molstad!

[18:05] Justin asks how often Gen. Molstad meets with business leaders, decision-makers, and people in the corporate finance sector. In the last two to three years, Gen. Molstad has had a lot of opportunities to do that.

[18:21] Gen. Molstad got involved with the Institute of Corporate Directors about two and a half years ago when he gave a chapter event. He continued to engage with Corporate Canada on risk management and viewpoints from a senior military leader.

[18:37] Gen. Molstad took the ICD designation as well to understand corporate governance. Governance in the Canadian Armed Forces and in the Canadian government are different. Understanding what other organizations do in terms of governance is really important.

[18:57] Gen. Molstad has taken part in workshops that have been planned by governance centers of excellence. There's an inundation of industry coming toward the Canadian Armed Forces because of the unprecedented investments in defense.

[19:14] Gen. Molstad says we're engaging with the opportunities we have in Canada for defense investments, and ensuring that we have the industrial base that we need, very much engaging with the corporate community for the last two and a half years. It's been really enriching.

[19:30] Gen. Molstad says he's learning a lot from corporate Canada and he hopes they're learning a lot from him as well.

[19:37] Justin notes that one of the big buzzwords in mainstream media and risk management is resilience. Gen. Molstad calls it le mot du jour, both at the individual level and at the organizational level. At the individual level, resilience is both mental and physical.

[20:16] From a military perspective, we need physical resilience to operate in harsh environments. We need mental resilience to react in a positive way to stressful situations to be sure we're using rational thought and that we can move forward.

[20:42] Organizational resilience is about organizational adaptability and agility. That happens through sets and reps, going through situations that give you exposure that requires resilience. We get that on a day-to-day basis in the military when we do exercises and operations.

[21:04] Gen. Molstad says we're tested in our resilience, organizationally and individually, all the time.

[21:18] Gen. Molstad repeats that things don't happen in isolation and we need to be looking at the big picture. Gen. Molstad would like Corporate Canada to take away that they are an integral part of our national security. National security and economic prosperity are interdependent.

[21:41] We need to be prepared as a society to ensure that we can react to global shocks in a way that is going to be positive for our economy and for our national security. It's important to have early-warning mechanisms in place. In the military, we call them indicators and warnings.

[22:01] Gen. Molstad says we look for specific things that might indicate that something is happening that we need to be prepared for. In the corporate world, you have to develop that same sort of system. What are the things that will indicate potential risks or the need to pivot?

[22:20] Gen. Molstad says we have to be careful not to respond emotionally to the risks that we face. Take a few deep breaths, understand how much time we have to react, and go at your problems with a very objective and rational mindset.

[22:42] In your organization, you have to build the capital and the trust that is needed so that when it's time to surge, in a moment of extremis, you've got the workforce that is ready to line up behind you and surge with you, because you've built that trust and that capital.

[23:04] You can't have an organization in a constant state of surge, because you will rapidly reduce the capital and trust that you have with your organization. You have to find the balance between day-to-day activities and moments of extremis, to get through those difficult moments.

[23:44] Justin asks about leadership under pressure. Gen. Molstad says being deliberate, listening before speaking, and being a good human. Leadership can be summed up in a simple sentence: be a good human. If you start with that, everything else should fall into place.

[24:06] Gen. Molstad says often the best ideas don't come from the top. Listen to your entire organization. He says everyone in a hierarchical organization is a leader. The youngest, most junior-ranked person may have some amazing ideas you need to listen to and consider.

[24:24] It's very important in leadership under pressure to look at the time you have available to you, try to listen before you speak, and try to make the best decision that you can, being careful not to be a victim of your own biases. Hear from everybody to make a better-informed decision.

[24:54] Once you make your decision, execute it faithfully. Own your decision. The buck stops here. It's your responsibility, your authority, and your accountability. It's the same thing in Corporate Canada. Make the decision, own it, drive it, and lead from the front.

[25:24] Justin says we want people to come out and see you on Monday, October 19th, at 9:00 a.m. for a moderated discussion, which will be hosted by Michael Lewis, the President of Marsh Risk Canada.

[25:40] Gen. Molstad's last words: Be proud of your Canadian Armed Forces. Our soldiers, sailors, aviators, and special operators are doing incredible work.

[25:30] We have an opportunity of a lifetime in a dangerous world to bolster Canada's defense, Canada's national security interconnectedness, and overall, our economic prosperity as a result of that. I look forward to working with all of you to do that with a common objective.

[26:12] The people who serve in uniform are somebody's son or daughter. I think about that every day because one of them is my son. I take decisions knowing that I've got to make sure that they have the tools that they need to succeed. We can do it together.

[26:30] I see our moment as a very difficult moment, but it's an opportunity of a lifetime, where if we work together, we can achieve common objectives. Be proud of your Armed Forces. Thank them for their service when you see them. We are very proud of them.

[26:46] Special thanks again to Lt. Gen. Darcy Molstad for joining us here on RIMScast. If you want to see the video version of this interview, with some great still images spliced in there, head over to RIMS.org/Canada.

[27:03] His fireside chat will be the opening Keynote at the RIMS Canada Conference in Quebec City, on October 19th. So many great speakers have been booked, including Sophie Grégoire Trudeau, a recent guest on the show. If you're on the fence, this is the time to buy your ticket.

[27:22] Register now at RIMSCanadaConference.ca.

[27:24] Plug Time! Become a RIMS member and get access to the tools, thought leadership, and network you need to succeed. Visit RIMS.org/membership or email membershipdept@RIMS.org for more information.

[27:41] Risk Knowledge is the RIMS searchable content library that provides relevant information for today's risk professionals. Materials include RIMS executive reports, survey findings, contributed articles, industry research, benchmarking data, and more.

[27:58] For the best reporting on the profession of risk management, read Risk Management Magazine at RMMagazine.com. It is written and published by the best minds in risk management.

[28:11] Justin Smulison is the Business Content Manager at RIMS. Please remember to subscribe to RIMScast on your favorite podcasting app. You can email us at Content@RIMS.org.

[28:23] Practice good risk management, stay safe, and thank you again for your continued support!

Links:

RIMS Canada Conference — Oct. 18‒21, 2026 | Quebec City | www.rimscanadaconference.ca

RIMS ERM Conference 2026 | November 19‒20 in Columbus, Ohio | Registration Now Open! | www.rims.org/ERM2026

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RIMScast Canada — Episodes Now Live — Watch the video with Lt. Gen. Darcy Molstad of the Canadian Joint Forces Command.

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"Cybercrime, Fraud and AI: Real-World Threats and Practical Defenses for Business Leaders" | Sponsored by Zurich | Oct. 22, 2026

"Signal Over Noise: Smarter Risk Analytics" | Sponsored by Riskonnect | Nov. 5, 2026

"RIMS Advocacy Presents: Terrorism Risk Insurance Act and Program: An Update on Federal Developments" | Nov. 10, 2026

"RIMS Advocacy Presents: Third Party Litigation Funding Risk" | Dec. 3, 2026

"Managing Insurance Programs at Scale: What Complex Risk Portfolios Require" | Sponsored by Origami Risk | Dec. 10, 2026

Related RIMScast Episodes from 2026:

"Opening Windows of Tolerance with Sophie Grégoire Trudeau"

"When Geopolitics Hits the Balance Sheet with Cari Stinebower"