Saturday, December 02, 2006

US Military Exceptionalism 

In the last two months, US Rep. Charles Rangle (D-NY) and Sen. John Kerry (D-MA) have made negative remarks about the education and job prospects of those who enlist in our military forces. They are factually wrong. A recent study by The Heritage Foundation shows that our military is better educated and has better job prospects than the average American.

Moreover, there is another trait exhibited by ex-military people that gets very little attention: an exceptional talent for business management.

Korn/Ferry International, the world's premier provider of executive human capital, conducted a substantial study that revealed a very positive link between military service and success at the executive level in corporate America.

What did they find?

59 companies (11.8%) of the S & P 500 were headed by CEOs with military experience. This percentage is quite high since our active and reserve military comprise only about 1% of the US population. CEOs with military experience tend to last longer in the job (7.2 years vs 4.6). Having spent decades in corporate America, primarily as a sales representative and IBM marketing manager (large systems and telecommunications), I can attest to the positive effect that stability at the top provides.

These companies had a much larger average annual shareholder return higher than the S & P 500 index for three measurement periods ending Sept. 2005:

Time Period...Military CEO...S & P 500

3 years.................21.3%...........11.0%
5 years..................9.5%..........(10.7%)
10 years...............12.2%............9.4%

Why would these former military people out perform the so-called elite educated gurus? Military people:

1 - Lead from the front
2 - Communicate clearly and succinctly
3 - Know how to delegate tasks (in other words, don't micro-manage)
4 - Trust people to do their jobs, hold them accountable
5 - Truly accept responsibility for their own actions

Their experience managing stressful situations during military operations transfers to an ability to manage stressful corporate environments. It is apparent their training in acting and doing versus reading and philosophising results in better returns for everyone.