Companies & Industries

Reporting for Board Duty


Former military officers are increasingly trading their dress uniforms for business suits

The parallels between the boardroom and the battlefield have long been noted by those who study business. Indeed, aspiring business leaders are as likely to read The Art of War as they are In Search of Excellence, in the hopes that the strategic lessons of combat can be applied to various corporate challenges and conflicts. On the battlefield, even the most carefully considered plan will invariably need to change in response to the situation at hand. Companies facing an aggressive competitor in a cutthroat market find the pace no less chaotic, though thankfully less bloody.

With these similarities in mind, it's no surprise that many companies are increasingly pursuing former military figures for board assignments. Occasionally, these military men and women have had direct experience in the company's line of business, but it's often the case that they are strangers to the specific challenges posed by the corporate environment. The quantity of tested military brass is also on the rise due to the galvanizing nature of the Iraq war and the likely reduction of forces there. Boards and corporate recruiters are increasingly wagering that the stripes an officer has earned in service to the country are ample qualification for service as a director, and that when a military director reports for duty, he or she brings to the boardroom strategic discipline, a fresh perspective, and battle-tested credentials.

A Breed Apart

On a fundamental level, many of the same skills needed to rise through the ranks of the military are found among those who have achieved similar renown in the corporate world. The path to a highranking post is not easy, and the military does a rigorous job of weeding out those unfit for command at the top levels.

Just as hungry business students fight for spots at Harvard and Wharton, cadets-in-training vie for entrance into West Point, Annapolis, and other prestigious military officer academies; competition is fierce and begins early. And just as continued success in business requires executives to successfully navigate a large interconnected community of resources and personnel, to earn accolades in the military, officers must be able to ascend through a worldwide organization whose employees number in the millions. The two worlds are more comparable than one might think.

"These are special men and women," says Jackie Arends, who leads executive search firm Spencer Stuart's government relations practice in Washington, D.C. Arends believes the demanding career path facing senior military officers makes those few who attain that level a natural fit for the intense corporate climate. "Someone who's reached a high rank in the military, a four-star general for example, simply cannot get to that point without being extremely talented and adaptable. You have to be beyond the pale to even get there in the first place. [Military officers] are incredibly bright people and they are used to operating in high-pressure environments."

Possibly the greatest asset a former military man or woman (current officers are forbidden from working with corporate entities) brings to the boardroom is a broad range of leadership experience. Like their business counterparts, military officers begin at a lower officer ranking, or even as an enlisted soldier. Just as in the business world, as they advance up the chain of command, they are entrusted with more resources and a larger pool of staff.

General Lester Lyles, a retired four-star general of the United States Air Force, controlled a staff of 82,000 and an annual budget of about $40 billion during his stint as the commander of Air Force Materiel Command (the Air Force's research and development and logistics operation). After his retirement in 2003, board recruiters quickly solicited his services, and he now sits on four public boards, including General Dynamics and Dayton Power & Light. Gen. Lyles describes the transition as a smooth one: "Because I had been involved in program management and I was used to working with industry, I found my leadership skills were very fitting with the needs of most corporations."

The broad array of leadership experience officers gain in a career in the military isn't just a selling point of recruitment efforts—for those who have been responsible for the instruction and lives of thousands, a seat on a fast-paced corporate board might be a welcome change, as well as a means of learning new ways of doing business. Says Lyles: "Those of us at the senior positions have been exposed to the opportunity of managing large organizations, giving us decades of relevant leadership experience."

Rear Admiral Marty Evans, who headed the Navy's worldwide recruitment operations as well as the Naval Postgraduate School in Monterey, Calif., agrees that the skills acquired in the military are directly transferable to the boardroom. "I was pleased at how translatable my military experience was to corporate life," she says. "The same leadership skills you need in the military come into play as a director. It's all about putting together resources, determining the mission, and accomplishing it in an excellent way." Evans retired from the Navy in 2005 after nearly 30 years of service; she now sits on four public company boards, including Office Depot and Huntsman, a chemicals company.

But if the military produces great leaders, it also makes great strategists, individuals with both a solid (and ever-growing) educational foundation and a clever tactical mind. Just as a profitable company keeps its edge by anticipating market developments, so must a field general take into account a changing climate—in both times of war and times of peace.

The Chess Board

"Successful military officers are able to think on a number of strategic levels," says Arends. "It's important not just to evaluate what's happening right now, but also to be able to predict the future to an extent, and always be ready for change." In the current economic crisis, skills that involve strategic analysis and the ability to anticipate and react to hidden risks are at a premium.

Former military officers also bring a uniquely global perspective to the boardroom. Part of understanding the current economic climate—and preparing for the future—is realizing the international dynamic of the modern market system. The United States has long ceased being a market unto itself; and just as today there are more international opportunities for expansion than ever, tomorrow there will be even more. For this reason, it is vital that boards take on directors who are capable of interacting with a growing cast of international partners, and few are as versed in or have as many contacts with these individuals as former military leaders.

"The job you have as a senior officer changes from day to day, especially in terms of the people you deal with," says Lieutenant General Mike DeLong, president of Boeing Aerospace Middle East, and the former deputy commander (second in command to Gen. Tommy Franks) at Central Command, where he oversaw the early stages of the Iraq War until 2003. "It's an international business world from here on out, and a military person is much more comfortable working with people around the globe…there's no other way to get this kind of perspective."

General Don Cook, who retired from his position as commander of the U.S. Air Force's Air Education and Training Command in 2005, described these benefits as a deep understanding of international cultures and backgrounds.

"It's no secret that American corporations go overseas for financial advantage, but for officers who have dealt within the international community, cultural understanding is the key to success, not just knowing people's names and organizations but how business is done in different countries, and how Americans are perceived in these places." Cook believes military leaders are particularly well suited to understanding the appropriate approaches to doing business in different countries. For example, in the Middle East, he explains, it's important to build long-standing and trusted relationships; for much of the European sector, relationships are conducted in a lightning-paced, deal-in-a-day style.

For better or for worse, reputation has become a strong component of a boardroom's character, in the sense that a company's credibility is linked directly to that of its directors and executives. When searching for a new director, a company is on the hunt not just for the right attributes and experience, but also for someone whose identity is firmly established—and approved of—in the business community. A director who oversaw a catastrophic downturn at his last job is going to have to go to lengths to prove his reliability at his future job interviews. On the other hand, when someone like General Norman Schwarzkopf or General Tommy Franks knocks on the door, you don't have to ask for a résumé.

For this reason, former high-level military officers can bring a certain amount of distinction to a board. While a qualified board recruit plucked from the traditional business channels might be well known in business circles, former military men and women can bring instant credibility to a board. This may seem like a relatively superficial reason, but a military appointee reinforces to shareholders and business associates the diverse qualifications present in the boardroom. For this reason, officers are sought after, and are generally snapped up immediately following their retirement. Both Lyles and DeLong found their corporate service in high demand following their retirement, and the two sit on six public boards between them, as well as on numerous committees and boards of non-profit organizations.

Special Operations

Given the "typical" military officer's specialized background, especially in fields related to engineering or technology, it's no surprise that many retiring officers move into a board position for a company that produces products and services used or required by the military and Department of Defense. The defense industry is of course, of epic scope, and there is constant demand for directors who understand the nature of a given military "product" and the process the government goes through in developing its defense systems. "[Military officers] understand the system, the levels of bureaucracy, and they can move quite easily from the public sector of military service to the private sector of military industry," says Arends.

Indeed, no defense company should be without one or several military retirees in the boardroom, say recruiters who follow this sector. For companies that hope to stay competitive in a fast-paced and ever-evolving field like defense, it is absolutely essential that a board be composed of people who know the ropes inside and out. Here, too, is where the all-important issue of a preceding reputation comes into play; directors who have served in the military are generally on close terms with the company's customers—namely Uncle Sam— and have valuable contacts within various government agencies.

Of course, while retired officers may make a natural fit for a given defense industry position, they are no less suited for many of the board seats open on other companies far from the command center. The range of board opportunities for retired military officers extends across the entire spectrum of industries; these men and women have exchanged their uniforms for formal business wear in fields as removed from the military as transportation, energy, restaurants, and finance. Franks, who was commander of U.S. Central Command until 2003, nabbed two high-profile board seats following his retirement: Bank of America and Outback Steakhouse.

For Cook, such diversity is exactly what his post-military career has brought him. Three years removed from his tenure in the Air Force, Cook has earned seats on four boards that are not connected with the defense industry: Crane, an industrial products manufacturer; Burlington Northern Santa Fe, a rail company; Hawker Beechcraft, an aircraft manufacturer; and the United Services Automobile Association, a financial services firm. "After leaving the Air Force, I wanted to try something outside of my comfort zone," says Cook. "I had been thinking about it for awhile, but had not yet fully realized the educational process that someone like me has to go through in order to be effective on the board."

Getting Up to Speed

Indeed, as General Cook and many others understand, though the fundamental leadership and strategic strengths officers acquire in military service are often ample qualification for admittance to the boardroom, there may still be a learning curve. At the fundamental level, military officers are used to dealing with budgets, instead of an income statement. While any new director will gradually learn the ropes at his or her new board, military directors in particular may want to study up on the unique language and culture associated with day-today corporate affairs. "The most obvious way to get up to speed is to make sure you can communicate effectively with your fellow board members," says Lyles. "You need to understand the nuances of how public companies are run, the verbiage, the terminology associated with profit and loss; you need to be willing to learn a new language."

For Evans, preparing for corporate life required a refresher course in the latest accounting trends. "In my case, because I had spent several years as chief recruiter, I had some experience in marketing, advertising, and HR, but it was the accounting part that required a fair amount of time studying and learning about the new rules and regulations, especially Sarbanes-Oxley and the Public Company Oversight Accounting Board," she says. "But, like anything else, it just requires time and dedication."

Department of Detractors

Though the presence of retired military leaders on corporate boards has become a common sight in recent years, critics claim that though these men and women have had impressive success in the military, they are underqualified for the particular challenges posed by the corporate boardroom. Though such detractors might be advised to express such sentiment at a considerable distance from someone whose boot camp training isn't quite forgotten, it's an understandable concern. After all, directors typically only earn a seat on a board after years spent climbing the corporate ladder. Military officers, by comparison, are more likely to have spent their early years climbing rope ladders. This decades-long process of education and personal development can't be discounted.

"I think there is a perception in the corporate community that senior military people are used to having a large staff and aren't used to doing work themselves," says Lt. Gen. DeLong. "Especially when you have an older person that isn't used to the environment or the exact requirements, some boards don't want to take a chance that [he or she] will work out."

Rear Admiral Evans says boards are changing their outlook, as military officers are becoming a better fit for the director profile: "Ten years ago, boards only wanted CEOs, then they started looking for CFOs, and today all sorts of people are getting seats. Companies are realizing that it's not just about direct experience."

Indeed, cases where ex-military officers don't excel in their new boardroom assignments seem to be more the exception than the norm, says Spencer Stuart's Arends. "The boards I've worked with have been absolutely positive in their feedback of my military placements. These senior officers are quick to adapt, and they're very willing to learn the new responsibilities that come with a board position," she says. "It's also important to realize that when you have one military member on a board of ten, you still have nine experienced business leaders, and while they bring their expertise and experience, a military officer brings a brand new perspective on old problems."

The qualifications and skills required to ascend to high-level military posts are as demanding as their corresponding equivalents in the corporate world. Any board looking to add members should consider what unique experience and outlook a former officer brings to the table, as well as what values he or she holds. It's vital to look beyond rank and consider personal character. Ultimately, as is the case with any potential director, the choice is not simply if the individual in question is qualified, but whether this individual is the right fit for the board.


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