- Jun 8, 2006
By Robert Sterling
From the July/August Issue of The American Standard
From the July/August Issue of The American Standard
West Point, the Naval Academy, and the U.S. Air Force Academy train young Americans in the business of war. In the process, they turn out many men and women superbly prepared for the war of business.
Indeed, America’s military academies may well be the nation’s very best business schools. Since World War II, our three main service academies have produced 1,531 corporate CEOs, 2,012 corporate presidents, and well over 5,000 vice presidents—not to mention thousands of small-company entrepreneurs.
In the course of their military training, cadets and midshipmen absorb uncompromising lessons in honor, teamwork, and discipline. Later, these lessons help many of them lead businesses toward successful ends. This training cannot be duplicated at most civilian universities or MBA programs.
First and foremost, America’s military academies teach their charges how to be a leader—how to take command, execute orders, and make sure that they’re carried out. "That’s a constant," says Robert Herres, a graduate of the U.S. Naval Academy and retired CEO of USAA, a $60 billion insurance company. "You were never outside the environment in which leadership mattered. We marched to class and we marched to every single meal, constantly in the presence of someone exhibiting leadership."
"If you look at the majority of successful people in business, the common feature of most of them is that they get things done, they deliver, they execute," says Pete Dawkins, a West Pointer and Heisman Trophy winner now vice chairman of Citigroup Private Banking. "That’s built into the DNA of what you’re taught at the military academies."
"The academies are designed to produce leaders, and I think good leaders are successful irrespective of the medium they’re working in," adds James Kimsey, a West Pointer who, after serving as an Airborne Ranger in Vietnam, went on to co-found America Online. "You can have a terrific idea, a great plan, and bad leadership, and you’ll fail. You can have a bad plan and really good leadership, and still figure out how to make it successful. Leadership is the single most important ingredient in all institutions. If you have bad leaders, the rest doesn’t matter."
Plebes at West Point are told to reply "no excuse, sir" when they are called short for their failures. "Once you absorb that," notes Kimsey, "your whole mindset changes. In battle, if you’re leading a company up a hill, and that night you have to write letters to all the mothers whose sons got killed that day, for whatever reasons, you realize there is no excuse. If you’re a CEO whose company is laying off thousands of workers because you failed to understand how the market changed, you also realize there is no excuse for those people now out of a job."
Cadets and midshipmen are taught to persevere in the face of obstacles and impediments, important skills in business as well. "The Academy training gives you an attitude, and it’s the attitude that makes the difference," said Ron Jones, a Naval Academy grad who’s now a senior vice president at Veridian, a computer and engineering company. "When I deal with Academy people in the business world, and I am asking for something to be done, I know it’s going to get done. I don’t hear a lot of, ‘Here are my excuses,’ but rather, ‘I am going to get it done, regardless.’ And that’s leadership."
But orders have to be understood if they’re to be carried out properly, and the service academies excel at teaching cadets and midshipmen to communicate with the rank and file. That’s a skill that CEOs need as well.
"All classes you participate in are held to a 12-person maximum," recalled Joe Gudenburr, a West Point grad who’s now a vice president of manufacturer BuckBee-Mears. "Every day, you interact with your classmates and with your professors. You have got to communicate from day one as a plebe when you’re being hazed. You’ve got to communicate with your peers to survive."
"The academies naturally foster the ability to get along with your fellow man, primarily because you live so close together," adds James Kinnear, a Naval Academy grad and Korean War veteran who rose to become CEO of Texaco. "You have to be able to relate to senior officers, to peers, and people under you. It’s imperative. This is directly transferable to business."
West Point graduate Perry Smith, a former fighter pilot who now heads his own company, notes that "at the academies, you lead 20 or 100 people. You’ve got to make sure their uniforms and rooms are cleaned up. You have to do that even though you don’t have much power. They just happen to be undergraduates and you’re a senior. Where else can a 21-year-old get this sort of experience?"
The academies also teach their charges the importance of character: honor, ethics, integrity. They are required to be reliable, trustworthy, honest. "We learned at the Academy that the Honor Code had no geographical boundaries or limits," writes Vietnam war hero Gil Dorland in his book Duty, Honor, Company. "It applied at all times, whether we were in or out of uniform…. At first it was rather intimidating. One slip-up could mean expulsion."
Corporate rogues may prosper in the short term, but often fail in the long run. "I’ve seen scumbags who are running companies," said Eric Grubman, a Naval Academy graduate and a partner at Goldman Sachs. "The fact is, honor, ethics, and integrity are key success factors in many areas of the private sector."
In the long run, insists Jim Kimsey, the America Online co-founder, "If you don’t have honor, integrity, and ethics, it will be found out and people won’t deal with you. Whatever you do in the business environment, your word is most important. You’d better do what you say you’re going to do. Once you lose your credibility, your value diminishes dramatically, both through the eyes of the people that work for you and the people you deal with. It’s sort of a sine qua non of being successful."
Naval Academy graduate Alexander Haig, President Reagan’s first Secretary of State and now CEO of his own company, suggests that "the academies are the finest institutions in the world at teaching honor, ethics, integrity, and loyalty. What you learn at a place like West Point will remain with you throughout your business career."
Individuals who have graduated from a service academy and then gone on to business school often find that the academy training was more beneficial. Ron Jones, who attended the Naval Academy and Wharton, contrasts the education he received at each institution: "At Wharton, leadership was a class that we took. At the Academy, leadership was a way of life."
"An MBA does not assure you’ll be successful," adds author Dorland, who also has an MBA in addition to West Point. "If you have a military academy background, the primary benefit of an MBA is to teach you the language of business, economics, accounting and marketing. But there is no substitute for rolling up your sleeves and working hard."
Elite business schools themselves hold academy graduates in high regard. Consider the Harvard Business School. In the class of 2001, 37 students have bachelor’s degrees from Harvard. In second place for undergraduate training are the service academies, with 24 alums.
The academies teach their graduates to make quick decisions. In combat, squad leaders don’t have the luxury of consulting with headquarters. They are forced to make crucial quick decisions on their own. Lives depend on it. With many firms flattening their decisionmaking hierarchies, this has become a valuable skill in business.
"Communication is very poor on the battlefield; so commanders have to react to the situation rapidly on their own with relatively limited information," notes West Point graduate Jerry York, formerly CFO of Chrysler and IBM and now vice-chairman of Tracinda, an investment company. "There’s no time for the chain- of-command to issue orders. This is very characteristic of business. Businesses that do this well end up with higher performance."
Kimsey observes this process in the company he helped build. "At AOL, you see battalions of programmers who sit there and communicate with each other. If they had to go through layers of management to make decisions, the company would end up in the brackish backwaters of technology."
With business leadership comes stress. And there is perhaps no more practical way to teach stress management than attending a service academy and serving in the military.
"Business school was just class," said Eric Grubman, Naval Academy graduate. "When you spend four years on a fast-attack sub at the height of the Cold War, and you come out and someone is trying to get you excited because you might get a B instead of an A in finance class, well, it’s very hard to get uptight about that."
Bob Herres, the former USAA chief, still remembers his first day as a plebe. "After they cut off your hair, stick you in a uniform, run you all over the place and start humiliating you, then you go to be sworn in and the guys says, ‘O.K., look to your right and look to your left. One of you is not going to make it through.’"
Not every former soldier sees a military background as beneficial for business. Matt Caulfield, an ex-marine who did not attend a military academy, is CEO of Hire Quality, a headhunting firm. He says that employers no longer have much in common with military personnel transitioning into the private sector. He describes an FA-18 pilot who was not hired at a bank despite an impressive résumé. In response to an inquiry, the hiring manager explained that he couldn’t comprehend "the fact that someone this talented would spend four or five years flying around in a jet."