I must admit that it is a difficult comparison. I admit that many objections will be put forth and they will be justified, depending on the experiences of people in both professions. But we have to admit that people who have served in the armed forces at some point in their lives always compare their business life experiences to their days in the military.
I have to concede that the dynamics of the military and business lives are not as different as you think, depending on the level of the hierarchy you are at when you are making the comparison. Even the spirit of struggle involved in both fields is similar. When you compare middle to upper level executives-commonly referred to as white collar employees-with the corresponding officers, it can be said that many military principles such as the unity of command, objective, the element of surprise, economy of force, and security, can and actually should apply to management principles in business life. In every battle that’s lost, the reason of the loss is that one of these principles has been undermined. In the case of many failed businesses, the reason is again erroneously prioritizing the main principles. Undoubtedly, there might be additional rules for business management. Even military principles differ from country to country.
If leadership is defined as getting a person to take a certain course of action with their own will, then military service is the perfect school for learning about leadership because you do not have the chance to sack a person whom you do not like, or to decrease their salary. You have to do your best with the resources you have at hand. This also includes to influence for the ultimate sacrifice humanly possible for them. The understanding that “a soldier will carry on all orders” is a complete lie. The order must be based on solid ground.
Despite the similarities, I think that business life contains more obstacles that should be overcome than the military life. In the military, for a future fight, you estimate your possible way of actions for two, three enemies. And you make your calculations taking into account the manpower, the military equipment you possess and the topography of the terrain on which you will fight. Then you go on to drills and trainings and keep your plans up to date. Business rivalries are more dynamic. While you focus on a single competitor when making your calculations on a particular day, you might end up facing another rival the next day.
Unless you are a logistics officer, you don’t deal with cost calculations in the military until you become a high-ranking officer. Manpower, equipment and time are the primary concerns you have. In business, however, the cost is always a parameter that you need to account for. Otherwise you cannot survive. When I was first initiated to business life, the first comment I made to myself was: “Those who know the inputs/outputs and the market well and who calculate the costs correctly can win this fight.” Certainly, what I mean here by “input” does not only include tangible products, but also includes having the right type of manpower, the risks involved, technology, current expenditures and many other factors that need to be considered.
At the same time, financial activities come with serious accounting requirements in the military. The level of accountability and the impact that cost calculations have on the outcome is higher than they are in business. As Colin S. Gray, a professor of strategy studies, defines it, strategy can be defined as choices made to ensure a balance between cost and benefit. The great strategic thinker Carl Von Clausewitz wrote in his On War: “As war is no act of blind passion, but is dominated over by the political object, therefore the value of that object determines the measure of the sacrifices by which it is to be purchased. This will be the case, not only as regards extent, but also as regards duration.” At the end of the day, war requires solid finances. For your finances to be solid, the decision of where to invest in defense (in terms of return of investment) should be made wisely.
Beating a rival in business life does not mean that you have won the war. You have to be constantly developing yourself and adapting to changes. New opponent might emerge at any time. Even if a competitor is ruthlessly taken out of the game or if they move to another field of activity, it is possible to read any time in the news that a newcomer is in the game. You might even find out that a company you underestimated might have gotten all in a competing environment, which you were certain you would be winner. Moreover, it is possible that your rival won that competition using asymmetrical warfare tactics.
After an absolute win in the military, a recovery, a reorganization or sometimes a shrinkage may occur. But in business life, the fighting continues uninterruptedly after each win or defeat. Companies have to constantly evaluate their market (operational area). Not only the competitors, but also the costs (training costs, raw materials, human resources, time) need to be constantly monitored.
In order to ensure the continuity of war in business life, investments should bring returns. Otherwise you will not be able to take on the next battle because you won’t have enough resources (soldiers, weapons-employees, raw materials). A return on investment (ROI) in war is a tactical success, or a successful operation. When you bring things to the strategic/operational levels, the situation also changes. Those talking heads on TV who use the title “strategist” don’t talk about real strategy most of the time, because they don’t possess enough information about resources. One cannot speak about strategy without having knowledge of the resources. Strategy is about the utilization of the resources in hand.
As the market (area of operations) grows, the need for political support increases for business. Activities in the international competition environment should have the same political backing as the military operations, just as a military victory needs to be crowned with a political victory.
In military service you can also measure your return on investment, at least to a certain extent. For example, you may be able to measure the value of training to the effectiveness of operations, but you cannot fully measure the impact, in terms of deterrence. Therefore, the concept of “return on investment” in military service is less common than in civilian life. Among lower ranking officers, this concept is almost never used. At least, it was not even mentioned once I was in uniform. A more often used concept was cost-efficiency. In purely militaristic terms, a high-ranking commander can focus on the effectiveness of the weapons that will be used for a mission vis-a vis-the budget at hand. But if the budget is under civilian control, there have to be different plans such as the development of the industry, creation of new jobs, new exporting opportunities etc. In such cases, full cooperation is necessary in the transition from identifying what is required to planning the defense strategy. Sometimes, as in the case of many developed nations (U.K., France etc.), boosting exports is considered among the unwritten commitment of the armed forces.
In the case of simulators, it is relatively easy to calculate the savings made on the basis of actual utilization. But, the ROI for a fighter jet or a navy vessel can also be measured in terms of their contribution to national strategy in addition to their value in a war. Although for some military craft it is almost impossible to measure the return on investment, for some others different parameters can be used according to various fields of activity. There are academic studies on the return of investment on platforms, trainings and capacity, but at the end of the day, the real ROI on military investment is the capability of fighting the enemy and the power of deterrence. The measure can be war, or post-training evaluations, the impact you have on friends and foes, or it sometimes can be diplomacy, humanitarian aid or propaganda.
Quantifying the effectiveness value of a rifle can be comparatively easy. Qualities such as its range, impact, endurance, sensitivity and weight might be helpful factors in making such a calculation.
Debates are not rare in defense business in terms of advantage and cost. Here are some examples of the ROI discussion on weapons and vehicles: The U.S. is a world superpower and its administration spends enormous amount of resources on the defense industry, but while doing so, they are also highly accountable. For example their latest Ford class aircraft carrier has a capability of 160 sorties per day. The previous Nimitz class aircraft carrier had a capability of 120 sorties per day. The cost of the Ford class is USD 13,5 billion, compared to USD 7 billion for Nimitz class carriers. Now the question is, do they really need a 97 percent increase in costs for a return of a 33 percent performance increase? Or does it make sense to spend USD 6,5 billion for 40 extra sorties a day? Couldn’t two extra aircraft careers cover the 40 sorties?
Over the past year, the number of Patriots which shot Unmanned Aerial Vehicles (UAVs) has increased significantly. For this reason, a more economical anti-UAV method should be developed. Predictably, these countries will make the same calculations, they will probably end up focusing on the source of the problem.
Looking at this issue from a different angle, calculations about the damaging power of weapons–which involve the technological performance or the firing speed of a weapon–bear a resemblance to the production potential of companies and their processes of developing tactics, investment in production, planning and design.
Here is my say: Although it is difficult to compare military service to civilian life, I think a professional officer who moves on to a civilian corporation doesn’t really start his business life from scratch. The only difference is the values involved in measuring the parameters of the battlefield. The reputation of military officers among their colleagues is a strong indicator of their professional success, and this reputation expands to civilian life. This might come as a surprise to those who have never professionally served, but I believe that the management process and understanding in business life is almost identical to that of military life. I will write more about leadership and management in next month’s issue.