Army lessons for Australian business

Australians have an enduring love affair with the Diggers. They are revered as the embodiment of the Australian spirit.  But when it comes to the business of making money, perhaps not as many people would have thought that Australian warriors are also making their presence felt in the cutthroat corporate sector.


In fact, some of Australia’s leading corporate executives are former servicemen. The chief executive of St George Bank, George Frazis, was an air force engineering officer before he turned to banking and the chief financial officer of Frank Lowy’s Westfield empire used to play with F-111 fighter jets before he acquainted himself with Excel and balance sheets.


Patrick Brothers, head of strategy at Leighton, was an army officer who served overseas before he took the plunge to become a businessman. Patrick Snowball, the head of Sun Corp, once faced off the Soviet-armed armada in Germany as a British tank commander. These are just a few examples of some high-flying warriors who ditched their khakis for pinstriped suits.

We have in our minds a military culture that is deeply rooted in an authoritarian approach to management. Just think of drill sergeants shouting at hapless new recruits.  Many people in business think the military’s 'command and control' approach is not suited to contemporary business practices.


However, some military officers and business theorists are saying exactly the opposite. Patrick Brothers, who is the head of strategy at Leighton, argues that people’s perceptions of the military are not only wrong,  but that, in fact, the private sector is actually lagging behind the military in terms of adopting the latest management practices.

We need to remember that Australian soldiers have been fighting continuously since the September 11 terrorist attacks and often in unfamiliar terrain. Though it is sad for world peace, it is a blessing for the military, which has to adapt to a very flexible and lean fighting structure.


“The military has been in an environment where it has been testing and adopting these management theories in real time and in life and death situations,” he said. The war against ghost-like Taliban forces in rugged terrain has forced the military to change military doctrines and management techniques designed for a different war in a different era.

The defence force has been forced to flatten its hierarchy and empower officers and soldiers on the ground to make judgment calls according to ever-changing battlefield situations. British SAS and American forces have also undertaken similar changes.


The old command-and-control approach has given away to a more flexible mission and command structure, where commanders identify the mission objectives but leave junior officers on the ground to pursue these objectives as they see fit.


Another great asset that ex-servicemen can bring into the corporate sector is their ability to stay calm and work effectively during times of great uncertainty. Brothers recalled the time of the 2008 great crash, when a lot of people lost their nerve during the financial meltdown.


“Your team needs to have the confidence that you are not rattled or startled by events to the point that you can make decisions,” he said.  His claim is in fact backed up by research from two Harvard economists Efraim Benmelech and Crola Frydman, who find that CEOs with military backgrounds perform better during bad times.


Officers are also groomed for leadership positions as soon as they join military colleges. Young officers are given significant management responsibilities and budgets at an age when their peers are just starting their careers.  For example, a young army lieutenant can lead up to 30 men -- including a platoon sergeant -- who is 15 to 20 years his senior.

Patrick Snowball, the CEO of SunCorp, told the ABC: “I think my style of leadership is based on 19 years of military training, and certainly the amount of time invested in training and leadership in the armed services is very, very significant.”


In Australia, we have been shy about boosting people’s military credentials in business. However, in the United States, it is paraded as a badge of honour.  Harvard Business School is said to be dominated by three Ms: McKinsey, Mormons and the Military.


According to a report from Fern/Ferry International from a few years ago, nearly 10 per cent of American CEOs from S & P 500 companies are former military officers. American companies like Amazon pride themselves on their military-friendly hiring policy.  

   
Well-trained former servicemen and women are a significant asset to the country, not only as a fighting force but as a talent pool for many walks of life — including the business world. That there are so many current and former executives with military background is a testament to their skills and leadership quality.