Companies led by chief executives with military experience are outperforming those without by up to 20 per cent, a recent study has found
COMPANIES led by chief executives with military experience are outperforming those without by up to 20 per cent, a recent study has found.
Australia’s most famous retired soldier and renowned leader, General Peter Cosgrove, is now active in the corporate world, sitting on the Qantas board of directors and becoming a consultant to professional services firm Deloitte. According to the US study, this should come as no surprise as former servicemen as CEOs deliver consistent outperformance when benchmarked against the stockmarket.
There are 59 companies on the S&P 500 index in the US headed by CEOs with military experience, and the provided annual shareholder returns for these organisations is 21.3 per cent over three years to September 2005, against 11 per cent for the rest. The study, carried out by Korn/Ferry, also found that CEOs with a military background last longer than their peers with their average tenure totalling 7.2 years, compared to 4.6 years.
“There are clearly certain traits CEOs possess that drive their approaches to leadership, communication and, perhaps most importantly, the ability to translate company vision into tangible results,” said Joe Griesedieck, vice chairman of Korn/Ferry International and head of the company’s CEO practice. “While we don’t necessarily believe that one must obtain military experience to become a successful CEO later in life, it is evident that the leadership skills acquired during military training can absolutely enhance one’s chances for success in corporate life.”
The biggest link between executive performance and military training was leadership performance, the study found. Rockwell Collins’ CEO Clayton Jones, a former US airforce fighter pilot, said “At a very young age you get a chance to be in leadership positions of significant magnitude. You become comfortable in a leadership role.”
EDS CEO Michael Jordan, who served with the US Navy, added “What the military is really good at doing is teaching you to plan and program. The essence of being an officer is to figure out how to deploy forces and resources to get something done. From a management standpoint, that is one of the really great lessons.
Examples of Australian firms with ex-military CEOs include Manpower Australia (Malcolm Jackman) and Rockwell Collins Australia (ex CEO John Staal).
