State of the Union January/February 2011

Why Our Best Officers Are Leaving

Why are so many of the most talented officers now abandoning military life for the private sector? An exclusive survey of West Point graduates shows that it’s not just money. Increasingly, the military is creating a command structure that rewards conformism and ignores merit. As a result, it’s losing its vaunted ability to cultivate entrepreneurs in uniform.
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The Heads of State

John Nagl still hesitates when he talks about his decision to leave the Army. A former Rhodes Scholar and tank-battalion operations officer in Iraq, Nagl helped General David Petraeus write the Army’s new counterinsurgency field manual, which is credited with bringing Iraq’s insurgency under control. But despite the considerable influence Nagl had in the Army, and despite his reputation as a skilled leader, he retired in 2008 having not yet reached the rank of full colonel. Today, Nagl still has the same short haircut he had 24 years ago when we met as cadets—me an Air Force Academy doolie (or freshman), him a visiting West Pointer—but now he presides over a Washington think tank. The funny thing is, even as a civilian, he can’t stop talking about the Army—“our Army”—as if he never left. He won’t say it outright, but it’s clear to me, and to many of his former colleagues, that the Army fumbled badly in letting him go. His sudden resignation has been haunting me, and it punctuates an exodus that has been publicly ignored for too long.

Why does the American military produce the most innovative and entrepreneurial leaders in the country, then waste that talent in a risk-averse bureaucracy? Military leaders know they face a paradox. A widely circulated 2010 report from the Strategic Studies Institute of the Army War College said: “Since the late 1980s … prospects for the Officer Corps’ future have been darkened by … plummeting company-grade officer retention rates. Significantly, this leakage includes a large share of high-performing officers.” Similar alarms have been sounded for decades, starting long before the wars in Iraq and Afghanistan made the exit rate of good officers an acute crisis. When General Peter Schoomaker served as Army chief of staff from 2003 to 2007, he emphasized a “culture of innovation” up and down the ranks to shift the Army away from its Cold War focus on big, conventional battles and toward new threats. In many respects (weapons, tactics, logistics, training), the Army did transform. But the talent crisis persisted for a simple reason: the problem isn’t cultural. The military’s problem is a deeply anti-entrepreneurial personnel structure. From officer evaluations to promotions to job assignments, all branches of the military operate more like a government bureaucracy with a unionized workforce than like a cutting-edge meritocracy.

After interviewing veterans who work at some of the most dynamic and innovative companies in the country, I’m convinced that the military has failed to learn the most fundamental lessons of the knowledge economy. And that to hold on to its best officers, to retain future leaders like John Nagl, it will need to undergo some truly radical reforms—not just in its policies and culture, but in the way it thinks about its officers.

All They Can Be?

It would be easy to dismiss Nagl’s story, except you hear it almost every time you talk to a vet. In a recent survey I conducted of 250 West Point graduates (sent to the classes of 1989, 1991, 1995, 2000, 2001, and 2004), an astonishing 93 percent believed that half or more of “the best officers leave the military early rather than serving a full career.” By design, I left the definitions of best and early up to the respondents. I conducted the survey from late August to mid-September, reaching graduates through their class scribes (who manage e-mail lists for periodic newsletters). This ensured that the sample included veterans as well as active-duty officers. Among active- duty respondents, 82 percent believed that half or more of the best are leaving. Only 30 percent of the full panel agreed that the military personnel system “does a good job promoting the right officers to General,” and a mere 7 percent agreed that it “does a good job retaining the best leaders.”

Is this so terrible? One can argue that every system has flaws and that the military should be judged on its ultimate mission: maintaining national security and winning wars. But that’s exactly the point: 65 percent of the graduates agreed that the exit rate of the best officers leads to a less competent general-officer corps. Seventy-eight percent agreed that it harms national security.

The shame of this loss of talent is that the U.S. military does such a good job attracting and training great leaders. The men and women who volunteer as military officers learn to remain calm and think quickly under intense pressure. They are comfortable making command decisions, working in teams, and motivating people. Such skills translate powerfully to the private sector, particularly business: male military officers are almost three times as likely as other American men to become CEOs, according to a 2006 Korn/Ferry International study. Examples abound of senior executives who attribute their leadership skills to their time in uniform: Ross Perot, Bill Coleman, Fred Smith, and Bob McDonald, the new CEO of Procter & Gamble, to name a few. The business guru Warren Bennis reflected in his recent memoirs, “I never heard anything at MIT or Harvard that topped the best lectures I heard at [Fort] Benning.”

Why is the military so bad at retaining these people? It’s convenient to believe that top officers simply have more- lucrative opportunities in the private sector, and that their departures are inevitable. But the reason overwhelmingly cited by veterans and active-duty officers alike is that the military personnel system—every aspect of it—is nearly blind to merit. Performance evaluations emphasize a zero-defect mentality, meaning that risk-avoidance trickles down the chain of command. Promotions can be anticipated almost to the day— regardless of an officer’s competence—so that there is essentially no difference in rank among officers the same age, even after 15 years of service. Job assignments are managed by a faceless, centralized bureaucracy that keeps everyone guessing where they might be shipped next.

The Pentagon’s response to such complaints has traditionally been to throw money at the problem, in the form of millions of dollars in talent-blind retention bonuses. More often than not, such bonuses go to any officer in the “critical” career fields of the moment, regardless of performance evaluations. This only ensures that the services retain the most risk-averse, and leads to long-term mediocrity.

When I asked veterans for the reasons they left the military, the top response was “frustration with military bureaucracy”—cited by 82 percent of respondents (with 50 percent agreeing strongly). In contrast, the conventional explanation for talent bleed—the high frequency of deployments—was cited by only 63 percent of respondents, and was the fifth-most-common reason. According to 9 out of 10 respondents, many of the best officers would stay if the military was more of a meritocracy.

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