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.
Entrepreneurs in Uniform

During World War II, German generals often complained that U.S. forces were unpredictable: they didn’t follow their own doctrine. Colonel Jeff Peterson, a member of the faculty at West Point, likes to illustrate this point using a parable about hedgerows. After the Normandy invasion in 1944, American troops found that their movements were constrained by the thick hedgerows that lined the countryside of northern France. The hedges frequently channeled American units into German ambushes, and they were too thick to cut or drive through. In response, “Army soldiers invented a mechanism on the fly that they welded onto the front of a tank to cut through hedgerows,” Peterson told me.

American troops are famous for this kind of individual initiative. It’s a point of pride among officers that the American way of war emphasizes independent judgment in the fog and friction of battle, rather than obedience and rules. Lieutenants, even corporals and privates, are trained to be entrepreneurial in combat. This emphasis doesn’t just attract inspirational leaders and efficient managers—it produces revolutionary innovators. From the naval officer Alfred Thayer Mahan, whose insights on sea power transformed warfare at the beginning of the 20th century, to General Billy Mitchell, the godfather of the Air Force, to General Petraeus, who’s now implementing his counterinsurgency strategy in Afghanistan, the U.S. military has a long and proud tradition of innovative thought.

Creativity of this sort is increasingly celebrated by economists who study growth, many of whom now believe that innovation is essentially the only factor that drives long-term increases in per capita income. Since innovation relies entirely on people—what economists call human capital— academics are showing more appreciation than ever for Joseph Schumpeter and his pioneering focus on entrepreneurship. Entrepreneurs, Schumpeter noted, take risks, experiment with new technologies and ideas, and bring about the “creative destruction” that enables capitalism to flourish. Likewise, martial progress relies on innovative officers, especially those who question doctrine and strategy.

But the Pentagon doesn’t always reward its innovators. Usually, rebels in uniform suffer at the expense of their ideas. General Mitchell was court-martialed for insubordination in 1925; and who can forget the hostile treatment afforded General Eric Shinseki in 2003 after he testified that “something on the order of several hundred thousand soldiers” would probably be required to stabilize post-invasion Iraq?

In a 2007 essay in the Armed Forces Journal, Lieutenant Colonel Paul Yingling offered a compelling explanation for this risk-averse tendency. A veteran of three tours in Iraq, Yingling articulated a common frustration among the troops: that a failure of generalship was losing the war. His critique focused not on failures of strategy but on the failures of the general-officer corps making the strategy, and of the anti-entrepreneurial career ladder that produced them: “It is unreasonable to expect that an officer who spends 25 years conforming to institutional expectations will emerge as an innovator in his late forties.”

Despite the turnaround in Iraq since engineered by General Petraeus and his allies, it is hard to escape the impression that the military has indeed become less hospitable to entrepreneurs at the strategic level in the past few decades. Schumpeter predicted that as capitalist economies evolved, innovation would become routinized in large organizations, obviating the need for individual entrepreneurs. Until the 1980s, this idea was widely accepted in corporate America, and certainly in the defense industry. But Schumpeter’s prediction was upended definitively when the knowledge economy evolved out of the industrial economy, and symbolically when Steve Jobs and Steve Wozniak started Apple Computer in a California garage. In America today, capitalism is entrepreneurial: our economy is defined by individuals failing or succeeding on the strength of their ideas. Crucially, the military has not recognized this shift. And the Army, in particular, has not changed from its “inefficient industrial era practices,” as a report by the Strategic Studies Institute put it last year. It still treats each employee as an interchangeable commodity rather than as a unique individual with skills that can be optimized.

It’s Not Business, It’s Personnel

The most blatantly anti-entrepreneurial aspect of the Army is the strict time-in-service requirement for various ranks. Consider the mandatory delay for becoming a general. Active-duty officers can retire after 20 years of service. But to be considered for promotion to general requires at least 22 years of service, and that applies to even the most talented and inspiring military officer in the nation.

John Nagl might have been that officer. His 2002 book, Learningto Eat Soup With a Knife, anticipated the kind of insurgency warfare America was likely to face in the new century, and it proved a prescient warning as the wars in Iraq and Afghanistan dragged on. After serving in Iraq, Nagl helped General Petraeus write the Army’s counterinsurgency doctrine in 2005 and 2006. Conventional wisdom holds that the “surge” broke Iraq’s insurgency the following year. But the surge was more than just the 30,000 or so additional soldiers and marines who were deployed. The key was instead a new emphasis on stability and development, inspired in large part by ideas laid out in Nagl’s book.

In 2008, Nagl hit the 20-year mark, and what happened? He retired. Since he was not yet a full colonel, let alone a general, it was clear that he could be more influential as a civilian. He is now the head of the Center for a New American Security, known in Washington as President Obama’s favorite think tank. Had he stayed in the Army, odds are he would have been a career colonel, or a professor at the Army War College. Now his work at CNAS regularly reaches the White House and the National Security Council. While I assumed the loss of Nagl would be seen as an outrage within the military, most officers I spoke to shrugged it off as typical.

The more experts I talked with, the more I realized that targeting one inefficient policy, like the time-in-service requirement, wasn’t going to work. I asked the survey respondents to grade different aspects of the military in terms of fostering entrepreneurial leadership, using a standard Athrough-F scale. The “recruitment of raw talent” received 12 percent A’s and 43 percent B’s. Formal training programs and military doctrine also got good marks. What emerged as the weakest area was personnel. The evaluation system received 51 percent D’s and F’s. Job assignments got 55 percent failing grades. The promotion system got 61 percent. And lastly, the compensation system received 79 percent D’s and F’s.

Simply put, if the Army hopes to stanch the talent bleed, it needs to embrace an entrepreneurial structure, not just culture. That doesn’t mean more officers who invent new weapons, but rather a new web of incentives rewarding creative leadership. The military has reinvented itself in this manner before. West Point’s Jeff Peterson recounted the standard story line of the Army’s soul-searching after Vietnam. After eight years of committing hundreds of thousands of soldiers to a war that was lost on many levels, the Army returned to a strategic comfort zone, with its leadership thinking about conventional wars instead of the messy counterinsurgency it had just muddled through. While this story isn’t wrong on the whole, Peterson argues that it ignores the radical transformations that took place in the 1970s. He pulled James Kitfield’s book Prodigal Soldiers from his bookshelf and encouraged me to read it.

Kitfield chronicles a revolution in that era in how the Army treated, organized, and trained its soldiers. No change was bigger than the adoption of an all-volunteer force in 1973. It was a radical idea at the time, so controversial that many in the Army expected it to fail, or even to destroy the military. Instead, the all-volunteer force served as the beginning of a renaissance in the ranks, across all the services, and paved the way for a newly professional military. Instead of staying in for just two years, enlistees now commonly stayed for five years, or 10, or a career. The Army started paying better and, more important, making investments in its human capital. But make no mistake, moving to a volunteer force was not an incremental reform. It was radical. This connection may explain why almost 60 percent of the West Point respondents favored “radical reform” of the personnel system.

Radical reform may not sound like much of a blueprint, but the all-volunteer force must be understood in terms of a philosophical shift: the military rejected centrally planned accessions in exchange for a market mechanism. Faced with having to attract and retain volunteers, the military filled its requirements for labor with the right price: better pay, better housing, better treatment, and ultimately a better career opportunity than it had ever offered.

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