House of Eratosthenes

Here, contrast the way this story is put together, with the story discussed in my immediately previous post. There is a two-point drawing upon empirical data here, causation data (CEO is ex-military, yes or no), and there is result data (financial performance). Whereas in the Economist article discussed a couple hours ago, there is causation data (wealth gap) and the result data was contradictory to the message of the article. The article wanted you to think a large wealth gap, and widespread apathy of same, caused economic doom and gloom…and yet the anecdotal case about large wealth gaps & apathy of same, was the United States. The wealthiest nation on the face of the globe, bar none.

So with the resultant data contradicting the central pillar of the thesis, the Economist article cited earlier has to discard the reality and venture off into theory. Oh, this is sure to lead to something bad. Theory over practice. What is it about Americans that they aren’t worried about what we think they should be worried about? Oh boy, it’s all downhill from here…just wait a few years, and we’ll have the evidence, but of course we don’t have it just yet…

Contrasted with that, take a look at a thesis that makes sense.

U.S. companies led by chief executives with military experience have outperformed the U.S. stock market’s benchmark index over the past three, five and 10-year periods, according to a survey released on Friday.

The study by recruitment firm Korn/Ferry International (KFY.N: Quote, Profile, Research) found 59, or 8.4 percent, of the CEOs running the 500 companies in the Standard & Poor’s 500 Index had served as military officers, and these companies on average outperformed the index by up to 20 percentage points.
:
“A military background gives you a more pragmatic and practical approach to the job,” Joe Griesedieck, vice chairman of Korn/Ferry International, told Reuters. “We are not saying the correlation is absolute, as there are other factors to be taken into account; but this is interesting, as it could be to do with the the type of leadership.”

I had this figured out years ago, by which time, receiving job offers from hiring managers who were ex-military simultaneously with job offers from hiring managers who were not, I had formed the habit of accepting the job from the soldiers — provided I would end up reporting to them. Is that some kind of fun? No, not always. But it’s a good job to have.

It’s not hard to see what my logic is when you think about it. Just walk up to some guy who thinks his job sucks ass, I mean, it sucks ass because his boss sucks ass, and get the disgruntled guy to elaborate. The portrait that emerges of the sucky boss, matches line-for-line with the list of bad habits that military training knocks down. Let’s see…I never understand what he’s trying to do, I doubt he knows himself, he screws things up and blames me for it, I’m confused about what I’m even doing there, he tells me I’ll get what I need to do the job and then he welches on delivering the resources, he can’t even remember what he told me he was going to do, blah blah blah. Ex-military bosses don’t do that.

They also own the turf. A base commander doesn’t say “yeah sure it’s my thing, but I thought my XO was handling that, so you’ll have to talk to him about what went wrong.” Nuh-huh, it don’t work that way. Sergeant tells the Specialist what to do, the Specialist doesn’t have the training to do it right, it’s the Sergeant’s ass. End of story. You want a boss like that? You want a CEO like that? Who, in their right mind, wouldn’t?

Of course there is one drawback — you screw up so many times, and you’re gone. But wouldn’t you rather have it that way, than to not even know if you’re doing what it takes to keep your job over the long term?

The survey found the 59 companies in the S&P 500 headed by ex-military CEOs provided an average annual shareholder return of 21.3 percent over the three years ended September 2005 compared with 11 percent for the S&P500 Index.

Think about what this means. Fifty-nine companies represent 8.4 percent. That 8.4 percent produced 21.3 shareholder return versus the 11 produced by the whole, which includes the 8.4 percent. They didn’t just squeak out over the average, they kicked it to hell & back.

I wonder how the MBAs did against the average? In fact, if you go beneath the CEO layer, I wonder how well staff succeed when they’re hired on the merits of what they have done, versus what kind of sheepskin they carry around. I’ve often observed that when positions are created and supervisors start to hold interviews to fill the positions, nobody ever says “We have to fill this position with someone who has a diploma, experienced or not.” Nobody ever says that. Nobody says “I don’t give a shit about past accomplishments, just get me someone with sheepskin.”

People act on it, they don’t say it out loud. Nobody ever says it out loud. To say it out loud would be to define that as a mission, and nobody makes any actual money just sitting around handing out payroll checks to guys who happen to have degrees.

Because I can offer experience but no higher education, I’ve ended up working for my share of military supervisors, who are remarkably unimpressed when applicants walk in with fancy degrees but haven’t actually accomplished much of anything. This is another thing about military experience I notice: Once people have been through it, when they say the mission is A, what the staff will be doing, is A. They don’t articulate a priority in one thing, and then shepherd the resources off in some other direction. The mission is what the mission is.

Small wonder they’re kicking tail by twenty points. I wouldn’t be surprised if it was more like forty.

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Ex-Military CEOs Perform BetterSaturday, June 17th, 2006

Ex-Military CEOs Perform Better
Saturday, June 17th, 2006