Military Chiefs Find Second Careers as CEOs

NPR's Scott Simon talks to Chuck Wardell of the consulting firm Korn/Ferry International about a new study they conducted with the Economist magazine that found that former military officers are more likely to rise to the top of American corporations than whose who did not serve.

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SCOTT SIMON, host:

A new study of the Standard and Poor's 500 shows that military experience may actually be the best training to become a corporate CEO. The executive search firm Korn/Ferry International and the Intelligence Unit of the Economist magazine found that former military officers are more likely to become CEO's in top companies than those who didn't serve in the military, and they are more likely to succeed in the job.

Chuck Wardell is managing director of Korn/Ferry International. He joins us from NPR's New York bureau. Thanks very much for being with us, Mr. Wardell.

Mr. CHUCK WARDELL (Korn/Ferry International): Well, it's my pleasure. Thank you for having me.

SIMON: And I have to begin by asking if you served in the military.

Mr. WARDELL: Yes, I did. I'm a Vietnam era soldier. I was an officer and served and fought in Vietnam.

SIMON: What do you learn in the military that becomes directly applicable in corporate life?

Mr. WARDELL: Well, particularly at the company grade levels, lieutenant and up to captain, you learn organizational skills and you learn teamwork, and you have to be a good communicator, and you have to stay calm.

SIMON: To serve in the U.S. military, especially, does it require people to figure out a way to get along as an effective working unit, if not necessarily personal friends?

Mr. WARDELL: You know, absolutely. It's an interesting statistic. If you look at all adult males, only three percent were officers in the U.S. military, and yet if you look at the CEOs in the S&P 500, 8.4 percent had military experience. So A) there's a higher level of percentage of CEOs, and it does require skills that, unfortunately, not all that many American males get.

SIMON: What's performing well? How do you define success?

Mr. WARDELL: The study found that 59 companies on the S&P 500 headed by CEO's with military experience provided an average shareholder return of 21 percent over a three-year period ending in September '05, versus 11 percent for the S&P index during the same time. We also found that CEO's who have served in the military tend to survive longer on the job, I think probably because of their market-beating performance.

So you look at a company return on investment, turn-over in personnel, the morale of the company, the culture that's been built, it's ability to absorb new products, it's ability to bring in new people and new ideas and keep reinventing itself, a lot of these traits are learned in the military.

SIMON: As I understand it, there's a caveat in this report that says that people are more likely to succeed in a corporate career if they leave the military as lieutenants or captains, rather than if they rise to a higher rank.

Mr. WARDELL: The training that the CEO's talk about, and the skills they bring in the corporate life, are generally those learned in the early years in the military. After captain, you get away from the company grade demands in the military, and you get more into the politics of the military, more into getting promoted within the military.

But the first three ranks in the military are company grade ranks which require many of the skills CEO's fall back on when they run big companies.

SIMON: Does a military background offer someone in corporate life an avenue to learn how to effectively question authority or policy?

Mr. WARDELL: No, but it teaches you the cost of impulsively trying to comply, and so the ability to stay calm, to think it through, to know you're going to do it, but to question the best way to get there are things that you learn early on in the military.

SIMON: Is it difficult for people who have been military officers and perhaps have seen combat to go into making chairs or software or something like that?

Mr. WARDELL: The answer is yes. It's a very tough transition and it's one that you have to come to grips with early on when you leave the military. It's a lifestyle and a culture that's very hard to then readjust to the corporate world. Many do it successfully and quite honestly many don't.

SIMON: Chuck Wardell, managing director and head of the northeast region of Korn/Ferry International. Mr. Wardell, thank you very much.

Mr. WARDELL: Thank you.

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