Let’s talk about cost and savings when it comes to the military and the business world. I will start with this; the military isn’t all just “reach into the pocket and have Uncle Sam pay for it later.” There are budgets and many people who are cost focused.
However, in the military we focus on some costs, which have second order effects on actual budgets, but we are terrible at truly analyzing cost in terms of dollars and cents. Look at the saying, “hurry up and wait,” it in and of itself states that we do not value time. I come from the aviation world, where time truly does matter. We are limited on aircraft flight hours from both a budget and maintenance standpoint. We have certain windows to completed certain maintenance checks and therefore have to analyze missions for each aircraft. Likewise, the same goes for the crew flying those helicopters. We have flight hour restrictions and rest or “downtimes” that crews have to adhere to in order to increase the overall safety of operations. All that said, we are perhaps the worst when it comes to cash wasted. I have sat and waited on the auxiliary engine or my mains several times for the inevitable no reason, some VIP running behind schedule, mission cancelation or whatever the case, all while burning up expensive JP-8 (jet fuel). Not a very cost-effective way to do business. It would be like paying UPS to sit at your loading dock for an order that you may never even produce. Thinking about it from that perspective it is very wasteful. I say all that to say this, we unbeknownst save money by reducing waste elsewhere, but by no means is saving cash ever our main effort. There is twist. People cost the most in business in terms of wages, medical care, retirement plans, etc. Organizations have gone away from the pension (I cannot name one out there other than the military) in favor of a 401k. Recently, the military has begun to analyze these numbers more. Previously, it was 20 years and a retirement pension or nothing at all. You could contribute to your 401k style retirement plan (the thrift savings plan or TSP), but the military wouldn’t match a dime. In its 40 years behind the time wisdom, the military has begun a shift that cuts human costs with both sides of the blade. They are now doing a 3 percent match while reducing the pension rate from 50 percent of retired salary to 40 percent. Now I am not a betting man (although I used to be), but I would put my money on that rate continuing to go down before it completely goes away. This focus is not as much focused on the pension pay, as much as it focused on keeping a younger military (with lower ranks and therefore wages decreased) with a higher turnover rate. Take a look at the Army for example, where Army Future’s Command chose Austin, Texas as it’s operational location. Nestled in “Silicon Hills,” where companies continue to flee California tax rates for business-friendly Texas, many of which are technology based, the army has positioned itself to tap into that technology. The army is behind the times as a result of cash spent on the “war on terrorism,” but at one point in time, the military drove invitation for the rest of the world…um, the internet, radar, atomic energy, etc. The military, and army specifically here, wants to get back to that. It is cozying up next to brightest technological minds. It is doing it not only for the sake of the defense of our great nation, but to do what businesses are doing, relying on data and machines to handle the brunt of the work. This will allow the force to stay young for two reasons. One, soldiers will join to gain a technical skill with the intent on leaving after 4 or so years. Maybe they stay a little longer even, but the choice to leave and use those skills in the corporate world will be easier when your time hasn’t been “wasted” (since one has been collecting that 3 percent match), instead of staying in and “sucking it up,” to receive retirement. Secondly, the military can rely more on technology and reduce the overall force size needed. So yes, the military is terrible at cost savings, but we (ha, 5 years out and I still consider “me” a “we” despite my efforts to “break contact”) are finally striving to make some changes. Now only if we can get rid of the people and thought process like the person who scolded me for leaving formation to turn the lights off in the barracks. “It isn’t our money.” Ah, last time I checked I still pay taxes, so “Yes sir, it is our money!” Switching gears to the corporate side of the house. It is pretty straightforward; you make money by either generating more cash (sales) or by reducing operating costs. Some organizations are certainly better than others, but this is certainly a major focus on every businesses mind if they want to survive. Let’s look at the lean waste types: defects, overproduction, waiting, non-utilized potential, transportation, inventory, motion and over-processing. This is all generated around reducing operating cost. Defects require more material purchases and more man-hours to fix the process and replace the defective material. How about waiting, remember that hurry up and wait military saying, well waiting is waste that costs you money. Would you like to pay someone to sit around and do nothing? At my first post military job, I was given the tasks to figure out when and what type of hot dog to put on the roller grill. We had been throwing a bunch out at the end of night. Was it because we put a type our customer didn’t want on there (a little bit)? Was it because an hourly associate, trained to keep it full, saw it low and loaded up some more to support our value of customer service (mostly)? A simple case here, ensuring the employees logged the type and time of hot dogs they put on the grill in addition to simply asking customers which they preferred, ended up reducing wasted hot dogs by 30 percent. The crazy part about this was that our gas sales had decreased across this time, which meant foot traffic was down. That meant sales of everything should have gone down with an overall decrease in profit. Yet this wasn’t the case, our profit actually increased. Why? Because we made money by not losing money, using this mindset and emplacing processes to reduce waste. It all ties back to the mission of the organization. In the military, it is winning the battle, sometimes at all costs (money, material, men, etc- sounds like a fishbone diagram doesn’t it?). In the corporate world, the mission is to make money. That is the metric. It isn’t an evil thing. Making money means jobs, economic stimulation, etc. Therefore, businesses are naturally more cash focused and drive the cost reduction mentality to survive and flourish. If saving money was metric in the military, if leaders attended business and finance school, things may change. But until that time, the military will focus on what it is designed to do, defend our country. Likewise, businesses will focus on what they are designed to, make money.
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I have contemplated writing this. I did not want to alienate myself. I do not mean this as an attack on the leaders in the business world. In the end, I found it important to highlight how effective most military leaders are at making decision, and perhaps most importantly, the why, in hopes that business leaders will take a “risk” on talent they do not always understand.
To jump right into, I believe veterans and military leaders are better decision makers for two reasons: 1- Planning abilities 2- Understanding the cost With that being said, I will now go ahead and deep dive these two, all the time remembering this is solely an argument on decision making and not on leadership in general. The Military. Planning. The military has a process for in-depth, detailed planning and a timeline it must occur on so lower levels have the opportunity to plan as necessary. The Army calls it MDMP (military decision making process). A whole book (field manual) is written on it and it is standardized across the organization. Sure some may be better than others, but as I can attest as a Blackhawk pilot, we did not skimp on planning. Detailed powerpoint briefs walking through all the turns, timehacks, distances, headings and formations for each leg. All proceeded by load plans, and followed by landing zone procedures with primary and alternate locations. Kneeboard packets filled with all this information, armed to make the best decisions in flight, when the inevitable plan was changed by the enemy’s vote; and this is just the tip of the iceberg. This doesn’t account for the meetings that define and coordinate the whole mission for all the stakeholders before the detailed planning could be done. Army aviators, infantry, artillery, air defense, logistics, intelligence, perhaps the navy and air force involved as well, internal and external businesses if you will, all working together on a common goal, while each maintained sub-objectives that must be openly agreed upon before the contract was signed. The military identifies so much data to assess a Go vs No Go criteria for the mission in accordance with the plan. Why is that? Because of the cost. Victory vs Defeat, or perhaps more direct, LIFE VS DEATH. We plan as if our lives depend on it, because they do! The Cost. Sure the cost may be terrain given, a tactical defeat that doesn’t mean losing the war. Perhaps it is retreat, or maybe it results in missing the opportunity to capture a high profile target (enemy leader), etc. As you work your way up, maybe it changes policy on the war, what the strategy in the theater of operation is, what future acquisitions and technology that will be pursued and purchased, etc. However, when in the fine grains, it is simple, live to come home from the mission. And although not the overarching decision at the strategic level, in the back of the mind of every leader, who has been there and done that before, is the fact that with one commanding order, numerous lives will be at stake. That is powerful, and with some exceptions here and there, that cannot be said for the business world. Business. Planning. Yes some businesses do it better than others. Private businesses can often plan further out than those traded publicly. However, should that matter? Regardless, because of this, planning further out is not done in great detail. I will use my experience in GE Aviation here. A large company, around more than 100 years; one you would think would have a plan for everything as well as a standardized processes for doing such. Granted, I was at the tactical level, so it wasn’t our objective to plan five years down the road. But our principles (call them key tasks in the military operations order) were simple: cost, cash, customers and people. In the simplicity of things (sometimes all it takes, getting back to basics and “keeping it simple, stupid), this meant meeting customer demand (customer) on time without interruption to other lines of business so hardware stayed flowing (cash) while reducing operating expenses like idol inventory (cost) and taking care of the employees (people) who made this all happen. Perhaps even more simply put, lead people to flow product and therefore keep the cash coming in while reducing operating costs in order meet the customer need…so the business remains productive, relevant, ALIVE (and not out of business) if you will. However, here are some examples of the poor planning I saw. As we strolled into 2020, we still had not received our KPIs (Key performance indicators), our marching orders if you will. Rather than driving towards an objective, our plant waited to react, like a train rolling down the tracks without a conductor. After receiving those orders, we began to hold meetings and finally published our KPIs around the end of Q1. One quarter of the year had passed before we defined what success would look like that year for us. Much of this is pressure from investors being a publicly traded company, but as you can note from the above principles, not much could or would really change. Why not take the bull by the horns and drive the train how you want and then adjust as necessary? It gets worse however. Numerous times I could recall, as the quartered was winding down, we constantly stayed fixated on the quarter point. Always with our back against the wall to meet some metric, we would lose focus on the big picture. I seriously can recall not discussing the next quarter, and being told not to even bring it up in meetings, until the day before it began. It was like each quarter was the end of long and grueling football season, in which we would have an entire offseason to prepare. But it was not like that, the first day of the new quarter brought questions from vendors and customers that we could not answer. This happened like clockwork, as much as I tried to plan, while still staying focused on the close fight, I ran into brick walls. Tell me, can you go to range and only shoot 50 meter targets and qualify? That was what it felt like. The Cost. Here the lack of planning cost us to be ill prepared to answer questions. It put us behind schedule, but we could make tradeoffs in part prioritization, ask for overtime, work weekends, etc. The cost was minimal, outside of maybe making some tradeoff on a KPI, so missing an inventory reduction target to hit a sales target was acceptable since cash was king. It was like Biggy, we threw more money at things and it created more problems. You could certainly make the argument the military does this too, allowing the enemy to take an objective so one can mass forces on a different enemy weak spot. But the cost in the corporate world wasn’t taken as serious, it wasn’t lives lost, so why treat it as such? Well, as an organization who was strapped for cash (over extended in our investments with little depth in most, and certainly less reserves; intentional or lack of planning again?), “lives” became at stake when the aviation industry got severely impacted by COVID-19. Not in the true life or death sense, but we are talking 25 percent of salaried employees laid-off. Furlough was never even considered as an option, it was time to trim the fat and gain some level of cash reserves back (or at least stay alive) while certainly reducing operating cost. No ill will, it is business, you cannot operate in the red. But it is also counter to your principles; it is not taking care of your people, you sacrificed them as the cost. Not like the military, when a fallen angel (downed aircraft occurs), all resources go to rescuing the people, then securing sensitive information, then recovering the aircraft. Instead, the corporate world recovered the asset (the aircraft) and left the people. It had to happen in my organization give the cards we had been dealt, but did it ever have too? With proper planning, it should have never come to this, but in the end people (salaries and benefits) cost the most money (in both the military and corporate world), but what is defined as an asset and how to reduce operating costs are approached two totally different ways. Yet it all could have been avoided or at least slowed with proper long range detailed planning and the commitment to put your people number one, like the military does. Please see my leadership blog post (https://viewfromtheskies.weebly.com/blogs/corporate-leadership-success-story-chobani-and-hamdi-ulukaya) about Chobani. The company, when it went public gave a large amount of shares to its employees. The answer to the question why was simple and remains the same to this day despite operating as a publicly traded company. Employees are number one because they impact the product the most as they have the greatest amount of time touching it. Customers are number two, as they have the next most amount of time. Last are the investors, as they do not touch the product. This people first mentality, along with detailed and long term planning (and cash reserves), can help an organization reduce costs in other areas when your back is against the wall. Your people will be grateful and will sacrifice a lot knowing you are not intentionally walking them into and ambush and to their death. 10/28/2019 0 Comments A Personal Leadership Failure StoryIt turns out, we are all not perfect and we do make mistakes, and here is one of my more glaring leadership mistakes. It has to do with planning and quitting on my team while deployed to Al Asad Iraq. Here is the back story.
As the Navy and USMC moved out of Al Asad in Western Iraq, the US Army moved in. The west, an open desert with a few cities, had been tamed. The towns of Hit, Ramadi, and towns along the Jordanian and Syrian borders had been quite for some time. So the Department of Defense, tasked a mixed task force, one company of UH60 Blackhawk and one company of AH-64 Apaches, to conduct security and transportation operations in the area. The task of leading this thrown together band of misfits went to an Apache Major. The authority and command and control structure was weird. He would "lead" us in all day to day operations, but our Blackhawk Battalion Commander, stationed some 120 miles away, would still be the final say and approval for missions. Time came for annual gunnery qualifications. An army regulatory requirement yearly, but definitely different when stationed in theater versus at home. At home, there was a dedicated range and targets, varying terrain to qualify the gunners from stationary, on the go and in flight. In Iraq, this was a check the block. A big flat desert with an old bombed out Iraqi tank to shoot at, not nearly the same. But alas, regulations are regulations and we would conduct our qualifications. Here in the lied the difference, what a Blackhawk unit does, throwing some small arms machine gun rounds down range from your door gunners is vastly different than what an Apache does, armed with missiles, rockets, and 30mm machine gun. Here your pilots are conducting the major part of their mission, become effective weapons of destruction. With Blackhawks on the other hand, our crew chiefs manning small caliber machine guns was made for self-defense. Now don't get me wrong, I love a well-organized and effective gunnery range for the crew dogs. They can be a difference maker and be a great last resort in support of infantry on the ground. However, again, these "ranges" in Iraq were far from effective and well planned. I was tasked with the planning and coordination and to give the brief to the Apache Major. It was pretty simple. We would start at a hover, call for the engagement, conduct movement forward at a certain heading then circle back and conduct the pass by. After one door gunner was "qualified" (we really had no way of confirming other than our instructor crew chiefs saying, "the looked effective on the target," we would repeat the same for the other crew chief. All seemed simple, or so I thought. I pretty much gave this brief to the Major and expected little push back, because he really gave us much and trusted us since he was not very familiar with lift operations. Boy was I wrong, I struck a chord with the hole chest bumping, machismo gunnery thing with a man whose whole mission was to blow things up. He wanted a powerpoint presentation, range fans, engagement start and stop lines, etc, etc. Man, we were shooting at an old tank in the middle of the desert, in a war zone, with nothing around. I tried to reason with him, but he wasn't having it. I decided I would show him the hard way, if he didn't want common sense to prevail, all our crew chiefs would become unqualified and be grounded, therefore, we wouldn't be able to fly and conduct our mission. All Western Iraq air lift support would cease to exist. My boss, who was stuck at another base because of bad weather, finally returned and asked about the progress. He had already known about the progress it turns out from talking to the Major, but he wanted my story. After listening to me vent, he recommended I get the crew chief instructor more involved and let him help plan. So as I sat down and talked with the instructor, he was more than happy at the opportunity to show his abilities. Here, I was taking for granted the work I felt was extra and not empowering someone else the opportunity to grow his career. Boy did I feel like an idiot. Needless to say, the instructor put together a detailed plan that went above and beyond the briefing requirements. The Major was satisfied, the instructor had proven himself, and the team could go out and execute the gunnery and ensure we could conduct combat missions in the future. Pretty simple. My boss was a great leader, he handled the situation above perfectly by listening and recommending. And afterwards, he was honest, he said, "You hit resistance and quit, which could have cost the team." He was right again! The moral to this leadership failure story is: 1- Listen and guide, like my boss did for me 2- Don't ever quit, continue to find ways to get your pitch effectively across 3- Empower, you don't have to do everything yourself 4- And plan, always have a plan for everything, it may seem simple operationally, but it could have a strategic impact! 10/21/2019 0 Comments Leadership Tip #1: Handwritten LettersMy first tip in my leadership series comes from both personal and instructed experiences. The best part is that it is something simple, and in today's society of email and social media, it goes much further. Taking a few extra minutes and a few extra bucks may just show how much you care and value your employees, and in return, they are more likely to go that extra mile.
This idea was first floated by me while getting my Master's in Educational Administration from SUNY Albany. Our guest speaker, who was a school principle, shared a story about when he wrote some letters home to the parents of some of his teachers. Yes, 30, 40, and 50 some year olds, with parents ranging from the ages of 60-80. He shared the value that each son or daughter (the teachers) brought to the organization and the children they instructed. Even at the age of 80, parents still would go show friends and family and brag about the good their child was doing. Of course, this information circled back to the child. Imagine, you are 50 years old and your 80-year-old mother calls to tell you congratulations for being a good teacher and that they are so proud of you...powerful! Now, this teacher is motivated for being recognized for the great work they have done, and they are smitten about the relationship and conversation they had with their parent. I decided to take a similar approach while deployed to Iraq. I pulled the next of kin information and hand wrote a short letter home to the love one of each of the 39 people I helped lead in our unit. See, often while deployed, you do not share what you really do and you usually do not brag. "Oh, you know, just another day, nothing major." So I shared the greatness that each individual did for the organization. And yes, it circled back around. Some thought I was doing it for punishment, haha, but most were happy that I shared the information. When we returned from deployment, I even got some thank yous from the parents and spouses for sharing such wonderful information. Everyone was proud of their spouse, son or daughter for serving and they bragged about it! Finally, you can tie this all into business if you want to talk dollars and cents. How, just ask Chewy. I moved to small town and didn't have the dog food options I wanted anymore, so I began purchasing from Chewy. It basically was a necessity. However, as the first Christmas rolled around, my wife and I received a handwritten letter from Chewy. Now it claimed to be from the founders, which I believe to be unlikely, but someone took the time to write it. It thanked us for using them and asked to continue to provide feedback before wishing us happy holidays. That one or so minute it took to hand write that card, just ensured customer loyalty. So this is my tip to consider. Do something for your employees. Do not just send an email, as we are numb to those, but show you care with a handwritten letter to them or their families. This will show you care, you know what they have done for the organization and that you know who they are and their family outside of work. If you invest in the time in doing this, I can guarantee it will go a long way! I have been getting feedback for a success story in the corporate world. Could this be that we are cynical? Or maybe there isn't many success stories out there because there are not many good leaders? Well, I dug and found some good news, positive leadership stories. This first one hits close to home, literally. I will look at Chobani (headquartered in New Berlin in upstate New York, not far from my birthplace of Albany. I mean the CEO, Hamdi Ulukaya attended SUNY Albany, the same school I received my master's from. So, it is only natural I start here.
Some would say he is an anti-CEO, perhaps even a socialist. Perhaps he just cares and believes to reward those who deserve it. Perhaps it is his background as a farmer and immigrant from Turkey that connects him with his employees, his community, etc. Let’s look at some of his contributions to start. 1- Paid off student lunch debt on numerous occasions. Do a quick google search and find two payments off the bat, at over $100,000. Nothing to a CEO or a $1.5B business, but a lot to two school communities and the individuals in debt. It is an amount that does not make headlines but makes a difference and shows he cares...his whole intent. 2- Gave 10% of company stock to employees before going public (average of $150,000 per person- based on tenure). Imagine a $150K bonus for being a committed employee, sure beats any Christmas bonus. Giving back to the people that helped build a $1.5B organization out of once feta cheese farmer. It is taking care of his people for what they have done and inspiring them to not only continue that drive, but to do even better. 3- Has donated over $2M in support of refugees around the world. Call this his soft spot for being an immigrant. But it also shows his personality and caring for people. He takes a stance on his passion and that is key, his passion. He has emotional intelligence and connects with others in and out of his organization as a human-being who puts his pants on one leg at a time like the rest of us. 4- He is flipping the script on what a CEO and big business stands for...and this is the people and communities they are located. He says, "It’s time to admit that the playbook that guided business and CEOs for the last 50 years is broken. Spreadsheets are lazy. They don’t tell you about people, they don’t tell you about communities. But unfortunately, this is how too many business decisions are made today.” Call it old fashioned, but he is playing less off analytics and more off gut feeling. Is it really a gut feeling when you are interacting and engage with your people who are telling you want you need to know? In a recent interview, he stated the four major principles that guide him: 1- Express gratitude to your employees. “It’s your employees you take care of first, not profits." It’s their work -- not just yours, CEO, and not just your capital, investors -- that makes your company successful. Support the people on the frontline, they and the customer handle and therefore contribute most to your product success. Look no further than sports, who gets the big pay days in football? The quarterback (14 of the top 15 salaries), and why? He touches the ball pretty much every play on offense. He controls the product on the field. 2- Be involved in the community. Corporations come into communities asking, “what can you do for me?”, demanding tax credits and other incentives, he pointed out. But it’s the other way around: communities are the ones doing businesses a favor by welcoming them in, and businesses should give back. “Go search for communities you can be a part of, ask for permission, open the walls and succeed together.” You can spin this into a business positive. Go to where the talent is, acknowledge that community has the skill and talent you need and support it. This works better than waiting and waiting and waiting for talent to come to you. Look at Chobani, offices in rural farm land. Why? That is where the source of the product is and the talent of people who understand that source and how to maximize it. 3. Act responsibly. “Businesses, as citizens, must take a side." Companies cannot be neutral on the big issues of the day. For Chobani that issue is immigration. Refugees and immigrants are now 30% of Chobani’s workforce, he said. “Business, not government, is in the best place to make a change in the world." Taking a stance on your values, your plans, and your goals means something. Again, spin this into a positive. Business A, waivers from plan to plan, quarter to quarter, day to day, fire to fire. Soon, there is no direction, no guidance, no leadership, just a group of people reacting. Business B, sticks to the business plan, the goals and values they have established for a reason, often sailing through turmoil, having strategies to change course if necessary, but holding true as long as possible. The captain gives direction to the shipmates and all work together to keep the ship sailing on course. Now that sounds much more like leadership and going with the new trend. 4. Be Accountable -- to the right people. “The CEO reports to the consumer, not the board." For the first few years, the customer service number of yogurt cups was his own personal phone number. Doing right by customers, by employees and by communities will grow the business and allow it to do right by shareholders -- as a consequence, not as a primary goal. “This is the difference between return on investment and return on kindness, profit and true wealth.” Take care of your people and the rest will shake it out. Also, connected with point A, the consumer touches your product next to the most, so they should be your next focus. And this is all tied around a holistic approach of wealth and what it means to be wealthy. What does Hamdi sound like to you? A smart person, good leader, good businessperson? Anti-CEO or Servant Leader? Let me know what you think. 10/7/2019 0 Comments Believe in Your People"There are four words that, when said, will bring out the best in your team, your employees, and your family. They are: I believe in you." -Coach K
Whether it is building a team, establishing trust, motivating, holding individuals accountable, or whatever the reason, these four words are powerful for any situation. You can easily relate this to business via Jim Collins and "Good to Great." These are your people and your team, employ them with belief and trust. You hired them for a reason, so believe and trust in them. So why believe in Mike Krzyzewski anyway? Most winningest NCAA basketball coach of all-time 1132 wins and 344 loses, 5 NCAA championships, 5 Olympic Gold Medals, 3 Naismith Coach of the year awards, college basketball hall of fame inductee, and 5 year Army Officer. The man's credentials speak for themself as a winner and a leader. People make mistakes, but in order to improve, this is a necessity. But in order to make mistakes, employees must have an opportunity. In order to have an opportunity leaders must believe them and understand they will make mistakes...all of this is in order to get better, to improve and develop the individual, to improve the team, to win! And that doesn't matter what industry you are in, the more time you spend developing individuals, the better chance you have at accomplishing your business mission and key performance indicators. "I believe in you" instills confidence and confidence ensures that individuals or teams will: get things done, will monitor their progress, will ensure they do the right thing, become more aggressive and fearless, will follow through and will think and plan long term. Think about this as your team...now think about the alternative out of your team: hesitance to get things done or not getting them done at all, not worried about accomplishing key performance indicators or progressing, do what is easy, never following up on tasks and leaving them at the will of others and only working the here and now. Which group sounds better? You can instill confidence by saying and truly willing to believe in your employees. My challenge to you leaders, one time a day, step away when you feel like you need to make the decision. Start with letting your employees making the decision, but then follow up with the words, "I believe in you!" |
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