Report: Succession Planning with Military Precision

Lessons for CEOs from the Armed Forces

PART ONE – SUCCESSION PLANNING WITH MILITARY PRECISION

The Armed Forces provide a rich yet largely untapped playbook for companies looking to improve the ways they identify, develop and promote internal leadership talent.

KEY TAKEAWAYS:

  • Businesses are increasingly eager to develop stronger internal talent pipelines and to improve their ability to both attract quality people and retain their current talent.
  • The Armed Forces are way ahead of other sectors in talent retention and developing world-class leaders within, but their model is overlooked by commercial companies.
  • Organisations can take important learnings from the military approach to identifying talent, assessing potential, embedding a leadership culture and nurturing well-rounded individuals.
  • There are flaws in the military organisational structure, too, but with a balanced approach commercial organisations can vastly improve their talent succession processes.

The trio of organisations that make up the British Armed Forces – the British Army, Royal Navy and Royal Air Force – are each the size of a FTSE 100 company and have their own leader responsible for managing tens of thousands of people and billions of pounds of budget and assets. They represent the UK on the global geo-political stage, including security, trade, foreign relations and international business partnerships.

Yet while their roles are comparable, the military chiefs earn less than £200,000 per year compared with an average FTSE 100 CEO remuneration of £3.61 million in 2019. And in contrast to the intense and uber-competitive CEO recruitment market in the commercial world, the heads of the British Army, Royal Navy and Royal Air Force were all internal successions, having progressed through the ranks from humble beginnings as Officer Cadets at Sandhurst, Dartmouth and Cranwell respectively.

The British military is renowned for its world-class leadership, which is all nurtured internally. The only route in is at the bottom, starting as a junior officer. And with no option to source a senior hire externally, the Armed Forces rely entirely on internal succession through promoting their existing talent base. Over centuries, they have honed a highly effective structure for identifying and developing leadership talent.

Such learnings are hugely untapped in the commercial sector, where companies often have little to no structures or processes in place for internal succession planning. This is despite UK companies spending £38.9 billion on external recruitment costs last year, according to the Recruitment and Employment Confederation, and 45% of HR professionals admitting in a Gartner survey they struggle to develop strong leaders internally.

In PwC’s Annual Global CEO Survey this year, 93% of chief executives said they recognise the need to change, or are already changing, their strategy for attracting and retaining talent. As part of that, there is a rapidly growing impetus on developing talent within, and demonstrating that people can advance their careers in their employment.

Speaking the Same Language

The underutilisation of effective military techniques in businesses can be partly attributed to accessibility. While the Armed Forces are undoubtedly good at talent development and succession, the same is not necessarily true of how well they communicate to the outside world. A 2020 study by BFBS, the Armed Forces media organisation, found that more than two-thirds of the UK population don’t understand what the military does outside of combat, and one in ten thinks they only exist to fight wars.

In recent years, Savannah Group has seen increasing demand for CEO and leadership succession planning and benchmarking work, as organisations look to lessen their reliance on the external recruitment marketplace, strengthen their internal talent pool and improve key employee retention. The average staff turnover rate in the UK is 15%, according to research by Monster, about three times what it is in the Armed Forces.

“The similarities between military organisations and commercial businesses are closer than many people think, certainly when it comes to the techniques that can be used to identify, develop and promote leadership talent”.

To cut through the military jargon and understand how companies can learn from the Armed Forces, Savannah Group interviewed a series of former senior service personnel who have since forged successful second careers. They have witnessed succession planning in the Armed Forces first hand, and where organisations in the commercial world often fall short.

How do the British Army, Royal Navy and Royal Air Force ensure a steady pipeline of high-calibre leaders when, unlike private corporations of a similar scale, they cannot recruit externally? In this report, we outline the considerations of our interviewees and how companies can adapt such insights to their succession planning strategies.

PART TWO – UNDERSTANDING THE MILITARY WAY

To learn from the ways the Armed Forces breed world class leaders entirely from within, companies need to first understand how it works – and it’s simpler than many assume.

From officer cadet to senior rank, the Armed Forces have a highly structured career track that is constantly identifying, preparing and pushing individuals through the process. The sheer rigidity of this approach and the continual upward pressure on internal talent contrasts with the inertia that can often cripple commercial companies whose own people management and succession plans are disjointed and haphazard.

The constant assessment of individuals in the military, against well-defined KPIs (that extend beyond the numeric computations that are increasingly relied upon by corporate organisations) at all levels, creates an ever-evolving pipeline of highly able people who are noted for their leadership potential. But not everything about military talent management can be described as rigid. In fact, it is the wide, flexible exposure to different roles and tasks that prepares individuals for promotion much faster than in the commercial sector.

Far from the traditional route to a FTSE CEO – an MBA followed by climbing a commercial or finance function – the Head of the Royal Air Force (has thus far) traditionally started their career as a pilot. How do you take someone predominantly trained to fly fast jets and re-orientate them to lead a large, complex organisation? It’s a transition the military has mastered, and one that businesses can take valuable learnings from as many seek to develop leaders from a less conventional and more diverse talent pool.

Identifying Leaders Early

The process of identifying future leaders in the military begins on day one. “On my first day, the Chief Petty Officer pointed at us all and said, ‘One of you will be an Admiral someday,’” says Admiral Sir Jonathon Band, who led the Royal Navy as First Sea Lord between 2006 and 2009 and is now a nonexecutive director to defence firm Lockheed Martin UK and Carnival Corp, the cruise line. “The military is always looking at people with extra potential.”

This search for individuals with talent and potential beyond their current role is unceasing, and in the early-to-mid phase of their careers officers are sent on long residential courses designed to build on their managerial experience to date. They are encouraged to elevate their knowledge and apply it in the next stages of their careers. Crucially, however, the courses inform the ‘appointers’, those responsible for deciding people’s career paths, of individuals’ leadership potential, intelligence and adaptability.

“The military system is such that there is always somebody else thinking about your next move,” Admiral Band adds.

“In the commercial world, on the whole, people look after their own careers, and approaches to internal spotting and succession planning are variable at best. There’s always a debate about whether somebody better can be sourced externally. Formal reporting systems and targets are essential, but not many have them.”

Performance & Potential

Appraisals in the Armed Forces are not just frequent but nuanced too – with a clear divide between performance and potential. By deliberately separating the two, and giving equal weighting to people’s future potential as to their performance against current KPIs, rising stars are always known two layers up. In commercial companies, performance and potential are often blurred, with a tendency to look backwards.

The Armed Forces also use training interventions as a chance to identify talent and objectively assess people’s leadership potential on a level playing field. For instance, they will put all officers across the army, regardless of speciality, on a single training course where everybody is then subject to the same challenges and opportunities. The average senior military officer spends 20-30% of their career in training. While it is not realistic to match those levels of training resources in the corporate world, using training as a talent spotting tool is certainly an opportunity that could be tapped more.

“My first impressions in the corporate world were surprise at how unstructured it is in terms of career planning. Leaders don’t seem to view it as a core part of their role, leaving it to employees’ own devices or delegating to HR,” says Harry Holt, Chief People Officer at Rolls-Royce and a former Colonel in the British Army.

“In many firms, little time and investment goes into leadership or management training, and appraisal and promotion systems are often haphazard. The military career structure is more robust.”

Trusting with Responsibility

Once people with leadership potential are identified, the focus is on engineering their upward progress. While a number of training milestones are geared towards exercising military capabilities on a large scale, others increase the amount of time spent on more commercial skills such as programme management and finance. As people continue to be pushed up through the pipeline, some inevitably drop out when they reach the limit of their abilities. This sustained, structured progress is rare in the commercial world.

Despite all of the formal training, when service members progress into more senior roles there is still always a large element of learning on the job. Very few individuals are ever totally prepared for their next appointment, however having been through the system there is trust that they will adapt. In the commercial world, meanwhile, there can often be an obsession with ensuring somebody is completely qualified for a particular role.

“The military has the ability to nominate their own people for projects as they arise, which broadens their experience and raises their profile,” says Major General Nick Caplin, a retired British Army officer who commanded UK Support Command (Germany) and is now CEO of the charity Blind Veterans UK.

“There are occasionally opportunities for a high-profile role outside of the unit, normally four-to-six-month deployments. That’s difficult to emulate in the commercial world, but it’s possible.”

At the end of this structured pipeline, there is a pure concentrate of talented individuals who have demonstrated they are able to operate and manage across a range of responsibilities. It is from this relatively small yet very well-formed and continually replenished pool of talent that the Armed Forces are able to select their future leaders.

PART THREE – ARMING YOUR INTERNAL SUCCESSION STRATEGY

For organisations keen to improve their retention rates and build a robust talent pipeline, there are several actionable insights to take from the military approach to succession.

The average time spent employed by the British Armed Forces is nine years, Ministry of Defence statistics show. This compares to just four years in the wider economy, according to the Employee Tenure Summary. And for nine years in a row, the Work Institute’s Employee Retention Report, which interviews over 250,000 people, has found career development is the top reason employees leave their jobs. The number of people attributing a lack of growth and development opportunities has grown 170% since 2010.

With this in mind, it’s easy to surmise that one of the key reasons people stay employed much longer by the British Army, Royal Navy or Royal Air Force than other employers, and retention is significantly lower, is because they are more likely to feel they are on a clear career trajectory. They feel invested in, that both their work and potential are being recognised, and that their progression is being constantly observed and looked after. In turn, the Armed Forces get greater loyalty and a strong pipeline of highly engaged talent.

“The military system of advancement is very closely scrutinised by the outside world and greatly admired – it’s seen as fair and objective,” says Major General Caplin.

“The military approach is highly systemic. There’s a recognised way for people to be trained and advanced. By and large, the system for training and development is very good.”

This is partly down to necessity; there is simply no option to recruit externally, yet strong military talent is critical to the success of our whole nation. While commercial organisations will never face such limitations, the success of the military approach lends valuable insight at a time when many companies are keen to improve their retention and internal talent pipelines. Military practices are often lifted into the commercial world without people realising, such as having a ‘mission statement’, but one area where businesses should proactively seek inspiration is in talent development and succession.

From our own experience crafting succession planning strategies for large corporate clients, and the insights we have drawn from our interviewees, Savannah Group has identified three core areas where businesses can take key learnings from the military.

1.Planning for Future Needs

It is common for military leaders to be consistently thinking 15 years ahead, or even more. Defence is an ever-evolving sector and it’s essential the Armed Forces are always at the cusp of the latest trends and technologies, such as cyberwarfare. With no opportunities to plug knowledge gaps with external hires, they must be forever considering what skills and expertise they will require in their leaders many years down the line. The Navy Board and Chiefs of Staff, for example, will currently be thinking about what the head of the Royal Navy needs to be 30 years from now, and planning the waypoints they need to hit before eventually taking on the role.

Such a long-lens approach to leadership development is nearly unheard of in the commercial world, which tends to operate a maximum of five or ten years ahead. The need to gaze much further into the future, of course, is appeased by the ability to source external talent when required, but this can quickly become an over-reliance. Clearly, if companies had a well understood, high-calibre pool of internal talent, they would be more likely to draw their leaders from that rather than falling into a reactionary mode of sourcing externally.

Businesses might not need to plan for cyberwarfare but their ability to adapt to digital trends could be the difference between success and extinction. Over half of Fortune 500 companies from the year 2000 already no longer exist, while C-suite executives told a study by ChristianSteven Software they believe 40% of the current cohort will be gone within just ten years. But how can companies build a workforce that can deal with future challenges they can’t yet totally foresee? The Armed Forces achieve it not by hiring skills but rather identifying and honing talent that is able to learn and adapt to change.

2.Embedding a Strong Leadership Culture

In the knowledge that future military leaders lie within, identifying and developing talent is not only a key discipline but a culture that is truly embedded in the Armed Forces. All officers are officers first and foremost, and their specialty comes second, which means focusing principally on their potential to lead people, not whether they will make a good pilot, engineer or logistician. This approach is at odds with the commercial world.

Many organisations today spend a lot of time thinking about and trying to build a strong corporate culture, but few get close to the military ethos which is revered around the world. Military personnel serve under the banner of “all of one company”, and this culture of togetherness, and a common camaraderie, is promoted throughout the Armed Forces. Leadership is a core thread and an expected behavioural pattern regardless of level. From day one, service members are instilled with military values that breed accomplished leaders, including commitment, integrity and respect for others.

“Service members are immersed in the military ethos, values and heritage,” says Air Commodore Jon Ager, Director of Infrastructure Modernisation at the British Antarctic Survey, the UK’s national Antarctic operation, and a former Assistant Chief of Staff in the Royal Air Force.

“They share a common purpose. You need to be professional and committed to the mission. Failure is not an option. There’s a real focus on investing in and developing people, and it’s got even better recently with more standardisation.”

3.Train, Expose, Evaluate

The highly structured career pathway in the Armed Forces typically sees officers rotate through appointments of up to three years in duration. Moving them through roles is a delicate balancing act informed by insight into likely future requirements, which enables a promotion pipeline to be formed and nurtured. The sheer breadth of areas that officers are exposed to is crucial to their development, which is something businesses can learn from when nurturing high-performing executives. Increasingly, many already do this.

The variety of roles also means people are more likely to remain stimulated in their role, fuelling higher talent engagement. As people transition from specialist roles into more senior leadership positions, the military develops training milestones to help prepare them for new appointments. The Armed Forces have always had a strong training ethos, spending considerable time preparing for a rainy day. It’s always a rainy day in the commercial world, a stark difference; however, short courses and mentors go a long way.

“The military gives people a breadth of responsibility and autonomy and always ensures appropriate training packages are there,” says Air Vice Marshal Christina Elliot, who became CEO of the RAF Benevolent Fund in 2020 following 35 years in the Royal Air Force, culminating as Air Secretary in charge of personnel.

“They’re very good at career development and training. It’s how you grow people at the base level. People are more tied-in with the military, and so the churn factor is much higher in the corporate world.”

Appraisals are almost universal in business, but many only focus on performance and simple objectives for further development. The Armed Forces’ comprehensive annual reporting and assessment process discerns a clear stratification of high-potential individuals and a career path designed to ensure their upward progress is continued. The individual and their employer are then both fully invested in advancing that path.

PART FOUR – A BALANCED APPROACH

It’s impossible to completely emulate military organisational structures in a commercial environment, but businesses can take inspiration from tried-and-tested techniques.

It would be foolish to claim the military model of talent development and succession should be lifted in its entirety and dropped into a commercial organisation. There are many differences between the two sectors, including one already mentioned in this report, being the inability of the military to source external talent. But there is a very distinct difference that hasn’t been noted: in the commercial world, the objective is to make money; in the Armed Forces, it is to deliver an outcome, whether that be fighting a war, providing humanitarian relief or supporting the response to a global pandemic.

This distinction is more important to talent development than people might realise. As an outcome-based institution, the military mentality is entirely committed to tangible outcomes, meaning people’s contributions can always be recognised within that. In the commercial world, financial results aren’t always the total sum of tangible outcomes, and staff can often even be competing against each other. This in itself, however, is a key learning for commercial organisations. By encouraging togetherness, and recognising the sum parts of its success, a company can make itself more attractive to the best talent.

“Constant training and focussed development means you grow talent into broadly capable people who can take on anything that comes their way,” says Admiral Sir Trevor Soar, a former Commander-in-Chief Fleet in the Royal Navy and now Chairman of Chatham Dockyard Trust and Director of TrueLeader, a leadership development company.

“Companies should take these learnings, identifying talent early, giving people broader experience and responsibility, and using all of that as a marker for the future. I would love to see better leadership development in the commercial world – real investment in leadership. And it should be managed at an executive level, with board sponsorship. Unfortunately, in my leadership development work I have seen some very bad leaders out there. Threading leadership through the fabric of the organisation is key, as is making people feel motivated. At one company I know of, which had a high churn rate, some 85% of their people in their exit survey said they were leaving because of their relationship with their manager. The difference, in good talent management, is always leadership. You’ve got to engender good leadership”.

Diversity vs Uniformity

It is also important for organisations to recognise that, invariably, there are pitfalls in the military approach to developing a strong succession pipeline for its leadership. For example, a rigid and stratified career structure, while great for identifying and developing talent in line with requirements, could restrict diversity in the truest sense because all leaders are a product of the same system. Togetherness and shared values clearly render strong results, but too much uniformity could limit original thinking.

Considering the nature of their work, the Armed Forces are perhaps understandably conservative and rigid when it comes to various aspects of their management dynamics. Achieving uniformity in leaders is important because military chiefs are usually limited to three-year stints in charge. Should leaders be too radical in their creative thinking, their successors could spend most of their own tenure unpicking their changes and restoring some long-term stability and continuity. The average tenure of a FTSE 100 CEO is roughly double that of military chiefs, and often they have even been given the job because of their track record of expelling archaic processes and driving much-needed transformation.

Avoiding a pack mentality is crucial. Head-hunters have seen for many years the benefits of diversity of experience in management teams and, indeed, some of the best leaders in the commercial world are those that have a broad industry and functional experience. Often in executive succession planning, looking beyond direct competitors is a crucial process in developing the talent and knowledge base of a management team.

Lessons to be Learned

It remains the case, however, that there is a great deal of value that businesses can gain from adopting certain practices and disciplines from the Armed Forces, whose retention, talent succession and outstanding leadership credentials can’t be denied. Doing so successfully relies on a balanced approach to implementing a more structured way of identifying, developing and promoting leadership talent, and establishing a strong culture at the core, while preserving the nuances of the commercial sector. There is no exact science behind it, but rather a continual process of building a robust talent pipeline.

There are undoubtedly many lessons that the military can take from the commercial world, too, but the fact remains that for over 150 years the Armed Forces have successfully cultivated their own leaders with a great degree of success. Only a handful of companies could truthfully make a similar claim. The rigour of the military’s talent development and succession processes has ensured a constant supply of leaders with such flexibility and resilience to cope with whatever situation they are confronted with.

The talent identification process, continual upward advancement, plethora of training and breadth of responsibilities all ensure the Armed Forces always have a cadre of proven leaders to draw upon. In a commercial world that continues to evolve at a rapid pace, any company that can match that internal supply of talent is well prepared for the future. The military can, in turn, learn from commercial organisations about how best to manage talent pools, but such lessons would be more than recompensed in kind by lessons of military succession planning.

5 Questions companies should be able to answer affirmatively:
  1. Do you have a robust internal talent pipeline for future leaders?
  2. Do you have formal structures in place for internal talent succession?
  3. Does your corporate culture help breed strong leadership?
  4. Do you assess talent regularly based on both performance and potential?
  5. Do you actively plan career pathways and give people broad exposure?

Access the report here.

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