The loose-tight model and importance of hiring veterans

Blackstone veteransI’m in New York City, having just finished a session on Founder’s Mentality for the inaugural Blackstone Veterans Hiring Summit, a brilliant initiative in which Blackstone has committed to hiring more than 50,000 American veterans across its portfolio companies.

That is not a typo: 50,000 veterans.

Although Blackstone’s initiative received great support from the US government, a key theme of the conference was that this is not being done simply because it is good for the US or its veterans. First and foremost, Blackstone is committed to hiring veterans because it is good for business.

After the conference, I had a chance to talk with Sandy Ogg, the Blackstone partner leading the initiative, who is, himself, an ex-US Coast Guard line officer. Sandy has dedicated a lot of his career to applying what he’s learned in the military to business. It is remarkable how many of those lessons fit with what we’ve been learning about Founder’s Mentality.

Let Sandy begin:  “An awful lot of what I’ve learned about company transformations has come from my military experience. In the military, strategy is ultimately about what happens at the front line. Unless your guys are in the right place, with the right equipment and training and the ability to adapt on the ground, you’re doomed. Yes, the generals sit in big map rooms and move the pieces around the table, but every one of those generals started at the front line and knows exactly what the movement of each piece means. In the military, strategy equals front line execution.”

“Of course,” he continued, “the same applies to business, but I’ve been amazed how easy it is in business to lose sight of that. We sit in our boardrooms all day staring at PowerPoint presentations, and it is easy to believe that slides equal actions on the street. But they don’t. Maybe it’s because more and more business leaders didn’t start at the front lines of their organizations. I’m excited to bring veterans into our businesses because I know they will bring a ruthless focus on execution. They will be obsessed about taking action at the front lines of our businesses. We welcome that experience. We welcome that energy.”

I asked him what it is about military training that maintains such focus on front line execution. “I never really understood it at the time, but the military has really mastered the ‘tight-loose model’ that we talk about in business,” he explained. “On one hand, the military is really tight. There’s a clear command structure, and you follow orders right down that line of command. The guy with more bars on his shoulder gets the salutes, and the guys with fewer bars give the salutes. You know your place in the hierarchy, and Lord help you if you forget it.”

“But on the other hand, the military is very loose. When you’re at the front line, you have to know your mission, but you also have to know your freedom to operate within that mission, because the one thing the military teaches is that the fog of war flows over the battlefield very quickly—your front line needs to act, adapt and act again. We know that veterans will bring that management style to us. Our companies operate under that ‘tight-loose’ model, and veterans thrive under it.”

Ogg’s observations link quite closely to the work we’re doing on Founder’s Mentality. But it actually isn’t always something founders get right. In their early growth phase, founders operate under a tight-loose model, but it isn’t a scalable model. The founder exercises extremely tight control over the organization. In Sandy’s language, “As the founder, I wear all the bars around here. Do what I say, salute when I walk by and we’ll thrive.” The founder is extremely loose with himself—he will adapt very quickly to change but very tight with those around him. The question is how he makes that style scalable. One of the most unnatural acts for a founder is to start to delegate some of the ”loose” parts of the model to others.

Other founders refer to this as ”freedom within a framework.“ As the founder of an Indian company recently explained to me, “One of the hardest transitions we had to make as a founding team was to learn to let go. We needed to give our people a framework in which to operate, but then we needed to let them freely operate within its boundaries. That isn’t easy. First, we had never described what we did in terms of a framework, and it took a lot of work before all of us described the framework in the same way. Second, it was even harder to give people the space to operate. We always had a better idea, a little adjustment that would improve things. But that just gets in the way of our peoples’ development.”

Veterans understand viscerally that strategy equals front line execution. Many have mastered this tight-loose model—one of the hardest acts in business and a hurdle many founding companies fail to cross. Blackstone intends to bring 50,000 of these veterans into its different portfolio businesses. Lord help the competitors of those businesses.

This entry was posted in Frontline obsession, Revenue grows faster than talent by James Allen. Bookmark the permalink.

About James Allen

James Allen is a senior partner in Bain & Company's London office and recognized as a leading expert in developing global corporate and business unit strategy. He is co-head of Bain’s Global Strategy practice and a member of Bain & Company's European Consumer Products practice. He is co-author, with Chris Zook, of Repeatability (HBR Press, March 2012) and Profit from the Core (HBR Press, 2001 and 2010).

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