Value Creation Vs. Capture Mindset In Combat
Children need the most care and assistance in Afghanistan.
Recently, I was having a conversation with a Private Equity client looking for Operators to run their portfolio companies. As a firm closing out its fourth fund and soon-to-be starting their fifth, they know who they’re looking for when it comes to Operators running their acquisitions.
He explained that the typical qualities of leadership: discipline, drive, communicating, EQ, team-building, etc. were table stakes for the Operators they work with. What really mattered was having a “value creation mindset.” Immediately, I thought of how lots of Vets inherently have this mindset bred in them during their years of service, especially those who’ve experienced combat.
Value Creation, as discussed in my Strategy course in business school, is the act of increasing perceived benefits through improved services (or product). As Professor Thomas Hubbard put it, Value Capture is then the ability to gain (and profit) from this created value, particularly through share captured (which we won’t discuss here). In the end, you can create value, but if you can’t capture it, you lose it.
VALUE CAPTURE = VALUE CREATION * SHARE CAPTURED
While on my Army deployments to Afghanistan, my unit and I were tasked to conduct counter-insurgency (COIN) operations to win the “hearts and minds” of the population, in key geographic areas. While we were spreading the message of the legitimacy of the Democratic government of Afghanistan, our “competitors” (Taliban or Al Qaeda forces) were terrorizing locals through fear and intimidation.
When it came down to head-to-head firefights with the enemy, however, we generally crushed them, as we had superior firepower, training, and equipment. Hence, my unit was creating immediate value by defeating the enemy and forcing an environment of peace and stability. After all, we are the strongest nation in the world.
But as this was asymmetrical warfare, this outcome was usually short-lived, and primarily only tied to our physical presence in the area; after we left, the hoodlums came back to terrorize the people once again. Hence, our objective to “capture value” was to build on the stability we created in the area, and ultimately turn the populace into supporting the legitimacy of the Government of Afghanistan.
In order to build on our peace, we captured value as warrior diplomats and conducted full-spectrum COIN Operations to build trust with the locals. We treated sick children and taught them concepts of basic hygiene. We built schools and taught kids how to read. We handed out much-needed wheat and grain for families to eat and use for farming. We regularly met with village elders and shared with them news of the Afghanistan government’s successes. We provided wells for clean water. If something did not work, we pivoted and took new initiatives.
Treating infants and kids in a medical clinic.
And we didn’t stop there, we ended up connecting our local leaders with regional and national authorities, so they could create systems for Afghan self-governance. We developed systems to allow our local government officials to bring in Afghan aid to assist with local children education and care. We selected and trained local males to stand up a Afghan Local Police force, backed by the Afghan National Police, to build their own capabilities of security. This was the fruits of our value capture, and what allowed us to ‘move the needle’ in the war.
And we didn’t stop there, we ended up connecting our local leaders with regional and national authorities, so they could create systems for Afghan self-governance. We developed systems to allow our local government officials to bring in Afghan aid to assist with local children education and care. We selected and trained local males to stand up a Afghan Local Police force, backed by the Afghan National Police, to build their own capabilities of security. This was the fruits of our value capture, and what allowed us to ‘move the needle’ in the war.
Training Afghan Local Police on tourniquet applications.
VALUE CAPTURE MINDSET OF OUR VETERANS
This mentality in candidates is exactly what we target for our recruitment services. Mid-career, corporate-experienced Veterans have the foundation and competencies to be effective Leaders AND the ability to immediately capture value for the organization. It’s in how these Veterans build a culture of customers-first service, goal-setting and execution, values-based principles, and lead-by-example mentality, to ultimately ‘move the needle’ in business.
Recently, MilSpec Capital placed a West Point grad with combat experience as a helicopter pilot, to a firm that desperately needed operational leadership specifically in Real Estate. This Veteran wasn’t only a warrior, he was an accomplished Real Estate professional, with a Cornell MBA and over six years in RE Development, Operations and Sales. Within a week of joining the firm as the VP of Operations, he was able to build a plan of action for his new Employer, identify shortfalls in current assessments, and build a blueprint to raise capital for the firm for new development. Boom. Instant credibility.
He is one of thousands of other Veterans who not only create, but capture value quickly, just like they did in the grounds of combat.
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MilSpec Capital is a boutique Operator Search Group that connects High-Impact Veterans to our client companies in various industries. Our Veterans typically have 5-15 years of private sector experience, in addition to their successful track record of Leadership.
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