Executive Voices: An Op Ed Column

Building a Better Military
N.C. leads the way in helping the armed forces adopt to modern business practices

By Bill Powell

North Carolinians are rightfully proud and strongly supportive of our state’s longstanding tenure as home to many of the nation’s premier military forces. Soldiers, airmen and marines from our bases are among the first to be called upon to defend freedom — and our Coast Guardsmen are assuming ever more vital roles in national defense. It is a tribute to the importance of our bases that many of the military’s top leaders have spent significant portions of their careers in North Carolina.

As well as making us proud, our relationship with the military has helped us prosper. A 1995 East Carolina University study estimated that military bases contributed $6.4 billion annually to North Carolina’s economy ($7.5 billion in 2002 dollars). In addition, the Department of Defense (DoD) indicates that roughly $1.6 billion in business was performed under prime contracts for the military in North Carolina during 2002. While the latter dollar figure is significant, it comprises only 1 percent of the Pentagon’s $159 billion annual contract total.

Clearly, strengthening and expanding North Carolina’s involvement with DoD would be beneficial. A partnership that includes our leading academic institutions, the business community and a non-profit organization is seeking to accomplish this by helping DoD meet strategic objectives in a unique and mutually beneficial way.

DoD is transforming itself to create a force that will be more rapidly deployable, more sustainable and more dominant on the battlefields of the future. The military is looking to private sector companies for their best practices, management skills and technologies to help achieve this transformation.

As Gen. Hugh Shelton, a North Carolinian, said during his tenure as chairman of the Joint Chiefs of Staff, “I think we’ve got to reach out and go to industry and get their best business practices,” adding that it should be a goal of the DoD to establish “long-term relationships with industry” and use “commercial solutions to meet many military challenges.” Those thoughts are shared by current leaders, including Secretary of Defense Donald Rumsfeld.

Many companies in North Carolina employ forward-thinking business practices, and our university system faculty has expertise in business and financial management, logistics, science, technology, and a host of related fields. By bringing together these resources — along with selected experts from elsewhere — the state has taken the lead in providing a unique series of educational programs to the U.S. military.

The Institute for Defense and Business (IDB), a North Carolina nonprofit foundation, is a catalyst for this effort. The University of North Carolina and the state created the IDB in 1998, and a significant portion of the organization’s work involves the DoD and the service branches. That work has made it apparent to me that addressing the military’s needs with North Carolina expertise can be beneficial for all concerned.

That understanding stems largely from what I have observed during the past three years as the IDB established and managed the Center of Excellence in Logistics and Technology — “LOGTECH” — for DoD. In conjunction with the Kenan-Flagler Business School, the IDB works to provide LOGTECH programs to military and private sector participants. The DoD’s executive agent for LOGTECH is the U.S. Army Material Command, which provides soldiers with everything they “shoot, fly, drive, wear and eat.” The command is also responsible for the Army’s research work, including the operation of the Army Research Office in Research Triangle Park.

LOGTECH is open to selected senior military and civilian participants from all the services and joint commands, along with private sector executives from relevant fields. Many of the generals and admirals who are among the military’s top leaders have attended LOGTECH programs, where they learned how to bring advanced knowledge and successful business techniques and technologies to bear to meet military challenges.

Faculty from several UNC System campuses and lecturers from industry provide instruction for executive education programs, forums, and other offerings. In addition, LOGTECH offers an MBA program — a collaborative undertaking in which the IDB has partnered with Kenan-Flagler and the Kelly School of Business of Indiana University to provide web-based and residency instruction. Finally, LOGTECH conducts research related to logistics and technology.

Through my work with the IDB, I have been struck by the determined efforts of the military’s leaders to identify and use the best that the business community and academia have to offer. Furthermore, while LOGTECH focuses on logistics and technology, there are similar needs across many business areas of the DoD.

Notably, the nature of the military’s interests means that the potential exists for numerous opportunities that would mesh well with the state’s efforts to enhance the knowledge-based aspects of its economy in the face of challenges to our traditional industries.

As the private sector better comprehends military’s needs in various areas — and as the military gains knowledge of successful private sector business practices — specific synergies can be determined and the prospects for stronger ties will improve. The programs of the Institute for Defense and Business can help to build relationships with the military — particularly when companies have appropriate expertise to share — and the IDB looks forward to that continuing role.

However, it is worth remembering that work with the military is about more than the business and jobs it generates. Contributing to that end is worthy in its own right, and North Carolina is can be proud of playing an ever greater role.


William T. Powell Jr. of Chapel Hill is president of the Institute for Defense and Business, www.theIDB.org.

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