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Bleeding Talent: How the US Military Mismanages Great Leaders and Why It's Time for a Revolution

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Shaping the debate on how to save the military from itself. The first part recognizes what the military has done well in attracting and developing leadership talent. The book then examines the causes and consequences of the modern military's stifling personnel system and offers solutions for attracting and retaining top talent.

276 pages, Kindle Edition

First published December 11, 2012

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About the author

Tim Kane

19 books9 followers
Tim Kane is a professor at the University of Austin and research fellow at Stanford University's Hoover Institution. He is the author of 'The Immigrant Superpower' (Oxford) and ‘Bleeding Talent’ (Palgrave Macmillan). Kane also co-authored the book ‘Balance: The Economics of Great Power’ with Glenn Hubbard. Kane was born in Michigan, raised in Ohio, and served as an officer in the U.S. Air Force.

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Displaying 1 - 17 of 17 reviews
Profile Image for Tim.
Author 19 books9 followers
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January 29, 2013
I am the author, and have been happy to see this book make a positive impact on so many readers.
Profile Image for Frank Theising.
395 reviews37 followers
March 21, 2018
Like most military officers, I have experienced my share of frustrations with the current military personnel system (inflated performance reports, risk-averse culture, arbitrary job assignments by a faceless bureaucracy, etc). In this book, I think Tim Kane offers some innovative solutions to these problems that are worthy of further consideration. His core argument is that the problem is not cultural but a structural problem with personnel policy at the center. In order to retain talent, he argues the military must move away from centralized planning to an internal market for officer assignments, taking advantages of market incentives to more effectively measure performance, flexibly manage the force (supply and demand), and accurately match skills with jobs. He makes a compelling case that this fundamental change would be a vast improvement over the current system. However, some things in the book just didn’t sit quite right. First, his argument is built on a survey of the opinions of 250 West Point grads. Sadly, this just comes across as sophomoric and insufficient justification to support such wholesale changes to the system. Second, while he addresses the most common objections to his proposals, I don’t feel he offers an honest assessment of any potential negative second or third order effects (higher costs, retention, impacts to less desirable military installations, a potential return of favoritism and the good-ole-boys club, etc). Third, the statistics given for military officers leaving is largely concurrent with the peak of the fighting in the wars in Iraq and Afghanistan. These were prolonged conflicts with repeated deployments to fight in wars with muddy strategic objectives and limited potential gains. I think he dismisses these factors a little too flippantly based on the responses of those he surveyed. Finally, with regard to writing style, although most applicable to those serving in the military, the book is written to be understood by a general audience. This leads to a lot of explanations of military life and repetition of key points that those currently serving might consider annoying and unnecessarily long winded. Still, these issues aside, I think many of his proposals are worthy of further analysis and I commend the author for bringing so much attention to the problem.

What follows are my notes on the book:

Why does the US military generate some of the finest, most entrepreneurial leaders in the world, but then mismanage them using the most risk-averse bureaucracy possible? Even among active-duty officers there is recognition that the personnel system bleeds talent, externally through attrition and internally through misallocation. The author argues that the attrition rate of the “best” officers has become a crisis in the contemporary Army and proposes an evolutionary step forward (based on classical economics) on how the Pentagon manages its leaders. He calls this solution the Total Volunteer Force which has at its heart an internal market for officer assignments, matching supply and demand rather than the central planning system in place today (4).

As a veteran officer, he believes he is best positioned to address this issue (active duty cannot do so without jeopardizing their careers, and outside observers don’t want to be viewed as “not supporting the troops”).

The civilian sector is ruthless about getting the right people in place and weeding out those who don’t fit. The military bureaucracy takes the opposite approach…officers are almost never fired and seniority dominates the culture. Human capital management in the military is a quagmire, typical of government operations: opaque, inflexible, dominated by seniority over merit, and hostile to change (6-7). The shame of this anti-entrepreneurial bent in personnel management is that it ignores the successful revolution in recruitment when the “all-volunteer force” was implemented in 1973. Military moral and effectiveness returned when the Pentagon began using market mechanisms instead of central planning and built the highest quality force in history (7).

Many officer have tried to change the system (repeating clichés about our need to innovate) but have failed. The author argues that the reason they failed is because the problem isn’t cultural. It is a structural problem with personnel policy at the center. This system operates like a bureaucracy with a unionized workforce rather than a cutting edge meritocracy (10). It is a relic of the industrial era of mass production, treating people like replaceable cogs in a machine. As such, it does a horrible job at matching skills with institutional needs, wasting talent and discouraging excellent people (13).

Since WWII, the military has implemented centralized boards, which eliminated favoritism but also produced negative side effects including institutional hostility to true leadership (like the capacity to challenge orthodoxy, think creatively, and act independently) (17). Under centralized boards, the military sends powerful signals to young officers that there is something of a “golden path” to the top. In carefully planning a career, this forces ambitious officers to constantly change positions in order to check all the right boxes needed to get ahead. Centralized boards have little time to consider complex factors that would fit the skills of all the candidates with the job requirements that need to be filled (23).

It’s convenient to believe that top officers simply have more lucrative opportunities in the private sector and that their departures are largely inevitable. But the reason overwhelmingly cited by veterans and active duty officers alike is that the military personnel system is nearly blind to merit. Performance evaluations emphasize a “zero-defect” mentality, meaning that risk-avoidance trickles down the chain of command. Promotions occur on a schedule, regardless of an officer’s competence so that there is essentially no difference among officers the same age, even after 15 years of service. Job assignments are managed by a faceless, centralized bureaucracy that keeps everyone guessing where he or she will be shipped next (25). The author argues that implementing market incentives will not replace the culture of selfless service (duty, honor, and camaraderie) with a mercenary culture. The military began the shift to free-market forces (better pay and incentives) away from coercion (the draft) in the 1970s and the military maintained its culture. The author argues that implementing similar reforms in personnel management (direct hiring authority, lateral entry, market-based compensation, etc) instead of coercion (centrally managed assignments) will not harm military culture either (26).

The author identifies five core issues: 1) personnel management is centrally planned and managed, 2) promotions are constrained by seniority rules and made arbitrary by box-checking, 3) compensation is almost entirely merit free, 4) assignments do not match jobs with officers very well, and 5) evaluations are ineffective in giving feedback or assessing skills. The author goes on to point out that the military has adapted to this and developed an unwritten method of measuring merit outside the rank structure (specific jobs often count more than rank in determining merit). The military’s up-or-out philosophy thus requires careful management of all personnel along the hierarchical pyramid, meaning the time allowed for an officer to stay in a job is tightly scripted by central planners and officers are prohibited from staying somewhere or developing specialized expertise (highly trained pilots forced to do staff tours or command for example) (29).

The problem at the center of this Gordian knot is how to efficiently match supply with demand. Because time and information available to central planners is limited, their matches are inefficient and sub-optimal. Flexible prices are the only way a market can efficiently match supply (a soldier demanding a price for his skills) and demand (a commander making a competitive bid). For this to work, commanders need the freedom to fire ineffective individuals and the freedom to hire or promote whoever they think is the best fit for their unit (even if it means promoting them ahead of more senior officers) (31-33). He argues this would be a much more effective way to evaluate merit than the shadow method currently employed (box checking, attending professional schools at the right time, earning “distinguished graduate” at those schools, etc) (88). There is no flexibility in the current system. If an officer declines command (regardless of reason) that decision is held against them for the rest of their career, derailing future promotion and assignment opportunities (90).

In the author’s survey of 250 West Point grads, only 9% indicated that deployment cycles and operational tempo were their most important reason for leaving the Army. Almost 75% said financial reasons were the least important consideration. The two factors that emerged were an organizational inflexibility and a lack of commitment to innovation. Specifically, the number one reported reason for separations among the respondents was a limited ability to control their own careers (102-103). When faced with an exodus of officers (like in 2005-2007), the Army responded like a giant inflexible bureaucracy by throwing money at the problem, offering cash bonuses to any officer who would stay. The author argues this merely bandaged the wound and didn’t solve the underlying cause.

Modern military HR is built on four flawed assumptions that can all be traced back to the centralization of power: 1) the generalist assumption, that all officers should have broad experience rather than specialized expertise, 2) the up-or-out promotion system with incessant box checking to make rank (even if officers are not interested in command), 3) a centralized bureaucracy that oversees evaluations, promotions, and job assignments, and 4) standardized evaluations based on one-size-fits-all measures for all officers (125). Since the path to command is so narrow, the struggle to get assigned “key and developmental” jobs is fierce but also a function of luck. As a consequence of the need to check career boxes, officers have traded off career depth for breadth: fewer, shorter assignments. What is lost is the ability to specialize, and those that do are effectively punished. For example, language capacity is very much in demand in the field, but is not rewarded by the promotion system and so remains in critical short supply (126).

The author submits that there is no incremental way to fix the problem, yet that is all that is ever suggested by critics. The system can only be changed by fixing the false premise at the heart of it (i.e. that centralized planning will work if only you have enough data and computer power) (129). Only an internal officer talent labor market can efficiently and effectively resolve the problem. So how would this “Total Volunteer Force” work?

Step 1: Create an internal market for job assignments and promotion. In a market system, demand agents have hiring authority. Local commanders would be given final, but conditional hiring authority. Promotion boards would shift to become authorization (qualifying) boards. Any officer who qualifies could submit an application to a unit (on something like monster.mil). Rank would be tied to jobs. This would solve both the distribution problem as well as force shaping (i.e. if the Army needs to shrink 5% they eliminate the billets and those who can’t get a commander to hire them are let go… [Reminds me of Office Space “We just fixed the glitch”]. This system would eliminate the need for central planners (HRC, AFPC) (136-137).

Step 2: End the use of year groups. By default, a free labor market would end year groups. After a few years, it is experience (not time) that matters. This would also lift the ban on technical specialization and break the up-or-out promotion system. The big effect is that officers would become experts at their jobs, not to mention the potential cost savings from fewer PCS moves (137-139).

Step 3: Open the officer market. In the commercial sector, compensation is a powerful signal of value. Commanders could choose the best allocation of their resources when building their team (do we spend $70K on a sniper or $80K on a linguist, or find someone with both skills for $110K, etc). Since officers could apply to any job, rank would become a two way street (i.e. they could choose to move to a position at a lower rank). Another component would be lateral entry of former military veterans. Finally, end the 20-year vested retirement in favor of a defined contribution plan (401K) (139-141).

The common objection raised is that this sounds all well and good for most jobs, but who would choose to apply for a job in Afghanistan, Diego Garcia, Thule, or less desirable US locales (177). The author argues that a market system would automatically correct this problem. There would be a finite number of positions at desirable locations (Hawaii, etc). The market would eventually work out the problem of balancing demand with supply (178).
Profile Image for Scott Nestler.
11 reviews2 followers
April 28, 2013
Some great ideas in here. However, the study that serves as the basis for many of his conclusions is inadequate in a number of ways. That doesn't mean that it doesn't point at issues worth considering. The good news is that the Army is headed in the right direction regarding a number of his suggestions, including: a market-based system for assignment (Green Pages), adapting performance reviews to provide better distinction between top performers (re-added box-check for junior officers, addition of a much tougher "top performer" box check, etc.), and coming implementation of a true, 360-degree evaluation for leaders. While the changes might be more evolutionary in nature (as opposed to the revolution the author suggests), they should be useful in helping to retain and develop top performers.
Profile Image for Elliot.
3 reviews22 followers
March 12, 2013
Lots of good research and interesting ideas. If only the conservative leadership who have flourished under the current system would consider the proposed changes. They won't, but it would be cool if they did.
Profile Image for Mike Green.
1 review1 follower
March 3, 2013
The bests and most relevant "military" book I've read...ever.
152 reviews
March 4, 2013
Expected this book to help me understand the depth of the problem. Was pleasantly surprised to see the author suggest market approaches vice central planning of traditional military. References to Milton Friedman and F. Hayek -- sweet!

I loved the market-based solutions chapters; anything describing how the Total Volunteer Force concept could work were interesting. The history of removing the draft was also illuminating. The questioning of core principles and how they manifest in HR are edgy. Nice.

My only complaints:
1) The first several chapters were slow and repetitive. The points made about entrepreneurial soldiers, the defense of the survey results, the exodus ... all were fine ... but could have been shorter and held same weight.

2) There weren't enough details about TVF. Giving local commanders ability to choose their personnel was clear enough ... but there were only quick mentions about how to change/remove deployment lengths and salary bands ... I'd be curious of the author's ~20 bullet points of required changes or simplified diagram of the envisioned market+personnel-focused process. Also would've enjoyed analysis of what problems the proposed system could create and how to fix.

3) Would've liked a Silicon Valley (Google/MS/Amazon) take on organization management/structure in addition to the P&G view. Scale may not be quite the same but keeping talent from bleeding is huge and expensive problem there, too.

The details of #2 were sprinkled throughout ... I just would've liked a clear 'action plan.' I gather this book was more about making the argument for action vice the specific actions ... but at least for me, what does this look like?

some quotes I'll remember ...
"I submit that there is no incremental way to fix the talent bleed in the US military. Unfortunately, this is the approach suggested by almost all critics. The problem with HR is not that the system is poorly managed, but rather that the system is based on a false premise. The premise of central planning is that enough data and enough computational resources can generate efficient allocations. That is fundamentally not true." (this could've been the first sentence of the book for me)

"What the GAO did next [after reporting dismal 2011 results of cyber workforce] is even more revealing about how the federal government responds to a workforce problem. It recommended "better" bureaucracy: "better planning, coordination, and evaluation of governmentwide activities. Agencies concurred with the majority of GAO's recommendations and outlined steps to address them."

"I was surprised to learn that the phrase 'toxic leader' is actually part of the Pentagon lexicon. .... a recent article by staff writer Michelle Tan in Army Times ... of 22,630 soldiers from rank of E-5 to O-6 ... [found] 20 percent of respondents see their superior as "toxic and unenthical." (crazy! I wonder how long the longest chain of officers all thinking 'my leader is toxic' could be?)

moving around in a bureaucracy: "a cultural norm was established whereby ACOMs [better than average] were automatically given to officers in branch-qualifying jobs and COMs [average] to staff officers. The norm evens out on average if everyone takes his or her turn rotating through key jobs."
Profile Image for Hui Ping.
33 reviews42 followers
September 6, 2025
DNF. The book was relatable on so many aspects, it was as if I could have written it myself, contextualised to where I am.

“Captains in particular were the source of anxiety for army planners since they were choosing to resign just as their initial commitments were up, leaving behind a smaller class of midcareer officers than was needed.”

“Promotions had become less meritorious once the seniority system cracked under such low retention rates, meaning officers were pulled up to captain and major faster than the norm out of a need for warm bodies more than as a reward for competence.”

In similar militaries across the world, there is massive talent hogging in the officer corps at an early stage. Officers are carefully selected based on their fulfilment of core principles of leadership, and are entrusted with high levels of responsibility and authority at a very young age, in terms of the personnel and equipment they manage. Soldiers often have to make decisions between lawful and unlawful choices, and at a very early stage in their lives hone a moral compass that takes other professions years to arrive at. There is no other organisation that builds the character of young people the same way, who learn early to lead by motivating people, instead of by coercion.

Ironically, the mechanisms that make people stay for a decadal long career are often coercion instead of motivation, using retention bonuses and early retirement bonuses in force shaping. Personal careers are controlled large by a coercive system, one that “convinces” you to stay for the second decade, or those few years more for the promised mid-career“rewarding academic journey”. For personnel at critical junctures of their career (in the US it is identified as the five-year mark), they “throw money at the problem”, by giving a generic one-size-fits-all cash bonuses to those who stay, but in the author’s words, “bandaging the wound rather than addressing the underlying causes of the problem”. Personal motivation becomes second-place as people move along, gradually eroded for those who did not get great assignments (posting), and therefore had not checked the right boxes to prove themselves. Job desire always comes second place to job fit, and even for the latter, it is not assessed by the individual himself or herself.

I wonder how people can change this. Losing good people from the military is much more painful than losing people in the private sector as the “closed system” disallows people from re-entering, with senior officers only able to promote from within. What is the rationale, I wonder, for the undying “tradition” across militaries - promotion mostly by seniority instead of merit, choice of appointments tagged to seniority, and the stringent control of officers’ careers.
Profile Image for Christopher.
320 reviews13 followers
December 31, 2019
This book changed my mind about how we promote and position soldiers in the Army. I have previously thought the current system broken (doesn’t manage talent well across the force) but few options to make it better.

This book laid out several ideas that would, over the long term, change the culture and use talent where it is best for the individual and the organization. This is based on a economic model, underlaid by the assumption that a centrally managed system cannot optimize resources better than one based on a model of economic incentives.

So let’s open up trading spaces, hiring at unit level, and allowing some to leave and come back. There is much worth considering in this book to make the US Armed Forces more effective.
This entire review has been hidden because of spoilers.
Profile Image for David.
12 reviews1 follower
June 18, 2013
His point is valid, his methods seem solid, but the book never really comes to a forceful conclusion. Kane presents a bunch of good points but then the book just kind of ends. Additionally, I hope someone in the future writes a book that encompasses all the branches and not just the Army. The book is billed as how the military mismanages great leaders, which is misleading since 99% of the book is about the Army. As a military person who feels mismanaged, I expected a much warmer and fuzzier feeling of validation from reading this book. Didn't get that.
3 reviews
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July 21, 2013
As someone who is currently in the military and planning on transitioning to the civilian side this rang true in all aspects, the author articulated many of my feelings and reasons as to why I'm leaving.
Good read.
Profile Image for Daniel.
Author 1 book7 followers
June 15, 2014
good book, the author makes some good points, but is off the mark in others, he presents ideas worthy of consideration but I think he does not address the risk or downside of those ideas. I did learn a bit about the history of the HR problem in the military and the effects of DOPMA
Profile Image for Jason.
Author 2 books4 followers
May 20, 2016
Outstanding. A must-read, and must ponder, for anyone who works in or with the military.
Profile Image for Sue Davis.
51 reviews1 follower
January 1, 2019
Extremely thought provoking read, and full of excellent insights and proposed solutions for overhauling the Army’s archaic personnel system. Having spent the last 10+ years of my career in personnel/HRC/Talent Management, I’ve wrestled with ALL of these issues in one form or fashion.

Four stars, only because the book could use some significant editing.
1 review1 follower
November 30, 2022
Mandatory Read for the US Military

This book is still relevant in 2022 because the same bureaucracy is still in place. The veterans who say, “I love the military, but not the leaders,” will understand this book.
42 reviews
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April 24, 2019
This book makes several different arguments for reforming the military's personnel system. I had hoped this book would talk more about how the military decides how to deploy its forces for low grade conflicts. The book spends most of its time talking about the path dependence of the military's personnel system, and how incremental change is the only realistic solution to the system's shortcomings.
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