0:02 Who are you and where are you going? What do you want? [Music] Hello and welcome to Business Lessons from the Military. I'm your host Kevin Bemel and I'm here every Tuesday to talk about business history. I'm sorry. Uh, military history, uh, doctrine and leadership and tr and draw from that lessons that we can apply to our
0:37 businesses and professional practices. So, I'm going a little bit offbeat today, you might say, especially for a Jewish guy. Uh, but a while ago, I I read a book called Alpine Elite, uh, German Mountain Troops in World War II. So um obviously during World War II uh Germany was ruled by the Nazi regime and uh you know they controlled every aspect of life. It was a a socialist
1:13 government. Uh and and uh so I'm this is not you know um you know revisionist history um of the Nazi regime or anything like that. There were a group within uh what was called the Vermach in in World War II. Vermach people I think think it means the army. It actually means the military. And there were different branches of the Vermach including the Luftwafa which was the the air force um and and the Hod which was
1:50 the the army. Although I I never hear that term used in World War II movies. Um and um I'm going up on the name for for the Marine um for the for the Navy. But in any event, um within um the the Vermach, there was uh this group of elite um soldiers really uh who were specifically trained to operate in alpine territory. Alpine territory is very high elevated
2:28 uh territory. Typically, it's a very cold. Uh it's snowing often times. Um and and so it's a very harsh uh clim or harsh uh environment in which to to operate, especially when you're talking about military performance. So uh the United States and the European powers had uh the allies I should say had no such comparably uh trained uh troops. So the
3:05 United States for example they had what in the Navy what were called at the time frog men which eventually became the SEALs. Um they had uh airborne uh um troops like the 101st Airborne and the 82nd Airborne. Um and they had special training for you know parachuting and and you know into a a particular location other things like that. They had gliderbased troops uh as as well. And u the the British of course
3:41 had their commandos. Uh but then the commandos were were somewhat like uh the the US frog men in that they were doing sort of uh kind of covert military operations, but they had no uh troops specially trained um like the uh Alpine Corps or what what's what's what was known as the um Gabber Jagger. um my German's not particularly good. Um
4:16 that the Vermach created. And so that's why I'm using this examp this this example from the Vermach in order to talk about uh the these issues. Um and and so um you know for for for those of you I guess who think well we should never talk about um military history from from Germany and World War II. Okay. Huh. You know I guess you won't watch this episode. But I I I I think we can we can learn from all
4:52 aspects of history. And uh and and and I I I will say that um the the the uh recruitment and training that these uh soldiers went through was was really quite extraordinary by by any standard. And so um their their their example I think can can teach us quite a bit. So uh and and James Lucas in the beginning of his book he talks about how uh when the the uh you know Vermach leadership
5:28 decided to create create an Alpine Corps it was done to operate in countries like uh those in Scandinavia, Norway uh Sweden, Finland uh and also in air alpine areas of uh Austria. uh and and the the thinking was that um they were going to need such uh special specialized trained troops in order to be successful. Now the interesting thing was that for uh much of the their
6:05 existence the gabber zer gberger I should say uh did not fight in alpine territory. So it's I I think that while this is not uh a a specific business lesson per se, I think one of the first things we can learn from the gerger is that don't create something un unless you're really going to use it. There was a tremendous amount of time, energy, and money put into recruiting and training these men. and yet uh very o of
6:44 oftentime their specialized training was was of was of no use to them because they were fighting essentially like conventional soldiers. So especially in the early days of the uh formation of the Gberger uh the the men who were recruited were those who had experience uh living and working in alpine countries. So they were used to doing exhausting labor if you will uh in you know in high elevation locations where
7:21 now why is that so taxing? aside from the cold and the snow, the air is thinner, so it's it's harder to to breathe uh or well, you need to essentially breathe more to get the same amount of oxygen. And um there, you know, the um u the the vegetation is different than at lower levels. Uh typically it's it's rockier, so it's much more dangerous. and anything that you need pretty much you have to be able to bring in with
7:56 you. So unlike conventional uh military forces uh for the Gabberger um you know they they couldn't just put you know massive artillery on a flat car for a train for example on the flat car of a train I should say and have the you know the train pull it to where it was needed. nor could they use uh for the most part motorized vehicles. Um they they could not climb the kind of steep um hills that that they needed to climb. They couldn't operate effectively in the
8:33 snow. Uh so those kinds of mechanized military equipment was of no use to the Gabger and so they had to develop their their own uh type of equipment that was uh first of all possib it could be ported you know through Alpine territory number one and number two could operate in the cold in the snow uh in in what were very unfavorable
9:08 uh conditions just just from the get-go. So they used primarily small weapons, small arms I should say, things like uh pistols, long long guns, uh mortars, um grenades, those kinds of um sort of handarried weapons, if you will. um they had they they had very little artillery and like I said they didn't have things like tanks and and and that sort of equipment. And so another lesson I think and before I get to my my formal lessons that I that I worked out,
9:44 another lesson that I think we can take from the Gabbe Jagger is that one can be successful even with somewhat rudimentary tools uh compared to what other uh competitors are using. uh if one is familiar enough with one's environment, if one has trained well in the use of the the simpler technology, uh there are times when that can make
10:19 you more effective than having a lot of fancy technology that either is illsuited to what you're doing or you and your team are not particularly well trained to use it. And so therefore, you cannot be as effective with it as you could be with something that's simpler to use or on which you're better trained or is more in concert with the uh with with the environment in which you're going to be operating. Now, and in this case, when I say
10:54 environment, I I don't necessarily mean environment in terms of cold and and and and ice and snow like like in the alpine, but the the the market environment in which you're you're going to operate. So, this is kind of, you know, an opening opening thoughts on this. uh I I I think we there's there's there's you know a rich mind here uh that that we that we can extract lessons from. And so uh you know going through the book um I came up
11:29 with I think six or seven that that I want to share with you. And um the the first one is uh specialization yields competitive yields a competitive advantage. So, uh, when when you're focused on your niche, okay, then you can more easily dominate that niche. So, earlier today, I was listening to a podcast, a business podcast, and they were talking about uh Amazon moving more deeply into the grocery business. So
12:07 currently uh at least according to this podcast Amazon controls roughly I guess 8% of the grocery business through its online grocery oring ordering and through its ownership of Whole Foods whereas the largest grocery supplier Walmart controls 30% or or maybe a little bit more than that of the grocery business. So you can see that Amazon uh controls only a small part and I think one of the reasons is is Amazon is even less specialized than Walmart which I
12:44 would argue Walmart is not particularly specialized either. Um but Walmart has pursued the grocery business quite aggressively for at least I think a couple of decades now. Right. So looking at just the disparity between these two giant retailers, right, and how specialization has allowed Walmart to be dominant and leave uh Amazon in its dust basically. So the we we we can take that same
13:19 lesson and apply it to us who are not Walmart or for that matter even Amazon at least in the grocery business. Right? So the the Gabber Jagger they trained they had specialized training in alpine warfare so that they could operate very effectively in the cold and the snow and the ice at these high elevations. And it really and they they trained in that that kind of environment. And so that it really gave them a tactical edge where the people against whom they fought just
13:56 didn't have the same ability. So when they were in Norway for example, although Norwegians in some way live in an alpine environment, okay, just living in the environment doesn't necessarily prepare someone to fight in that environment. Those are not the same thing. And so to be trained to uh you know husband animals in an alpine environment for example is a completely different thing than to be trained in combat in in an alpine environment. And
14:33 so when when other forces in had to engage with the Gabberger um they almost always lost because this Alpine elite unit had been specifically trained to operate in that environment. So where we can see this happening in the business world, I think in a more specific example than the one that I just gave is a company like Patagonia. And and Patagonia is a nice example for this because it is an it's an outdoor
15:08 company. Uh it specializes in outdoor and alpine gear and with a commitment to sustainability. That's kind of part of the ethos of that company. and um because they have focused very strongly on on being a dominant player in that business or I mean sorry in that that area. So Patagonia has has become one of the best known and most affected market competitors
15:43 for for outdoor clothing and equipment. Okay. And and in fact, whereas a company like uh Adventure 16 went out of business here in Los Angeles several years ago, now I think REI has seen its footprint shrink even though it was in a similar it was a similarly focused business. uh and and other companies that are involved in it aren't really the kind of uh uh premium player that Patagonia is. I'm thinking of Dick
16:19 Sports and and Big Five, for example. They're both sporting goods stores and and and they sell gear that, you know, one can use in out the outdoors, camping, that sort of thing. Uh Patagonia is really focused on that area. it doesn't get into other uh other sport or activity oriented uh areas and so by being very focused it's it's been it's become like I said a dominant if not the dominant player uh com the
16:56 dominant business in this area and and I think this is the reason I'm doing this first is because I think this is one of the the most important lessons that that we can take from the Gabber Jerger is that in some ways the smaller our business the more important it is for us to focus on a narrow uh aspect of of the business world. Okay. So we don't spread ourselves so thin or we don't try to
17:31 compete with companies that are much larger than we are and and much better resourced than we are. Right? So starting very focused is the best way to go. Once we you know gain a very significant uh presence in a particular uh area then we can expand from there. So uh my business is an example of this. My professional fiduciary business, I focus solely on trust and estate administration. Even though if you saw my show yesterday, I talked about the
18:07 other aspects of professional fiduciary practice that my license would allow in which my license would allow me to engage. I don't get involved in those areas of practice uh at all. I don't do conservatorships. I don't do guardianships. I focus solely on probate and trust administration. Okay? And and and that and as a result, it's it's an interesting phenomenon. I've been doing this for a few years now. And I was not I was uh um uh nominated basically to handle uh a
18:44 probate that was being contested by two groups of heirs. and my lawyer reached out to the lawyer for the other side and said, "Hey, uh, we'd like to bring in, you know, Kevin Bemel, uh, or I should say the lawyer for one side, who I happen to know, uh, called me up and said, "Hey, would you be would you be willing to, you know, get involved in this situation? Here's what it's about." I said, I said that, you know, it sounds like I can add value here. So, yes, I will. I'll let you throw my hat in the ring, so to speak. And then he called up the other lawyer
19:20 and I didn't I didn't know the other lawyer at all. I've never met him, at least not that I recall. Uh but in in the conversation he had with my lawyer friend, he said, "Oh yeah, I I I know Kevin Bemel by reputation and uh you know, I I think we can, you know, work something out to bring him in so we can move this forward." Right? So the the the fact that be I I think in part of that that reputation comes from my focus and and people who people who have heard of me, they know
19:55 this is what I do. I don't get involved in other things. And so I'm I've been able to build a presence in that niche. And so again, specialization leads uh yields competitive advantage. That's that's not only true for an elite alpine unit like the Gberger, but it's it's crucial in business today where there is so much noise, so many people um you know trying to do all kinds of things that uh we need to be able to show people we're an expert in this one area.
20:32 Okay, let's take a break. America is a maritime nation. Our freedom and security depend on strong sea services. The Beverly Hills Council of the Navy League stands with our Navy, Marine Corps, Coast Guard, and Merchant Marine through community support, education, and advocacy. For over 120 years, Americans of all walks of life have heeded our call. No prior military service is required to join our mission. The Beverly Hills Council of the Navy
21:08 League of the United States. Help us support those who serve at sea. Visit navyleague.org. So this is Business Lessons from the Military. I'm your host Kevin Bemel. I'm talking about an elite Alpine unit that was part of the Vermach in World War II known as the Gabber Jagger. and drawing lessons from this really unique uh unit. Um, as I mentioned uh at the beginning of the show, the Allies did not have anything like this. They did have some
21:44 specialized units, but but nothing in the Alpine territory. So, I talked about the importance of specialization because it it yields a competitive advantage. So let's look at some other uh aspects or some other lessons that we can learn from the Gabber Jagger. So uh one of the hallmarks of this elite unit was its adaptability in hostile conditions. So uh I I I've mentioned already that they operated in an extreme environment, cold, snow, rock, ice,
22:21 steep, you know, grades that they had to navigate. Uh and and and as a result, uh even today there's not a whole lot of uh equipment that can be brought into such an environment. And so uh the the Gabber Jerger had to uh had to really maintain optimal performance uh with with limited supplies, limited equipment in this very harsh environment. Okay? And they specifically trained to do that. So for the most
22:58 part, what they only had to use, eat, etc., you know, fight with that which they carried could carry themselves, either carry on their back or slung over their shoulder or something like that. Now, in some cases, they had uh some some pack animals, but in the most extreme situations, they didn't even have animals that could uh help them transport equipment or food. And so they had to be they had they had to rely only on you know themselves as as a team
23:34 basically in order to be able to navigate and fight effectively in the harsh alpine environment. So um not that the business environment is necessarily as harsh as an alpine environment. However, it is the case that business is very competitive and while various innovations were supposed to make business uh easier, more accessible for more people, while the internet for example certainly has done that has made certain things easier and
24:11 has made uh marketing more accessible to more people. In the end, it hasn't made business success easier. It and in fact, I would argue has made business more competitive and therefore it's made being successful more challenging because with with more competitors, among other things, it it's a lot harder to break through and and create a situation where people know about you and your business. So, um, an example, and I've used this example in other shows, um, but but it
24:48 really stands out is is Netflix. So, I was a Netflix user early on when it was a a male DVD service. You would you would go and and tell uh you'd go online and and basically choose the DVDs you wanted sent to you. They'd be mailed to you. You had a certain amount of time to watch them. you put them back in an envelope and mailed them back. And that that was how Netflix got started. Uh and and the uh leadership team at Netflix was quite precient in seeing that
25:25 uh down the road streaming was going to become the dominant way that people consumed content. And so at a time when Blockbuster was the dominant player in in recorded viewing i.e. DVDs and to a lesser extent uh uh um uh VHS uh cassettes and uh and and laser discs. uh Netflix made what what looked like a huge gamble at the time switching to
26:01 streaming even though they they knew pretty certainly that streaming was going to cannibalize their existing DVD business. Um but it turned out to be not just the right decision. It was the brilliantly right decision to uh adapt to a very uh uh rapidly changing highly competitive uh media media uh distribution and and creation environment. So, so first Netflix
26:38 shifted over into streaming early on and then after that they got actually they actually got into content creation and and now Netflix is I I believe the largest media company in the world. it it it dwarfs even huge companies like the Walt Disney Company uh and and and it's I think it's called Sky Dance Paramount now that the latest merger has closed. So and prior you know when when Netflix got started it was nothing in terms of
27:14 market cap or impact on the market. So its ability to de to adapt and and to make the changes that are necessary to keep at the forefront of the market have made it the most relevant media company in the world. I would add that most recently perhaps is Netflix in their streaming service they all they did not have a an adup supported model but I think uh several years ago they realized that they were going to have to adapt further that as as more and more
27:50 streaming players entered into the marketplace and had adup supported uh varieties of their streaming services which let them offer them at a lower monthly price. So Netflix was going to have to compete with that. And so they they created an adup supported tier that was much less expensible much less much less expensive than their non-adup supported t uh tier. And although their ad revenue uh got off to a pretty slow start, um the the adup
28:28 supported tier at Netflix has grown tremendously as has the revenue that Netflix gets from from advertising. And so again, you see the ability of of Netflix to adapt in what is a you know hostile uh market conditions in the business world. Okay. Uh next is uh leadership by example builds cohesion. So the the fact of the matter is
29:03 especially today leaders need to be willing to share in essence the hardships of their teams so as to foster trust and loyalty. And again the Gabber Jger uh you you see this you also see this in in most elite combat teams the SEALs. I know personally because I was a command chaplain for a SEAL team. Uh the officers work very closely with their men. They lead from the front. They operate and
29:40 and endure the same conditions as the the so-called rank and file. It's it's a little bit I think of a misnomer to think of elite troops as rank and file, but but they they all endure the same conditions. They eat the same food. they carry the same burdens at least the same physical burdens and then the officers carry of course the burden of command in addition. So uh that was the ethos of the gabberger as it is with again most elite combat uh troops. So an example of this uh an event that I actually took a
30:18 part in when I was in the Navy was uh during the uh earthquake and the subsequent tsunami in Japan in 2011. So among the companies that were impacted was Toyota, the automaker, and their their operations were significantly disrupted. And so the leadership of to Toyota had a kind of a fundamental choice to make and that was that was do we just issue instructions to the rank and file employees
30:54 uh directing them how to get the company up and operating again back on its feet or do we sort of you know roll up our sleeves and get in there with them and in essence share the same experience of of of rebuilding of of frustration of trying to of figuring out what needs to be done and how it can be done, how it can be accomplished most effectively and and the leadership to of Toyota chose the latter and as a result they were able to restore operations more quickly, number one, which of course
31:30 was, you know, important to the to the the company itself, but also um they were able to strengthen employee morale and supplier relationships by showing that everyone in the company was committed to getting it back on its feet. And and so anytime a company faces a crisis or a particularly big challenge, I think it's it's very important that leadership demonstrate to the team members that they're willing to take on the the same
32:07 burdens and and take the, you know, the hits to the quality of their life that that they're asking their people to take in order to overcome whatever this large challenge, this problem is. Okay. So, leadership by example certainly builds cohesion. Okay. Next, invest in training and preparation. So, uh you know, I I've already talked a little bit about how the Gabber Jerger underwent very intensive training. So
32:43 despite at least in the initial uh um you know months and and and year or two of the Gabber Jagger the the um the men recruited to be a part of this elite unit were used to working in an alpine environment. So despite you know having that that background if you will uh the the they were still given very uh rigorous uh specific training to operate on a combat basis in in the alpine
33:19 environment. So while they were um many if not all of them were very accomplished skiers, snowshoeers and and that sort of thing which is you know among the the the modes of transportation when you're at high elevations with snow and such. Um you know they didn't necessarily have training in in demolition and combat those sorts of military activities. And so in order to make them effective as an elite combat uh group or team, they
33:56 needed specialized training that allowed them to be ready for a very high level of performance. And this the the same is true in our businesses. So there is no such thing as enough training. We should be looking for training opportunities on a continuing on a continual basis. So, and and not just for ourselves, of course, but for our people. And in some ways, it's even more important for our people because one of
34:31 the ways I think that we can generate loyalty from our team members is by letting them is by showing them, not letting them know, but actually showing them we will invest in their improving their knowledge, their skills, their abilities. and and that we we do that freely with the sole purpose of creating more opportunity for them. Now, of course, we want the we want them to hopefully they'll exercise that opportunity within our organization to improve its
35:06 performance. Uh but but in any event, we want to show our people that we will invest in them. So and and a company that does this is known for doing this is Mckenzian company the the consultancy. So um um they they have very structured training and mentorship programs. Um, all of it is designed to not just create the uh image but the reality that McKenzie people are highly skilled, highly
35:43 knowledgeable, very experienced and so they they will deliver uh very high quality service and they will help your you know the the businesses with which they consult operate in ever higher levels of performance, right? So, um if if if the McKenzie people were known as schleers, which is a good Yiddish word, it sounds like what it means is that they just really, you know, they're really not at the top of their game, right? Then then
36:18 why would a company that's looking to improve itself hire them? So the reality is we want to be and we want our team members to be at the very top training. Now of course we they can't be training all the time, right? that there there would be no there would be no one to actually you know make the business op make the business run. But still periodic uh training, investing in training, keeping our people at at peak readiness so that they when the inevitable challenges arise they can
36:54 respond to them is a very very wise investment on our part and it is again another another lesson we can learn from the gerics jagger. Okay. Uh lesson number five uh cultural we we need to be uh culturally and environmentally intelligent. So understanding the operating environment is crucial to success. Now, I've I I've raised this uh issue before in other
37:30 episodes of Business Lessons from the Military, but it it bears repeating. And, you know, we the business environment is rarely as harsh as operating at, you know, thousands of feet elevation in the cold, ice, snow, etc. with with, you know, limited amount of equipment. Business is rarely like that today. However, when we're getting started, when we don't have a lot of resources to buy fancy equipment and maybe all we can afford is, you know, a
38:05 computer, a cell phone. I'm pointing my cell phone over here. That's the charger, you know, a a a printer scanner, right? That if that's the only equipment that we can afford. So, then how are we going to operate successfully? And one way we can compensate for the inability to have sophisticated equipment is by being as culturally and environmentally aware as possible. And and that goes back for the Gerger. uh that goes back to the kind of uh
38:42 knowledge that many of the early members of this elite unit brought with them because they were used to operating in this harsh environment. Okay? So they came with a background in it and then the training that I that I spoke about just a moment ago improved their environmental and cultural awareness and intelligence for operating in that environment. And so you know we may not be able to afford to hire experienced business people in in into our company
39:19 into our organization. That's fine. But then we need to be willing to invest in their training and not just in the training they need to know how to do their job the the the sort of you know fundamentals of doing their job. We also need to invest so that they understand the business environment in which the company operates and who are the competitors. How might they be able to out compete us? How can we better understand who our customers are, who our climates are, what what the
39:56 challenges may be in in the economy that we'll have to with which we'll have to deal that we'll have to overcome. So creating that level of cultural and and environment intelligence is another aspect of the training. Okay. But it it can pay big dividends. So for example, Unilver is well known for tailoring products for the specific markets in which it operates. So, it looks to tailor flavors of of foods, for
40:33 example, to specific markets as as as opposed to, and this is not knocking uh Hershey's company, but Hershey's chocolate has a very distinctive taste to it. And um I mean, I happen to like it. I grew up eating Hershey's chocolate. Uh, and if you eat Hershey's chocolate and and and another, you know, large sort of um everyday chocolate maker like Nestle's, you'll see very different taste. The taste is homogeneous no matter where you go in the world. Okay? And and that's
41:08 that's part of the hallmark of Hershey's. Okay? Whereas other uh other companies will tailor the flavor of their products to specific markets. Okay. And and in that way they attract local customers. So um um I just lost the example that I was going to use for that. Oh shoot. Uh uh I think Starbucks, if I if I remember correctly, they tailor their beverages to local tastes. So the flavors that are
41:44 available in China or India are different than those available in the United States. Okay. So by taking advantage of or by learning about the various cultures and environments in which our company operates, we can we we can make a fundamental decision. Are we looking to acclimate customers and clients to our product or are we going to tailor our products or or even services to the the tastes, wants, needs
42:19 of a particular market or submarket. Okay. So, cultural and and environmental intelligence very important. Um and then finally, um elite status requires constant reinforcement. So if if we're going to create an elite team, okay, in in business or in the military, it's not a one-off thing. It's not we train them to peak performance and then move on with our day. Not at all. So uh in the Gabber Jerger and this
42:56 is this was one of the problems that they faced is because over the the time of their existence they did not operate in the in the Alpine environment the way they had been trained but operated more like conventional uh troops. it became increasingly difficult to for the gabber zer to maintain a sense of elite status. Okay. And the same is is true for our businesses. Once we
43:33 hit the pinnacle of of the area in which we operate, whether it's a product or or in a service area, we can't take it for granted that now that we're there, we're going to stay there. We're we have to keep in mind that there are going to be competitors whose sole objective is going to be to knock us off that that peak, right? And so to maintain that elite status, we have to constantly be reinforcing the the idea to our people. And it's not just enough to keep to to do training.
44:11 So training is important and g and gathering cultural and environmental intelligence is important. But the the the most important aspect of that is the reinforcement of the message that we want to be the top competitor in our market. We want to be the the elite. If we are not continually demonstrating our commitment to holding that position, eventually we're going to fall from that position. So those are the the lessons that I drew
44:49 from uh James Lucas's book uh Alpine Elite um about the Gabber Jagger uh this this elite Alpine combat unit in the Vermach during World War II. And I think that uh you know we are well advised the smaller our business is the the more important it is for us to adapt our mindset to the idea of creating an elite team that is specialized very focused on a particular
45:26 uh niche to become successful and dominant in that niche. and then we can move on from there. So, I thank you very much for joining me today. Uh especially my live viewers, I always like to give them a a hello. Uh tomorrow at 10:00 a.m. Pacific time is my show, People Making Money. And then this week on Thursday at 5:00 p.m. Pacific time is my every other week show, Jiggers's Place. We'll have a cocktail and a smoo. and we'll we'll we'll relax a little bit as
46:01 we head in toward the end of the week. And then next week on Monday at 10 a.m. is my show, Trusts and Estates Weekly. And then, of course, a week from today, I'll be back with the next episode of Business Lessons from the Military. So, again, thank you so much for joining me. If you like what you watched or heard on this show, tell a friend. I' I'd love to have the opportunity to uh gain them as as a viewer or listener or subscriber and would very much appreciate uh you you giving me that opportunity. So again, thank you so much for joining me.
46:37 Hoping to see you again this week and signing off as I always do. Marie darling, you are my bell. Courage at all times.