Military's Demand for Iraqi, Afghan Role Players Boosts Lexicon

To make training as authentic as possible for troops deploying overseas, the U.S. military contracts with private companies to provide native speakers for instruction in foreign language, cultural awareness, and civil operations. Demand increased after 9/11, and supplemental wartime spending went from $25 billion in 2001 to an estimated $144 billion in 2009, according to the Center for Arms Control and Non- Proliferation, a nonprofit research group.

Drawing on 29 years of collective experience in the U.S. military, Jamie Latshaw and her husband, Leroy, founded Lexicon Consulting in 2005 to meet this demand. Today their 50-employee business, with offices in El Cajon, Calif., and Washington, D.C., specializes in ground support tactical training for military personnel before they head into war zones in Iraq and Afghanistan. Jamie, 35, says Lexicon expects $14.4 million in revenue this year, virtually unchanged from 2009, and $35 million in 2011. Jamie spoke recently with Bloomberg.com contributor Matt McCue about her time in the military, the contracting process, and why Lexicon will continue to expand when the wars in Iraq and Afghanistan are over. Edited excerpts of their interviews follow.

Matt McCue: What does Lexicon do for its clients?

Jamie Latshaw: Our core service is providing role players and battlefield effects. Stu Segall, the owner of Strategic Operations out of San Diego, gave us our first big break in 2007. He does a lot of television production, but he branched off into ... the explosions and the sights, sounds, and smells of military training. He had a bunch of contracts to provide exercise support, so he took a chance and subcontracted the role players to us.

We [now] employ a huge staff of role players ... close to 540. You can call them seasonal employees because they work for 20 days and then are off 10 days.

We also started to provide cultural immersion [training] in the past year, and we’ve been very successful at it. We have [native] experts who train the military on the cultural dos and don’ts, the customs and the courtesies, how to negotiate, how to talk to village leadership, how to get around without offending somebody, and how to get things done within the theater of operations.

Q: Your role players speak a wide variety of languages. Do you?

A: A lot of our role players speak Arabic, Khastu, Pashto, Dari, and Farsi. We specialize in providing those languages, but we also offer role playing and language training services in any language you can imagine. Most recently, Tagalog, Swahili, Somali, and Korean. But Leroy always says that we have trouble with English. We do not speak any other languages.

Q: You went to West Point, then you were an officer in the Army’s Transportation Corps for eight years before starting Lexicon. What was your role?

A: When I was still on active duty and stationed at the Army’s National Training Center in Fort Irwin, I was a company commander in the 11th Armored Cavalry Regiment. The NTC is the largest training center in the U.S., so all the units come there to do redeployment training before they are deployed. We were responsible for providing the opposition force.

At the end of my command, the focus at NTC and the Defense Dept. shifted from traditional force-on-force training to more full- spectrum combat operations, including counterinsurgency, cultural awareness training, and all the things the troops needed to go into Iraq and Afghanistan.

Q: What did you spot in your training that you felt could be improved and developed further at Lexicon?

A: When we started, we were using Army soldiers to perform the role of the insurgency. They were going out dressed up as Iraqis and Afghans in traditional clothing and running around and chanting. It wasn’t the realistic type of training we thought the soldiers needed before they were deployed.

Down in El Cajon, where our office is located, there is a huge Iraqi population and there are pockets of Afghan American populations around the U.S. These people had actually been there, and they know the culture and how to teach basic language skills. We saw how critical it was for our troops to receive realistic training ... before putting their lives on the line. That’s when we decided to start Lexicon.

Q: Describe your start.

A: I think Leroy and I experienced everything a new business owner could experience. We used all of our savings. In the military, your 401(k) is called a Thrift Savings Plan, and we cashed those out. We cashed out mutual funds, maxed out credit cards. I would say we had to provide $100,000 of our own money. We were trying to get bank financing, and that’s impossible to do when you haven’t been in business for two years. We were scraping for every contract we could get.

Q: How did you go about bidding on contracts?

A: When I got out of Army in 2005, we lived with my parents [in Los Angeles] and started Lexicon from their dining room table. They allowed us to live with them until we could get our business off the ground and supported us with encouragement, babysitting, and the occasional loan to make payroll. For the first year or so, we traveled from military base to military base in our RV and wrote proposals, made phone calls, filled out loan applications, and conducted payroll with a post office box as our corporate address. We lost many bids before we won our first contract. Over the course of the past five years, we’ve probably won less than 20 percent of the contracts we’ve submitted proposals for.

Q: You’re currently doing a lot of subcontracting. When do you see yourself moving from small to big business and contracting the work to smaller companies?

A: The Small Business Administration has several NAICS [North American Industry Classification System] codes, and each one has a three-year average dollar cap. Lexicon will not be big business [in 2011], because most of our work is classified as Temporary Help Services, which caps out at a $13 million, three- year average. We still have a long way to go to reach big business status.

Q: What happens to your company when the wars in Iraq and Afghanistan are over?

A: We’ve thought about that a lot, and we get that question asked frequently, mostly by banks: ‘Are you going to be in this for the long haul?’ Our answer is that there is always going to be military training going on, and we are experts at conducting it.

To contact the reporter on this story: Matt McCue at matt.mccue1@gmail.com

To contact the editor responsible for this story: Nick Leiber at nleiber@bloomberg.net

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Lexicon Consulting Co-Founder Jamie Latshaw

Lexicon Consulting via Bloomberg

Jamie Latshaw, co-founder of Lexicon Consulting.

Jamie Latshaw, co-founder of Lexicon Consulting. Source: Lexicon Consulting via Bloomberg

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Military’s Demand for Iraqi, Afghan Role Players

Lexicon Consulting via Bloomberg

An improvised explosive device (IED) explodes during a Lexicon Consulting training exercise at the National Training Center (NTC), Fort Irwin, California.

An improvised explosive device (IED) explodes during a Lexicon Consulting training exercise at the National Training Center (NTC), Fort Irwin, California. Source: Lexicon Consulting via Bloomberg

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Military’s Demand for Iraqi, Afghan Role Players

Lexicon Consulting via Bloomberg

Two marines on patrol while players simulate villagers or "Civilians on the Battlefield" (COBs), in a Lexicon Consulting exercise in Ft. Pickett, Virginia.

Two marines on patrol while players simulate villagers or "Civilians on the Battlefield" (COBs), in a Lexicon Consulting exercise in Ft. Pickett, Virginia. Source: Lexicon Consulting via Bloomberg