by Mike Young
Download the Full Article: The End State
Modernizing the Department of Defense (DOD) organization using known blueprints from the market place will allow the DOD to remove $100B from its annual baseline budget without cutting a single weapon system program. Pretty bold statement; but take it to the bank.
The Department of Defense (DOD) approach to organization was once the organization construct most copied by large corporations in the 1950's. Back when General Motors was the largest employer in the country, the competitive landscape did not change very often, and firms were able to sell everything they made to the domestic market. This management construct was put in place to reduce the chance to make mistakes and preserve the status quo. Most companies produced their overall profit and loss statements for the company as a whole, masking how each business unit fared. To say the competitive landscape has changed significantly since the 1950's would not do it justice.
Over the past thirty years, in response to investor insistence for clarity, global competition, and a customer with access to all the information necessary to make an educated value driven decision on whether to buy from company A or company B, the world's largest public corporations modified their organizational and accounting constructs to be more agile, autonomous, self-contained, accountable and successful. Global conglomerates opted to set up semi-autonomous strategic business units (SBU) who are solely responsible for their success or failure. In concert with the organizational change, companies adopted profit center accounting practices whereby each business unit inside the corporation is a stand-alone unit responsible for its profitability, allowing management and its investors to see exactly which unit is doing well and which ones are not. To survive, they slashed overhead, merged organizations, eliminated whole echelons of management, increased individual productivity, optimized its supply chain, and provided its investors complete transparency to its management and business successes or shortcomings in near real time.
In organizational terms, the DOD, its five Under Secretaries, fifteen Defense Agencies, ten Joint Combatant Commands, and its three Service Secretariats remain organizationally in the backwaters of the middle of the last century. Each employs a traditional top down autocratic, bureaucratic, mechanistic line and staff organization. The organization by design is slow to move on an opportunity, slow to innovate, slow to respond to complaints about product or service, risk averse, and often if not always has very complex and confusing chain of command. The old organization cannot keep up with the speed of change. The old organization is bloated with overlapping and duplicative functions. The old organization does not provide incentives to the employees to improve their productivity. The old organization does not incentivize management to flatten their organization; in fact it incentivizes them to do the exact opposite. The old organization is not easy to understand who does what, to whom, and when. The focus is blurred and accountability suffers as a result. Note the term "old"; unfortunately it is really "current."
The richness of the United States and its citizen's willingness to spare nothing to ensure the country is able to preserve its way of life is legendary. President Kennedy's inaugural address 50 years ago, he advised the world "...that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty." No one questions the military's or the country's willingness to do what it takes "to assure the survival and the success of liberty." To date the Defense Department has taken his words "we shall pay any price," literally to mean send money and people. Admiral Mullen, the Chairman of the Joint Chiefs (CJCS) has gone on record stating the national debt is the number one threat to our national security; and yet the fundamental military combat strategy in all venues is to never go to a knife fight with a knife.
Something has to give. The country faces the worst economic conditions in 80 years; it has $17 trillion dollars of debt. The country incurred most of that debt to fight wars, provide money for infrastructure enhancements to facilitate trade, incubate new technologies in all disciplines and provide social support programs for its citizenry. One would think, because of the state of our nation's economy, the President, DOD and Congress now have the closest thing to a "burning platform" to make radical change in the way DOD and the Services operate internally as well as the way they each work with the Congress to manage the nation's defense. The President called it "our generation's Sputnik moment" is his 2011 State of the Union address. If one took a poll of the DOD employees the day after the speech, do you think we would find the vast majority of the DOD community "burning" to lead the charge towards remaking the DOD into the most cost effective, efficient and accountable military in the world?
Download the Full Article: The End State
J. Michael "Mike" Young is a logistician with a major in business software that facilitates business operations (logistics). A twenty-year veteran of the US Air Force, Mike has a B.A. in Political Science from the University of Georgia and knows enough about object oriented programming, user interface, and database design to keep out of trouble.