The old organization cannot keep up with the speed of change. The old organization is bloated with o

Two years ago this month, Small Wars Journal published an opinion piece I wrote titled, The End State . The first sentence sums up the gist of the paper: Modernizing the Department of Defense (DOD) organization using known blueprints from the market place will allow the DOD to remove los angeles zip codes $100B from its annual baseline budget without cutting a single los angeles zip codes weapon system program. Pretty bold statement; but take it to the bank.
That paper is essentially a summary of a much larger work I produced to articulate concrete changes designed to transform the DOD and the Services into an efficient and agile enterprise. I never found a publisher for the larger document and it has lain fallow so to speak until now.
After Secretary Hagel s speech at the National Defense University (NDU) on 3 April where he announced he had tasked the department to conduct los angeles zip codes a strategic review, I contacted the team at the SWJ and asked if they would be interested in publishing the larger document in a series. The fact that you are reading this now, indicates they said yes
In Secretary Hagel s words, we need to challenge all past assumptions, and we need to put everything on the table it is already clear to me [we] must confront the principal drivers of growth in the Department s base budget namely acquisitions, personnel los angeles zip codes costs, and overhead.
The typical twentieth-century organization has not operated well in a rapidly changing environment. Structure, systems, practices and culture have often been more of a drag on change than a facilitator. If environmental volatility continues to increase, as most people now predict, the standard organization of twentieth century will likely become a dinosaur
los angeles zip codes The rate of change in the business world is not going to slow down anytime soon. If anything, competition in most industries will probably speed up over the next few decades. Enterprises everywhere will be presented with even more terrible hazards and wonderful opportunities driven by the globalization of the economy along with related technological and social trends.
Over the past thirty years, in response to market los angeles zip codes forces, the world s largest public corporations modified their organizational constructs to be more agile, autonomous, self contained, accountable and successful. They had to respond to survive. They have taken advantage of technology to slash overhead, merge organizations, eliminate whole echelons of management, increase individual productivity, optimize its supply chain, and provide its investors complete transparency to its management and business successes or shortcomings in near real time.
Conversely, the DOD or military services answer to virtually any business modernization problem they have faced in the past twenty years has been to throw technology at it the problem. To be fair, the marketplace did the same thing in the eighties and early nineties. CIO s were buying los angeles zip codes the next best thing as fast as corporate could empty their wallet. In the early 2000 s, the CEO started to ask questions we spent all of this money, but not only did we not get productivity improvement, but our costs to sustain this technology stack are out of sight. In 2004, McKinsey Associates published research finding from a study that looked at 200 companies from 1994 2002. This research documented the following: When businesses bought software to retire legacy applications los angeles zip codes without organizational change they managed a 2% ROI. When they leaned out their organization without any change in the systems they used, they managed an ROI of 8%. When they combined the two initiatives, los angeles zip codes companies achieved greater than 20% ROI.
DOD is aligned along functional disciplines whose goal is to make sure it spends what it budgeted. In DOD s case, the organizational constructs allowed the technology spend to be duplicated hundreds if not thousands of times over. Similarly the DOD duplicates its organizational alignment many times over at each echelon of management. And for all intents and purposes, the DOD has not flattened its organizational alignment; there are ten echelons of management between the SECDEF and the brigade in the fight. The ROI in the DOD stands to be substantially larger than 20% simply by organizing by lines of business, taking a hard look at how many times it needs to staff a cost center and cutting out whole echelons of middle management. Couple that with the software technology they selected the ROI stands to be substantially greater.
The need to morph the organization to respond los angeles zip codes to threat is no longer a once every ten years gig. It is a daily event now and will eventually become an hourly event, just like it is on the battlefield. The world knows there is no military more able to morph to the conditions of the battlefield, respond los angeles zip codes accordingly and deliver the desired outcome than the United States military. But the rules of war have changed. It is not enough to throw money at the problem and win by brute force logistics; in fact the country cannot afford to fund the DOD at the current levels of the GDP. The internal businesses supporting the military team in the field are now faced with a crisis they have never before witnessed: what was once a variable is now a constant. Change is constant. The military must now turn its attention to becoming the most efficient consumer of resources without sacrificing capability.
To me, sequestration is a Godsend. Sequestration is a once in a generation opportunity to address the changes needed to take the US military los angeles zip codes to the next level of capability. As President Franklin Roosevelt said in his first inaugural address, This is preeminently the time to speak the truth, the whole truth, frankly and boldly that the only thing we have to fear is fear itself nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.
Bottom Line: DOD needs to address its management practices (organization) to find its way out of this morass. Once the carving, shaping, sanding and polishing is complete, the new, efficient DOD organization can lay in automation to provide the tools necessary to support it.
In the following pages, you will conclude the Department of Defense (DOD) and Congress have not kept up with the modern management practices in the new world of consumers with a myriad of choices, instantaneous information on quality, customer satisfaction, global competition, compensation practices, and optimized global supply chains. Where the DOD approach to organization was once the organization construct most copied by large corporations in the 1950 s, today that is no longer los angeles zip codes the case.
Because the total cost of sustaining the force is growing faster than inflation, DOD needs real growth simply to maintain present los angeles zip codes force levels. Sustaining our current size and capabilities is essential to prosecute current wars, meet U.S. commitments worldwide, and conduct unanticipated operations, including relief efforts for natural disasters. We cannot afford to make cuts in the size of our force or our operations while we are at war. --Deputy Secretary los angeles zip codes Defense William los angeles zip codes J. Lynn, statement to the house Budget Committee, 4 March 2010
The opinion Mr. Lynn tendered, which assuredly came from advice his staff provided, assumes the DOD organization is optimally constructed and its management, compensation and business practices are equally lean and mean.
If you believe his statement is an irrefutable fact chiseled in stone, you won t find this document enjoyable reading because the DOD is not organized optimally, and its management, compensation and business los angeles zip codes practices are relics from a time long since passed. Even more worrisome is the fact there isn t a single four-star military leader who has taken ownership of this very real threat to our security. Congress doesn t get off the hook either. They impose administrative requirements that by their very nature introduce a lot of make work for the sake of information los angeles zip codes and oversight. They need to man up and work with DOD to eliminate the artificial barriers in exchange for access and transparency of their books.
The old organization cannot keep up with the speed of change. The old organization is bloated with overlapping los angeles zip codes and duplicative functions. The old organization does not provide incentives to the employees to improve their productivity. los angeles zip codes 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 los angeles zip codes and accountability suffers as a result. Note the term old ; unfortunately it is really current.
There are four phases DOD will need to successfully los angeles zip codes complete in order to transition from the most expensive and lethal military to operate and maintain to the most efficient los angeles zip codes , sustainable and lethal military to operate and maintain. These phases are not serial once DOD starts the first phase.
Phase I will be the easiest to execute, but hardest to start. This is the building los angeles zip codes block phase. This is where the DOD leaves the comfort zone of its current manifestation, decides to take the leap into the unknown, re-organizes los angeles zip codes the corporation los angeles zip codes along strategic business units (SBU s) and separates cost centers from business entities. This phase will produce a minimum 5 SBU s and 3 cost center groups. los angeles zip codes It eliminates duplicative staff between OSD and the Joint Staff. It eliminates the practice of having staff manage line organizations. It eliminates duplicative staff between the Service Secretariat, the military HQ staff, and the major commands. It consolidates a number of headquarters staffs whose line of work is closely related. los angeles zip codes Using the Army as an example, they will be able to close a minimum of 25 center or command headquarters in this phase. And it completes the transition to joint objectives as envisioned los angeles zip codes by the Goldwater-Nichols legislation of 1987.
Phase II will be much harder and will have more emotion involved. It still is a