Acquisition: Practitioners vs. Pontificators

DoD Acquisition Process

The DoD Process Simplified

I ran across an article from the National Defense Industrial Association (NDIA) the other day by Sandra Erwin on Congressional frustration on how the Pentagon buys things.  Not being satisfied with the progress being made by the DoD Acquisition guru’s, Congress has decided that more legislation is needed to fix things (Really? Congress is going to fix something?).  The Congress has asked nine of the industry associations around the Beltway to provide comments on how to make it better, with inputs due in July.  I belong to several of those and I’m glad the Congress is asking for industry input, although I hope they remember that asking the people who make money as a result of inefficiencies is just one side of the argument. I think significant progress has been made since then Under Secretary of Defense for Acquisition, Technology and Acquisition (USD(AT&L)) Ash Carter launched his “Better Buying Power Initiative” in September of 2010. In his memo to acquisition professionals he provided a roadmap to improving acquisition within DoD.  He focused on five areas of interest:

  1. Target Affordability and Control Cost Growth
  2. Incentivize Productivity and Innovation in Industry
  3. Promote Real Competition
  4. Improve Tradecraft in Services Acquisition
  5. Reduce Non-Productive Processes and Bureaucracy

Details of this can be found at this link if you are interested.  All these are worthy goals, and they have made a difference.  A recent GAO report found that some progress was being made, but that cost and schedule growth remain significant; 39 percent of fiscal 2012 programs have had unit cost growth of 25 percent or more. The amount of money in the DoD acquisition pipeline is staggering;  86 major defense acquisition programs  estimated to cost a total of $1.6 trillion according to GAO. If you have any questions about a specific program click here.

Besides the modest, if not marginal, improvements in acquisitions, some not so nice things happened as well.  As is often the case in large bureaucracies, what the big guys at the top are saying and what the little guys in the field are hearing frequently don’t jive.  That was the case with the Better Buying Power Initiative.

Dr. Carter said “Increase the use of Fixed Price Incentive Fee contract type where appropriate…”, but the dudes in the field heard “More Fixed Price contracts, less Cost Plus Fixed Fee and Time and Materials contracts.”  Contracting officers were suddenly burdened with having to provide extensive justification for any non-Fixed Price contract.  Since they were busy enough, the Contracting Officers would rather just go with the flow and issue fixed price contracts, even though the work was not appropriate for them.  The words “where appropriate” were overlooked.  In the end, it wound up costing more money.  Here’s why.  When a contractor agrees to a fixed price contract, the contractor is assuming all of the risk.  Suppose the job was improperly scoped by the Government, or suppose a software glitch pops up that takes time (and money) to fix.  All those unexpected expenses are absorbed by the contractor.  Consequently, Fixed Price contracts tend to be more expensive in order to cover the risk.  This was certainly the case in my former life when a long-time client came to me and said, “The Boss says we have to do a Fixed Price contract” this year and it can only be for one year at a time.  This was not what the customer wanted, but the customer was at the mercy of the acquisition folks.  The work we were doing at the time was rather unpredictable and my team was never quite sure from day-to-day what they may be tasked with next.  In order to be responsive, it was a Time and Materials (T&M) contract, which allowed us to flex to the client’s requirements.  But with a fixed price contract, I was not able to flex without a contract modification (and that takes time and money).  I told the client that if we were going to do a fixed price contract, I would have to increase the price and that I would not be as flexible in doing new work.  That fell on deaf ears because it was going to be such a hassle to justify anything other than a fixed price contract.

Here’s another example.  Dr. Carter says “Promote Real Competition”, but the  folks in the field heard, “Use Lowest Price, Technically Acceptable (LPTA)” evaluation criteria for source selection.”  This caused all kinds of price wars in the community and the Government was feeling smug about how much money they were saving, but…………Turns out many Requests for Proposals were poorly written with vague and overly broad technical requirements, so that just about any old company with the resources to put together a proposal could win the contract.  And they bid ridiculously low rates, so in the end they were unable to deliver and customers began to fall back to other contact vehicles to get the work done, or just didn’t do the work.  I think it’s a little too early to actually get to the real statistics about how many customers are really satisfied with the results of LPTA winning vendors but the Congress should find out before attempting to come up with more legislation.

The current USD(AT&L), Frank Kendall,  issued an update to the original Better Buying Power, known around town as Better Buying Power 2.0.  In it Mr. Kendall says:

  1. Achieve Affordable Programs
  2. Control Costs Throughout the Product Lifecycle
  3. Incentivize Productivity & Innovation in Industry and Government
  4. Eliminate Unproductive Processes and Bureaucracy
  5. Promote Effective Competition
  6. Improve Tradecraft in Acquisition of Services
  7. Improve the Professionalism of the Total Acquisition Workforce

The result has been a much greater focus on costs of acquiring the systems and a recognition that perhaps the LPTA pendulum was swinging just a little too far over.  As in the original BBP, those in the field had some different interpretations about expectations from the top.  One of the initiatives within the Incentivize Productivity goals was to “Align profitability more tightly with Department goals.”  This translated into government auditors deciding they need to closely scrutinize contractors books to ensure vendor were not making “excessive profits,” even on fixed price work.  I just don’t think that’s in the government’s lane. If they are so concerned about profit margins, then why not issue Cost Plus Fixed Fee contracts where the Government essentially controls corporate profits?   Thus,  despite all their good, it seems to me a few fundamental flaws in the acquisition system have not been addressed in BBP or BBP 2.0:

  • There is still a lack of coordination and cooperation between those who generate requirements, those who pay to satisfy the requirements and those who buy the stuff with the money they are given.
  • There is still a disconnect between contracting officers and the customers for whom they buy products and services.
  • There is still a disconnect between what the leadership in the Pentagon says and what the people in the field do.
  • The uncertainties of funding from year to year drive programs to their most expensive procurement options.
  • Certain key programs get a “pass” from all the rhetoric about performance, affordability and life-cycle costs, overshadowing all of the progress made to reform acquisition. The top 10 acquisition programs still account for 65% of all the acquisitions according to the GAO.  The Joint Strike Fighter is 25% of all DoD acquisition alone!

So in the end, I doubt very much if legislation will fix the problem.  Four feet of  stacked up Federal Acquisition Regulations and Defense Federal Acquisition Regulations are not going to be much affected by another thousand pages or so of legislation.  Check out the recent testimony of Dr. Paul Francis, the Managing Director of Acquisitions and Sourcing Management at GAO.  He has some very practical steps on how to improve the process. In addition to those steps, I would like to see DoD actually evaluate each program on its own merit, not on investment levels or political support or not simply press on with a poor program because they managed (mismanaged is probably the better word here) to get into a position where there is no alternative.  It would also be nice if the people who are actually charged with executing the acquisition system at lower levels could have a say in how to make things better.  There’s too much Top Down and not enough Bottom Up built into the process in my humble opinion.  What if we asked the practitioners to come up with a series of reforms instead of the pontificators?

 

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Porsche or Maserati? What to Drive?

Let’s see…..What do I drive to work this morning?  My Porsche or my Maserati?  Gosh, it’s such a tough choice.   When I read all the rhetoric coming out of the Pentagon theses days about the tough choices they are making over there, I tend to think that’s their definition of  a “tough choice.” Maserati or PorcheGranted they do make a few hard choices, but none of them are the budget choices they are making for the FY15 budget that’s on the Hill right now.  They have so much money to deal with that the normal ways in which you or I would deal with problems is not possible.  There are several reasons why I believe the tough  choices are not possible.  In fact, in the Pentagon the toughest choices are actually the easiest.  Take for example the luxury of scale.  Because of the vast quantity of money the Pentagon has, scale makes things easy.  Let’s just say for the sake of argument that the total Pentagon budget for 2015 will be around $550 Billion.  I’m  working on the budget and I need to come up with $5oo million to pay for my “widget ” program because it’s two years behind schedule and Congressional support is waning.  I dare not go to the Hill and ask for more money.  What tough choices can I make?  How about I assume the inflation rate for next year will be 0.1% less than it currently is….Guess what?  Instant $550 Million in my pocket.   Problem solved!

Another factor which prevents the tough decisions is the herd mentality.  It’s much safer to stay with the herd than to break away.  Suppose one senior leader in DoD, uniformed or civilian had said, “I value people over weapons.  The margin of superiority that we enjoy over our adversaries is so great that I don’t mind shaving a few dollars off my massive budget to ensure I fulfill the promises we made to our Number One weapons system, our people.” What do you think would happen?  That person would be dragged to the River Entrance and publicly flogged and made to walk the plank into the Pentagon Lagoon.  So it’s much easier and safer to stay with the herd.  The tough decision is to break away from the herd and stand on principle.

Yet another problem in the way of making tough decisions is the limited line of sight of senior people.  They only know what their staffs want them to know.  And if you have ever been a staffer, you know that staffs tend to seek out the solution of least resistance in order to move on to the next problem.  Solving the problem is more important than how the problem was solved.   If everyone tells SECDEF that the only way to balance the Pentagon budget is to make the tough choice to continue to fund (and actually add more money to) the worst performing acquisition program in history, the F-35, and to pull money from Commissaries, up TRICARE fees and fiddle around with the retirement system, he believes them.  Somehow that seems like a no-brainer to me.  A few billion dollars is not going to make a difference in the JSF.  It’s already over $160 Billion over budget and 7 years behind schedule.  Does anyone think the money saved by cutting Commissary subsidies by $1 Billion is really going to make a difference? Well, not to the JSF, but it will certainly make a difference to a young E-2 Marine who is already on food stamps and struggling to make ends meet!

There’s also the Irreversibility Principle.  I saw this time and time again when I was in the building.  In fact, I admit guilt in actually using the Irreversibility Principle to my advantage.  It goes something like this:  The DoD budget is so complex and large that once it’s put together, it’s impossible to start over.  If you don’t get your oar in the water at the very beginning, then you will be unable to make a change.  If you want to have any hope of making a tough decision with major impacts, it must be made very early.  What do you think the DoD budget would look like if in the very beginning SECDEF had said, “Whatever we do to balance the budget, it must not be on the backs of our people.” I guarantee you there’s plenty of wiggle room to develop the budget without monkeying with people programs.  Just take a look at my previous article, Food Stamps and Decisions, and you will see what other things might be done besides chopping people programs.  The tough decision is to declare the Irreversibility Principle null and void and demand a change.  Heck, there’s so much churn in the development of the budget these days a little more chaos isn’t going to make much of a difference.

Finally, there’s the Fixation problem. Ralph Waldo Emerson said ” A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.”  For example, over the past few years there has been attempt after attempt to raise TRICARE fees again and again and again…(sorry , I got carried away!).  Each time it’s shot down by the Congress and public opinion.  But it’s their baby now, and to back down would admit defeat.  There’s a “pay any price, bear any burden” mentality now associated with the TRICARE issue to the detriment of looking for alternate solutions.  This is what happened with Asiana Airlines Flight 214.  The pilots got so focused on the landing threshold and altitude they forgot to monitor airspeed and engine power.  The same thing happens in the budget process.  People get so focused on a single solution that they forget to look for others.

So it’s hard to make tough choices in the Pentagon.  If there’s any hope of actually getting to the tough choices that NEED to be made, the following “Tough” decision barriers must be addressed:

  1. Luxury of Scale
  2. Herd Mentality
  3. Limited Line of Sight
  4. Irreversibility Principle
  5. Fixation

How will we know when “tough” decisions are being made?  I think there are a few signs:

  • Service budget allocations will no longer be roughly equal
  • Under and Poorly performing programs will be cancelled
  • Majority-based decisions are made instead of consensus decisions (In other words, someone is going to be unhappy, or at least more unhappy that the rest)
  • Decisions being made early in the process
  • The number of Decision Making bodies in DoD will decrease (let’s see, they have the Joint Chiefs, the JROC, the DAWG, the Small Group, the Large Group, the SCAMR, the DBC, ……….sigh!)

If the Five Barriers to tough decision making are removed, we just might see some of those signs in our lifetime.

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Beware the Cyberwock

JabberwockyIn a previous article, Cyber-Too Big Not To Fail, I provided some comments on the recently signed Improving Cybersecurity and Resilience through Acquisition .  This document lists six recommendations for doing just that.  As I mentioned in the article, it’s very hard for a “cyber-outsider” to understand much of what it is saying (which is part of the problem IMHO).  It does however prioritize the recommendations and pushes for tackling Recommendation 4 as a first step.  Recommendation 4 is this: Institute a Federal Acquisition Cyber Risk Management Strategy.  Here is a link to the draft of the plan to implement Recommendation 4.  I had a chance the other day to have a look at a draft document which is in support of implementing Recommendation 4 entitled “Appendix I, Category Definition, Prioritization, and Overlays.”

This document is trying to show how Federal dollars are spent on cybersecurity and then provides a proposed structure on how to characterize the types of cyber acquisitions, based on Product and Service Codes.  I just have to provide a quote to demonstrate just how confusing documents like this are to me (and I suspect to most of us non-geeks). Here it is,”..[This document]..is intended to provide a starting point for the collaborative, stakeholder-centric development of a method for categorizing similar types of acquisition that achieves the goals of recommendation number four…..”  Can anyone tell me what the heck a “collaborative, stakeholder-centric development” means? (Now’s a good time to review my article on Self-Licking Ice Cream Cones.)  I know it’s a complex subject, but geez-louise can we at least use plain English?  It seems to me before we start diving into the pool we ought to see how deep the water is.  By that I mean, I strongly believe that we should spend some time first developing a set of principles to guide us through the process.  These principles should be simple, easily understood and brief.  Once we get the principles right, all the other stuff is easy.  So you heard it here first: Crenshaw’s Cyber Acquisition Guiding Principles.

 

  1. Government and Corporate data must be protected.
  2. Access to data must be controlled at all times.
  3. Risk to Government and Contractors should be considered.
  4. How the information is being used is as important as what hardware is being used to handle the information.
  5. Rules must be consistent with existing rules and regulations to minimize confusion.
  6. Leverage existing rules and regulations before inventing new ones.
  7. Rules must be executable by all, from  the smallest 8A, SDVOSB, Hub Zone firms to world-wide corporations.
  8. Contracting Officers must have enough knowledge in cyber to make reasonable judgments when drafting RFPs
  9. Rules and Regulations must be verifiable with reasonable effort and minimum time (In other words, no 5 year long DCAA audits)
  10. Incident response responsibilities must be clear and incentivized.

OK.  Now that we understand that, perhaps we can get down to putting something on paper that we can work with, not “a collaborative, stakeholder-centric approach”, whatever that means?

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Bric-a-BRAC

birc-a-bracThere’s lots of hot air blowing about on the subject of Base Realignment and Closure (BRAC) inside the Beltway.  I thought I put a few points out there as food for thought.  First of all, a quick explanation of the BRAC process is in order (Here’s a link to the 2005 BRAC web page).  BRAC is the process by which the Defense Department determines what US bases and facilities are no longer needed or facilities which should be repurposed, obtains Congressional approval to close those bases and goes about closing the bases  The determination process is done secretly within each Service based on criteria set in advance by OSD and the Services.   The Service data is then forwarded to OSD where the lists are “modified” to accommodate the desires of the OSD staff and SECDEF.  This list is then presented to an independent BRAC Commission.  The commissioners are appointed by the President, in consultation with the Congress.  The BRAC staff reviews the recommendations, conducts field visits and hearings around the country, and then the Commission produces a list of base closures.  This list is given to the President for review and approval who then forwards the list to Congress.  Congress has 45 days to vote “all or none” (no modifications allowed) on the recommendations.  If they do nothing, the recommendations become law and DoD has six years to close or realign the bases on the list.  In past BRACs the DoD has done a variety of disposal actions, including Federal real property  made available by public benefit conveyances for airport, education, and homeless assistance; federal transfers to native American tribes; economic development conveyances to local redevelopment authorities; and public sales.

Communities spend vast amount of money and effort preparing for BRAC, making sure the contributions to the local economy from local bases are well known, lobbying the Hill and Pentagon and generally stirring up dust in an attempt to “BRAC-Proof” their bases. That’s a big reason why the process is kept under wraps until released to the Commission.

The Defense Department says it needs BRAC to rid itself of excess infrastructure in order to reduce costs.  The big question is rather or not BRAC closures actually achieve the projected savings.  That’s a tough question because there is a fair amount of conflicting data out there.  The DoD uses a model (critics say it’s flawed and inaccurate) called COBRA (Cost of Base Realignment Actions) that projects closure costs and the modeling results are generally used for racking and stacking the recommendations. To my knowledge, the model has never be compared to actual costs in order to validate its results (partly because I doubt if the real costs are known). I just don’t know enough about it to have an opinion either way, but given that determining costs is involved I tend to agree with the critics.

There have been several problems related to BRAC which have limited savings or increased costs:

  • Environmental Clean up costs are often underestimated negating the savings anticipated.
  • Turnover from DoD to the receiving locality or other governmental agency has not progressed smoothly.
  • Unsafe building must be demolished before turnover
  • Local communities not prepared to accept the property and ensure security.

I just read today that the Navy’s Treasure Island Facility, BRACed in 1993, is now scheduled for radiation testing because high levels of radioactivity have been detected in the housing areas. YIKES!

The CNO has said that the Navy does not need another round of BRAC , but the Army and the Air Force maintain that it’s needed.  The Army’s position is certainly understandable  given the  personnel reductions they are facing.

Although great pains were taken to “de-politicize” the BRAC process, politics inevitably creep in.  Take for instance the Portsmouth Naval Shipyard located in Defense Committee Heavy New England.  Its main purpose was to refuel nuclear submarines.  The Navy’s newest version, the Virginia-class is designed to last 30 years without refueling.  The last of the submarines requiring refueling are long gone, but when the Navy tried to close it, the fan was clogged by politics and it was removed from the list.

So keep an eye out in the  Defense Budget debate over the next few months.  To Bric-a-BRAC?  That is the question.

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Rethinking LCS

I was recently asked to do an interview on Federal News Radio on the subject of the Secretary of Defense’s decision to terminate the LCS buy at 32, instead of the 52 on the Navy’s FY15 Shipbuilding Plan. Here is the audio:

LCS It was on my watch as the chief requirements and resources officer for the Navy (N8) that the requirement for the number of LCS’s was determined.  At the time, the Navy was looking towards a more sophisticated engagement policy with the navies of developing and emerging littoral countries.  The idea was to have a ship which could access shallow water ports and operate in the “brown” water environment.  Its defining attributes were speed and maneuverability.  Some limited self-defense capability was built in, chiefly rapid firing, larger caliber guns to combat the swarming boat threat (then a big concern) and an aircraft point-defense capability.  The number was based on what we thought was needed to execute the “From the Sea” maritime strategy in a variety of littoral interest areas.  Another attribute of the LCS was the inclusion of mission modules, specially developed, mission-focused packages of sensors and aircraft (helos, manned and unmanned) with limited weapons capability.  The modular approach was chosen for affordability since large, multi-mission ships (like DDG-51 class) are very expensive to build.  We carefully crafted a ship inventory to ensure that our carrier battle groups and amphibious ready groups were protected and that our ISR requirements were met before looking at how many LCS’s were needed.  Said another way, LCS’s were not planned to be a front-line battle force protecting carriers and amphibious assault ships.  The three modules we envisioned were mine warfare, surface warfare and submarine warfare.  In each of the appropriate warfare areas, the LCS’s were meant to augment forces by providing extra eyes and ears.

Now Secretary Hagel wants a smaller, more capable and lethal ship to be built to take the place of the LCS.  But we can’t afford the Navy we want to build now.  Adding a more capable, lethal ship (Frigate style) is going to cost more that the LCS it will replace and will lead to even smaller quantities of ships at a time when the vision is to expand the Navy’s reach in the Asian-Pacific region.  Where’s the reality check? By the way, it’s not like the current US Navy frigates are bristling with armament….a Point-Defense CIWS, 76mm gun, a few torpedoes, maybe a towed sonar and a helo.  Virtually the same  as the ASW module equipped LCS.  So I submit using current frigates as a model for the capable, more lethal vessel is probably not a good idea.LCS
A Congressional Budget Office analysis of the Navy’s 2014 Thirty Year ShipbuildingPlan has some startling data in it.  It notes that the most optimistic case is that the FY14 plan was going to cost at least $18 Billion a year for the next 30 years and that a more realistic figure is probably closer to $20 Billion.  The report also notes that the historical average in the Navy’s ship procurement budget from 1984 to 2013 is about $14 Billion…..that’s a deficit of $4-6 Billion a year!  Keep in mind in the FY15 request the Navy is putting 11 Aegis Class cruisers on the bench, seriously considering not refueling the carrier USS George Washington and delaying the procurement of the amphibious docking ship replacement by a year.  There’s a fairly reliable benchmark used by shipbuilders to determine the cost of a ship… the DDG-51 Class costs about $167,000 per ton to build and the frigate exported by the French (probably about the size and capability that SecDef wants) costs about $122,000 per ton to build.  The LCS is costing about $350 Million right now, so the Big Guy wants to replace that with something that’s going to cost about $500-600 Million to build.  The current frigates “lack multi-mission capability necessary for modern surface combatants” (that’s a quote from the US Navy web site) so whatever frigate the new LCS Study Group comes up with will have to be more capable than what we have now……and that, my friends, will cost a lot of money the Navy does not have.

So I’m really interested to see what the Study Group comes up with….a deadlier, more capable ship than either the LCS’s or the FFG’s currently in service. And in order to afford them the Navy will have to come up with an additional $400 Million or so in the shipbuilding budget each year.  Where’s the money coming from?  I guess we just print more.  Why not?  It’s not much different to be $4 Billion under the requirement as it is to be $$4.4 Billion.  What’s a few hundred million among friends?

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Dinosaurs and Dead Reckoning

I’d like to think that I’m fairly open-minded when it comes to the use of technology.  As I mentioned a few days ago, the changes in lifestyle brought about by technology are mind-boggling.  The same is true for war fighting.  I was with a group the other day touring a US Navy guided missile destroyer and my ears perked up during a  briefing on the Bridge by the ship’s navigator.  This young officer was enthusiastic and obviously proud of her position as the Navigator.  I was pleased to see an electronic navigation system over her plotting table on the Bridge, but when she said that she was qualified to only use electronic navigation I took note.  She continued that her goal was to become qualified in paper navigation at some point.  I know that going to electronic navigation can save the Navy a ton of money by eliminating the need for lots of paper charts, to say nothing about the manpower needed to keep them up-to-date.  It brought back memories of my third-class year at the Naval Academy and the year I spent learning basic navigation and celestial navigation.  I even remember a brief section in the textbook, Dutton’s Navigation and Piloting, regarding the advent of LORAN-C, a new radio aid to navigation (you needed a degree in electrical engineering to make it work!).  I struggled through endless P-Works (navigation exercises) in the Navigation Loft of Luce Hall.  Luce Hall was also the place where we learned to read flashing light and signal flags.  I endured a whole semester of celestial navigation, sun lines, local apparent noon, and latitude by Polaris calculations.  As I recall, using planets to navigate was particularly difficult because those suckers were always moving around! Inevitably,  I would wind up with a fix that was a triangle that put me somewhere in a 50 square mile spot in the ocean ( or worse yet, a point fix 25 miles inland!)

As an A-6 Bombardier/Navigator I  experienced the same thing.  As a junior officer the best we could do was write down the ship’s position about 45 minutes before we took off and hope that the ship didn’t go too far.  Once airborne, the first thing you had to do was figure out where you were by finding a landmark on the radar.  Then you had to find your target,  hope the pilot could follow the steering directions and while you guide your bomb to the target (assuming you were using a laser guided weapon).  Then you had to go back and find the ship and land.   Now all that is done by GPS, the bomb guides itself to a target you never have to find.  How sweet is that?

USS LaMoure CountySo is relying on state-of-the-art electronics a good thing or a bad thing? One would think that using GPS has got to make things easier, yet ships continue to run aground even with GPS in working order.  I seem to remember that the USS LaMoure  County ran into the continent of South America using GPS several years ago. USS San FranciscoThe  submarine USS San Francisco was using an electronic map when it hit a seamount  in 2005.  So clearly, electronic systems are not infallible (although there’s always an element of human error).  One could argue had there been less reliance on technology and more reliance on the tried and true methods of navigation those events might not have happened.  On the other hand, using these systems reduces manpower requirements (and cost), saves time and can enhance safety when used properly.  Heck, without technology a pilot could never fly an F-18 and accomplish the mission because of the complexity of the aircraft and weapons systems.

So I’m not sure I know the answer to the question, “Should I rely on technology or tradition?”  This is a classic dilemma that Dr. Rushworth Kidder addresses in his book, How Good People Make Tough Choices.  Both choices are have merit and could be considered correct.  I think this one falls into the category of the “trilema” mentioned in the book, which suggests there’s a third answer and that is to seek a balance.  So when you are faced with deciding between technology and tradition, carefully consider the facts and seek a balance.  With that thought, it’s time to take the slide rule out of my desk.  I’m sufficiently comfortable with the calculator app on my iPhone that I think that piece of tradition is no longer needed.

 

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A Self-Licking Ice Cream Cone

Today’s title is a fairly common term used when referring to an organization that appears to have no other purpose other than sustaining the survival of the organization itself.  Ice Cream ConeIt’s like an Organizational “Black Hole” (OBH) which sucks up activity and productivity, only to have nothing of value produced in return.  It’s a phenomenon I’ve observed in both government and the private sector so neither world has a corner on the market.  Organizations that one might classify as a “bureaucracy” may exhibit the characteristics of an OBH, but not necessarily.  There are plenty of bureaucracies in government producing useful things, perhaps not at the speed or efficiency we would like, but that issue is a different matter from the OBH.  I  suggest as a leader that you should periodically take a look at your organization to ensure you remain well outside the influence of the OBH.  OBH’s have the following items in common:

  1. They tend to form when an entity reorganizes frequently
  2. There is excessive focus  on development of strategy
  3. There is too little focus on execution of strategy
  4. Their mission and/or desired results are not clear
  5. They have highly organized and complicated structures
  6. They have difficulty in articulating what they do in plain terms (excessive “buzz word” use)
  7. They are always in meetings

Black HoleI think that will do for now.  I’m not going to comment on all of these factors in this posting, but I will chat for a moment on what I consider to be the most significant problem, the balance between strategy and execution.  My experience has been that most successful and growing organizations have a healthy balance between the two.  If there is too much focus on strategy, companies are constantly conducting strategic off-sites because they never feel like the previous strategy is accomplishing the desired results.  This is not surprising since if there is little focus on execution, metrics are rarely established and responsibility rarely assigned for elements of the strategy.  Therefore, no one really knows if the strategy is being effective or not.  If a company focuses too much on execution, it never achieves its growth targets because of Crenshaw’s Anti-Multiplicative Rule, “ You can’t double revenue by doing twice as much of the same thing.”  I’ve noticed that many OBH’s have very sophisticated organizational structures and have multiple interconnected relationships.  The organization has spent so much time organizing and admiring itself, it has forgotten to produce product. The leadership feels very comfortable with this complex organizational structure because it gives the outside observer the illusion of operational excellence and it looks great in Power Point.   I firmly believe it’s possible to organize yourself right out of business.

The dilemma leaders face is that as companies and organizations grow, they require more structure.  But structure tends to inhibit agility and entrepreneurship, thus limiting growth.  Good leaders know how to put just enough structure in place to allow for growth without adversely impacting agility and entrepreneurship.

So beware the Organizational Black Hole syndrome.  Be highly suspicious of briefings pregnant with elegant organization charts, explained with a healthy dose of “buzz words” like stovepipes, barriers, synergistic effects,  vis-a vis, etc.  Make sure the focus is not so much on structure but more on execution and results.  I believe that an organization that is focused on execution excellence will do well with just about any strategy but an organization focused on strategy will never quite hit the mark.  There’s a quote I like from Stephen Covey….”The main thing is to keep the main thing the main thing.”  Make your main thing execution and you can’t go wrong.

 

 

 

 

 

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Horseless Carriages and Pilotless Airplanes

I’ve often thought of my Grandfather and the changes he saw in his 95 years.  Once he plowed fields with a mule (~1 HP) , but switched to plowing with a turbocharged International Harvester tractor (~300 HP) in his later years. As a young man on a farm in Alabama he got the news of what happened last week by horseback, but in his later years he got the news as it happened from the television.  He even went from watching the man in the moon from the back porch to watching a man walk on the moon.  At the turn of the century he saddled his horse and rode four hours to town and just before he died , he hopped on a plane and was in Las Vegas in four hours.  And he saw the horse-drawn wagon turned into a horseless carriage.  I suspect he wondered what possible benefit could come from getting rid of the reliable horse and replacing the Old Grey Mare with an unreliable, noisy and complicated gasoline engine.  In fact, I bet he would still saddle his horse to go to town, even when he could have taken the Ford and I’m sure he wasn’t the only one.  MQ-9As I was looking at an MQ-9 Reaper, Remotely Piloted Aircraft (RPA) doing touch-and-go’s at Creech AFB near Las Vegas this morning,  I thought once again about my grandfather and the parallels in our lives.  I’ve gone from giving the Operator the phone number to having my iPhone give me the number.  I’ve moved up from the Atari 800 (with the 32K memory module) to the MacBook Air….heck, I even have a three terabyte server sitting in my basement (at significantly less cost than the 32K Atari I might add).  My fleet airplane, the A-6 Intruder, had a computer with a memory made up of 32,000 little round ceramic magnets woven together, operating at a speed of 8 Hertz (32 Hertz in Attack).  Watching the JSF flying this morning I can’t even imagine how much memory it has, although I suspect it’s in the Giga’s.  And my guess is the speed of its computer is in the Giga range as well.  Wow!

So think about the early attempts to field a pilotless airplane or what was called a drone.  DASHI remember the Navy’s attempt at pilotless aircraft as a midshipman looking at the DASH helicopter operating from the deck of a destroyer.  You never see them in museums because they all were last seen flying over the horizon, never to return.  We made several other attempts before arriving with Fire Scout.  We are now on the dawn of deploying a fixed-wing, X-47Bpilotless, tactical aircraft on aircraft carriers with the X-47B and long-range Global Hawks operating from our Naval Air Stations.  The Air Force is conducting routine combat patrols with MQ-1 Predator and MQ-9 Raptors and contributing to our war efforts in Afghanistan daily.  The Air Force pilots who remotely fly these aircraft are quick to point out that they are not flying drones, but rather Remotely Piloted Aircraft.  Just like at the turn of the century when people thought of automobiles as “horseless carriages.” Because of that narrow view they had no concept of what the automobile might become.  I submit the same is true in the RPA world.  Even now,  I suspect that many of the “Old Salts” are questioning the value of a carrier-based RPA because they see it a merely an A-7 or A-4 flying around with no pilot inside.  We have no idea how the addition of the X-47B to carrier air wings will change the way the Navy flies and fights.  But the sooner we get out of the “horseless carriage” mindset and look at the X-47B not as an airplane without a pilot, but as a radically new way of projecting power, the better off we will be.

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A Day Younger

I was honored to be on the waterfront last week and had an opportunity to meet officers and Sailors on a soon-to-deploy ship and boy did I leave feeling good about our Navy.  Everyone I talked to, from seaman to the Captain, were excited about their ship, their contribution to national security and the upcoming deployment.  Their enthusiasm was genuine as it was a weekend and I’m sure they would have rather been with their families.  It reminded me of a saying I used to share with my audiences when I was important (at least in my own mind): Every day I spent at sea I got a day younger, and every day I spent in the Pentagon I got ten days older!  That certainly explains why I look so old now–too many days in the Pentagon and not enough days at sea.  It’s probably not intuitive to you land-lubbers, but being at sea and on deployment is the easiest part of the whole cycle.  Before deployment there are endless exercises, training and long hours preparing for the task ahead.  Many would say that’s the hardest part of being in the Navy.  That’s not to lessen the impact of being away from family and friends…there’s always that.  But Navy leaders have done a lot to lessen the distance between families during deployments.  Sailors are generally well connected to their loved ones by internet, email and instantaneous telephone connectivity.  During my first deployment in 1975, the lovely Mrs. Crenshaw and myself exchanged daily letters, sequentially numbered on the back flap so we could read them in chronological order.  Nothing’s worse than reading about your son being released from the hospital when you didn’t even know he was in the hospital to begin with.  I wish we could establish a program that gets all Pentagon confines out in the field a couple of time a year so they could recharge their batteries.  I felt even better when I had the opportunity to meet with Soldiers this morning, many just returned from Afghanistan and many more looking to go back in less than a year.  I didn’t hear one sour note.  They were all ready and willing to go back, despite the hardships on their families.   As I read the news about the possibility of us pulling our of Afghanistan, I can’t help but think about the 2176 brave Americans who gave their lives for this cause.  We could argue all day about rather or not Afghanistan is a critical aspect of protecting America’s freedom and I frankly don’t care which side of the argument you are on…..The fact is 2176 have died for the cause.  To pull out lock, stock and barrel would be a dishonor to them and the families who remain behind.

And I can’t imagine how anyone can look them in the eye and tell them that they are pulling the plug on their Commissary benefits, or telling them that their health care is too expensive so when they retire, they will have to pay more.  I would rather see us spend all the money and effort people are spending on marginal costs on homeless veterans and jobs for veterans and other programs which honors their service, not puts a price tag on it.

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Food Stamps and Decisons

I’ve had the opportunity and honor to meet with Marines and Sailors in the field, working hard and doing the incredibly difficult things they do….all with enthusiasm and a smile. My first thought was, “It’s good to be way outside the Beltway!”  But that’s nothing new.  Somewhere in the attic filled with the boxes of all the command plaques and farewell pictures that I’m not allowed to put on the walls is my favorite, the ubiquitous “Pentagon in the Rear View Mirror” farewell picture, signed by all my shipmates who were so sorry to see me go.  My recent flight to freedom outside the Beltway has caused me to reflect on just how hard it is for many of the leaders in the Pentagon to leave their commands, far removed from the self-generated controversies  inside the Beltway, and plunge themselves back into the budget battles, policy proliferation and day-to-day crises that erupt in the Pentagon.  No wonder they are  happy  when they escape, even if only for a brief while.

 

 

So this is a round-about way to get to today’s topic, which is really all about decisions and an appreciation for just how difficult making them can be.  I remember listening to Bill Lynn, former Deputy Secretary of Defense, at a briefing where he was opining about some of the challenges he faced.  His point was that it’s really tough being the DEPSECDEF, because all of the easy decisions have be made by people below him in the chain of command.  He wasn’t complaining about that and I don’t blame him.  If you are in a leadership role and you find yourself making easy decisions, then I would submit something’s wrong.  Your value to the organization is in making those tough decisions that no one else can or wants to make.  That’s your “value proposition.”  I used to tell my staff that I was willing to make any decision they asked me to make, but the ground rules were once they came to me and I made a decision, they were stuck with it.  They were out of options.  That tended to weed out the easy ones. (I’ve always hoped that it wasn’t because my decisions were so egregiously bad, by the way) There’s a great book which has had a substantial impact (see my course on Ethical Decision Making) on my life as a leader entitled “How Good People Make Tough Choices” by Dr. Rushworth Kidder.  I commend it to you.  The basic premise is that just about anyone can decide issues of right and wrong, black or white, legal or illegal, but the ability of leaders to decide between two equally “right” options is essential and requires the special talents of a leader.  As a leader, you should strive to prepare yourself to make those types of decisions and reflect on the factors you consider when making them.  One example is a simple one.  It’s made every day in thousands of households every day:  Do I take the family out to dinner tonight, or do I save the money and put it in the college fund?  Both answers are equally good, I suppose.  I teach a class on ethical decision making based on Dr. Kidder’s book and I always ask the question,”When you are driving in the countryside eating an apple, do you toss the core out when finished?”  After all it’s biodegradable and some hungy creature might enjoy the treat.  It will actually help the environment.  Most people will say that they have done that.  But it’s always interesting when I ask if before they do it, do they wait until there’s no car behind them. Hmmmm. If it’s a good decision, why wait?

Here is an example of they types of tough decisions faced by the leadership: Do we cut Commissary subsidies to free up money for operations and procurement? The dilemma here is that DoD needs the money to fund and modernize weapons systems, but at the same time troops used over $103.6 Million in food stamps at base commissaries in 2013.  That’s a tough question to which either answer, yes or no, is correct.  Dr. Kidder points out that in the process one should first check and see it there might not be a third option that isn’t readily apparent.  Decision makers sometime get so focused on two options, they sometime overlook others.  For instance, with over $100 Billon in working capital funds throughout the DoD, if they set a goal to become just 1 per cent more efficient, they would generate the money for commissary subsidies.  I know our leaders have to make hundreds of these decisions each day.  I respect that and trust their judgement.  I only hope that in making their tough decisions they don’t become so focused on “yes or no”, that there might be a third alternative out there somewhere that was overlooked.

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