Why do some companies thrive in uncertainty, even chaos, and others do not? Based on nine years of research, buttressed by rigorous analysis and infused with engaging stories, Jim Collins and his colleague, Morten Hansen, enumerate the principles for building a truly great enterprise in unpredictable, tumultuous, and fast-moving times. The DoD, while not driven by stock prices and profits, can apply many of these findings to ensure their major programs, organizations, and enterprises can achieve spectacular, long-term results.
The Economist recently published a piece The Over-Regulated America critical of financial and healthcare reform laws that were noble efforts to prevent another crisis, abuse, or skyrocketing costs but imposed a huge burden. Politics aside, the DoD faces related burdens of over-regulation and would benefit from exploring the author’s recommendations.
America needs a smarter approach to regulation. First, all important rules should be subjected to cost-benefit analysis by an independent watchdog. The results should be made public before the rule is enacted. All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorizes them.
More important, rules need to be much simpler. When regulators try to write an all-purpose instruction manual, the truly important dos and don’ts are lost in an ocean of verbiage. Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them. Legislators should pass simple rules, and leave regulators to enforce them.
Deputy Secretary of Defense Dr. Ashton Carter in September 2010 as the Under Secretary for Acquisition laid out the Better Buying Power strategy. It included:
- Reduce the number of OSD-level reviews to those necessary to support major investment decisions or to uncover and respond to significant program execution issues
- Eliminate low-value-added statutory processes
- Reduce by half, the volume and cost of internal and congressional reports
- Reduce non-value-added overhead imposed on industry
Dr. Carter’s leadership in championing these reforms has been much needed in OSD. While I haven’t seen any interim progress reports, there is still ample room for improving DoD operations. The OSD culture will take years to change from an over-regulated mantra to more of a facilitating and guiding approach. I hope leaders and staffs can see the benefits and are laying the ground work of real reforms within their organizations.
Each new policy, while well intended, is additive to the mountains of policies that organizations struggle to understand, apply, and comply with. It would be very interesting to see cost benefit analyses and sunset clauses for each major new policy. The approach would force DoD leaders to assess the true impact, including the cost and energy, of implementing this new policy, and weigh it against the anticipated benefit. As it takes significant energy, debate, and political power to repeal a bad policy, a sunset clause would limit the long term growth of policy mountains. If 5-10 years later the policy still has value, it can be reauthorized with any necessary updates based on feedback, effectiveness, and assessment of the current environment.
Similarly, Congress via the National Defense Authorization Act (NDAA) imposes dozens of new policies on the DoD annually. As the Congressional Budget Office (CBO) scores legislation for the economic/budget impact, the GAO could develop and publish a cost-benefit analysis of all proposed defense legislation prior to voting on the NDAA.
The DoD bureaucracy needs to be aggressively simplified and policies streamlined. While we operate in a very complex enterprise, the over-regulation of DoD has taken a considerable toll in delivering cost efficient, effective, and innovative solutions.
DoD’s massive budget cuts are going to drive a transformation one way or another. There are some great lessons from Jack Welch that may help shape the future of the Pentagon. Here are 10 of his rules that I believe the Pentagon leadership must adopt today. [My comments]
- Manage Less. “We are constantly amazed by how much people will do when they are not told what to do by management.” Let your people do their what you hired them to do.
[DoD’s countless policies, reports, reviews, and oversight crush productivity, morale, and innovation.]
- Articulate Your Vision. “Leaders inspire people with clear visions of how things can be done better.” Leaders do not provide a step-by-step instruction manual for their teams, they let their vision inspire action.
[Instead of writing more policy or holding more reviews, share your vision with subordinate organizations and more importantly, those on the front lines]
- Simplify. Keeping it simple. “Simple messages travel faster, simpler designs reach the market faster and the elimination of clutter allows faster decision making.” Simplicity is not easy, but is effective.
[Could others in your organization convey the key tenets of your vision or strategy?]
- See Change as an Opportunity. Change is a big part of the reality in business. This reminds me of the old Chinese proverb that the icon for danger is the same as the one for opportunity.
[Budget cuts provide an opportunity to eliminate non-value added processes, reports, organizations, individuals, and systems to be more streamlined, agile, and competitive going forward.]
- Get Good Ideas from Everywhere. New ideas are the lifeblood of business. “The operative assumption today is that someone, somewhere, has a better idea; and the operative compulsion is to find out who has that better idea, learn it, and put it into action – fast.” The best ideas of all usually change the entire game–vs. trying to improve it.
[DARPA and the IC have leveraged the wisdom of the crowds to develop innovative solutions – have you?]
- Get Rid of Bureaucracy. The way to harness the power of your people is “to turn them loose, and get the management layers off their backs, the bureaucratic shackles off their feet and the functional barriers out of their way.” Keep bureaucracy to the absolute minimum required to scale with predictability and quality.
[The DoD bureaucracy imposes greater risks to programs than the risks they intend to mitigate.]
- Create a Learning Culture. “The desire, and the ability, of an organization to continuously learn from any source, anywhere – and to rapidly convert this learning into action – is its ultimate competitive advantage.” When you stop learning you are dead.
[Leverage the web to amass the collective knowledge of the DoD and external sources.]
- Involve Everyone. Business is all about capturing intellect from every person. The way to engender enthusiasm it to allow employees far more freedom and far more responsibility. If people are not involved, they have little reason to be creative and add more to the pie.
[As Nilofer Merchant writes: Get those on the front lines involved in developing strategies and solutions.]
- Constantly Focus on Innovation. “You have just got to constantly focus on innovation. And more competitors. You’ve got to constantly produce more for less through intellectual capital. Shun the incremental, and look for the quantum leap.” Again, something very true in today’s technology world where no leaders can emerge from anywhere – if they have a solution that is far more innovative to all others.
[Divorce strategic plans from the decades old CONOPS mentality – develop innovative alternatives to achieve strategic objectives – you’ll find 10X solutions are out there.]
- Live Speed. “Speed is everything. It is the indispensable ingredient of competitiveness.” Everyone who gets the market second is a “me too” follower.
[Stop wasting time with excessive documentation, reviews, and analysis to get the perfect long term solution (which you’ll never achieve) – deliver users some initial capabilities today and build upon them tomorrow.]