DoD Has Erected Barriers To Innovation

The Defense Business Board has another great presentation, this one on Innovation – Attracting and Retaining the Best of the Private Sector.  bright-idea-lightbulb-switched-on

They highlight that DoD needs both sustaining and disruptive innovation.  Sustaining innovation tends to be “top down”, addressing known problems with contracted and independent R&D.  Disruptive innovation tends to be “bottom up”, the source of major breakthroughs from non-traditional, self-funded development.

They found DoD has a closed system that discourages innovation.  From components that are hard wired into programs to a vertically integrated supply chain restricting competition.

The unintended consequences of budget reduction actions will hurt future innovation.  Cost focus via LPTA reduces staff and technical quality discouraging industry investments in innovations.

DoD lacks sufficient understanding of business operating models and drivers of innovation.   The fundamental business imperative is to increase earnings per share.  Profit is the lifeblood of the capitalist system and is risk calibrated.

They also summarized the slow acquisition process has 7-10 year platform cycle vs. 18 month Moore’s Law technology cycle.  The development curriculum for DoD acquisition workforce is inadequate.

The DBB lays out eight recommendations:

  1. Establish FAR Part 12 as default procurement method for non-platform acquisitions
  2. Require adoption of modular approach to new mission-essential platforms
  3. Rebalance policies on Intellectual Property
  4. Remedy unintended consequences of budget reduction actions
  5. Provide clear and consistent senior-level messaging of DoD goals and policies
  6. Systemize and mandate DoD workforce education as condition for promotion
  7. Simplify DoD internal processes and policies: ensure consistent long-term leadership
  8. Re-examine industry structure and incentives from standpoint of future DoD needs

A final series of factoids: The market cap of Apple, Exxon-Mobil, Google, and Walmart each exceed the entire defense industry.  Apple could buy nearly the entire defense industry today with their cash on hand.

So what are you thoughts on the DBB Innovation report?  I believe they go beyond the standard acquisition reform report and identify some key recommendations acquisition executives could implement today.  Which findings or recommendations resonate with you most?

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Defense Business Board on DOD Program Managers and Change

The Defense Business Board has two great reports on DOD Program Managers and Implementing Change in DOD. These are concise reports with some extensive findings and solid recommendations.  Below are the highlights, and the reports are short enough for a quick read.

Review of DOD’s Program Managers

Findings

  • PMs could be more effective if the requirements and acquisition processes were more closely aligned
  • PMs have experienced an erosion of authority and an increase in bureaucracy
  • Civilian PMs are considered to have different career paths, longer tenure, more continuity, and perhaps more business acumen than uniformed PMs
  • Military PMs spend too much time managing the politics and processes within DOD than their specific program
  • PMs are risk adverse because of the extensive oversight process
  • The checkers checking checkers throughout the PM process is ineffective and inefficient
  • Industry would support an expanded Defense-to-Industry exchange Program for PMs

Recommendations

  1. Professionalize the Uniformed Acquisition Corps – A job, not a tour; a career destination
  2. Put Civilians in Leadership PM roles – Uniformed officers in operational/field roles
  3. Align the Requirements, Resources, and Acquisition Processes – Expand PM role as integrator of these processes

There are many interesting supporting recommendations for recruitment, selection, training, development, performance measurement, incentives, rewards, PM characteristics, roles, and authorities.

A Culture of Savings – Implementing Behavior Change in DoD

Findings

  • A culture of change is especially necessary during this constrained and unprecedented fiscal environment
  • Many DOD senior officials believe there are substantive barriers to creating lasting cultural change within the Department
  • The stovepipe structure of the DOD and turf protection behavior make it difficult for cultural and institutional change
  • DOD needs to upgrade its change management skills as the workforce lacks change management skills
  • Senior leadership’s rapid turnover and organizational misalignment are also significant barriers to change
  • Cultural resistance within the DOD is overwhelming and real – A formal, top led and sustainable change process is essential for success
  • DOD needs a dedicated, full-time governance and process aligned organizational structure in order to drive and sustain real behavioral change
  • DEPSECDEF is the first position in the unity of command and authority for all support processes in the DOD organizational structure
  • SECDEF should ensure that the right governance is in place around every transformation initiative
  • Cultural behavioral can only change if hearts and minds are first won.
  • We are a layered, bureaucratic organization with four Services and 29 agencies, both military and civilians, operating in a complex process that is very difficult to get our hands around.
  • Insiders and outsiders are unprepared to engage in the type of collaboration necessary for true integration
  • Leaders have been traditionally tasked with understanding the combat environment rather than the business environment and therefore may not understand the relationships between business problems, processes, and systems.
  • Cumulative implementation of directives, regulations, and congressional mandates on top of organizational layers, outdated legacy systems, and fragmented manual processes have taken a heavy toll.
  • Considerable resistance to modernize business systems has caused a proliferation of stand-alone platforms.
  • Reward and incentive systems are not set up to promote the achievement of shared goals along end-to-end process performance outcomes.
  • There are many functional organizations involved with no clear ownership or leadership of the problem. This means communication of policies is cumbersome and coordination is usually insufficient or lacking.

Recommendations

  1. DEPSECDEF should assume a more intensive day-to-day role in leading and driving this change initiative or designate a comparable senior leader to do so.
  2. Phase 1: Create an action plan with a sense of urgency, open communications, and careful planning. Complete in 2011
  3. Phase 2: Define goals, roles, and responsibilities. 2011 to early 2012
  4. Phase 3: Train, test, and reward senior officials on their performance. Late 2011 to 2013+.

Some of the Tenets to Create and Sustain Change

  • Transformational and lasting change is a major strategic undertaking
  • The will and skill to lead and execute a sustainable change process must be nurtured, developed, and rewarded
  • Do not underestimate resistance forces. Engage and lead them.
  • Leadership, org structure, empowerment and associated alignment are necessary to make a collaborative environment possible