Thursday, February 9, 2012

Gordon Gekko, DoD, and the La Brea Tar Pits

It would be good for the stockholders in DoD, Inc. to remember Gordon Gekko thundering in the original Wall Street: "You own the company. That's right, you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their luncheons, their hunting and fishing trips, their corporate jets and golden parachutes. ...  Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you. I am not a destroyer of companies. I am a liberator of them!"

Just as Gekko wondered about what the vice presidents of Teldar Paper did, I often wonder the same thing as I look at all of the lieutenant colonels, colonels, and general officers that populate our staffs, each with twenty years or more of military experience, and each shuffling paper back and forth.  This is not an attack on individual officers, but rather on their collective profusion and the resultant choking effect on the organization.  Over and over again, I have heard senior officers state that certain generals are “action officers,” meaning that they want detailed cognizance of the inner workings of projects once left to majors.  Paperwork and “staff processes” proliferate in these top-heavy commands, as papers and policies are staffed and staffed again, round and round to all the vice presidents of Teldar Paper.  Our military, for all the centralization of control bemoaned in professional journals, rules by committee decision at the upper levels.  As a result, decisions take months if not a year or more to come by, as the proliferating staff power centers guarded by colonels and general officers seek to have a cut on every policy, put their fingerprints on every initiative, and jealously guard their position and that of the bevy of contractors, activated reservists, and hapless active duty officers that chase their every whim.  This bureaucratic accumulation of seaweed and barnacles slows down the organization tremendously and proliferates tasks and information requirements by the day.  Thus, your government flies lieutenant colonels, colonels, and a general across the world to meet for days, costing hundreds of thousands of dollars, but with nary a decision or any really measurable progress made. 

The critics of my criticism and cynicism will say that I do not understand.  That below the surface, important things are happening.  Understanding and “buy-in” are gained.  The stage is set for future action.  I say, “Bullshit!!”  I understand the power of such intangible things, but the reality is that these intangibles can be gained along with real actions and decisions if we have leadership capable of action and decision and senior middle managers capable of driving a working group.  In this I mean, someone who comes prepared with an agenda and a predicted outcome, but ready to be guided by the intelligence of the group, rather than standing for hours and pontificating off the cuff, spouting platitudes about crawling, walking, and running, et cetera, ad nauseum.  For this to begin happening again, however, these officers must be given the power and trust to be decision-makers, or at least decision-shapers, rather than insignificant cogs in a massive bureaucratic decision machine.  The lack of initiative is due to the vast scale of the institution and the remote and diffuse locus of power and focus in the institution.

Our staffs are trudging, more so every day, into deeper and deeper sections of the La Brea Tar Pits (if you haven’t been, I highly recommend the real deal).  Their legs grow heavier with each step, but unlike the mastadons beset by dire wolves and saber-toothed tigers, these slow, giant mammals do not know their demise is near.  They stand woodenly spouting buzz words and imagining grandiosities, many blissfully ignorant of their pathetic state.  Not only have they been lobotomized, they have been neutered, emasculated even, by the incredible inertia of a pathologically bloated defense establishment.  It isn't that the people are bad, it is that the institution they inhabit cripples them.  It was the tar in the pits, not the big dumb animals that did the trick.

When I sit watching such things, seething through my anger issues, I do a silent and motionless rain dance, hoping for sequester rather than rain.  I invoke the gods of the budget axe to come and strike down the giant choking weeds in our midsts, to end our monopoly, to deregulate our industry, and to let us start down the long road to recovery.  Whether sequester kicks in or not, a house-cleaning, an undoing of the entropy is dearly needed.  Even once the cuts start to come in, we have a long row to hoe.  My mentor (via print) Richard Rumelt writes in Good Strategy/Bad Strategy that organizations on the rebound from monopoly positions or regulated industries have a difficult time in adjusting because of the “inertia in corporate routines and mental maps of the terrain.”  They also lack cost data because they have “developed complex systems to justify their costs and prices, systems that hide their real costs even from themselves.”  It thus takes years to “wring excess staff costs and other expenses out of its systems.”   The first step in breaking cultural inertia is to simplify.  “This helps to eliminate the complex routines, processes, and hidden bargains among units that mask waste and inefficiency.  Strip out excess layers of administration and halt nonessential operations – sell them off, close them down, spin them off, or outsource the services. … The simpler structure will begin to illuminate obsolete units, inefficiency, and simple bad behavior that was hidden from sight by complex overlays of administration and self-interest.”

If you think like I do, this sounds therapeutic.  If not, join the growing line of people who are hoping for my head to be lopped off.  Let me tell you, though, more and more people in our esteemed defense establishment, and people senior to me in these, are hoping for a mercy killing, the sharp cut of the scythe to their neck, to relieve them of the suffering imposed by dysfunctional institutions and toxic leaders.  


  1. I don't think you'll find very many people under the rank of O6 who'll disagree with this rant. And probably at least of half the O6's and higher.

    The fact is, if I want to stall something in a military command nowadays, I guarantee that I can find a regulation/order/requirement to bog any new initiative down. Or, alternatively, I can find some GOFO at a command with similar responsibilities who'll feel threatened and will happily put a wrench in any initiative at commands that "compete" with his/hers.

    We just have too much human/bureaucratic cruft to move quickly, and there's very little incentive to slim things down, particularly with the powerful bureaucratic pressure to stay big in order to demonstrate your worth and to stay at a higher echelon.

    So, how, realistically, does this change? Do we wait until an enlightened set of Joint Chiefs unilaterally cuts regulation and staff size at all commands? (highly unlikely) Hope congress does this? (even more unlikely). I don't see a way out of this mess.

    And can we do this piecemeal, gradually? Or does it have to be done simultaneously, across the board?

  2. How much of the problem is political? Ultimately, the DoD is supposed to be subordinate to civilian leadership and that civilian leadership is supposed to come up with big picture goals. But we have 20 disparate big picture goals at once: pretending to be ready for a war with Russia, democratizing the Middle East, making sure our military is diverse, fighting two regional wars at once, implementing meaningless ideas like "network centric" warfare, etc.

    Some of this is unavoidable. Bureaucracies do this. 20 years post Soviet Union, they still have many of the same legacy commands, structures, and organizational concept (i.e., huge reserves and preparations for huge mobilization) when their chief threats are smaller, regional, and require fast response. Ludwig von Mises in his book Bureaucracy explains this problem well. It's universal for the entire government.

    The military still does some things well. Let's not forget this. And much of this credit goes to small unit leadership, high morale, fairly good gear (a product of overspending, but I'm still glad our guys have SAPI plates), and good and somewhat realistic training. Helps to have 70% plus of the force as combat veterans.

    Until we have either a military disaster or a huge budget axe or both--as did the Soviet Union after Afghanistan--nothing will get shaken up. And, like them, it may still take 20 years of wandering in the woods to get real about switching the organizational structure, cultural character, etc.

    Final observation/question: what should a staff or regional command do in your opinion. I know they waste tons of money, write useless reports, are three steps behind on intelligence and much else, but in an ideal world, what should they do?

    PS You have balls and moral courage. It's in short supply wherever you go. The US/Soviet parallels I see lately are incredible, though, not least in the character of our government, group-think, and widespread culture of deceit. Don't forget what Solzhenitsyn said, "Live not by lies." That's all most of us can do.

  3. Hexsaw and Roach,
    The way out of this, not all the way out, but a way in the right direction is for commanders to get serious about being managers/leaders of an organization and realize that they need to stand up and fight the bloat of their commands. Especially at the regional commands, the commanders have power to change without asking mother. The commands are not bloated, primarily, by permanent structure. They are bloated by individual augments drawn from line units, activated reservists, and contractors, all of which the commanders could forgo and/or return to their sources. A constant refrain I hear from my peers is that we could send nearly 50% of the people on these staffs away today and probably do the same amount of work but get it done with less churn. That is a random 50%. If we got rid of the 25% of uniformed and contractor welfare recipients who do little or nothing for their pay but watch YouTube (seriously), we would actually increase our productivity. The bureaucracy is not a problem within the battalion level and below. It starts a bit at the division level and really balloons above that. So, a lot of this could be done within DoD and below the level of the JCS.

    I know this is a huge task for "the commander" to take on while he's dealing with real-world issues, however it is something that could be turned over to the right trusted agents, preferably someone with some business smarts, to come up with an axe plan. People will cry bloody murder, but it needs to be done.

    As far as good gear, I totally agree, but again intelligent management and procurement could have gotten more good gear with less useless gear.

    We just don't think about cost. When I was talking to someone about what got done at a conference I recently attended, they were shocked when I said that I thought it was a huge waste. "But, people got to meet and a lot of intangible, etc, etc." "Look," I said, "If I was a manager at a civilian corporation and I told them I spent, say $300,000 (my estimate of the travel and per diem costs for this trip) to get a bunch of people together and all I produced were intangibles, they'd remove my head." The look I got was as if my interlocutor had never conceived of such a way of looking at things. "Well, I guess if you put it that way, we didn't get much done." Don't get me wrong, I do think the intangibles of getting people together are important, but that doesn't excuse a complete lack of preparation and leadership when it comes to getting some deliverables completed along with the intangibles. The point is, we are incredibly wasteful and we don't even realize the various ways in which we waste.

    As far as the culture of deceit, credibility is something easily spent and rarely recouped. It is hard to believe people who think that admission of imperfection is verboten.

  4. Good points all around. But in business, when we want people to care about money, we try to align incentives somehow. How about putting % under budget on FITREPS. Or financial bonuses for saving money. Obviously it's one of several things that need to happen--mission accomplishment, safety, etc.--but it's one of several important things.

    My field is screwy too--law--and the billable hour creates some perverse incentives. But since the businesses ultimate goal is to make money, bonuses are tied to things like a) hours billed b) dollars collected (a rough proxy for efficiency, as clients will pushback on overbilling and c) business generated. Why not a financial bonus for saving money, coming in under budget, finding ways to do things cheaper, etc.

    The pay system in the military makes some sense, but since promotions are pretty much lockstep (you won't see 28 year old colonels, like you did say in the 19th Century) there's no easy way to reward good financial horse sense.

    Of course, businesses with lockstep salaries still save money by shitcanning money wasters and having a money saving culture. But some financial incentives would probably make that happen faster.

  5. This is outstanding. I've been on the OPNAV staff for a few months now, and this is what I've wanted to say since about day 5, but couldn't distill beyond a sort of general, slobbering rage. Well done.