Saturday, September 1, 2012
The Case for Disruption and Dialogue in Defense Reform
Case studies abound of businesses that have seen their success turn into bloat, hubris, and ultimately decline. It should be no surprise then that the most powerful and unparalleled military in history is having a hard time coming to grips with the coming budget cuts. The resources at the disposal of the military are as massive as the coming cuts are comparatively paltry (despite protestations to the contrary), yet the real challenge is more one of rationalizing the organization’s allocation of resources.
The military is saddled with more restraints and armed with fewer incentives and metrics than any private sector organization. At the same time, the massive, conservative bureaucracy of the Department of Defense (DoD), replete with its four separate services and countless other fiefdoms, is notoriously resistant to change. Attempts to rationalize, streamline, and flatten the organization will be staunchly resisted, while general officer leaders are unprepared, if not unwilling, to break this phalanx. This all means that reforms will have to come at the hands of disruptive actors within and outside DoD, rather than a unified, top-down campaign. While it is much in vogue to deny that the rules of the business world apply to the military, the time is ripe for more dialogue between the two worlds to both inform and learn from this unique case.
The staunch resistance of entrenched, status quo interests in any organization makes reform efforts difficult. Corporate leadership, business units, employee groups, and shareholders can all be impediments to bold change. All can value the comfort of short-term stability over the risk that faces nearly every effort to reform. These challenges are all the more daunting in declining powerhouse corporations that have long enjoyed an advantaged position. As Richard Rumelt warned, “Success leads to laxity and bloat, and these lead to decline. Few organizations avoid this tragic arc." When businesses sense the imperative for change, they have a number of quantitative and qualitative tools at hand to rationalize their decision-making: industry models, market research, payroll costs, revenue, sales, and other statistics. They can turn to consultants, researchers, fresh views brought in from other companies, or even experts from other sectors in order to blaze a new trail forward.
America’s military has few of the tools laid out above to use in its reform campaign. First, it has no true strategic competition to focus minds. Surely, the insurgencies of the past decade have forced tactical innovation and strategic minds give lip service to the rising threat of China. There is no “threat and constraint,” no competitive pressure of the sort that forces hard, rational decisions about resource allocation. In DoD, parochial interests continue to dominate at multiple levels: competition for resources by fiefdoms within each service, the increasingly bruising inter-service budget battles, and the powerful purse-string control of Congress which often prioritizes industry and district concerns over fiscal and military effectiveness.
Second, the military lacks the metrics that guide most reform efforts. Its workforce is almost entirely salaried, leaving little data for optimization. It has no revenue or sales figures. Its unique warfighting functions have few, if any analogues in the private sector for comparison. And even when it comes to fighting the Nation’s battles, metrics are notoriously misreported, misunderstood, and misused. Furthermore, defenders of the status quo use the unique nature of the military to scoff at anyone who would try to introduce management and reform lessons from the private sector – often with a haughty reference to the failures of Wall Street and Enron (as if the conduct of our recent wars has been enlightened).
When you add these two points to a maddening third – the massive bureaucracy’s conservative organizational culture and legendary ability for self-defense – we are presented with what seems like an intractable challenge.
It would seem that changing this Leviathan could only be driven from the top, but prospects for that are dim. Institutional leadership is split between civilian political appointees (nominally in charge but ephemeral in office), general officers (long-socialized products of the organizational culture needing change), and career bureaucrats (even longer-socialized). But even these leaders lack control over the Congressional mandates that often drive the most inefficient acquisitions and personnel policies. In the face of this entrenched, status quo leadership, top-level reformers can only succeed by the de facto flattening effect of empowering “disruptive” juniors.
Junior and mid-grade officers have recently made a small buzz by discussing a set of ideas loosely labeled “disruptive thinking.” This concept has been criticized roundly by guardians of the status quo, and even some reformers. Supporters of the term have been labeled as “young Turks” – revolutionaries or rabble-rousers – and told that we must avoid scaring the organization if we want it to change. Yet, by definition, a closed system that is resistant to needed change must be disrupted. Thankfully, for all its conservative faults, the military is more forgiving of open discourse about reform than many corporations. The idea is out. Now it needs the purchase that can only come through a collaboration of visionary high-level leadership and bottom-up, disruptive reformers.
Lacking traditional drivers and avenues of reform, as described above, the only way to change an organization is for executives to partner with the lower and middle management to identify broken processes, bloated business units, dysfunctional institutions and paradigms, and ineffective allocation of resources. This partnership is surely disruptive. It partially cuts out the entrenched, status quo upper-middle management of the organization, in essence acknowledging that this conservative layer is constitutionally incapable of decisive change. Yet, without such a disruptive move, executives will never hear the ground truths about their organization, nor the bold options for change that fresh minds, not yet fully conditioned by the pedestrian interests of one stovepipe, have to offer.
This dialogue, if it continues, is worth watching by managers and students of management. The uniqueness of the case does not negate its usefulness to a broader audience. Furthermore, a more efficient, effective defense is in all citizens’ interests.