2012 ADC WINTER FORUM | PAGE 1 Installation Leadership Forum Dr. Craig College, February 28, 2012.

2012 ADC WINTER FORUM | PAGE 1

Installation Installation Leadership ForumLeadership Forum

Dr. Craig College, February 28, 2012

Efficiencies… the Last 12 Months

• Secretary Gates efficiencies ($100B) and reductions ($78B)

• POTUS April 2011 deficit speech… cut $400B in defense over 12 years… amended by OMB to 10 years

• Budget Control Act of 2011… cuts $487B from defense over 10 years, and potentially an additional ~$500B with sequestration

• FY12 Army budget ($203B) enacted 23 December 2011

– ~$13B below President’s Budget (PB) Request ($216B)

• POTUS and Secretary Panetta announce defense strategy 5 January 2012

• FY13 Army PB ($185B) submitted without consideration of sequestration

2012 ADC WINTER FORUM PAGE 3

The Fiscal Driver

Federal Deficit/Surplus

Federal Surplus / Deficit

-1,600

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

TY

$ in

B

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Su

rplu

s / D

efi

cit

as %

of

GD

P

CBO 5 Mar 10 ProjectionCBO 5 Mar 10 Projection

40-year average(1969-2009):

-2.6%

FY08 – $459BFY09 – $1413BFY10 – $1500BFY11 – $1341BFY12 – $915B

FYDP average(2011-2015):

-5.4%

Federal Surplus / Deficit

-1,600

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

TY

$ in

B

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Su

rplu

s / D

efi

cit

as %

of

GD

P

CBO 5 Mar 10 ProjectionCBO 5 Mar 10 Projection

40-year average(1969-2009):

-2.6%

FY08 – $459BFY09 – $1413BFY10 – $1500BFY11 – $1341BFY12 – $915B


-5.4%


-5.4%


.0 M

1.0 M

2.0 M

3.0 M

4.0 M

5.0 M

6.0 M

7.0 M

8.0 M

$ B

$100 B

$200 B

$300 B

$400 B

$500 B

$600 B

$700 B

$800 BDoD Military Manpower DoD Total Manpower DoD $ (FY12 Constant $) FY01-11 Base (FY12 Constant $)

Korean WarKorean WarArmistice (1953)Armistice (1953)

Vietnam WarVietnam WarEnds (1973)Ends (1973)

Height ofHeight ofVietnamVietnam

War (1968)War (1968)

Gulf WarGulf WarEnds (1991)Ends (1991)

Height ofHeight ofCold WarCold War

(1985)(1985)9/119/11

(2001)(2001)

The Defense Budget Over Time• Discretionary spending is ~35% of total federal budget – Defense budget is ~50% of discretionary spending • Increasing emphasis on reducing spending/deficit – Congress and the Administration• Historically, funding levels have decreased as military demand decreases

BCABCA

BCA BCA impactimpact

??

OCO?OCO?


The Army Budget

$78 $84$97 $103 $103 $105 $112

$131 $143 $144 $140 $135 $135

$26 $40

$64 $72

$109

$121 $92 $99 $100

$68 $50

$78$86

$123

$143

$167$177

$221

$252$235

$243 $240

$203

$185

$ B

$50 B

$100 B

$150 B

$200 B

$250 B

$300 B

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Execution Approp Request

Base OCO OCO Request


A Strategic Budgetary Way Ahead

• Future budget decisions must…– Preserve ability to provide national security– Be capability-based (not ad hoc or piecemeal)– Not break faith with the men and women who are fighting, or their

families (preserve the all-volunteer force)• Challenges

– Impact of budget Control Act 2011– Uncertain status of FY13 Defense Appropriation timelines– Ability to sustain modernization objectives

• To achieve budget reductions, everything is on the table– Force Structure, O&M, and Investment programs– Military compensation– Military health care


• FY 12: Current Year / Year of Execution• Must adapt to a ≈$1.5B reduction from FY11• Must reduce manning by 3766 employees this FY

• FY13: Transition Year•Execute changes in organization, manning, contracts, & services to adapt to expected funding

• FY 14-18: IMCOM Operations in the “New Normal”•IMCOM delivers to standards set by HQDA adapting to a ≈$2.5B reduction from FY10 funding levels

Three Time Horizons

Sustain Army’s Commitment to Soldiers and FamiliesSustain Army’s Commitment to Soldiers and Families2012 ADC WINTER FORUM PAGE 8

Installation Management Efficiencies

• FY11: Eliminated 2620 Temporary and Term Employees • FY12: Further reductions of Department of the Army

Civilians• MILCON transfer to SRM• Reductions in IMCOM reliance on contractors and

quarterly reviews of contracts• Reductions in Conferences and Travel• Reductions in Regions from 7 to 4• Eliminated National Capital Region Division • Eliminated 2-Star FMWRC and merged into IMCOM HQs


Organizational TheoryOrganizational Theory

Hierarchical Chain of command Centralized

Starfish“No head, cut off an arm, and it

grows into a new starfish”

Spider“Cut off the head and it dies”

The most affordable future for military installations and their surrounding communities is to create partnerships in far greater numbers that feed off each other’s strengths and economize on our weaknesses to survive the coming economic challenge. These approaches must become routine and pervasive and the Community Covenant is one such effort.

No defined leader (catalyst) Devoid of chain of command (circles) Decentralized Open system Standing on five legs Passion and enthusiasm

Building Spider and Starfish Collaboration and Partnerships

9Concept taken from : The Starfish and the Spider: The Unstoppable Power of Leaderless Leadership by Ori Brafman and Rod Beckstrom


A Starfish Strategy

• Army Garrisons and municipalities tend to think like spiders – but we both need to begin thinking like starfish

• The deleterious effects of municipal and federal budget challenges can be ameliorated through public-public partnerships

• Army Community Covenant is one very successful example - BUT

• We must catalyze the search for partnerships to solve everyday problems shaved by communities and installations

• Much remains to be done to make these broadly applicable – most importantly, new ways of thinking


Impact on Defense Communities

• Potential Reduction in Department of the Army Civilian and Military personnel

• Potential reduction in dollar value of contracts

• New opportunities for Public-Public and Public-Private initiatives

• Some potential for additional units arriving from overseas


Team of Teams

“We play with our cards facing out.”


2012 ADC WINTER FORUM | PAGE 1 Installation Leadership Forum Dr. Craig College, February 28, 2012.

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