Secretary of Defense Fellows Program FINAL REPORT of the Secretary of Defense Fellows Program...

Secretary of Defense Fellows Program

FINAL REPORT of the

Secretary of DefenseFellows Program

1996-97


AgendaAgenda

Program Overview- Background

- Origin

- Objectives

- Organization

- Tasking

- Results

Corporate Experiences

- Sponsors

- Observations

- Recommendations


SDFP BackgroundSDFP Background

Current military- technical revolution- Political, economic, social

- Shaped by information technology change

Businesses outside DoD successful in:- Adapting to changing global environment

- Exploiting information revolution

- Structural reshaping/reorganizing


SDFP OriginSDFP Origin

RMA Senior Steering Group recommended:- SECDEF Fellows Program

- SECDEF Strategic Studies Group

- Other (Concept Development Center, etc..)

Established by SECDEF memo- October 6, 1994

DoDD 1322.23- September 2, 1995


SDFP ObjectivesSDFP Objectives

Build a cadre of future leaders who: - Appreciate revolutionary changes in

information and related technologies

- Understand skills required to address changes

- Recognize operational/organization opportunities - Will motivate Services toward innovative change


SDFP OrganizationSDFP Organization

Two officers from each Service (USMC one)- High flag/general officer potential

- O-6 or O-5

- Senior Service College credit

Permanent Staff- USD(P)NA oversight

- SDSSG Director, Deputy, Admin


SDFP TaskingSDFP Tasking

Ten months at Sponsoring Company Group Education

- Seminars- Wargames

Final Report and Briefing- To SECDEF and Services- Work performed- Insights gained applicable to DOD culture/operations- Recommendations for changes to DOD operations and organizations


SDFP ResultsSDFP Results

Program objectives fulfilled- Education, education, education

- More sponsors than fellows

- Inter/intra-group experience sharing

Unique corporate experiences

- Strong corporate support

- Executive/operational level mix

- Mergers/restructuring


SDFP SponsorsSDFP Sponsors

95- 96- Hewlett-Packard, Lockheed Martin, Loral, Oracle, Northrop Grumman

96-97- American Management, CNN, CITICORP

McDonnell Douglas, Microsoft, Sarnoff

97-98- Andersen Consulting, DirecTV, Mobil,

Northrop Grumman, Sears, Southern Company


SDFP Corporate SDFP Corporate ExperiencesExperiences

Citicorp/Citibank

- LtCol Gary Barthold

CNN- COL Colin Dunn

Microsoft- CAPT Jim Engler


Citicorp/CitibankCiticorp/Citibank

Large, Complex, Global Enterprise- 90K Employees and 50M Customers

- 3,200 Sites in 98 Countries

Innovators in Management and Technology

Corporate Technology Office - Strategic Planning - Risk Management - Organization - Operations - Information Security - Human Resources - Technology Development


Citicorp/Citibank Citicorp/Citibank ObservationsObservations

Increasing, Non-Linear Change- Uncertainty

- Continual Strategic Adaptation

Institutionalized Change

- No One Predictable Scenario

- Tradeoff Optimization for Adaptability

- Adaptability provides Stability



Top-Down Flexible Planning

- Corporate Vision

-- Long-Term Broad Common Direction / End State

- Balanced Scorecard

-- Near-Term Objectives and Metrics (Max. 6 Qtrs)

- Windows on Risk

-- Tripwires allow Timely Decision Making


Citicorp/Citibank Citicorp/Citibank Observations/RecommendationsObservations/Recommendations



Information is the Core of the Financial Industry

Adaptive, Enabling Information TechnologyInfrastructure- Information Technology as Flexible as Operations

- Technology Fused with Business

- Integrated Technology Processes



Common Network Centric Architecture

- Building Plan for a Responsive Infrastructure

People

- Military can not Compete with Compensation, Outsourcing

Vendors

- Strategic Partnership, Cooperative Solutions, Outsourcing

Information Security

- Operational Diligence, Continually Raising the Bar

Innovation

- Technical Solutions are Already Out There

- Focus on Applying, Integrating, and Providing Guidance


Citicorp/CitibankCiticorp/CitibankRecommendationsRecommendations

Agile, Adaptive, Flexible

- Planning, Organization, Architecture

- Shorter Planning and Programming Cycles

- Accept and Manage Risk



Common Architecture- Network Centric - System of Systems

- Interoperable, Consolidated, Outsource

- Adaptable, Scaleable

- Limit Deviations, Cost vs Value Added

- Directed from the Top, Tighter Fiscal Control

Technology Fused with Operations- Information Technology can not be an

Afterthought Planned Separately


Citicorp/CitibankCiticorp/CitibankBalanced ScorecardBalanced Scorecard

Financial Performance

Customer / Franchise Performance

Strategic Cost Management

Risk Management

People Management


Citicorp/CitibankCiticorp/CitibankWindows on RiskWindows on Risk

- Country Risk - Risk Rating - Counter-Party - Distribution /

Underwriting - Equity / Sub-Debt - Product Concentration - Limits - Industry Concentrations - Price Risk - Liquidity Risk - Global Real Estate - External Dependency - Control (Audit) Risk - Technology - Business Risk Review - Legal


Citicorp/CitibankCiticorp/CitibankWindows on RiskWindows on Risk

CEO

GLOBAL REL

BANKING

PRIVATE

BANK

GLOBAL

CITIBANKING

EMERGING

MARKETS

CARDS

OPERATIONS &

TECHNOLOGY

FINANCIAL

CONTROL

HUMAN

RESOURCES

EXTERNAL

AFFAIRS

AUDIT *

DIRECTION

COORDINATION

MATRIXED ORGANIZATION

* ADDITIONAL STAFF SECTIONS ARE NOT SHOWN

RISK

MANAGEMENT



Citicorp/Citibank


CNN- COL Colin Dunn



Cable News NetworkCable News Network

News Standards: Accuracy, Balance, Timeliness

“AT CNN, SPEED IS LIFE.”--Tom Peters

Eight News Groups

31 Bureaus

1130 Affiliates

Organization:


Cable News NetworkCable News Network


CNN ObservationsCNN Observations

Work Culture

- Intelligent

- Sense of Urgency

- Dedicated

- “No Frills”

An “Innovation” Culture

- Encouragement to grow, not maintain

- Room for experimentation, mistakes



Paperless, Deskless

- Internet potential

- Increased leader contact

Adapting Technology

- “Buy what’s helpful, not what’s new.”

- Work culture is the key


CNN RecommendationsCNN Recommendations

Change the Culture of the Force- Encourage growing, not maintaining

- Make room for local experimentation, mistakes

- Knock down traditional “idea firewalls”

Expand DoD Internet/Intranet(s) Use- Internal functions (boundless)

- External functions



Citicorp/Citibank


CNN- COL Colin Dunn



MicrosoftMicrosoft

20,000 + employees / 50 countries and growing $8.67 Billion Revenue in FY 96 $12 + Billion in FY 97 R&D = 25% Revenue Enterprise Customer?? Equity Compensation Model “The Future ain’t what it used to be”


Microsoft ObservationsMicrosoft Observations

Bill Gates- Vision / Technology / Business

Executive Committee They Love a Good Fight

- Sun Tzu strategy

- No quarter given

- Market domination, not share

Customer focus


MicrosoftMicrosoft ObservationsObservations

Feedback- Customers/ Employees

Partners- Strategic Alliances

Creativity

- No perks

- Open communications demanded


Microsoft ObservationsMicrosoft Observations

“We eat our own dogfood”

Organized Chaos

Robust Intranet / Aggressive use of Internet

Headcount, costs, infrastructure

Hire the best, or just don’t hire


MicrosoftMicrosoft RecommendationsRecommendations

Make the Network of Networks interoperable

Leverage C3S technology- Communications, coordination, collaboration

Cut non-warfighting infrastructure

“Partner” long-term with leading-edge companies


MicrosoftMicrosoft RecommendationsRecommendations

“Recruit Smart” for the 21st Century force

Exploit advances in Distance Learning

Purchase Info Tech training and support



American Management Systems- CAPT Nan Honey

McDonnell Douglas Aerospace- Lt Col Jim Kowalski

Sarnoff Corporation- Lt Col Kim McKenzie


American Management American Management Systems (AMS)Systems (AMS)

Global business and information

technology consulting firm– Business Process Re-engineering– Change Management– System Integration– System Development– System Implementation

AMSAMS

“Innovative solutions to its clients by partnering with them to achieve breakthrough performance through the intelligent use of information technology”


AMS ObservationsAMS Observations

Business Process Re-engineering (BPR)– Military Sealift Command

Change Management/Organizational Development

– Achieving Breakthrough Performance (ABP)

New Business Unit formation – Utilities Industry


AMS ObservationsAMS Observations

Strategy and business/financial plan roll out– Rolling 3 YR plan

Infrastructure Management– “Hotelling”

People Management – Inclusive Leadership Committee (ILC)– ReVisioning Administrative Processes (RAP)


AMS RecommendationsAMS Recommendations

Acquisition

- Limit time

Culture

- Focus on work environment

- Incentivize efficiency/savings

Organization- Info Tech can support any structure

- Mobile computing and collaborative Info Tech at

individual level



McDonnell Douglas McDonnell Douglas AerospaceAerospace

Footprint– $8B Revenue, 36,000 Employees, 14 Major US

Facilities– US Government 68% of Business– International Sales 32% and Growing– 300,000 US Workers Tied to MDA Products

Culture– Technological Innovation – Product Performance– “Fighterland USA”



Business Development Division- Sales Organization

- Owns Market Planning and Analysis Team

- Produces Strategic Plan and Operating Plan

Phantomworks- Advanced Systems and Technology

- Matrixes with Programs and Supporting Units

Work Experience


McDonnell Douglas McDonnell Douglas ObservationsObservations

Strategic Planning– Formal Strategic Planning--PROGRAMMING– Scenario Based Planning--STRATEGIZING

System of Systems (SoS) – Organize Around Mission Areas– Cross Traditional Boundaries– Design Products for SoS (Joint Warfare Center)



Virtual Company– Time as Competitive Advantage– Link Partners, Suppliers, Customers– Invest in Technology That Gives MDA Advantage

One Vector Off– Concentrate Resources on Core Business– Avoid “Intriguing” but Unrelated Business

Opportunities– Spin-Off Companies/Negotiate Royalties


McDonnell Douglas McDonnell Douglas RecommendationsRecommendations

Reconsider “Planning” in PPBS– PPBS Good at Budgeting--Not Strategy– Institutionalize Scenario Based Planning at

Several Levels in DoD— Examples: AF 2025, Army After Next

Restructure for Mission Areas– OSD Organized for PPBS--Reductionistic – Organize Around Holistic Mission Areas

— Example--JROC



Experiment with a Virtual JTF – Mission Area Focus--i.e., Precision Strike– Tie Core Competencies Together in Virtual Unit– Train as a Unit (Real and Simulated)

“One Vector Off” Criteria– Core Competency is Warfighting– Example:

— Organic Maintenance within One Vector— Depot Maintenance is Not within One Vector


Sarnoff CorporationSarnoff Corporation

Small, single-site enterprise Mission...create technologies that change

the world Core competencies in three major areas:

information, biotechnical, and solid state Growth experienced in three phases

– Phase 1: RCA Corporate Research Laboratory– Phase 2: Spin-off and survival– Phase 3: Vision of “10-in-10”


Sarnoff CorporationSarnoff CorporationObservationsObservations

Guiding principle of operations--strategic adaptation

Vision centric, top down planning Reorganizing principles

– Optimize growth and reward performance– Preserve organization flatness – Spin-off non-core competency activities



Creative Culture--hitech is a state of mind Highly efficient matrixed workforce Examples of Sarnoff Technologies

– Micromachines/microfluidics– Data compression and distribution – Generalized Emulation of Microcircuits– 3D Emersive Visualization Environment


Sarnoff CorporationSarnoff CorporationRecommendationsRecommendations

Organizing Ideas– Spinning-off with business principles– Partnership Brokers--both internal and external

Creative Culture– Matrixing benefits through exchange programs

Acquisition and the “Hollywood Business Model”– Commercial is more than catalog sales– Government Agency Teaming approach


Sarnoff CorporationSarnoff CorporationRecommendationsRecommendations


SDFP Common SDFP Common Observations/RecommendationsObservations/Recommendations

Internets/Intranets- Enterprise-wide architectures/protocols

- Paperless/deskless/virtual

Strategic Planning/Vision- Topdown, not bottom up

Fiscal Planning- 18-36 months max

Outsourcing– Personnel– Infrastructure


SDFP Common SDFP Common Observations/RecommendationsObservations/Recommendations

Partnerships/Teaming Organizations

- Flexible/dynamic structure

- Change incentivized

Culture- High employee value

- Junior level participation

Innovation- Risks taken/mistakes tolerated

Secretary of Defense Fellows Program FINAL REPORT of the Secretary of Defense Fellows Program...

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