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Secretary Rumsfeld Interview with Business Week

Presenter: Secretary of Defense Donald H. Rumsfeld
June 22, 2001

Tuesday, June 19, 2001

(Interview with Stan Crock, Business Week)

Crock: I'm sure when you came back after 25 years, even though you've kept a hand in various things in Rand and they obviously did a lot of work for the Pentagon, you knew that you'd have some surprises when you came back, both positive and negative.

Rumsfeld: Uh huh [affirmative].

Crock: Can you elaborate a little bit on some of each?

Rumsfeld: I don't know that the word surprise is quite the right word. The differences, the big differences.

I think one is the one that the president put his finger on, and that's the tone in the town. I mean his emphasis on trying to restore some sort of civil dialogue and discussion and debate on important issues is not an accident because things have changed in this town dramatically.

I was in church Sunday and bumped into a former Democratic congressman who served with me in the '60s, a wonderful fellow. He brought it up. He said isn't it amazing what's happened in this town? We used to play paddleball down there in the gym and had very close friendships that led people to moderate their behavior. And that's changed notably.

You watch the tone and the tempo or the tenor of a congressional hearing or a floor debate, and it's different here in Washington.

The press is different. With the Vietnam War and Watergate and the various events that have occurred have kind of changed that somewhat.

The Goldwater/Nichols is a significant difference in this particular department.

On the other hand, a lot of things are very much the same. People are people, and I like people, so I kind of enjoy life and like working with different kinds of people on different kinds of problems. The work is still important to the country.

Crock: Within the Pentagon more specifically, were you -- these are just hypotheticals -- surprised at let's say the state of disrepair of the infrastructure, spare parts problems, personnel problems? Were you perhaps pleasantly surprised that some of the weapons that might have been dismissed as Cold War relics actually had rationales for more contrast? Positive and negative surprises in that respect here in the building.

Rumsfeld: Two things. Yes, the things were worse than I had been led to believe in this sense. When you look at it from outside you can hear things but you don't see them and feel them and touch them. When you actually hear someone say to you well, the best practices in the private sector is that you would recapitalize your infrastructure in the aggregate every 67 years, and we're currently at 198 years recapitalization. That's multiples of best practice.

Then you go down to Fort Stewart and you see the paint peeling off and you see the asbestos and you look at the places where we're asking these people to live, and it is personalized.

Kind of like when I was in government, I thought I understood business, and I did, it turned out. I understood it intellectually and one-dimensionally, but I had no idea three-dimensionally and [passionately] what it means to have government decide to review something and have a company with no money go broke while government's reviewing something. They don't get it in government. How time helps the big guys, and if they've got the lawyers or lobbyists making their financing, they can sustain themselves during a period of government review whereas the little guys expire.

When you look at housing where someone's actually living, it's quite different than looking at 67 years best practices and 198 on the other hand.

The other thing that's intrigued me is the processes, the number of things that go on for something to happen. The number of different stock points that an issue has to pass through before it can be approved. The number of years it takes to produce a weapon system has lengthened, it doubled. The number of people that have to be in a room when a decision gets made. It is unhealthy.

I have a way of assuming that I don't know a lot, which I don't -- you can't know everything in the world and I certainly am a long time away from this place, but I've done different things in my life. I've gone in the pharmaceutical business having not studied chemistry or biology; and I've gone into the electronics business not studying engineering. If you're dealing at a level of aggregation that I tend to deal in things, I could run a pharmaceutical company but I couldn't have been the head of research and development, and I probably wouldn't have been very good at running the market [information], and I might not have been very good as general counsel because I'm not a lawyer. Most of the jobs I couldn't do, but I could do the other ones.

Here, to do that what you have to do is ask a lot of questions and you try to understand what people understand about what they think they know. And I have asked dozens and dozens and dozens of people to explain to me how something moves through this process. And a lot of smart people, a lot of people who have been around a long time, a lot of people who think they know and they can't explain it.

The process is so snarled and so confused and so overlapping that it does not lend itself to surfacing, unlike, and balancing them against each other. It can surface this weapon system, the advantages and disadvantages of this weapon system versus not having it; or this weapon system versus that weapon system. But the idea of being able to really consider and give texture to an issue like how do you balance the risk of not investing in your people against the risk of a war plan against the risk of not investing in the future against the risk of not fixing your acquisition system? How do you look at these categories of risk? There's operational risk they know very well and they understand it and they can do that. But there are also the risks that -- a nice, clear balanced risk.

Whatever the reason, the process between the Congress and this department and successive administrations has resulted in the situation where we have under-invested in people and the morale and the infrastructure and as a category, things that are people related -- where they work, where they live, how they're treated.

Second, we've under-invested in the weapons systems. So you see a shipbuilding budget that at steady state is headed towards 220, down from 300 plus today. We're looking at an average age of aircraft rising over the past decade to the point where we now have to spend a great deal more on spare parts and repairs and down time than we would if we had like if you had tires that were 20 years old instead of three years old, five years old, ten years old.

The process, for whatever reason, shorts those things, and yet in most enterprises one recognizes that... Take the pharmaceutical business. You couldn't short the R&D. And you get by, and no one's going to notice, and in three, five, seven, eight, 10, 12 years, you won't have a business. That's what's happened here.

Why it is that with good people here, good people in the Congress, good people in the country, dedicated, patriotic, caring about it, why would that interaction produce unsatisfactory results like that? It's intriguing. Yet people don't want to change anything. They say, if you talk precedents you might be changing something, and if you're changing something it makes people nervous and concerned and apprehensive, and that's understandable. Change is hard for people.

It is hard for me to get my head wrapped around the idea that when we look at the product and are concerned about it and we recognize that it's this process that's producing that product, and that you ask people about the process and they can't explain it with clarity then you know you've got a problem with the process. The institution is not working the way it ought to work and it's not interacting with its audiences like the Congress, the contractors, the men and women in the armed services. There's something about it that's got to be fixed and we're going to figure it out.

Crock: Gordon England was saying that the institution is more product oriented rather than process oriented than a company is.

Rumsfeld: It is.

Crock: And there's simply not the same emphasis as in a company on improving processes.

Rumsfeld: And the metrics tend to be more input and effort oriented than output and result oriented which of course in business you do that about two years and they find a new CEO. (Laughter)

Crock: Let's talk about some of these processes. Like (inaudible). You mentioned that. The process is double.

Rumsfeld: At a time when technology is turning over faster. You designed it to produce weapons that are well behind the technology curve.

There have been 128 studies, so we decided not to do another one. And we decided to look at the studies. Sure enough, you look at the studies, you drop a plumb line through them and about 80 percent of them are the same. Most people had come to some reasonable agreement as to what needs to be done. So we're going to try to get some of those things done.

Crock: Examples?

Rumsfeld: Well, shortening the time that it takes, trying to find a way -- I'm told that the last major weapon system that has gone through this place without a major legal and political battle was the F-16 when I was SecDef, and I don't think there's been one since.

The ones that Vice President Cheney tried to deal with when he was here as secretary of defense are still going on, in courts. Fines being paid, adjudications taking place...

Crock: The A-12?

Rumsfeld: Nothing's ever over. It's just amazing.

What are you writing about? How about the service secretaries? They're very interesting people. The president's quite excited about them. We were over there yesterday and had a picture taken with them in a formal swearing in, official swearing in. You know this has been (inaudible), and you (inaudible) leadership centers, and they are going to be leaders in their services, and I'm delighted they're here.

Crock: Are you concerned, one of the things talked about at the briefing yesterday was that they want you to provide an incentive for reform and good practices, and that would be retaining savings that were created...

Rumsfeld: We've got to find a way to do that. If you talk to skipper of a base, he's got no incentive to save a nickel. He just loses it the next year. You sit down and talk with anyone, a colonel in the Marine Corps, ask him about the base he's on. (Inaudible). This is taxpayers' money. We have to care about it. And if the system is designed in a way that there is not a single -- there's no way you can run around and monitor everybody. We've already got 24,000 auditors crawling all over this place. You could add another 24,000 auditors, which is more shooters than we can find.

You could do that and you wouldn't improve this place one bit. We've got to get people incentivized to do the right thing. People want to do the right thing. They don't want to do the stupid thing.

Crock: Does the rotation of personnel, the fairly frequent rotation of personnel, undermine that incentive? That skipper is not going to be at that base in X years to reap the benefits of whatever changes he or she puts in.

Rumsfeld: I have been asking that question every day for four or five months. I can't say I have the answer because David Chu just arrived, the under secretary for personnel and readiness, and the QDR is just starting. But I'll tell you if you ran a business this way you'd go broke awful fast.

How can you run people through every 10, 12, 18 months in a job and expect them to know anything about the job? All they do is skip along the top of the waves. They don't even know the mistakes they've made because they're never there long enough to see them. There has to be a better way to do it.

Crock: It's basically a story about the Pentagon as a turn-around project.

Rumsfeld: It's a great place, this institution, and they're wonderful people. And you don't spin anything on a dime, let alone a place this big. We have an enormous task. There is resistance at every corner to change. The important thing is that it's the taxpayers' money. We have an obligation to them. Some carpenter or plumber or waitress in Chicago is making their money and sending their taxes in here and I think everyone in this institution has an obligation to care about it and see that we manage those dollars as efficiently as is humanly possible.

Second, what we're here for is enormously important. To be able to contribute to peace and stability in the world. Without that, we don't have prosperity and we don't have economic opportunity.

So it's an important task that we're about, and we have every responsibility to try and do it right, and that's what we're going to try and do. And it's fun trying.

Crock: I really appreciate your time, sir.

Rumsfeld: It's nice to see you.

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