Director of Administration & Management Michael Donley Remarks at the Defense Management Institute Kick-off Event

Thanks to Gen. Schwartz, Peter, and the IDA team for hosting today’s kick-off event for the Defense Management Institute.

I particularly want to thank all of you, here and on-line, for joining us. Part of our objective with the DMI, which I will discuss further in a few moments, is to build a community of practice – and that requires a range of expertise across functional disciplines, and building bridges across FFRDCs, non-profits, academia, and the private sector. So, thanks again to Peter for a wide range of invitations, and to all of you for saying “yes” to today’s event.

And thanks to Deputy Secretary Hicks for her remarks, providing the strategic context for this initiative. The Secretary and Deputy Secretary of Defense have two of the most difficult jobs in Washington. And at the highest level, the goal of the DMI is to assist our defense leadership and Congress in making informed decisions regarding management of the defense enterprise.

My role this morning is to provide a little more background on why we’re establishing a DMI, and what we’ve asked Peter and his team to help us do. There are some important details that remain to be addressed – such as how we will work across the DoD team to develop and coordinate priorities for a DMI research agenda – but today we’ll provide some insights on the immediate tasks ahead.

So, Why create a Defense Management Institute?

• First, we’re recognizing defense management as an important area for research
  • As the Deputy Secretary noted, there is the uniqueness of DoD: missions, size, diversity in composition. It is, actually, quite breathtaking.
    • In addition to the military capabilities of the five Services, there is a Medical system, school system + universities, grocery chain, intelligence agencies, communications, research, contracting, acquisition, logistics, and more. All supported by multiple work forces and personnel systems.
    • Using the latest World Bank GDP data, DoD’s annual budget would rank among the top 20 largest economies in the world.
    • As a thought experiment, ask yourself –“How would I manage an economy the size of the Netherlands?” But instead of a free market economy, it is a command economy – with all its resources centrally balanced and distributed among competing missions, functions, and activities, and approved annually through an open democratic process.
• Managing this enterprise involves a combination of academic disciplines --
  • Public Administration
  • Business Administration
  • Political Science
  • International Relations
  • Science / Engineering, etc.

• And yet there is very limited (if any) formal academic preparation outside DoD’s most senior schools.
• It is certainly inter-disciplinary work that needs to be viewed through the complex lens of DoD’s many missions and requirements…. Its organization, multiple management processes, and its civilian and military cultures.
• This connectivity to the defense enterprise is critical for two specific reasons: First, it is the business side of DoD that supports and enables the building of combat capability in the warfighting elements of the department. And second, one of the bases for successful change and reform is a solid understanding of how DoD operates to begin with.
  • I use Google Maps and GPS as an analogy: getting from point A to point B
  • GPS starts with where you are --- a map that includes your destination will not be helpful if you don’t know where you are starting from
  • And, if I can take this analogy an addition step, you need to know the weather for your trip, potential roadblocks, detours, and alternate routes
• In fact, our experience suggests that improving DoD management and business operations, getting from point A to point B, can be just as challenging as building new technologies and capabilities on the military side.
• Second reason for the DMI, is that we Need to promote a learning culture in defense management
• Here’s a second thought experiment concerning the systematic availability of knowledge: What might happen – what could we potentially do -- if we approached research on DoD management and business operations with the same discipline, focus, and preparation that we bring to the research and development of weapon systems?
• The “valley of death” to which the R&D community refers in bridging technology development with acquisition programs of record, has a counterpart on the business side. Using a more friendly description, it is “Crossing the Canyon” between best private sector business practices and the management and administration of DoD.
  • How do we know a “best business practice” when we see it?
  • And how do we translate private sector experience to the public sector, then from the public sector into DoD?
• DoD’s long history of management, technological, and organizational change has been evolutionary and at the same time punctuated by senior leader or congressional interventions and world events.
• We should know that history better than we often do, and we should be capturing lessons learned from our successful and less than successful experience.

• The rationale for the DMI also includes recent guidance from Congress (Sec. 908, FY22 NDAA) directing the Secretary to carry out a set of activities to improve effectiveness in defense management, with the goals of incorporating private sector management practices and technologies, and enhancing the capabilities of the defense management workforce.
• And in the FY23 NDAA (amendments to Sec. 125a) Congress as directed “reform focused research to improve management and administrative science” to be included among covered elements of reform.

What have we asked DMI to do?

• Build a digital database of prior research and experience (Task)
  • Collect, catalogue, and make available a digital library of reports / studies related to defense management and reform
  • Develop resources and lessons learned
  • They’re already out there – you’ve been producing them for decades.
  • Let’s bring them together in useful, organized, and searchable formats
• Build a defense management community of practice (Task)
  • Bring us together – practitioners, academics, FFRDCs, non-profits, and management consultants – for structured conversations. Expertise is distributed, but there is a loose community that would benefit from collective interaction
    • Build bridges with commercial sector… bridges that will help span private sector ideas across the canyon to potential DoD implementation
    • We need better visibility on your good work
    • IDA, RAND, DBB, BENS, NAPA, PfPS – not to mention DoD’s own graduate- level schools and war colleges.
  • No single element can do this alone, no single organization has the expertise, no single element can corner the market on defense management expertise
  • Build more non-partisan bench strength for the future
• In addition to building a digital repository of and for research, and helping us develop a community of practice, there are two specific tasks DMI is taking on: one looking back, one looking forward.
• Looking back: Why was the CMO experience less than successful, and what should we learn from the experience? Much of our focus over the past 20 months has been charting the way forward following Congress’ dissolution of the CMO position at the end of 2021. But many will recall this was a 15-year discussion between DoD and Congress, and statutory functions associated with the CMO function (such as the many elements Government Performance and Results Act) remain. DoD should be documenting and applying lessons learned from that experience as our work continues.

• Looking forward: We’ve asked the DMI to assist the department in meeting requirements of Title 10, Sec. 192 which requires periodic, cyclic review of Defense Agencies and Field Activities. The precise details of this effort are still under discussion and will be reviewed over the weeks ahead. But the focus on DAFAs is intentional. This category of DoD components (Defense Agencies and Field Activities) is among the most complex and sometimes misunderstood parts of the department. As we update our approach to Sec. 192 reporting, the DMI will help us develop a deeper base of data and knowledge on DAFA operations.
• Finally, you may ask: What does success look like? I would offer two measures for consideration:
  • In the future, when DoD leadership or a congressional committee is considering establishment of a new component, the consolidation of agencies or functions, or wants to know how long it will take for their management initiatives to reach a “fully operational capability”, we will have available -- based on the DMI’s work -- a ready reference of DoD’s history on that subject, lessons learned from related or prior efforts, and a ready stable of experts who are current on the issues and ready to support key decision makers. The time and distance in knowledge that we travel to answer these questions would be shorter.
  • Another measure – is to develop and transfer that knowledge more quickly to a new generation of defense managers… so they have more time to get even better.

There is much more to do in building and operating a network of defense management expertise, developing a shared understanding what constitutes best business practices, and how to implement them across the DoD enterprise. Establishing a DMI is a humble beginning, but it is a start.

DoD’s organization and management will never reach a state of perfection; and some of us are too jaded to believe that rapid progress in solving “X” is within our immediate reach, “if only we would…” (you fill in the blank).

The good news is that, as GAO and others remind us: In an institution as large and complex as DoD, there is always a target rich environment for improvement at many levels.