Implications of RO Concepts in Re-Designing the Business Side of the US Army

Speaker A I think the application of a principled theory of a way to look at an organization such as levels of work and levels of human capability informs us in a manner that we can then look for the highest value of limited resource application to transforming the army. I've got a three year appointment to help the Secretary do this and he also leaves at the end of this administration. It will not be finished. This huge undertaking will not be finished in three years. But we have to leave something behind. And I think what we leave behind is a principled way to look at this. Now, in terms of the organization itself, the army fights in a seven level organization, and I think that's one of the key lessons learned, certainly informed through my study and experience looking at all warfighting entities for the last several thousand years. They tend to exist in seven level organizations. That's how the army is structured and how it's been structured for some time. And are those seven levels fairly consistent with the Jack's seven levels? The seven levels, in terms of the way we fight, are very consistent with Elliot Jack's theory. In fact, he has examined that several years ago in the army and I think confirmed that. The business space of the army, however, is nowhere near as consistent as that. In fact, it's different in different commands, it's different in different locations, it's different in different functional areas. And so it gives us an opportunity to sort of hold a mirror up from the operational side of the army, the warfighting side of the army, to the generating side or the business space of the army, and say, see, we do know how to do this and we do know how to look at an organization. And in fact, we use those principles rather implicitly. You don't hear people in the army and the uniform side of the army talking about, well, I'm going to get promoted from level six to level seven. That doesn't happen, but it is the structure in which they live. We have to be more explicit about this in the business space. We have undertaken some studies now. In fact, we really used a model that was explained to me by Sir Roderick Carnegie in Melbourne about the way he did this. He applied the theory in CRA 20 years ago to go right into the back office of the leadership. And so we looked at this rather innocuously sounding organization called the Office of the Administrative Assistant, which is close to a billion dollar back office operation. There's nothing like it in the world. And so we applied the theory. Steve Clement was instrumental in helping us do this, applied the theory and really did do a thorough scrub of the organization, reformed it, saved millions of dollars in terms of cost, redeployed people to more productive work, redeployed some individuals into places where their contribution could be more valuable. And I think we sort of proved the principle that you could do this in the Army's business space. And then the next steps are we're going to go into the Installation Management Agency of the army, which is a worldwide, multi billion dollar sort of supervisory agency that provides basic homeroom housekeeping services to the army in the field. It's where all the post camps and stations are. It's where these small cities that are around the world and around the United States that house army units and families and they have fire departments and they have schools and they cut grass and they have gate guards, et cetera. All the housekeeping functions of the United States Army, which at $167,000,000,000 worth of budget, is a lot of housekeeping function worldwide. And so we're going in there to look at them, and we're also going to go to another post, a specific level five operation really, and look at the work there. But the thing I'm really interested in, in applying the theory and what I think I really learned from the experience that I had with Sir Roderick and then going out with Sam Walsh and Rio Tinto in Australia was this value proposition of the overhead. And that is where when I started on the Army Science Board, that was the impetus to look at organizations just based on we had another businessman who came in as the current secretary, is just this notion that it is the higher headquarters responsibility to ruthlessly attack overhead. From my business experience, having been in general management, where I attacked everybody else's overhead in terms of the value proposition because I had to pay for it, and then also being on the indirect side in things like business development and finance at a corporate level, I had to defend myself as overhead. So this tension of the value proposition overhead, I saw this play out very clearly in Rio Tinto almost at a subliminal level. The organization is so right, so well structured, so founded on principles that unnecessary overhead just cries out at you and begs to be challenged. That would be a wonderful outcome in the United States Army. But I can tell you that we have layers upon layers in the business space. We have organizations that were founded for good reason some decades ago, the reason for which, quite frankly, escapes everyone, including some of the people in those organizations right now, that that value proposition has long waned. So I think the application of theory to go out into what are essentially level five organizations and help them look at their own productivity, that will be useful. But the real benefit to the army will be to look up and examine the value proposition of the overhead at the higher levels. And I think we have the leadership now in the army with the chief of staff and the secretary that are willing to take that sort of humility back at the headquarters, that this will cause because I think again, we've proved the principle that it can work in the army. And now we're going to launch it on a much broader scale.