Corporate Reorganization: Keys for Success

Introduction:

The Department of Defense (DoD) is about to undergo one of its more significant reorganizations since the Goldwater-Nichols Act transformed the Department’s chain of command three decades ago. The 2017 National Defense Authorization Act mandates that the Office of the Under Secretary of Acquisition, Technology & Logistics (OUSD(AT&L)) divide into two distinct Under Secretaries by February 2018: one for Research & Engineering (R&E) and another for Acquisition & Sustainment (A&S). In a statement, Senator John McCain, Chairman of the Senate Armed Services Committee, observed that the technological advancements made by nation-state competitors are “increasing [the] risk of losing the military technological dominance that we have taken for granted for thirty years.” Accordingly, Chairman McCain concluded that “innovation cannot be an auxiliary office at the Department of Defense. It must be the central mission of its acquisition system.”

Currently, OUSD(AT&L) is responsible for over 17 different portfolios, including acquisition, logistics, research & development, and installation management. Successfully dividing the responsibilities associated with these portfolios between two new undersecretaries will be challenging. It will require a coherent business case aligned with a transparent roadmap for implementation, in which all employees understand their role. This approach is an industry-standard and was one of the key observations by a group of Business Executives for National Security (BENS) Members who offered their insight into how to accomplish the OUSD(AT&L) split. In partnership with the House Armed Services Committee, BENS Members outlined the keys for success during a corporate reorganization. This included specific recommendations for how to:

• Divide responsibilities between corporate and division levels;
• Maintain accountability throughout an organization;
• Conduct market research;
• Implement data governance processes;
• Effectively manage talent and empower lower-level employees; and
• Manage the interface between R&E and A&S.

This insight is not intended to be overly prescriptive. Rather, it serves to highlight issues, as identified by industry leaders, that the Department and/or Congress may consider as they examine ways to enable a more agile acquisition process through the OUSD(AT&L) reorganization.