The Business of Government Hour


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The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

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Michael Hayden interview

Friday, August 31st, 2001 - 20:00
Michael Hayden
Radio show date: 
Sat, 09/01/2001
Intro text: 
Michael Hayden
Magazine profile: 
Complete transcript: 

Arlington, Virginia

Monday, July 16, 2001

Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and the co-chair of The Endowment for The Business of Government. We created the endowment in 1988 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment by visiting us on the web at

The Business of Government Hour focuses on a conversation about management with government executives who are changing the way government does business. Our conversation today is with Lieutenant General Michael Hayden, director, National Security Agency.

Welcome, sir.

Gen. Hayden: Thanks very much, Paul.

Mr. Lawrence: And joining us in our conversation is Bonnie Brown, another PWC partner. Welcome, Bonnie.

Ms. Brown: Thank you, Paul.

Mr. Lawrence: Well, let's begin by finding out a little bit more about NSA. Could you tell us about its mission and its roles and responsibilities?

Gen. Hayden: Sure, Paul, thanks very much. NSA, located in Eastern Maryland, actually between Baltimore and Washington, is a global agency. And we would go by the phrase America's code makers and code breakers. We have two missions: One is signals intelligence, which is an attempt to extract information for American decision makers, whether they be military commanders or policymakers, out of the electromagnetic spectrum; and we have another mission, actually the other side of that SigInt mission � signals intelligence � it's information assurance, which is essentially preventing adversaries from doing the same thing against us. Hence, the more popular moniker code maker and code breaker.

Mr. Lawrence: Well, in preparing for today's interview, I heard some interesting things I'd be curious to have you comment on, that NSA has been accused of spying on Americans. That can't be true.

Gen. Hayden: No, it's not. There was a period in the �70s, the Church-Pike Commission, congressional investigations of NSA with regard to some activities of the National Security Agency during the Vietnam War period. Since that time, the legislation that governs us has become very clear and the National Security Agency stays well within the rules outlined in those regulations and laws. In essence, we're prohibited from targeting what the law calls American persons, which is a step beyond American citizens. An American person is an American citizen in the United States or anywhere in the world, anyone legally in the United States, and, frankly, any group comprised of the kinds of individuals I just described. And we can't intentionally target them unless we have probable cause, provable probable cause, that they're an agent of a foreign power, and we have to make that case to a body outside the agency.

If the individual is inside the United States, we've got to make that case to a court, a foreign intelligence surveillance court. And if the individual is outside the United States, I have to make that case to the Attorney General. These are very limited circumstances and, again, only upon probable cause that the American person in question is truly the agent of a foreign power.

Mr. Lawrence: Well, another allegation we heard that was if you don't do that you get our foreign partners, like the British, to spy on Americans.

Gen. Hayden: Well, I've heard the accusation, as well, and that's just as illegal as our doing it ourselves. By Executive Order, we're prohibited from asking anyone to do something on our behalf that is illegal for us to do and, at the same time, we are prohibited from doing something for someone else that their domestic laws prohibit them from doing, also.

Mr. Lawrence: And while we're getting all the laundry out, we've also heard that NSA is lagging behind and going deaf.

Gen. Hayden: Interesting metaphor. I wouldn't use deaf. Actually we may be drowning would be a better way of putting it. With the great volume and variety and velocity of modern communications out there, a signals intelligence agency, I mean, one designed to work out there in the electromagnetic spectrum, runs a serious risk of being overwhelmed with the vast quantity of ones and zeros and bits that are out there at the present time. So rather than going deaf, we're drowning in this sea of data. Now I will admit the effect of drowning is deafening. It's hard to pick out the valuable piece of intelligence in this vast array of communications out there.

Mr. Lawrence: Well, give us a sense of perspective. Where does NSA's mission fit in the overall intelligence community?

Gen. Hayden: We're divided up by discipline. And so you, for example, the National Imagery and Mapping Agency that works on visible light spectrum. You've got the Central Intelligence Agency that works in what we call HumInt or human intelligence. NSA is focused on what we call signals intelligence and, again, trying to learn things useful for American safety and liberty out of the electromagnetic spectrum. And to give you a sense as to how our mission has shifted, our deputy director, Bill Black, is fond of saying in the past, when he first began with the agency more than 3 decades ago, things were too hard to get and they were too little. Right now for us it's too much and too hard to understand.

Ms. Brown: General, let's turn to your career. What drew you to public service?

Gen. Hayden: Well, Bonnie, I started in ROTC at university in Pittsburgh, at Duquesne University; continued beyond the mandatory 2 years, which everyone was required to take at that time, into the voluntary program; was commissioned on active duty. The Air Force allowed me to stay at school and get a master's degree, and then I came on active duty and that's been about 3 decades ago. We'd done one assignment at a time, myself, my wife, and the children. Each one seemed to be interesting enough, enjoyable enough. We'd take one more, the same calculus would apply and here we are 30 years later.

Mr. Lawrence: Well, give me a sense of some of those assignments. How does one become an intelligence officer?

Gen. Hayden: Paul, it's interesting for me coming into the National Security Agency. My first day in the agency ever was my first day as director. I had never served in NSA prior to that time and, in fact, a fair amount of my career was spent outside the intelligence discipline. Now I do have a fair amount of intell background, but I've been at the White House and the National Security Council staff, I've been in plans and operations in the Air Force, I've been an ROTC instructor, a military attaché. None of those in the narrow channel that you would define as intelligence.

Mr. Lawrence: Which of those positions best prepared you for this job?

Gen. Hayden: My sense is all of them. The most interesting job I've ever had was as the military attaché in the People's Republic of Bulgaria back during the Cold War. All the assignments I think have well prepared me for the job in the sense that we've got some wonderful professionals, thousands of professionals, talented people, hardworking, patriotic people at Fort Meade and around the world, and they are well-schooled in SigInt, signals intelligence, and in the National Security Agency.

Well, here you have a director who's bringing in a bit of a different perspective. He's not been within NSA before, not all of his career has been inside the intelligence community, and so I, in a sense, have some value to add during our discussions because my experiences have been a bit more varied than the others folks in the discussion.

Ms. Brown: Is this your biggest challenge so far or what have been your biggest challenges throughout your career?

Gen. Hayden: Bonnie, this is the toughest job I've ever had. I told one small group last week that my job prior to this was in Korea. I was with U.S. forces there, not an intelligence job. I was the deputy chief of staff for U.S. forces. I'm fond of saying that in that job I could kick my feet under the desk and place them under my � on my chemical gear, my Kevlar, my body armor, and my helmet; that my desk itself was, even though in the center of Seoul, was within range of deployed North Korean artillery; and that my key job was negotiating at P'anmunjom with the North Korean military, I was their negotiator there, on a more permanent peace for the Korean Peninsula. And then I still miss Korea. (Laughter)

Mr. Lawrence: Was it � is it hard because of the subject matter? Is it hard because of the management challenges?

Gen. Hayden: All of the above. Let me tell you what's really driving us. We've downsized more than a third over the past 10-plus years. We've got a glide path pretty much like the rest of the Department of Defense and the intelligence community. That's made it hard for everybody in the American defense establishment, everyone concerned with American security. But it's made it particularly hard for us because as we've downsized at more than a third, outside of our walls mankind has gone through the greatest revolution in human communications since Gutenberg's invention of the printing press. And here we are charged to work in that battle space. I mean, telecommunications is where we do our mission and it's changed so dramatically over the past 10-plus years. That's really been the most serious challenge for us.

Ms. Brown: Over the years, what have you observed as the key characteristics of good leadership?

Gen. Hayden: Bonnie, that's a good one. I've seen a lot of good leaders and they've had different styles. I guess the one that's driven me is to "dance with who you brung, " to bring you yourself to the job, not try to reshape yourself, at least not reshape too much to the demands of the particular environment in which you're placed. I guess the word is to be true to yourself. Now that doesn't mean you adjust up and down, left and right depending on specific circumstances, but you can't get too far from who you really are.

What's worked for me and what I've seen work for many others is to look upon yourself in a leadership position, as an enabler, as a person who removes impediments from those others in the organization, making sure those others have a pretty clear idea of where we want to go, and then get out of the way and let them do their part of the work.

Mr. Lawrence: Do you think those characteristics are changing over time? A second � a few � an answer ago, you described the incredible changes taking place in technology. How about in terms of the people who are in charge?

Gen. Hayden: Again, I can only speak to my own experience. I can't lead the National Security Agency technologically. The people there are masters at this craft and I shouldn't even pretend to compete with them. What I can do for them is to provide the context within which they have the greatest opportunity, the highest probability of success, and that's how I view my job.

And that context could be viewed as organizational, you know, structuring the agency so that it's efficient. It could be fiscal and that's trying to get additional resources from the administration and from Congress. It could be political, answering, for example, some of the questions you asked earlier about whether or not we obey the law. All of those create a milieu in which the natural talent of the agency should be able to come to the fore.

Mr. Lawrence: We have to take a break now, but stay with us as we continue our conversation with General Michael Hayden, director of NSA. When we come back we'll find out what it's like to have the White House, the CIA, and the military as your customers. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with General Michael Hayden, director, National Security Agency. And joining me in our conversation is another PWC partner, Bonnie Brown. Bonnie?

Ms. Brown: General, late last year, you announced a reorganization of � a restructuring of the organization. Tell us about that.

Gen. Hayden: Sure, Bonnie. There are very few tools that someone, even someone called a director, has to meaningfully affect an institution. One's money and the other one's organizational structure and so we focused on organization quite a bit, we being myself, Deputy Director Bill Black, and some others. If you look back through the history of NSA, and I don't want to drag your listeners too far back through our history, but it has some import for what we're discussing now.

Cold War, not a Cold War; focus on the Soviet Union, focus on other issues; Americans in harms way, in actual combat, Americans in relative in peace � you pick your yes and no kind of combinations. The National Security Agency seemed to be always comprised of five key components. No matter what happened on the outside we had five big boxes on our organizational chart, and each of those boxes was fairly self-contained. Each had a protocol office, each had a planning shop, a programming shop, a budgeting shop, you can go on and on. Each had their own information technology shop.

And that's actually not a bad system if what you want to do is simply operate today's structure. It's not even a bad system if what you want to do is to kind of marginally improve what it is you do today. If, you know, you're doing X and you want to do 120 percent of X, you know if you thought about it a bit you could put a pretty positive spin on that kind of structure. Hire some management techs and call it empowerment or power down or matching resources with responsibilities and accountability, and so on.

But it's a horrible structure if what it is you want to do is fundamentally reshape what your agency is about. Since power, decision-making, accountability, manpower, resources, or any of the levers you might want to pull in order to effect fundamental change are so dispersed, you almost have to have a town meeting with everyone saying yes, of course, that's the right way to go, before you make any core shifts whatsoever.

And so what we did in this restructuring was essentially leave at the key component level those two activities that are core mission, signals intelligence and information assurance, but to dissolve the other key components and to extract out of everything what we viewed to be corporate functions. So if you looked at what the agency did and you looked at corporate, i.e., it went across the entire corporation, and it was a doer function, like information technology or training or human resources, we pulled it out and made it a separate stand-alone, and we call them associated directors. So now I've got an associate directorship for information technology, human resources, training, installations and logistics, and so on.

We then took all the planning, programming, and policy activities out of these disperse key components, pulled them up to the headquarters level, put them under a new position, the chief of staff. Okay? So now we've got two key components left, they just do mission. They don't worry about planning. They don't worry about programming. They assume their information technology's going to work. They assume the National Cryptologic School will provide them with trained individuals so they can focus day-to-day on mission.

Now this isn't perfect. We know there are still some pockets of activities that are dispersed, but in a way that's never been done before in the agency we've now shredded out these activities. That's given us economies of scale. That's given me and the other members of the senior leadership the ability to make hard, as in significant, turns, changes in direction.

It's also been kind of discovery learning. When you gather, for example, all of your information technology specialists from out the agency, you suddenly find out how many information technology specialists you really have and so on. And you begin to ask, I wonder if that represents best practices as we enter the 21st century. And so that's been the major organizational change for us.

And I've told the workforce that, you know, we did that sequentially, two major changes over about a 4-month period. And I've told the workforce that I don't have anything more hidden in my lower right-hand desk drawer, that we've made the fundamental changes and from here on out, organizationally, we'll just fine tune what we've got. I'm quite happy with it.

If your listeners are familiar with the Department of Defense and the Goldwater-Nichols Reorganization Act, our information assurance and SigInt directorates are our fighting forces. Our associate directors � human resources, information technology, and so on � those are the military departments; train, organize, equip, and provide. And those planning, programming, and budgeting functions? That's the joint staff and the office of the Secretary of Defense. It's a pretty consistent model with how Goldwater-Nichols restructured DOD.

Mr. Lawrence: What were the management challenges accompanying this change?

Gen. Hayden: We had grown to the point, Paul, that there wasn't enough trust amongst our parts; again, a product I think of downsizing. As you get smaller and smaller, the instinct of any government institution, any bureaucracy is toward self-preservation. And so, for example, if the training budget overall is getting cut, if you're inside one of the key components, you want to preserve some training capability because you're not so sure the corporation can deliver for you anymore. Well, over time, that's very inefficient overall, but in terms of making sure you're keeping yours and you've got a little buffer when it comes to training and education, you can understand why that happens.

The biggest challenge we had was to force people to get out of businesses that weren't their core business and to take that leap of faith that the corporation or the corporate entity responsible for that activity would indeed be there when the component needed it. The classic for this is information technology. We were so dispersed throughout the agency, practically everyone had their own IT shop because, the kind of organization we are, IT is everything. If the information technology doesn't work, we don't work, it doesn't happen.

And so we had this greatly dispersed IT structure with everyone trying to do the right thing, but doing the right thing in a field of view that was about 2 degrees wide. Now that may be very good for an individual analyst and he may actually have a wonderful tailor-made almost handcrafted workstation, you can imagine the logistics nightmare that would create for an institution that had tens of thousands of workstations. And so the biggest challenge we had was to get all of our people to take that leap of faith that they can count on other parts of the institution to give them what they needed when they need them.

Mr. Lawrence: At the same time, you also announced that NSA was interested in becoming more responsive to its customers: the White House, the CIA, and the military commanders. Could you tell us about your work on this effort?

Gen. Hayden: Sure. Now we've always been responsive. In fact, the agency gets very good marks, particularly during and after the Gulf War in terms of how it has embedded with its customers, how it has tried to lead � turn its customers, anticipating needs before the customer even can precisely articulate them.

We did a customer survey, it took place right before I came on board and so it was reported out just after I got there, so it's about 2 years old now. And our customers actually give us very good marks for that first report, that initial product coming out of NSA.

Now we get far less good marks when it comes to the first question after the product. We become very opaque to people out there beyond NSA and become a sea of acronyms and symbols and techno jargon that is very difficult for the people who use our product to understand. And so we're trying to move in the direction where we're even more fully integrated with those who use our product.

If we're in the business of responding to questions, we're already late. We need to have such a sense as to what our customers need that we anticipate their needs and meet them, again, before they're even able to articulate them.

Ms. Brown: You mentioned in the first segment that you manage enormous amounts of information and indeed much of that is related to the information that your customers need. What lessons learned could you describe for other executives in managing very large amounts of information?

Gen. Hayden: I don't know, Bonnie, that I can actually give you a lesson learned other than we've learned the lesson that this is where success or failure is really located. If you look at what the intelligence process is, and this is classic intelligence work, it starts with access and collection, then processing ,analysis, and then finally reporting. Okay? When it comes to looking at what we as an agency have to improve, you say we want to get better across the board. But when you really narrow it down and say but where's the real linchpin in this? Where's the real pivot point? It's not in access and collection. It's in processing and analysis. It's in dealing with vast volumes of information in a very efficient way.

If we don't develop the right tools to allow our analysts to do that, and right now I have to admit it's a very labor, manpower intensive activity, if we don't develop the right tools for knowledge management, our � we can't get to where the nation needs us to be. We've talked a lot with private industry about this, I mean, giants of private industry. And frankly, it looks like our needs just about outstrip anyone else out there, so we're at the top end of the spectrum when it comes to solving this problem.

Mr. Lawrence: It's time for a short break. When we come back we'll discuss � we'll focus our conversation on some of the more personal aspects of NSA. We'll find out how information is declassified and perhaps released, and what a candidate goes through before they can join NSA. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with General Michael Hayden, director of the National Security Agency. And joining me in our conversation is another PWC partner, Bonnie Brown. Well, General, can you tell us about the organizations that provide oversight of NSA and your interaction with them?

Gen. Hayden: Sure, Paul, that's really very important. From time to time, we get criticism that, what's the right phrase, we're off the leash or the fox guarding the henhouse or other descriptions that somehow imply that what we're doing is somehow unlawful or beyond the view of those who should be looking at our work. That's really not true. Occasionally, someone who's trying to be friendly to the agency in their commentary in the public domain will say no, we think the agency does obey the law, but, in essence, they're saying where the government trusts us, which is not very comforting to a free people. And you have to keep in mind that the thousands of agency employees out there are also citizens of the United States and are as sensitive to civil liberties as any citizen in the nation.

What I've taken to saying to groups is that you can trust us. I know the people in the National Security Agency. I know how committed they are to protecting American privacy. I know how knowledgeable they are about the Fourth Amendment and the other regulations that control their activities. So they deserve your trust, but you don't have to trust them, and that's the punch line.

There is a body of oversight in the Executive and Legislative Branch that looks into our business constantly and routinely, and there's no way we could sustain any kind of violation of American privacy without these oversight bodies being aware of it. There's an oversight office within the Secretary of Defense's office, there's an oversight subcommittee at the President's Foreign Intelligence Advisory Board. Both the Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence have a powerful oversight roll over the National Security Agency. They have staffers that have badges to enter the agency, just like mine. They are very aggressive in looking at what the agency does. And so if we're violating the law and covering that up, everyone I just described has to be in on it and it's just simply not true.

Ms. Brown: General, we hear the term "Project Groundbreaker." Can you describe that project for us and talk to us about what prompted this new project?

Gen. Hayden: Bonnie, this is a pretty dramatic change of course for us. We made a strategic decision that as we're trying to cope with that technological revolution I described a few minutes ago taking place on the outside that we needed allies in order to be able to do that. That's almost countercultural for NSA. Now keep in mind, we were America's information age enterprise during America's industrial age. And during that industrial age, we built up habits of turning inward, doing things for ourselves rather than looking externally beyond the confines of Fort Meade to the broader American society because, by and large, the things we needed didn't exist in the broader American society. If we didn't do it, it wasn't going to get done, so it built up that habit.

That's no longer true. America's going through a great technological revolution in both telecommunications and computer science. And so some things that we need are now readily available on the outside. And so, again, we made this strategic decision that a significant portion of our information technology, about 40 percent, was going to be outsourced to a private firm. That effort goes by the name of Groundbreaker.

We put out our RFPs, our Request for Proposal. Bids have come back in and we're going to let a contract before the end of this month, before the month of July. And we expect a giant of American industry to come in and cover a significant portion of our IT needs: our telephones, our workstations, our network, our network management. These are classified networks, but not narrowly, tightly defined mission networks. That allows us to narrow our front. It allows us to concentrate then on those parts of our information technology that only we can do because they're so mission-essential, because the activities are so inherently governmental.

Mr. Lawrence: How long did it take Groundbreaker to come to be? This month it will be awarded. How long did the thinking you described have to � how long ago did it start?

Gen. Hayden: It started before I became director, so that's over 27, 28 months ago. Last June, so now we're talking 13 months back, we got � I got � senior leadership received a briefing on the investigation that had taken place seeing if this would be a viable idea. And in June of last year, I made the decision that we would move forward on that. And what we have been doing since then is putting the Request for Proposal together, writing down detailed service level agreements, putting the RFP out, dialoguing with three industry teams that are competing for the contract, and, as I said, we're about ready to award it. This takes effect this fall, so once the contract is awarded well before the Christmas holidays, as I said, a significant portion of our information technology will be under the control � being run by a private firm.

Mr. Lawrence: How long did it take for people at NSA to realize what you described, that we had once been the only people doing this and now others were and often even doing it better? How long did that take?

Gen. Hayden: Paul, it � I would suspect intellectually, known a long time; emotionally, quite different. It's one thing to intellectually say yes, I understand we need allies in industry to do some things; yes, I understand that narrows our front and allows us to focus on things only we can do. It's quite another thing to take that leap and say, and so I quite understand why you're outsourcing my job. And the Groundbreaker contract is going to impact a significant portion of the agency workforce measured in hundreds. We hope we'll be hired and, in fact, the contract calls for them to be hired by the winning contractor. The hope part is that our employees would be willing to do this and go with that contractor because we think this is a � would be a very good deal for them, for the contractor, and for the National Security Agency.

Mr. Lawrence: Why don't we shift gears and ask about another subject that has to do with the declassification and often the release of information. What are the management challenges involved with doing that?

Gen. Hayden: The management challenges come back to just volume. There just masses of information that we've compiled over the years. At last count, I think we've actually reviewed about 50 million pages of classified documents and have moved about 35 million of them on to the National Archives. What I've just given you could be read as pretty sterile compliance with the law, which I guess it is. But there's something more here, too, that's really important for us.

I've been mentioning this need for us to have greater contact with the outside the world, that we need allies in private industry and so on. For that to happen, the larger American society needs a better understanding of what the National Security Agency does. I mean, we can't be viewed as malevolent or incompetent, which was making the rounds in some press articles about 2 years ago. But we also can't afford to tell people what it is we're doing today for reasons of operational security. SigInt is a very fragile discipline and an adversary's knowledge that you might be detecting him is in itself sufficient to destroy that source for us, and so one has to be very careful with this kind of information.

So how do you explain to the American people, how do you explain to the public at large what it is you're doing without compromising what it is you're doing? And the answer's history. And this declassification project has allowed us to tell some stories. We've told the story of Venona, which is our breaking of Soviet diplomatic codes and our backstopping to the Communist spy scandals in the early 1950s, and we've been actually able to lay that out in some great detail.

We've also been able to tell the part of the National Security Agency in the Cuban missile crisis. What we saw, what we learned, hearing Spanish-speaking pilots, for example, at airfields in Czechoslovakia � that kind of information that allows us to show what we actually contribute to the American people and to American safety and security. And right now, because it's the 50th anniversary of the war, we're rolling out a whole trench of documents on what it is we did during the Korean War.

Ms. Brown: Your organization obviously has very specialized skill sets. Talk to us a little bit about the recruiting process that candidates go through prior to joining the organization.

Gen. Hayden: We had not actually recruited much for more than a decade. Like the rest of the federal government, as I said, we downsized, downsized about a third. And I think like most of the federal government we downsized in the most comfortable way possible: we shut the front door. And so we rarely recruited more than 200 people a year in a civilian workforce that numbers in the thousands.

And we were puzzled. We weren't sure how well we could recruit. And this year, we decided that the target had to be 600. That, like the rest of the government, our workforce is aging. And if we waited for that build-up of 15 to 20 years to retire before we started to recruit new faces, all the coaching and mentoring that should go on from the experienced veterans to the newly arrived wouldn't happen. And so we have been aggressively trying to recruit.

We set the target at 600 for this year; we're going to hire 607. We set the bar high in terms of core mission as opposed to support skills; entry level as opposed to bringing in people at mid and upper grades. We've been successful in every metric we could have: grade point average, SATs, majors, prestigious institutions, and so on. This is good as we've ever been and so we'll really heartened by that. And I mean really heartened because government pay scales do not match private sector pay scales for most of these skills.

In addition to all that, before we let anyone come to work with us, we ask them a very long series of personal questions for their background investigation. And then just to cap it all off, we wire them up and ask them those questions again while a polygrapher measures the results. And so there's an extra burden of sacrifice that the people of the National Security Agency take just to come work for us.

Mr. Lawrence: Coming up after the break, we'll ask General Michael Hayden of NSA to peer into his crystal ball and tell us about the future of NSA. Hear the vision when we come back with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with General Michael Hayden, director, National Security Agency. And joining us in our conversation is Bonnie Brown, another PWC partner.

Ms. Brown: General, what advice would you give to a young person today who is interested in a career in public service?

Gen. Hayden: Well, great question, Bonnie. Obviously I've done this for 3 decades and so it's been very satisfying for me and actually very satisfying for my family, and my wife and the children especially. My children are who they are today because of we as a family unit moving around to multiple continents in the armed forces.

I think what I'd say to young folks today, though, might be a little different. You use the word "career in public service." Certainly in terms of the National Security Agency, and that's where I'm focused now, when we're doing our current recruiting we're not going out there pushing a career in NSA. That's a new tactic for us. By and large, for security reasons, the fact that we wanted a very stable workforce, when we went out to recruit in the past the implicit and, from time to time, the explicit contract we were talking about was come to work with NSA for life. We've not done that and I think that's really helped our recruiting effort. Essentially the mantra now for our recruiters is come work for NSA, you can't find a better first job. And then we'll take our chance then as to what happens 3, 4, 5, 6 years hence.

I'd also suggest that we, certainly at NSA and let me confine my remarks to that because I know it best, could profit from people moving in and out of government service into the private sector and back into government service. I mentioned earlier about all the things going on beyond our perimeter fence that we have to, for want of a better word, import inside the National Security Agency. To have personnel move back and forth, as well, I think would be a blessing. It keeps our skills at the cutting edge.

Now we are an intelligence agency, though. We're part of the intelligence community. Security's very important and if you do have this more flexible workforce, you've got to take care and you've got to use all the tools available to you to guarantee security because you're not relying on that old reliable, which was one workforce 35 years.

Mr. Lawrence: What type of skills should a young person have who's interested in joining the intelligence community? For example, what type of degrees did the 607 people you've hired this year have?

Gen. Hayden: Well, we're kind of atypical for the intell community, so let me answer that question, Paul, for NSA, but then expand it for the intell community at large. Right now, our crying needs at NSA are by and large in the technical skills and so you'll see us going after mathematicians, computer scientists, engineers, and the like. Being a foreign intelligence agency, we also need linguistic skills, also, so you'll see us pursuing those. But by and large, unlike anyone else in the intell community, you'll see us anchored in technical skills and so that's what we aggressively go after, that's what our crying need is.

But let me talk for a minute more broadly across the intell community. We need people who are culturally and intellectually diverse. We need people whose mental constructs allow them to think in ways that perhaps aren't parallel or rote or acceptable, if that's the right word, or certainly regimented by the way we Americans normally see things. We need intelligence analysts who are quite willing to immerse themselves in a second language and a second culture to be able to see things through the eyes of this second culture, not to justify that, not to go over to the other side, so to speak, but to better understand how that adversary or potential adversary perceives what it is we're doing. That's a tall order. It's almost a cultural question and it's something that I feel very strongly about, something that we need to have.

Well, let me give you an example just out of my own professional background. I was a UCOM J-2, chief of intelligence for U.S. forces in Europe '93, '94, '95, during the U.N. wars in Bosnia. And there was horrific fighting in a town called Mostar, south of Sarajevo along the Neretva River, between Croats and Muslims. And I recall one young officer on my staff briefing our commander saying that this fighting was going on. And the commander said, "Well, who's on the attack here?" And the young officer said, "The Croats." He said, "How far will they go?" And the officer answered, "They'll go the Neretva River." And the commander said, "Why? Is the Neretva a very defensible line?" And the young officer said, "Absolutely, sir, the bank drops off about 20 meters when they get there. It'll be a very defensible line, but that's not why they'll go to the Neretva." And the commander said, "So why will they?" And the young officer responded, "Because in the great schism of Christendom in the 11th century, the dividing line between Orthodoxy and Catholicism was the Neretva. To be Croat is to be Catholic. They'll fight to the Neretva."

That's the kind of cultural understanding that informs judgments about modern events. And I'm sure, Paul, you've heard the critique about Americans being an ahistorical people. We can't afford ahistorical intelligence analysts.

Mr. Lawrence: Why don't we shift gears a little bit? What kind of technological advances do you expect will assist NSA in managing its mission?

Gen. Hayden: The thing we need most of all is the ability to manage large volumes of information, knowledge management, if you will, to make that less a manpower labor intensive process and to allow our human capital, our human brain power to operate at the higher levels. If you took at kind of a taxonomy of information it goes from signals to data to information to knowledge to intelligence. We want our people up there on the higher end, you know, moving things from information to knowledge to intelligence. We don't want our folks down there at the lower end trying to turn signals into data or data into knowledge.

Mr. Lawrence: Do the tools exist now or, for the kind of volumes you're talking about, will they have to be invented?

Gen. Hayden: A lot of the tools exist, then they simply need to be imported by us, if that's the right word, and tailored to our needs, but a lot of the tools don't. There are things that we'll have to build or in cooperation with industry build in order to manage the vast volumes of data.

By the way, there's an interesting Fourth Amendment and civil liberties content to this, as well. We're required to protect American privacy all along in our process: access, collection, processing, analysis, and dissemination. It's just not at the back end. And so these tools that allow you to master the data, even in large volumes, are the same tools that allow you to protect American privacy.

Ms. Brown: What is your vision for the next 10 years at NSA and how do you see NSA evolving over this time?

Gen. Hayden: Rebirth of the agency; there are those outside the agency who criticize it. You used the phrase before "going deaf" as if it's in this death spiral, this downward turn. Actually the agency's quite successful today and we get very positive reviews from our entire customer and user base. That said, if one looks at what's available out there now in the electromagnetic spectrum, which is where we do our business, and compare the volumes that were out there 10, 20, or 50 years ago, all that volume that I've been kind of complaining about that is so difficult for us to deal with, within that volume are contained the secrets to protect American lives and American values. And so if we get this right, this is not about NSA getting well, this is a golden age in our contribution to American liberties.

Mr. Lawrence: What kind of management challenges will the technological advances place on NSA?

Gen. Hayden: Management challenges, essentially I think first and foremost is recruiting and retaining the technological skills that you have to have inside the agency. I already talked about a line with industry for other skills to do things that we no longer have to do ourselves. I think that's an important one.

Mr. Lawrence: How about in terms of the type of skills the NSA employees will have? Will they actually be doing or will more of this work be done by private sector partners, for example?

Gen. Hayden: No, there's always a hard core of activity. And when I talk about allying with industry this is not about mission, this is about the variant support structures that we need. There is always an inherently governmental activity that remains at NSA � and that's our intelligence work � that's got to be done, that must be done by government employees.

Mr. Lawrence: Will the challenges that the leaders face be the same or will they change as all this technology �

Gen. Hayden: Our heritage as an intelligence organization, our heritage as a government organization is very traditional. It's very bureaucratic, it's very hierarchical, power and information cascade from top to bottom. That's not how it can work in the future. We've got to be nodal networked, interconnected, just like the outside world. The big shift for leaders is to be confident and to be able to lead in a world that's not hierarch, in a world that's not bureaucratic, in a world in which power and information don't flow down from the top, but still be able to lead.

Mr. Lawrence: One final question. Just 2 years ago, this interview request would have been denied. Why now?

Gen. Hayden: We've made some clear decisions over the past 2 years that there's quite a bit about what NSA does for America that Americans need to know, and there is no great danger to American security by reviewing some of these things. I talked about our trying to ally with outside industry. I talked about increasing our recruitment. You can't do that if the public image of the agency shifts between being malevolent or incompetent, as I mentioned. And so we've tried to raise our profile carefully, protecting secrets. After all, one of our missions is to protect the nation's secrets, but to raise our profile so that the American people will have a better understanding of who we are and what we do. And that's why we're here doing shows like this one.

Mr. Lawrence: Thank you very much, General Hayden. Bonnie and I have enjoyed our very interesting conversation. Thanks for being here today.

Gen. Hayden: Thank you, Paul.

Mr. Lawrence: This has been The Business of Government Hour featuring a conversation with Lieutenant General Michael Hayden, director of the National Security Agency. To learn more about our programs and research the new approaches to improving government effectiveness, visit us on the web at And at this website you can also get a transcript of today's conversation. See you next week.

Michael Hayden interview
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