Raj Chellaraj interview

Friday, June 8th, 2007 - 20:00
The Bureau is responsible for administrative support operations; supply and transportation; real property and facilities management; official records, publishing, and library services; language services; domestic emergency management; overseeing safety and occupational health matters; small and disadvantaged business utilization; and support for both White House travel abroad and special conferences called by the President or Secretary of State.
Radio show date: 
Sat, 06/09/2007
Intro text: 
Human Capital Management; Managing for Performance and Results...
Human Capital Management; Managing for Performance and Results
Complete transcript: 

Originally Broadcast Saturday, June 9, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness.

You can find out more about the Center by visiting us on the web at

And now, The Business of Government Hour.

Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of the The IBM Center for The Business of Government.

With its unveiling of transformational diplomacy, the U.S. Department of State has charted a bold new course in U.S. diplomacy, a course that rests on working with U.S. partners around the world to build and sustain democratic well-governed states using America's diplomatic power and resources to help people across the globe better their own futures, build their own nations and thrive under an umbrella of security and peace. Supporting this ambitious approach seems no small feat.

With us this morning to discuss his Bureau's efforts in support of transformational diplomacy is our very special guest, Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State.

Good morning, Raj.

Mr. Chellaraj: Good morning, glad to be here.

Mr. Morales: And joining us in our conversation is Bonnie Glick, project executive at IBM.

Good morning, Bonnie.

Ms. Glick: Good morning.

Mr. Morales: Raj, most of our listeners are probably familiar with the Department of State as the diplomatic arm of the U.S. government. But perhaps you could give us a sense of the State Department and its history. When was it created, and how has its mission evolved over time?

Mr. Chellaraj: Surely. The State Department was the first federal agency, created in 1789. Thomas Jefferson was our first Secretary of State. It is the lead U.S. foreign affairs agency. Currently, Secretary Rice has defined transformational diplomacy in this way: it is to work with our many partners around the world to build and sustain democratic well-governed states that will respond to the needs of their people and conduct them responsibly in the international system. That means all of us need to think about how we are doing business, and adapt and change to meet these new priorities.

Here are some current initiatives under the leadership of Management's Under Secretary Fore: one, provide buildings and administrative infrastructure to 38 agencies overseas; maintain American presence with over 260 embassies and consulates, utilizing technology with virtual posts that can be accessed from anywhere in real time; help to ensure secure borders and provide a dignified welcome to visitors.

Mr. Morales: Raj, obviously, this is an extremely broad mission. Can you give us a sense of the scale at the Department of State? How is it organized? Can you give us a sense of the budget, the number of full-time employees, and its geographic footprint?

Mr. Chellaraj: There are nearly 57,000 employees worldwide. Nearly 45,000 of them are overseas. Over 7,500 Americans proudly call the State Department home who are overseas, and 37,000 locally engaged employees. There are more than 260 posts in 189 countries, and also in the United States. The State Department's appropriation for the past several fiscal years has been roughly $30 billion per year, and includes both State operations and foreign assistance. The FY 2008 request is about 11 percent increase, and it's around $36 billion.

Ms. Glick: Now that you've provided us with a sense of the larger organization, maybe you could tell us more about your specific area and your specific role within the Department. What are your responsibilities and duties as the Assistant Secretary of State for Administration? Could you tell us a little bit about the areas under your purview, how your area is organized, the size of your staff and your budget? Also, given the Bureau has responsibility for both overseas and domestic operations, can you give us a sense of how you balance limited resources between domestic and overseas operations?

Mr. Chellaraj: Wow, there are a number of questions in that one question. So let me just at least highlight the key areas. Some departments, as you know and our listeners know, have offices. Our department has Bureaus. So the Bureau of Administration provides global administrative support for the people and programs of America's diplomacy. We are proud that our work supports every foreign policy initiative, every employee and family member and every agency that's involved in foreign affairs activities.

The "A" Bureau is one of the Department's most diverse and dynamic organizations. The "A" Bureau budget is approximately I would say $600 million, with over 2,000 employees in over 30 offices. The Bureau's mission is making diplomacy work. And when I joined the Bureau, I added the word "better," making diplomacy work better. One of my priorities and our priorities in our Bureau is customer service and satisfaction. Our Bureau programs and services are very varied.

Let me just highlight on some of them. One, domestic real property and facilities management. We do procurement, roughly $5 billion or so a year, and that's a billion with a "b." Supply and transportation. Diplomatic pouch and mail services. Official records, publishing, library services, language services. Setting allowance rates for U.S. government personnel assigned abroad, and that's a fairly key one, as you can imagine. Overseeing safety and occupational health matters, small disadvantaged business utilization. Support for both White House travel abroad and special conferences called by the President and Secretary of State.

We also do direct services to the public and other government agencies. These include authenticating documents used abroad for legal and business purposes, responding to requests under the Freedom of Information and Privacy Acts, printing official publications, codifying policies into Department regulations, designing, publishing, and maintaining the Department's electronic forms, processing all Department public notices for publications in the Federal Register, and the list goes on.

Ms. Glick: The list does appear to go on. You're quite right when you say the responsibilities of the "A" Bureau are very varied. Regarding those responsibilities and duties, what would you say are the top three challenges that you face in your position, and how have you addressed those challenges?

Mr. Chellaraj: Surely. There are many challenges just based on the types of things we do, and frankly, we look at challenges also as opportunities to see how we can improve overall customer satisfaction. Let me give you three specific ones. Firstly, our posts are scattered throughout the world in different working environments with different technological capabilities and operating constraints, and so you can imagine the issues associated with that.

Secondly, in addition, emergency or crisis situations arise, as was the case when the war broke out in Lebanon last summer. We provided the logistics support, ships, planes, not quite cars, but vans and buses for safe passage of American citizens, 15,000 of them approximately, out of harm's way. By having sound and well-thought-out management processes in place, we are able to respond to these types of unexpected situations quickly and effectively.

Thirdly, it is really difficult to predict where the next challenge will arise, so we have our antennas and radar up and be very vigilant in terms of where the next challenge will come from.

Mr. Morales: Raj, I want to switch gears a little bit here and talk about you. You've had obviously a very diverse background, starting in the private sector and now migrating over to various roles within government. I'm curious, how did you begin your career?

Mr. Chellaraj: Surely. I immigrated to the United States with a Bachelor's degree in Engineering and a couple of dollars. I realized very soon after I got here that the American education, the critical thinking was a great equalizer, and so I worked, went to school, worked, went to school, and did this a few times, and I moved from the focused field of engineering to the broader issues of public policy.

The early days were simply tough, but I struggled and survived. And career-wise, I moved between private sector and government many times, and I would encourage your listeners out there who are considering a public sector career and an opportunity to come contribute in the government to consider doing that. And over the last 25 years, this is my fourth agency in government, and this has been a real tremendous opportunity. And I will always come back when a President calls, when the Secretary of State calls or when I'm called upon to serve the country.

Mr. Morales: That's fantastic. So with these various experiences both in the commercial sector as well as now in government, I'm curious, how have these experiences shaped and formed your current leadership style, and how are you applying those experiences to your current role?

Mr. Chellaraj: I have handled and been responsible for most of the functions that are currently in the Bureau of Administration in my prior life, prior career, either in government or in the private sector, and I really believe good management transcends both the public sector and the private sector. And let me give you an example here. Take procurement, for example. In government, you have the Federal Acquisition Regulations, known as FAR, which I'm sure our listeners are familiar with.

In the private sector, it's not too different. There's what is called DOAG. You know, there are always all these acronyms, and essentially, DOAG is Delegation of Authority Guide. And the principles are essentially the same, in areas like procurement. You want to have the proper checks and balances, the internal controls, and who can sign up to what limits, and the principles are the same. People generally say -- either when I'm in the government or in the private sector, and I hear this in government a lot -- we are really a unique organization. We are different. Not really sure whether something will work, and what I really look for is commonalities and similarities on how we can improve processes to be more effective.

Mr. Morales: So even though the core missions are different, many of the core fundamentals are really the same between the commercial and the public sector.

Mr. Chellaraj: That's absolutely true.

Mr. Morales: How is State administering its resources in more efficient ways?

We will ask Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State, to share with us when the conversation about management continues on The Business of Government Hour


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State.

Also joining us in our conversation is Bonnie Glick, project executive at IBM.

Raj, given the release of the joint State and USAID strategic plan for 2004-2009, could you tell us about the efforts to integrate USAID operations with those of the State Department, and what efforts has the Administration Bureau undertaken to streamline its operations in line with the efforts of the Joint Management Council of State and USAID?

Mr. Chellaraj: Thanks, Al. Again, there are several questions there, and I'll try to highlight the key points. Interestingly enough, I worked at USAID a while back. In fact, my office then was on the same floor as where I am today, just down the hall. Who would have thought I'd be back again?

Frankly, USAID does certain functions very well, and State does certain functions well. This is about getting the best of both. State and USAID have been attempting to restructure our overseas presence to meet the challenges of transformation diplomacy and sustainable development. We both recognize the need for a shared overarching vision for management partnership, overseas and domestically, to contain growth and consolidate administrative support services. The Joint Strategic Plan established the Joint Management Council. The Joint Management Council's mandate is to identify opportunities for cooperation, cost avoidance and improved service through operational improvements. The results from our pilot posts are very encouraging.

We believe the joint approach will result in significant savings as well as a more logical, more manageable administrative platform at our overseas posts. Our focus in the Bureau has been identifying the activities where we carry out tasks that are common to both organizations. We believe that by doing this, we discover opportunities to both save money and enhance performance for both of us.

Mr. Morales: So how has this joint effort enhanced the ability of both organizations to ensure that the nation's foreign policy and development programs are fully aligned, and how has it impacted your workload?

Mr. Chellaraj: Sure. In terms of impacting the workload, it is a little difficult to quantify, as some individuals and offices directly concerned with the joint management initiative work on projects would be underway regardless of whether we had a joint management effort. Let me give you an example. We have something called the Integrated Logistic Management System, or ILMS. This is a very customer-friendly IT platform that enables us, both our contracting officers, logisticians, and most importantly, our customers, to track items from the time they are purchased until they're eventually disposed of.

Through ILMS, we get a clearer picture of our worldwide logistics operation than we've ever had before. Enhanced transparency and a whole new level of accountability for our resources. This particular initiative and effort will be important to the success of joint management, particularly overseas.

Mr. Morales: So to provide a more specific and broader context, could you provide a brief overview of such initiatives, such as the right sizing initiative and regionalization?

Mr. Chellaraj: Surely. Transformational diplomacy has a number of ramifications for the Bureau of Administration, and Department management generally. For example, we're addressing the practice of each Bureau or post providing the full range of administrative services. Today's technology allows, as you know, many of these functions to be performed by a smaller group of people anywhere in the world and shared among Bureaus and posts. For example, the Department is working on establishing human resource centers of excellence.

The Bureau of Administration's executive office is one of those centers of excellence. Overseas, the security environment concerns underscore the need to provide the most efficient support services in the safest possible locations. My office is working with the regional bureaus to expand the number and scope of services currently provided by regional support centers located in Frankfurt, Bangkok, and Fort Lauderdale.

Another regionalization initiative that the "A" Bureau spearheaded along with the regional bureaus is the standardization of support services according to best practices identified and endorsed by a central governance council. These efforts I'm sure will facilitate our ability to further consolidate and regionalize overseas support services.

Ms. Glick: That sounds great. Given even tighter budget constraints, would you tell us a little about your efforts to administer the resources of the Department in the most efficient ways? How has the International Cooperative Administrative Support Services System that's known as ICAS assisted you in this regard? How does it operate and who uses it, and to what extent has it achieved its primary goals? Are there any plans to enhance the ICAS system and its use?

Mr. Chellaraj: Bonnie, the ICAS system that you refer to is really a cost-sharing mechanism. Industry has been using this for 15-plus years, and it provides us, the U.S. government, a platform for overseas shared support services. The State Department is the primary service provider at more than 260 posts worldwide. State provides these services for the Department employees, and most importantly, for the employees of dozens of other federal agencies posted overseas. There are more than 280 separate entities that receive invoices under the ICAS system. And it is really a customer-driven interagency mechanism for managing and funding administrative support services.

For example, it gives the post the authority to determine how services are delivered at what cost and by whom. This is about acting locally, ensuring that service providers are formally accountable to the customer, and incorporates a full-cost recovery mechanism for the Department of State.

Ms. Glick: Raj, you serve as chair of the ICAS Executive Board. Would you tell us about the strategies ICAS has developed to address several recommendations outlined by the General Accountability Office regarding the need to improve ICAS accountability and enhance its cost containment capability?

Mr. Chellaraj: Surely. The ICAS Executive Board -- let me just give you a little background on that. It is really composed of 15 senior representatives of Cabinet-level agencies, and we meet quarterly or more often depending on what the needs are. And this is set up similar to -- akin to a corporation that would have a board of directors and management. There is a working group -- we have several subcommittees, and it is staffed and funded office within the Department of State. You're right, the GAO's report in -- I think it was in September of 2004, which was the first systematic review of the ICAS performance since it was established in 1998.

And overall, I must say the GAO found that ICAS is generally effective in providing quality administrative support in an equitable and transparent manner. Like all organizations, we take these recommendations seriously, and it will continue to be a work in progress as it evolves and we adopt the recommendations and continue to move forward.

Mr. Morales: Raj, I want to turn to the President's Management Agenda for a moment. The Department of State is one of only two federal agencies out of about 15 that have recently achieved a Green for both status and progress on the PMA's federal real property initiative. Could you elaborate on this achievement, and could you tell us about your efforts in developing and implementing an OMB-approved asset management plan? And I'm curious, what advice would you give to some of your colleagues who are perhaps pursuing the same area?

Mr. Chellaraj: The responsibility for asset management of real property is really shared by two bureaus within the Department, the Overseas Building Management office and the Bureau of Administration. In terms of advice, the short answer is there are no quick fixes. Be real detail-focused, results-oriented, and continue to monitor the progress.

Mr. Morales: Now, competitive sourcing is another initiative under the PMA. Could you tell us about some of the key competitive sourcing initiatives being pursued by State that have affected your Bureau, and as a member of the Competitive Sourcing Executive Steering Group at State, could you give us an update on your Department's overall progress in this area?

Mr. Chellaraj: Surely Al, happy to. The important thing about competitive sourcing is we are looking for the most effective outcome for the government, whether the work is done inside the government or outside. And competitive sourcing is not outsourcing, and that is a concept that has been misunderstood. It is a really effective management tool, a tool designed to obtain the best value for the government, whether the work is done internally or externally. We completed the first standard competition, and it was to transform printing and publishing activities for the Department, with an estimated savings of $80 million over the next 10 years.

This is fairly significant. Modernizing printing and publication services will -- we believe -- will enhance the Department's ability to communicate its public diplomacy message in a more-timely, compelling and visually interesting way to overseas audiences. There were actually three offers that we received, and the award went to the revamped in-house organization, the Global Publishing Solutions Group. The in-house organization shifted to a market-driven pricing arrangement and adopted industry best practices and performance standards.

The Department overall from a broader picture on competitive sourcing has a green plan charting future studies which we have submitted to OMB, and we've committed to plan in terms of how we move forward. We are reviewing other administrative functions and really rethinking how the Department delivers domestic administrative services.

Mr. Morales: That's fantastic.

What are some of the challenges in administering the diplomatic missions in Iraq and Afghanistan? We will ask Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State.

Also joining us in our conversation is Bonnie Glick, project executive at IBM.

Raj, what are some of the significant challenges your Bureau faces in administering the diplomatic missions in Iraq and Afghanistan? How does the model for overseas management support within your Bureau ease the burden of administrative support in dangerous posts such as these?

Mr. Chellaraj: Thanks Al, for that question. Operationally, the model for overseas management support is now known as the Iraq Orientation In-Processing center, OIP. This center developed several concepts and methods to ease the burden of administrative support in danger posts. While developed for danger posts, many of these have potential applicability for other overseas posts.

Employees from all federal agencies who are bound for Iraq and who are subject to chief of mission or the ambassador's authority, go through the center to receive their electronic check-in, their OpenNet and e-mail log-ons, cyber security training, deployment support, common access cards and so forth.

This remote check-in process allows the employees to take up their responsibilities sooner at posts. It also saves embassy human resource personnel and diplomatic security staff considerable time and effort in the processing, and spares them from responding to policy questions from multiple federal agency headquarters and entering security eligibility data into the Department of Defense systems.

Mr. Morales: Now, Raj, earlier we talked about the very complex mission that your organization has, so I'm curious, what kinds of interagency, private sector, and nonprofit partnerships are you developing to improve operations or outcomes at State, and what are you doing to enable the success of these partnerships and collaboration efforts?

Mr. Chellaraj: Sure, happy to address that. Our offices throughout the A Bureau partner with other government agencies, the private sector, and nonprofit organizations regularly to achieve their individual missions. I encourage the A Bureau staff to seek out the best in class in their respective fields, both government and private sector, and benchmark against them.

For example, we sponsor the Management Immersion Program, where we place Foreign Service officers in recognized, well-managed external organizations to learn management best practices and bring them back to their posts and the Department. Another example is our Overseas School Advisory Council. Having been a product of several degrees myself, I take real pride, and this is very important to me and for us in the Administration Bureau and the Department.

In '67, the Department of State established the Overseas School Advisory Council, a public-private partnership with U.S. corporations that have substantial overseas operations. OSAC, as it's known, is the longest-running advisory committee in the Department. The purpose of this partnership is to obtain the advice and support of the American corporate community in providing quality education for U.S. citizens, children attending overseas schools.

Currently, there are 194 American overseas schools in 132 countries assisted by the Department of State, and serve 112,000 school-age children of U.S. government and private sector employees stationed abroad, as well as children of host country and third country nationals.

Mr. Morales: Along the same lines of partnerships, could you tell us about the Department's commitment to the small and disadvantaged business community? We understand that your Bureau annually recognizes selected small business contractors who have displayed exemplary performance. Could you tell us more about this award and your Bureau's efforts in this area?

Mr. Chellaraj: The Department of State is committed to ensuring the small businesses, including small disadvantaged, (8a), women-owned, HUBZone, and service disabled veteran-owned small businesses have the maximum opportunity to participate in the Department's acquisition.

For example, last year, the Department awarded approximately $1.3 billion to small businesses. The Department's Office of Small and Disadvantaged Business Utilization is a strong advocate for small business firms, and has a strong history of providing outreach to the small and disadvantaged business community.

Our office participates in many small business outreach events locally and throughout the U.S. that offer small and disadvantaged business with opportunities to learn about contracting. For example, we participated in 38 events last year. We also have a successful record of achieving small business goals.

Here's something we're very proud of: the Small Business Administration presented the Department with the Gold Star Award for excellence in achieving small business goals in both 2005 and 2006. We are also proud of the mentor-prot�g� program, which encourages large business prime contractors to provide mutually beneficial assistance to small businesses.

The Department recognizes the achievements and contributions that small businesses make to its mission during the annual Small Business Prime Contractor of the Year Award ceremony. The Award is sponsored by the Bureau of Administration. It recognizes contractors that have displayed exemplary performance, customer service, management and technical capabilities.

The 2006 award was presented to a team of four highly skilled interpreters, translators, who traveled with our ambassadors in Iraq and provided interpreting support. We also host a small business trade fair at the Department each June for firms that sell office supplies and common usage items, as well as three information technology fairs a year, a prime subcontracting networking session in October and in veterans business affairs. So we do quite a bit in this area, and that is why we are successful, and we're really happy that the Small Business Administration has recognized us for this.

Mr. Morales: That's quite impressive.

Ms. Glick: Turning again to the topic of language services, the State Department has an Office of Language Services that effectively delivers timely, world class interpreting and translating services to the Department as well as language training.

A significant challenge, though, facing this program is recruiting a pool of direct hire employees and contractors who are among the world's best interpreters and translators. How has your organization handled this challenge, and are there any plans to relax some of the Office of Personnel Management's applicant rating procedures and security clearance requirements, which may hinder the recruitment of direct hire employees in this area?

Mr. Chellaraj: Surely. This is a very critical area for us, and we compete head-on with many organizations, particularly international organizations. Our language staff services has a staff of approximately 45 interpreters and translators working in eight languages, and a roster of 1,500 contractor interpreters and translators in 40 languages.

Finding talented individuals to perform these tasks, evaluating their abilities and ensuring that they can pass the necessary security scrutiny will always be a challenge. State Department has certain advantages, we believe. The work we ask our interpreters and translators to perform is difficult, but it's also interesting and it's international. Anyone who can say they work for the State Department, whether as a staff employee or as a contractor, enjoys considerable respect in the profession, we've come to know, because we are well-known for the rigor of our testing process.

In our recruiting efforts for qualified contract interpreters and translators, we require individuals with the highest skill levels and in many languages, and this means that the pool of qualified applicants is limited, in some instances because there's no recurring commercial need for interpreters and translators, and certain languages of limited diffusion.

We actually have to find individuals with strong language skills and provide them with training in interpreting or translating. Let me give you some examples. We've achieved considerable success in the programs we've organized in such languages as Haitian Creole, Urdu, Hindi, Albanian, Vietnamese, Macedonian, Turkish and Greek.

The search for interpreting and translating talent, particularly for the languages of limited diffusion will be an unending quest, and it'll continue. Our staff attends conferences, seminars, regional gatherings, academic symposiums, and job fairs to find the talent we need to perform the work that is required by our clients at the White House, the National Security Council, Department of State, among others.

We also work closely with our colleagues in the Bureau of Diplomatic Security, turning to your question about the security challenges, to perform the required background checks in a timely manner. We receive excellent support from our Diplomatic Security Office, but there are no shortcuts, as you know, when you're trying to do background checks on people who have lived all over the world. This will always continue to be, I believe, a work in progress.

Ms. Glick: As the Chief Acquisition Officer, would you give us a sense of how procurement works within the Department of State? Given the State Department's global footprint, how decentralized are procurement operations within the Department, and what are the benefits of this decentralization, what are some of the challenges? Also, to what extent does your acquisition model emphasize the customer is king approach within your area?

Mr. Chellaraj: Sure. Procurement is a key area for us. In our Department, it is unique, because we have over 200 individual procurement offices at each embassy and post. These offices are located in virtually every country on the planet, with every imaginable set of market conditions. Some of this procurement must be done at post, because necessary goods or services can only be obtained there. Some examples would be renting a facility for a conference or obtaining janitorial service and vehicle maintenance.

These overseas procurement responsibilities are handled by Foreign Service officers who generally manage procurement, as well as a larger portfolio which could include warehousing, shipping, housing and motor pool operations. Locally hired procurement staff would support our Foreign Service officers.

For both the Foreign Service officers and local staff, one of our priorities is to provide worldwide training and oversight of this procurement workforce. Our Office of Procurement Executive, which is in our Bureau, uses the Department's improved Internet capability and e-mail to assist with these trainings. We have all the online training, we have the website, we have the help desk. So all we have made as part of standard operating procedure.

And the Department also uses regional procurement support offices. These are the ones I mentioned earlier in Frankfurt, Fort Lauderdale. It doesn't have to be procured from posts; if it doesn't have to be, we don't do it. We do it regionally as best as we can.

We're also focusing more on our technical representatives. In government, it is called COR, Contracting Officer Representative. And we hold seminars to build a community of practice. These CORs need to learn from each other. This is in addition to the normal training required to be designated a COR at the Department. We are also focusing on strategic sourcing. We've selected medical supplies, furniture, and digital copiers as strategic sourcing targets, commodities that the Department uses throughout our worldwide operations.

For example, we are piloting buying medical services by teaming up with larger partners such as DoD and the Veterans Administration. We are negotiating furniture contracts that'll standardize the types of furniture at posts for easier asset management and will leverage our worldwide purchasing power. With digital copiers, we are more concerned about supplier management and increasing the availability of suppliers.

So there are a number of things under way. Procurement is a real critical function, and we want to ensure that as we standardize and we change some of these processes, we maintain procurement integrity and the proper internal controls and the checks and balances are there.

Ms. Glick: That's great. One of the other areas that you focus on is in the area of allowances, and the Office of Allowances coordinates policies, regulations, standards and procedures for overseas allowances and differential payments throughout the federal government. Would you tell us about the e-Allowances Initiative, and what is the status of this initiative in its implementation?

Mr. Chellaraj: This is an area, where again, we are trying to focus on the customer and improve the service. The Office of Allowances, which is very closely monitored, for obvious reasons, as you can imagine, protects the interests of U.S. government and its employees and families serving overseas by ensuring that overseas allowances and differentials are appropriate to reimburse them for extraordinary costs and difficult living conditions associated with serving abroad.

Conditions at our overseas locations may change abruptly. Our current subsystem for submitting and reviewing allowances is a paper-based system, which obviously will have a lag, as you can imagine. And we really think this delay is unacceptable and began developing e-Allowances, an online way of doing things with quicker turnaround, so the surveys are done, it's reviewed properly, and the adjustments are made in a very effective manner.

Mr. Morales: What does the future hold for the U.S. Department of State?

We will ask Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State.

Also joining us in our conversation is Bonnie Glick, project executive at IBM.

Raj, given the management changes already underway at the Department, where do you see the Bureau of Administration going in, say, the next five years?

Mr. Chellaraj: Sure. If I had to blue-sky this, my objective during my tenure is to ensure that the fundamentals are in place and working well, that we have the flexibility to respond to the changes coming in the future, such as the new IT capabilities. And it's a work in progress, and certainly will be influenced by the external environment.

There will continue to be an evolution to more quicker turnaround, you know, better cycle times, solving issues in real-time.

To your point about advice for successors, I would say focus really on people. People are the key to making things happen, and I would say attracting a talented, innovative, diverse team of experts on the Bureau team, and continuing to do so, is very important. We are currently focused on that, and the Department and the Bureau need to focus on that, and also the processes -- do the standard operating procedures -- are they making sense, and are we doing things the most effective and efficient way possible?

Mr. Morales: Now, Raj, I understand that BusinessWeek has identified the State Department as one of the top 10 places to launch a career, specifically for new college graduates, and was the only federal agency listed in the top 10.

Could you tell us how significant this recognition is to your Bureau, and how has this recognition benefited your Bureau?

Mr. Chellaraj: Oh, this recognition is very important. As you know, competition is intense for top-notch employees, and on that list you will find many recognizable names who are in the Fortune Top 10, Top 20 companies. I recently spoke at an entry-level officers' conference for those serving on their first or second tour in the Middle Eastern region, and the work experience and the academic credentials these individuals offer the Department are very impressive. They represent a wide range of backgrounds and areas of expertise, and language skills. This is exactly the type of individual the Department needs both here and overseas.

Ms. Glick: To that end, and in the spirit of the BusinessWeek ranking, what steps are being taken to attract and maintain a high quality technical and professional workforce?

Mr. Chellaraj: That's a great question. The Department senior leadership, including Secretary Rice, are fully committed to ensuring the Department's workforce reflects the excellence and diversity of America; we want the best and the brightest to come to State, and we are seeking diversity. Now, well-run private companies, as you know, have already realized this and have taken major steps in this direction. Not having diversity is not an option. Look at President Bush's leadership team here at State.

In addition to doing diversity, we are also forming partnerships with many organizations, take part in conferences and gotten our message in print and electronic media. We have diplomat residents in 17 college campuses currently across the country and growing. We identify, counsel and mentor. We have broadened outreach to many minority organizations. We need Arab-Americans, Turkish-Americans, Chinese-Americans, Korean-Americans, scientists, IT professionals.

In terms of the recruiting for the civil service, the Department is one of the most active participants in the President's Management Fellows Program. In FY 2004, we ranked second among overall government agencies for employing the Presidential Management Fellows. We've expanded the Career Entry Program, which is a two-year career development program open to the public, with positions in areas like contract management, personnel management, financial management and other areas and other areas.

In addition, we've done something fairly unique. We have a number of students, interns and career development programs. We have something called a "Stars Program," which is a student program that allows students to work part-time on Freedom of Information Act issues and declassification programs. We have something called CLIMB, which is an entry-level career ladder program for logistics professionals. State really is reaching out to ensure that we have the best and the brightest workforce, and that is why I believe that we are on the Top 10 list.

Ms. Glick: It is fantastic, and it's quite an accomplishment. Attracting employees is important, retaining employees is important. How do you ensure that your employees have their appropriate training and skills to do their jobs? What's your organization doing to ensure that it has the right staff mix to meet the upcoming challenges that will be faced by the Department of State?

Mr. Chellaraj: Bonnie, the Department established a civil service training continuum, which is a tool designed to be a career planning roadmap and a means to ensure that an employee systematically acquires the knowledge and skills needed for successful performance from entry-level to senior-level.

In addition, we have identified certain types of trainings as mandatory for all employees, or in some cases specifically for employees at a grade level. Give you some of these examples: computer security awareness training, mandatory leadership training, equal employment opportunity diversity awareness. Our Bureau works with our colleagues at the Foreign Service Institute to develop and teach a variety of courses; both classroom and distant learning courses, on topics such as emergency preparedness, grants management, procurement.

I mentioned the Management Immersion Program that we have sponsored. I personally encourage and support our own staff to participate in external training opportunities such as the Department of Defense National War College and the Department of Agriculture leadership programs. One of our own special assistants will start at the National War College this August.

Mr. Morales: Raj, there's an ongoing discussion around government, and even in the private sector, about the pending retirement wave. How are you preparing for this within your organization?

Mr. Chellaraj: Sure. Happy to address that. Along with the rest of the federal government, this is an important human capital issue at the State Department. As part of the Department's broad succession strategy, we have developed numerous initiatives and programs designed to ensure we have the right number of people with the right skills to carry the Department's mission.

The Foreign Service system, which is roughly 60 percent of our workforce, is an up or out career system. Higher-level positions, needs will be met by those already in the system through promotion and seasoned employees according to anticipated needs at each level. With the civil service currently -- 14 percent or so of our civil service workforce is eligible to retire, and by 2010, nearly one third of our civil service workforce will be eligible to retire. This is a fairly sizable challenge for the Department of State.

To prepare for this, we've undertaken several initiatives under the leadership of the director general. The Foreign Service Institute School of Leadership and Management Development ensures the leadership training is part of every employee's career path. We project that by the end of the first quarter of 2007, 100 percent of the State Department's target population of roughly 7,000 mid-level employees will have completed this program.

There is the Senior Executive threshold seminar, which is a mandatory 2-1/2-week course for employees newly promoted to the Senior Executive Service or the Senior Foreign Service. Mentoring is also emphasized in the Department, both for our civil service employees and Foreign Service employees. Our own Bureau of Administration also promotes and encourages using individual development plans for our employees.

The individual development plans, or IDPs, as they're known, is a statement of long- and short-term career goals and development objectives that provides a systematic approach to the training needs of employees. By planning needed training and experiences in consultation with their supervisors, employees are better able to develop the knowledge, skills, and abilities to contribute to the organization in achieving their career goals, and more importantly, meeting the Department's mission.

Mr. Morales: Raj, we're coming to the end of our time, but I want to ask, given your diverse and highly successful federal career, what advice would you give to a person who perhaps is considering a career in public service?

Mr. Chellaraj: That's a great question, and that's a great last question. First, I highly encourage everyone to work in the public sector. The government needs innovative, dedicated and energized people. As you consider what you want to pursue, I would remind your listeners do what you're really passionate about. This may mean your career follows a non-traditional path; it certainly has for me. When I started my career, I did not plan to be the Assistant Secretary of State for Administration. Lastly, I would also say work hard, do your job well and you will get recognized and rewarded.

Mr. Morales: That's fantastic advice.

We have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Bonnie and I would like to thank you for your dedicated service to our country across the various roles you've held in our government.

Mr. Chellaraj: Thanks again. It's been a delight being here. In summary, as you can see, we in the Bureau of Administration touch a lot, we work hard at making diplomacy work better. And thanks again for the opportunity to speak to your listeners and share with them our mission and programs. I'd encourage our listeners to look at for very timely information relating to the Department of State.

Thanks again, it's been a pleasure.

Mr. Morales: Great. Thank you.

This has been The Business of Government Hour, featuring a conversation with Raj Chellaraj, Assistant Secretary of State for Administration at the U.S. Department of State.

My co-host has been Bonnie Glick, project executive within IBM.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales.

Thank you for listening.

This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's

Terry J. Pudas interview

Friday, June 1st, 2007 - 20:00
"Transformation can allow you to do things more efficiently. And that's what the question is about; it's not about numbers, it's about capability."
Radio show date: 
Sat, 06/02/2007
Intro text: 
Innovation; Strategic Thinking ...
Innovation; Strategic Thinking
Complete transcript: 

Originally Broadcast Saturday, June 2, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business.

The Business of Government Hour is produced by the IBM Center for the Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness.

You can find out more about the Center by visiting us on the web at

And now, The Business of Government Hour.

Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of the IBM Center for the Business of Government.

President George Bush's mandate for defense transformation was "to challenge the status quo and envision a new architecture of American defense for decades to come."

Over the past several years, it is becoming increasingly clear that defense transformation is not simply a response to global terrorism, but rather a way to leverage the core strength of the U.S. armed forces, which is its ability to adapt and change.

As the rate of change of technology continues to accelerate, it will be even more important that the U.S. military keep pace.

With us this morning to discuss this critical challenge is our special guest, Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources.

Good morning, Terry.

Mr. Pudas: Good morning. Thanks for having me.

Mr. Morales: And joining us is in our conversation is Chuck Prow, IBM's Defense Industry leader.

Good morning, Chuck.

Mr. Prow: Good morning, Al, Terry.

Mr. Morales: Terry, to provide our listeners an overall context on the subject of military transformation, could you give us a sense of the history, mission, and evolution of the DoD's Office of Forces Transformation and Resources, as well as its predecessor organization, the Office of Force Transformation?

Mr. Pudas: Sure, I'd be glad to. Let me just sort of go back in time, so maybe 5-1/2 years ago, when we first embarked on this journey. The President had declared transformation as a key priority. Secretary Rumsfeld clearly was charged was transforming the military for the new world, the new global security challenges in the 21st Century. And so my former boss, the late retired Vice Admiral Art Cebrowski, was asked to take the challenge up. The way we did that initially, of course, was we created an office that was intended to be a catalyst and a focal point for transformational thinking, and tried to jump start that kind of activity within the Department.

And so we went from that idea to creating a fairly modest office of about 15 people or So began to develop concepts of transformation. What was it, first of all? Everybody was kind of confused by this word. What do you really mean by transformation? And why do we need to do it? And of course, change is always very frightening for a lot of people -- how is it really going to affect me? And so that was a lot of the work we did in the first several years.

And besides just sort of the developing the concept, we tried to look at what are some alternative views of the future, perhaps with some alternative logic for the decision-makers as we run through this transformational activity. And then we actually created some sort of what we called experimental articles along the way as sort of tangible examples of those things.

So we went from there to last year, when we realigned the office within the Under Secretary of Defense for Policy to continue that kind of work within the Department. So essentially, we went from sort of this what is this and how is this going to affect me to the culture of the organization actually changing in a way where you can move this activity from outside and more closely align it with the formal processes within the building.

And so that's where we find ourselves today. We're a fairly young organization, obviously, but we're getting our portfolio together and developing the new relationships and making decisions about where you engage in certain processes and the things you can do to continue the work.

Mr. Morales: Now, certainly this area of transformation is very broad, so I'm curious, what is the size of the budget that you manage, and have you moved up from the 15 employees in your organization today than you were 3-1/2 years ago?

Mr. Pudas: Well, actually, the budget's remained fairly constant over the last several years, and it's fairly modest. I mean, we have probably around $5 or $6 million dollars that we use to catalyze projects with and research and studies and war-gaming kinds of events, and we always do that in collaboration with other partners, so we don't embark on these with ourselves. We try to develop a large community of interest in these things.

And the size of the office is about the same. We have about 15 to 20 folks comprised of sort of government employees and military officers as well as some outsourcing support, which we've done.

And so the question is, how do you do this with such a modest budget and few people? Well, you develop a lot of relationships with other folks. And so we have relationships with many of the think-tanks in town, and FFRDCs, or Federally Funded Research places, as well as academia, and quite frankly, with industry. We have -- all the large industries have groups of people that think about strategy and the future, and so we try to team with them as well. So you leverage a small amount of people and build a large virtual team.

Mr. Prow: Please describe your specific responsibilities and duties as Deputy Assistant Secretary of Defense for Forces Transformation and Resources.

Mr. Pudas: Well, I'll try to be as definitive as I can. The vision is really to align the transformational thinking, mainstream it within the Department, as I said, and be connected to some of those formal processes that look at the future strategic environment, think about what future capabilities might look like, and then participate in the processes along the way that lead to the fielding of those kinds of things. And so that's a major undertaking. As well as to continue to sort of push the envelope and look at alternative futures, look at alternative capabilities, look at what technology opportunities might be out there from a policy perspective.

And then part of my tasking is to be sort of the policy point of contact for all of those good transformation issues that are going on at the Joint Forces Command in Norfolk, and of course, Allied Command Transformation down there as well.

So that takes up a significant amount of time, and then, of course, we want to look broadly across all the general purpose forces to look where those interdependencies might be, and highlight those kinds of things.

Mr. Prow: What are the top few challenges you face in your position, and how have you addressed those challenges?

Mr. Pudas: If you've ever worked in a large organization, which I'm sure both of you have, that catalyzing change is always very, very difficult. And so that's one of the specific challenges, obviously, to do that. A large organization has a tendency to be bureaucratic, and so you have to find ways to deal with that and still be effective.

For me personally, not having been within the mainstream here for some time, that's a challenge for me to understand how that works, and so we're doing that. And then of course, it's always a challenge because there's very many competing priorities. But we are not necessarily charged with worrying about the near term. Our job is to be somewhat custodians of the future. And so to have that mix and still be relevant to some of the current things that are going on is always somewhat of a challenge.

Mr. Morales: Terry, we had a few moments prior to our show to talk a little bit about your career, and some time that you spent with the German Navy. I'm curious, how did you get started in your career, and how did you start with Defense Transformation?

Mr. Pudas: Yes, it's very interesting. I had a career as a naval officer for 32 years. At one point there during Desert Storm, I was working for a fellow named Capt. Art Sebrowski, who I got acquainted with very well in a particular job that I had, and it was very interesting. And anybody that knows of him or has been around him knows he's a very unique individual. And so that was the beginning of my association. We then parted ways and went on our own careers, and we ended up working together again up at the Naval War College in his capacity as president, and he asked me to be somewhat of a special assistant.

At the time, his charge was to sort of catalyze transformation in the Navy, and so we worked very closely together for two or three years, and then of course, he was asked to come and take this post, and he asked me if I would be willing to help him do that. And it's pretty hard to pass up a chance like that, to really have a chance to contribute, and of course, it's very hard. He used to talk about what he had spent his professional career doing, and he used to describe it as working at the intersection of national security and large-scale change. And there isn't any more difficult task, but there also isn't one that's more rewarding than that.

That's sort of how I've evolved into this position, and then of course, he stepped down a few years ago, and then I became acting for a couple of years, and we continued the mantra, and then I ended up where I am today.

Mr. Morales: Well, that sounds like a very busy intersection you just described there.

Mr. Pudas: Yes, it is.

Mr. Morales: You used the term "catalyzing change," and so I'm curious, how has your previous experience, your 32 years as a Navy officer and as a pilot, how do you think that's prepared you for your current leadership role and informed your managed approach and leadership style?

Mr. Pudas: Well, first of all, to be a good leader and manager, you have to have some competence in a particular subject, which is always key. And I learned a lot from my former boss, obviously -- you've got to be able to craft a vision for people. And then you have to be able to inspire them towards that vision. And so those three big pieces right there are the areas you have to work very hard at.

I had been in leadership positions in the Naval service and large organizations, and so I had some experience with managing people and different things. I alSo of course, had a history of making my own changes. And so some of the things that I learned were that you have to make change a very inclusive activity; you can't expect people to sit at their desks and wait for permission to think. And so what you do is you invite people into the process, you try to inspire them towards this vision, and then you invite them in to help craft their own future or participate in the transformation. And so I think some of those things that I learned while I was in Naval service, some of those I learned with my former boss, but those have been things that have sort of served me quite well.

Mr. Morales: That's great.

What is the Defense Transformation?

We will ask Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources .

Also joining us in our conversation from IBM is Chuck Prow, Defense Industry leader.

Terry, could you define transformation and transformation rate within the military context? What are some of the keys to transformation, and how has transformation changed from when then-Defense Secretary Rumsfeld first established the transformation office?

Mr. Pudas: Well, defining transformation is somewhat difficult. I think what I'd like to do is maybe try to describe it for you.

Our concept at Transformation is really about doing those things that allow you to continue to have a competitive advantage. And so the concept is really based on the fact that if you are in a competitive environment, whether it's in a national security context or whether you're in industry, and you're not doing this thing called transformation or constant creativity and improvement, you soon find yourself in a very big pickle here.

You are essentially a strategic fixed target. And if you think about it, there's lots of industry examples, and of course, in history in our nation-state examples. So the concept is to this continuum of constant innovation and creativity, seeking those things that are going to be the source of your competitive advantage. And it's really at the high level, it's really about strategy. It's really about choosing a competitive space and then going about the work of creating organizations, capabilities, policies, those sorts of things that influence that competition in the space.

So if you think from your side in industry, it's really the same thing, right? You're not interested in chasing the emerging market; you really want to create the next market. It's about creating the future. The future that you would like. So that's the competitive space. So essentially all the activities come under that sort of large, large strategic concept.

There's a number of things you do. You try to understand the future security environment. People like to look at it through the lens of technology. But it's really much broader than that. It's about new concepts, new organizations, doing things differently with different technologies. It's about trying to understand underlying principles, right? Which all strategists do; they look out there and they say that's really interesting that this is happening, but why is it happening? And is there a way that I could influence this particular trend in a useful way to my advantage?

So things like that. What's going to be the source of perhaps your next competitive advantage kind of thing, and there's some big examples in the past. There's the one from the Army that I always usually use is when the Army, several decades ago, said we want to own the night. Okay, well, we turned that vulnerability into an enormous competitive advantage for the U.S. today.

And it's looking for things that are game changers, changing the game and changing the rules. Changing the basis for competition. When we, for example, decided to compete on the basis of precise navigation and timing, that yielded GPS, Global Positioning Satellite, right? It not only changed the battlefield, but it changed the world. So are there things like that out there that we should be thinking about as well?

But really, and this gets to your question about rate, but it really is about people, it's about the culture of the organization. And all senior leaders know that that's where the real competitive advantage comes from. And so the ability to facilitate what you call a learning organization, one that has the ability to outlearn your competition, so this is about learning rate. And then of course, taking that learning and translating that into some kind of actionable kind of capability or organization or something. That's a real key to it as well, and if you listen to what very successful industry CEOs have done and other people, they really do focus on this learning rate piece.

Mr. Morales: That's interesting.

Now, recently, Defense Secretary Robert Gates has underscored that military transformation, and I quote, "is a major charge from the President that must continue."

I'm curious, how does the recent realignment of your office within the Under Secretary of Defense for Policy support this charge?

Mr. Pudas: Well, I think that we're there now to -- we're more closely along the line with the processes. We were more -- I guess I would characterize us as an influence organization, which would try to create some new logic and try to influence the larger processes, where now we are more closely aligned with the formal processes, and so it really has changed.

I mean, since I've been at this from the beginning, I remember trying to participate in certain forums to try to provide some alternatives, and that was met with mixed success sometimes. But now it's accepted. The views may not be accepted, but the views are always welcomed. And so I think that's a big change in the Department's culture, and so as I said, we're supposed to continue to do this. I mean, my job is to always be somewhat dissatisfied and impatient.

Mr. Morales: You just let out all your secrets.

Mr. Prow: Terry, the core of the U.S. defense strategy focuses on force security challenges outlined in the Department's national defense strategy.

Can you describe DoD's ongoing shift to enhance capabilities and forces needed to address irregular catastrophic and disruptive challenges?

Mr. Pudas: Yes. I mean, there's a tremendous amount of work going on here. Clearly, we had focused on what we called the traditional challenge. The Department of Defense is very, very comfortable in that particular quadrant and sort of took ownership of that, but when you step back and look at the larger competitive environment, you'll see that there's a dynamic that happens, and that is, as you create more and more capability to deal with what we call the traditional challenges, competition moves to the others. And that's part of what you're experiencing now. And so the question is, what kinds of capabilities and organizations and those sorts of things -- you need to deal with those, and so that's a great deal of the work right now. And of course, it's very complicated.

The traditional challenges were usually owned by the Department of Defense. The other three had a larger national security component to them where you now operate in interagency kinds of constructs, and so the team is much larger, so lots of work going on in developing those relationships and what do they look like, how do they contribute? And in many cases, you go from what people talk about as kinetic solutions to non-kinetic solutions, because it's really about behavior.

So what are those kinds of things that we need to be able to do to be more successful in that particular area? I mean, you hear lots of people talking about strategic communications, which is sort of the term of art today, but how much do we really know about that? How do we know about the cause and affect of those things. So that leads you to say, well, if we really want to understand that, then perhaps we need to bring in this group of cognitive sciences and cultural anthropologists to help us understand that particular dynamic.

The catastrophic things, those things are of course very troublesome because we are in a very globalized construct in the world today, where we are very interdependent, which brings with it an enormous amount of brittleness. What might trigger a shock through the system that we hadn't thought about? I sometimes refer to the SARS event in Singapore, right, which was in 2003. Our major focus was preparing for the Iraqi campaign. But the result of that had major disruptions in economics around the world. I think we had a couple of major airlines here in the U.S. that were on the brink of bankruptcy, and we all know what happened to the tourist industry in Canada. And so this catastrophic, cataclysmic kind of stuff is quite troublesome, so how to think through what might be the consequence management of those things.

Disruptive challenges are sort of another category. How do you think about those, and what kinds of things could you do deliberately to help mitigate those kinds of threats? And we have a construct, and if you're interested, we could share it with you. I know time is limited, but this is where rate of change comes in. If you're on a linear sort of path of modernization, a prospective opponent can get a bead on you at some point and disrupt whatever that is you're trying to create, and so being able to modulate rate of change becomes a very useful construct.

Mr. Prow: How can the U.S. military reduce its vulnerability to disruptive threats by increasing investments in programs that accelerate transformation?

Mr. Pudas: Yes, I just sort of touched on that a little bit, but clearly, there's lots of work going on in the Department to work on the processes. I mean, I don't think anybody would come in and say that we're really happy with our processes now and they're just fine, we don't need to change them. Because everybody acknowledges that the rate of change is causing us to re-look at how fast we can do things. So that's going on.

But how do we do other things that help influence our thinking about what are the kind of capabilities that we might want, and how would we use them and that sort of thing, and so this notion of experimentation really becomes a very powerful tool; creating sort of tangible capabilities or experimental articles, as I like to call them, putting them in the hands of operators, bringing the science and technology community together; and then on a very rapid cycle, the developing concepts and requirements and that sort of thing. And so I think that that's a very powerful activity which is very useful, this experimentation business.

Mr. Prow: Can you please elaborate on the concept of transformation chairs?

Mr. Pudas: Sure. I'd be glad to. That's something that sometimes is underappreciated and overlooked, but I talked about it briefly in the opening segment, which was this notion of culture. How do you fundamentally get at the culture of an organization? And of course, one of the key levers of that is education.

Several years ago, we said what could we do to effect that, and so what we decided to do was help facilitate the creation of transformation academic chairs at all of the departments, institutions, and as most people know, we have junior- and senior-level colleges. We have the academies; we have Naval post-graduate school; we have acquisition universities, a whole number of these.

So how can we catalyze transformational thinking in those institutions as sort of a focal point to insert certain things in the curriculum, help influencing how people think about things? And the chairs are interesting, but the real interesting piece is that they come together every quarter and they collaborate with one another, and they share experiences, and so it's sort of a large community, and it's been quite successful.

Mr. Prow: Very good. It sounds like you're creating new models in dealing with the academies and researchers.

Mr. Pudas: Yes. Yes, that's exactly the idea. This notion of collaboration is a different kind of construct in the Information Age. It means different things. And so to be able to facilitate that in this transformation chair network -- and we also have some affiliate chairs, both international and from other folks, too. So it's taking off.

Mr. Morales: Terry, you've used terms like "rate of change," modulating change, you talked about learning, you've talked about behaviors in culture. So I'm curious, to what degree has the DoD developed metrics for measuring the capabilities of transformed military forces and the effectiveness of transformational military services, and is DoD using these metrics in making decisions about programs and resources?

Mr. Pudas: Yes. Of course, that's really the hard question, isn't it; right?

If you're in industry, you can measure bottom line, but here, you're measuring behavior or outcomes that are very difficult to quantify, so they're normally qualitative, subjective kinds of things. And so there has been a significant amount of effort on doing that. It's difficult. We need to continue that effort.

We, of course, were great advocates, and continue to be, of this notion of networkcentric operations, or whatever term you want to use. Everybody seems to buy into that, and they like that, and it's no longer debated; it's how do you actually do it? But then of course, you always run into the question with the resource people, right, and everybody has this: so tell me about the return on investment. Okay, so you have to try to articulate that. And so we've done a number of case studies sort of things to look at different units and how their effectiveness was changed and different things, and so that's been a useful activity.

I actually have a personal metric that I use. And it's used to sort of judge the culture of the organization. Language conveys culture. So the words people use say a great deal about how they've changed, their attitudes about things. And so when I think back when we started, a great deal of talk always about coordination and deconfliction and those sorts of things, but you don't hear that anymore. You hear sharing and collaboration. People use those terms a lot. We used to talk about interoperability, and now we talk about interdependence of those systems. And so for me, that's a fundamental metric for judging how the culture is changing.

This is a tough subject. Metrics have always been the Holy Grail. But we continue to work at it.

Mr. Morales: Well, as you mentioned, it's really all about driving behaviors, and behaviors historically have always been difficult to measure and quantify.

Mr. Pudas: Absolutely.

Mr. Morales: What about efforts in military innovation?

We will ask Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources.

Also joining us in our conversation from IBM is Chuck Prow.

Terry, the Defense Science Board recently released its summer study on 21st Century strategic technology vectors.

Could you elaborate on this study, and what are your views on some of the key recommendations outlined in the study, specifically on the Board's new version of Observe, Orient, Decide, Act?

Mr. Pudas: Over the last decades or so, we had been very, very successful in sort of creating some sort of vectors in terms of precision, stealth, and a couple of others, which really, really served us well. But as we've been talking about, the world changes and the rate of change continues to grow. And so what are those things that we ought to really be looking at?

My personal view is that there are a whole number of exciting technologies out there which some people are calling revolutions in science, and in that category are things like robotics, nanotechnology, bioenergy information, and those are all really, really exciting. But historically, many times, the big advances have come when two or three or those collide in a very clever way or intersect, and you are able to do things that you didn't imagine before.

So I think we always want to be looking at these sorts of things, and I'm glad that they did this, and I'm sure that's going to be very useful to the Department to get their views. These are some very, very bright people who've got a lot of experience and are grounded in these sorts of things. But my view is that sometimes we also need to look at the intersections of these.

Mr. Morales: So do you have a perspective on what some of these new vectors should be, going back to precision stealth joint operations and so on?

Mr. Pudas: Well, these are personal views, but I think that there are things that are going to be very interesting in the future, and perhaps some small investment might be very, very useful.

For example, I already mentioned sort of this notion of the cognitive sciences. I mean, I believe there are many people that believe that is real science now. There were a lot of skeptics that wouldn't allow those into the scientific club, but I think that that's becoming less of a problem. I think that if we don't begin to look at things that affect logistics and sustainability, those sorts of technologies, that we're going to find ourselves out of balance. We have invested enormously in networking the force to allow the force to operate differently in sort of this large dispersed way, and so what are the things that are inhibiting us getting the maximum return on investment out of that?

And then I think that one of the things that of course is going to be extremely disruptive in the future are things in the category of directed energy. Anybody that follows that knows that it's a very interesting area, and lots of work going on there. You just have to look at the reports in the open press to know that there I think have been over 400 incidents of commercial laser kinds of things trying to dazzle airline pilots that are being used by criminals and things like that. And so I think that's an area that's going to be interesting to follow.

Mr. Morales: So again, it goes back to the novel ways of trying to drive behaviors, whether that's in a kinetic or a non-kinetic fashion.

Mr. Pudas: Right. Exactly.

Mr. Morales: Great.

Mr. Prow: Terry, have the fundamental rules of combat, meaning mass surprise, logistics in unity of command, given way to the rules based on information and knowledge?

Mr. Pudas: Yes. I mean, that's a very interesting question. I think that we're beginning to learn more about that. I mean, most people in uniform or that have been in uniform intuitively know that battles are won and lost in the minds of your opponent. It doesn't necessarily have to do with kinetic sort of stuff unless your strategy is attrition. And so what are those things then that affect the cognitive domain of your opponent?

Being surprised, being outmaneuvered, creating closely coupled events. Confronting someone with a situation for which they have no mental model, and so it is really about this notion of creating an information advantage and turning that into a competitive advantage. And so we have I think done a lot in that area.

There's still a lot to understand. It's really interesting to talk to commanders who have been in command of large network organizations and how they have admitted that they had to kind of think through their philosophy of command. All of a sudden, we have the ability for these chat rooms to pop up, and the horizontal sharing of information at lower levels, which isn't necessarily the old command paradigm, when things went up and down the chain. Now they can go across.

And so I look for sort of manifestations of different behavior kinds of things to give me clues to that. What do commanders want to command now? Commanders now want to command bandwidth, which is quite interesting, right? It used to be a back office function, moved to the front office because there's so much -- that's a source of power, and so I guess the rules or the goal hasn't necessarily changed, but I think the way we use information as a real source of advantage has become more appreciated, and people now are understanding how to use that.

Mr. Prow: Given your projection of future challenges to the nation's national security, what is the proper balance between conventional and special operations forces?

Mr. Pudas: Yes. I guess I couldn't give you an exact answer, but if I look at what happened most recently over the last several years and you see how those two conventional and unconventional forces have been operating in concert in many ways, we've always talked about being able to be more soft-like. I mean, that's been sort of the term.

What does that really mean? Well, I mean the ability to -- ease of employment and sustainment, having an appreciation for the local area that you're operating in. I mean, the Special Operations Forces have spent a lot of time doing that sort of thing. I mean, I don't know what the right balance is, quite frankly. I mean, we have to make sure that we have enough sort of capability to deal with any potential high-end kind of thing. And at the moment, of course, we're doing very labor-intensive kinds of operations, and I mean, there's been a lot of emphasis on language training and cultural awareness skills and those sorts, and those are all really, really good things.

I can tell you, though, that there are a lot of people engaged in this particular question. What exactly is the right balance? Are there synergies between the two, et cetera? And so I'm not trying to duck the question, but I don't have an exact answer for you.

Mr. Morales: Okay. Terry, I want to take us back to something that we talked about earlier around this notion of a return on investment. And certainly, calculating the potential cost of defense transformation is not a non-trivial matter. And skeptics have argued that the cost of transformation, both in the near-term and long-term, are uncertain, and that transformation therefore might not necessarily be less expensive than, say, routine modernization.

Could you elaborate on the efforts to really understand the costs associated with transformation within the military, and is it possible to reduce the defense budget and improve the Department's ability to carry out its current and future mission simultaneously?

Mr. Pudas: Let me answer it this way: I think that associating transformation to cost may not be the right metric, because it's really about making choices. Some of the choices that you make have enormous payoff to be able to operate differently than you could before, but are relatively cheap in terms of the overall system. And of course, there are some legacy things that very hard choices have been made over. I mean, you remember the big debate about Crusader and Comanche and all those sorts of things, so it's not necessarily tied to more money, it's tied to the choices that you make.

I'll give you a personal example here: so I'm trying to make the decision on my internet connectivity in my house, so the decision was do I buy this new computer, which was fairly expensive at the time, or do I invest in the high-speed internet? So I invested a modest amount in the high-speed internet, and the productivity in the household went up enormously. So it's not necessarily about buying some new high-end piece of stuff, it's how you use it that really makes a difference, and so making specific choices and understanding the return on investment I think is the real key here.

Mr. Morales: So it sounds like people are drawing an equation that transformation is equal to cost reduction, and that's not really what this is about.

Mr. Pudas: No, not necessarily. Transformation can allow you to do things more efficiently. And that's what the question is about; it's not about numbers, it's about capability. A brigade combat team today can do significantly more than one could a decade ago. And it's just like with airplanes. We used to have 200 sorties per target in World War II, and now we have targets per sortie. And so yes, you can create some efficiencies and effectiveness as you go down this transformational journey.

Mr. Morales: Terry, I only have another minute left, and we talked a little bit about this, so I'm curious, how are we using joint professional military education to transform the mindset and culture of the U.S. joint force community, including our allies and our industry partners?

Mr. Pudas: Well, of course, we talked a little bit about the transformation chairs, and that's a good thing, but one of the things that we also do is we sponsor what we call a transformation short course, which the National Defense University puts on for us. And of course, we invite everyone in the Department, as well as the other agencies, as well as members from industry, but it's pretty much opened up to just about anyone, and to sort of help catalyze this transformational thinking.

So that's been really successful, and most recently over the last -- I would say half year -- we also began a course on what we're calling stability and reconstruction. There's been a great deal of dialogue about that kind of capability and what it really is and how to think about that. And so education is a really powerful tool, I think, to get at this whole piece.

Mr. Morales: Great.

What does the future hold for the DoD transformation efforts?

We will ask Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources.

Also joining us in our conversation from IBM is Chuck Prow, IBM's Defense Industry leader.

Terry, we talked a little bit about behaviors and habits, and so I'm curious, how do you make something like transformation a habit? And given your efforts over the years, could you elaborate on DoD's culture of innovation?

Mr. Pudas: You're right. I mean, people are creatures of habit. It's difficult to catalyze change, and you have to remember that the product of the Department of Defense is national security. And so you have to be careful. I mean, you have to do the appropriate due diligence and all those sorts of things, because it is a really big deal.

But I think the Department's leadership has done a lot over the 5-1/2 years when I look through my lens, in empowering people to propose alternative solutions and different -- my experience is that everybody probably at every desk has some ideas on how to improve things. And so having the ability to listen and empower those people to go ahead and make some change, and be able to do informed risk taking I think is very powerful, and so when you look on the industry side -- I don't like to use too many industry examples because I get criticized for that -- but other large organizations, they're successful, they have that sort of culture. That's what they try to instill, so I think that great strides have been made. It's something that you always have to pay attention to because it's very easy to retrench, and of course, that's not what you want to do.

Mr. Morales: Terry, the integration of the DoD policy directorate was just one of the many changes to take place within the DoD policy directorate. Can you tell us about some of the other changes, and how these changes illustrate the core transformation principle of creating a more adaptable organization?

Mr. Pudas: Well, I can try. I mean, I'm fairly recent to the organization, and this effort was started sometime before we actually arrived, but I know that the leadership of the organization felt that there hadn't been a major transformation within that organization for quite some time. There was sort of some evolutionary steps that were done, and so I believe that they felt that it was time to sort of realign the organization to reflect the global environment of today post-Cold War, and be able to be much more effective in the future, as well as looking at things that could be done to make the organization more effective from a business perspective and management perspective.

And then also, there's a human capital strategy component of this. And so the idea was then to create a different organization that would be much more effective and perhaps more efficient for the future, as well as to create an organization which we call somewhat adaptable. The ability to then change as things unfolded or as new requirements came up and to create an organization where the whole is greater some of the parts.

Mr. Prow: An emerging area of DoD's vision for defense transformation are actions to reduce DoD's energy requirements and to develop alternate energy sources.

What is your role in this effort?

Mr. Pudas: Well, this is something we took an interest in probably three years ago, perhaps even longer than that, because it was our sense that at some point we were going to have to start thinking seriously about this issue, and so we did a couple of modest efforts, a couple of studies, and we actually co-sponsored with Under Secretary of Defense for Acquisition Technology and Logistics a seminar series that meets once a month. It's open to anyone that wants to attend, to look at the energy issues broadly, and it's a very complex thing.

Clearly, there are technology issues, there are policy issues, there are cultural issues. There's a whole number of things involved, but you can see that if you look just on the operational side of the house, how it's becoming a significant deal. It's part of the logistics burden I talked about earlier. And so what we'd like to be able to do is operate in this very dispersed sort of network environment that we've created, but we don't want to spend all of our time protecting convoys of petroleum, for example. So it's both a cost issue and an effectiveness issue.

And then of course, lots of people are talking about peak oil and when is peak oil really going to come, and how's that going to affect the world economy, and there's a competition for energy resources, so there's many dimensions of this, as well as environmental and all of those things. So we are still working on this. I have a couple of studies going on right now that they're trying to look at this through different lenses, trying to create some data for the decision-makers on how to think abut this big issue.

Mr. Prow: Transformation creates new competitive areas and competencies. What qualities will be needed in the warfighter of the future?

Mr. Pudas: We talked about the complexity of the potential future competitive space. Right now, we see our folks being put in very, very complex environments. They're very, very difficult. And so I think there are a couple of pieces of this.

One is clearly, there's a cultural dimension on all this stuff with language training and different things, and how do you think about these complex environments? And then also, of course, there's a capabilities piece of this, something which I call sort of how do you move from binary solutions to something that has a scale of effects? So we give our folks very, very good binary solutions, put them in very complex environments, and then perhaps they have to accept either enormous risk or they do something and there's unintended consequences. And so I think that things in that particular category that have a capability from sort of a non-lethal to a lethal capability would be somewhat useful.

Now, having said that, that is not a simple issue. There's incredible policy issues and cultural issues that go along with that when you start going down that trail, but I think that's an area that we have to start thinking about.

Mr. Prow: It sounds like there are significant human capital issues associated with this subject. What is the Department doing to attract and retain the highest quality workforce?

Mr. Pudas: I think they're doing a lot. I mean, I am not that familiar with the national security personnel system that was just put in place recently. But clearly, that was an attempt to be able to manage the human capital better, because everybody recognizes that that's really what we have to pay attention to. And so how can you unburden some of the previous burueaucratic things and large organizations have those, and so people don't necessarily want to be subject to those and in that kind of environment, so to make the environment much better, and I think that they're working very hard to attract people into government.

Mr. Morales: Terry, we're coming to the end of our time here, but I do have one more question I'd like to ask you.

You've had a very successful career in the Navy, and now supporting the DoD transformation efforts. I'm curious, what advice could you give to a person who perhaps is considering a career in public service today?

Mr. Pudas: I would tell them to do it, because I think there's no higher calling than to serve your country, whether in uniform or in the civil side. And it's very, very rewarding. It's difficult in some cases, but I believe it's a very worthwhile effort, and no matter what kind of day I've had at the office, at the end of the day, I always feel good about that I was contributing to something that was very worthwhile, so I'd like people to consider it very seriously.

Mr. Morales: That's fantastic. Thank you.

We have reached the end of our time, and I do want to thank you for fitting us into your busy schedule. But more importantly, Chuck and I would like to thank you for your dedicated service to our country both as a naval officer, and now leading the DoD's transformation agenda.

Mr. Pudas: At the end of every time I talk to someone or give a presentation, I always like to put a little plug in for our website. You can find us at, and we're always looking for your comments on our website. We try to keep it updated, and we do answer the mail that people send to us.

So thank you very much.

Mr. Morales: Great.

Thank you, Terry.

This has been The Business of Government Hour, featuring a conversation with Terry Pudas, Acting Deputy Assistant Secretary of Defense for Forces Transformation and Resources.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For the The Business of Government Hour, I'm Albert Morales. Thank you for listening.

This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's

John Salamone interview

Friday, May 25th, 2007 - 20:00
"Chief Human Capital Officers' responsibilities include such things as setting the workforce development strategy of the agencies, assessing workforce characteristics, and future needs based on the agency's mission and strategic plan."
Radio show date: 
Sat, 05/26/2007
Intro text: 
Human Capital Management; Leadership; Strategic Thinking...
Human Capital Management; Leadership; Strategic Thinking
Complete transcript: 

Thursday, January 25, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business.

The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at

And now, The Business of Government Hour.

Mr. Morales: Good morning. This is Albert Morales, managing partner of The IBM Center for The Business of Government, and your host for The Business of Government Radio Hour.

Never before have the issues surrounding the management of human capital been more important than they are today. Globalization, the maturing of a Baby Boomer workforce, the high costs of health care and changing demographics are all forcing the government, and the private sector, for that matter, to take on the challenges of managing a diverse workforce.

With us this morning to discuss their organization's role on this topic is our special guest John Salamone, Executive Director of the Chief Human Capital Officers Council at the U.S. Office of Personnel Management.

Good morning, John.

Mr. Salamone: Good morning, Al; good morning, John. It's a pleasure to be here.

Mr. Morales: Also joining us in our conversation is John Kamensky, associate partner and senior fellow at The IBM Center for The Business of Government.

Good morning, John.

Mr. Kamensky: Good morning.

Mr. Morales: John, perhaps you could start by giving us a brief overview of the mission of the U.S. Office of Personnel Management, otherwise known as OPM.

Mr. Salamone: Thank you, Al, I would be happy to. For your listeners who may not be familiar with the agency, they can go to our website, which is, and there, they would be able to find our 2006 to 2010 strategic and operational plan. In that plan, they will find OPM's mission, which is to ensure that the federal government has an effective civilian workforce, and they will also find our roles and responsibilities, which are multifaceted. For example, we accomplish our mission by providing federal agencies with personnel services ranging from recruitment tools to background investigations, as well as the administration of the federal retirement benefits and health insurance plans.

OPM also provides leadership for federal agencies on human resources policies. We provide guidance on labor management relations and programs to improve workforce performance. We do this in a way that's really designed to ensure compliance with the Merit Systems principles, and also protection from prohibited personnel practices. So basically, OPM's job is to hold agencies accountable for their human capital practices.

Mr. Morales: The Chief Human Capital Officers Act of 2002 established the Chief Human Capital Officer position as well as the Chief Human Capital Officers Council. At the time, I believe you were working for Senator Voinovich of Ohio, who championed this Act. Can you give us some background on the Act and why the Chief Human Capital Officer's position and the Council were established?

Mr. Salamone: Sure, I would be happy to. And I have the unique role, I think, of working for Senator Voinovich when he was working on the Chief Human Capital Officers Act, and now in my role in overseeing the Council. So I've had an interesting dynamic, and it's a unique perspective, I think. I will say that when I took the job, when I told Senator Voinovich that I was going to take the job, he sat me down and said, well here's what we would like you to accomplish, or here's what I would like you to accomplish. So I have my marching orders from the Director of OPM, but also from Senator Voinovich.

But to get at your question, both the position of the Chief Human Capital Officer and the Chief Human Capital Officers Council were created through Title 13 of the Homeland Security Act of 2002. The legislation created both the positions of the Chief Human Capital Officer and the Council really to elevate the importance of strategic human capital management in the federal government. Prior to the creation of the Council, there was some talk within the federal government that we really needed to elevate HR so human resources could be on a level playing field with some of the other chiefs; the chief information officer, the chief financial officer, really to get human resource professionals to have a seat at the table with the top level management in federal agencies.

Mr. Kamensky: John, before we discuss the Council and its role, let's talk a little bit about the Chief Human Capital Officer's position itself. Can you explain sort of what that role is and what the scope of responsibilities are of that officer within an agency?

Mr. Salamone: I would be happy to, John, that's a very good question. And actually, the Act specifically notes the responsibilities of the Chief Human Capital Officers, and those roles and responsibilities include such things as setting the workforce development strategy of the agencies, assessing workforce characteristics and future needs based on the agency's mission and strategic plan, allowing the agency's human resources policies and programs with the organization's mission, strategic goals and performance outcomes, developing and advocating a culture of continuous learning to attract and retain employees with superior abilities, and also identifying best practices and benchmarking studies.

And I would be happy actually on that last point to talk a little bit about what we've got going on in the Council with identifying best practices.

Mr. Kamensky: The Council that you just mentioned, could you tell us a little bit about the mission and the charter of the Chief Human Capital Officers Council and -- like how many people are on it, and their responsibilities, and how does that operate?

Mr. Salamone: Sure. I would be happy to. And in the Act actually, they specifically mentioned three areas for the Council and what the Council should be focusing on: first of all, working toward modernizing human resources systems; improving the quality of human resources information; and influencing legislation affecting human resources operations in organizations.

Now, the Director of OPM, Linda Springer, serves as the Chair of the Council, and the OMP Deputy Director for Management, Clay Johnson, serves as the Vice Chair.

We also have Chief Human Capital Officers from the 15 departments and other agencies, including the Environmental Protection Agency, NASA, the Nuclear Regulatory Commission, the Social Security Administration, the Director of National Intelligence, and we also have a small agency representative in the National Science Foundation.

The Council has -- in addition to just the Council structure, we have six subcommittees: Emergency Preparedness; Hiring and Succession Planning; the Human Capital Workforce; the Human Resource Line of Business; Learning and Development and Performance Management.

Mr. Morales: John, can you tell us specifically about your role and responsibilities at OPM as the Executive Director of this Council?

Mr. Salamone: Sure. As the Executive Director, I think my primary responsibility really is to advise and coordinate the Council business and the activities for the Chair and for the members on the Council. I also coordinate OPM's staff participation with all the Council activities. I really viewed my role coming in to this job that I am not the subject matter expert on any of these issue areas. I am learning quite a bit, and it's a tremendous opportunity. But I want to make sure that I bring the right people from OPM, the right staff from OPM to meetings with me so we can lend support to the Council activities.

I've also helped facilitate the development of the Chief Human Capital Officers 2007 strategic plan with our six subcommittee chairs. And the listeners can actually go to our website, which is, and there, they will be able to find our strategic plan for the subcommittees. But my role also includes providing briefings to various human capital stakeholders, including the media. So I am happy to participate in today's event, and I'm hoping that your listeners will learn quite a bit about the Council and will help us raise awareness for the activities that we have going on.

Mr. Morales: Great. We'll certainly have some more questions for you coming up in a little bit.

But first, we obviously talked a little bit about your tenure with Senator Voinovich, but could you describe for our listeners your career path? We're always interested in how people got started in their current roles, especially within the public sector. And more specifically, how has your previous experience, including the work on the Hill, influenced your current leadership style?

Mr. Salamone: That's great. I am really happy to, and actually, I'm very excited because in March I will have reached the 15-year mark with federal service. So I will be accruing leave at the 8-hour milestone, I guess. But my career began in the office of Senator D'Amato in my hometown of Rochester, New York. I worked for Senator D'Amato on a part-time basis as a district representative in his Rochester, New York office, handling issues like case work and constituent relations. I mean, it was really an excellent experience for me personally to get started with federal service. It was very exciting, very energizing. And after about a year and a half, I moved to Washington to serve as Senator D'Amato's assistant personnel director, a position that I was actually promoted to in November 1994.

So I've always had an interest in government service and in personnel, and I think I had a very good solid foundation in Senator D'Amato's office. While I was working in his office, I started my master's degree in public administration at George Mason University, and I was happy to have Mark Abramson as one of my professors there.

Senator D'Amato actually lost in 1998, but that was the year I finished my graduate program, so I was very fortunate enough to apply into and be accepted into the Presidential Management intern program. So I left Senator D'Amato's office in November -- December of 1998 and went right to the Office of Personnel Management , where I served as a Presidential Management intern, finished my two-year tenure there, stayed on for an additional year, and went back to the Senate in January of 2002, where I began working for Senator Voinovich on his Oversight of Government Management subcommittee.

When I went to work for Senator Voinovich, my roles and responsibilities included human capital, but they weren't limited to human capital. I had a much broader portfolio, actually, and the way that the subcommittee was broken down was the Oversight of Government Management, the Federal Workforce and the District of Columbia. And I handled the Oversight of Government Management portfolio for the Senator, which included such things as the Social Security disability process, DOD supply chain management issues, the GAO high risk areas, federal law enforcement reform, which was a personnel issue. I also handled trade-related issues, the human capital issues related to the trade agencies.

But I really think that my previous experiences have prepared me well for the position that I am in right now. I believe that I have an open and collaborative approach to accomplishing the tasks at hand. Director Springer has given me a great deal of autonomy for managing the Council, and I think that's really been extremely helpful for me both personally and professionally to grow, to develop and cultivate relationships with the Council members, with OPM staff, and really piggybacking on the skills and competencies and the things that I learned while I was at George Mason, and kind of the things that I have been working on professionally as well.

Mr. Morales: Great.

How is the Chief Human Capital Officers Council structured? We will ask John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

John, we want to talk about some of the changes you and Director Springer have put in place to enhance the effectiveness of the CHCO Council. I believe this past year, OPM established the Deputy CHCO position. Why were these positions established, and what are you looking to accomplish through these new roles?

Mr. Salamone: Sure. Actually, the Deputy Chief Human Capital Officers I think are extremely important. And prior to my coming on board, the Director talked about adding the Deputy Chief Human Capital Officers at the Council meeting last March. And we really see the Deputies playing three very important roles for the Council. First and foremost, they will help us serve as the links to the federal human resources directors. We've heard through GAO reports, through interviews that I actually conducted with the Chief Human Capital Officers and Deputy Chief Human Capital Officers when I first came on board -- I went around and met with all of the Chief Human Capital Officers and the Deputies. It took me about two months. And we heard that, you know, what was happening at the Council level wasn't necessarily filtering down to the federal human resource directors.

So, most if not all of the Deputy Chief Human Capital Officers are either HR directors themselves or they have HR directors that report to them. So we're hoping that the Deputies will serve as another set of eyes and ears to come to the Council meetings and filter information to the HR community.

Second, I think the Deputies will also help us identify and share best practices. We have a lot of goals in our strategic plan dealing with finding and sharing best practices. And really with their subject matter expertise, we're hoping that the Deputies will identify and help us share those best practices and find the right forums to share those best practices.

And finally, really the Deputies will help us ensure continuity when there are changes in leadership at the Council level. Most if not all of the Deputies are career civil servants, so when there are changes in administration or changes at the individual Chief Human Capital Officer level in an agency, the Deputy Chief Human Capital Officer will be able to step in and say here are the things that the Council's been working on, here's the direction that the Council is going, here's what's working, here's what's not working, and really just helping us ensure that there is continuity when we have that leadership change.

Mr. Morales: Certainly helps broaden the reach of the Council across the agencies.

Mr. Salamone: Most definitely. Most definitely.

Mr. Morales: Also recently, OPM made some additional changes to the subcommittee structure of the Council. Can you describe these changes as well as the rationale behind the new structure?

Mr. Salamone: Sure, I'd be happy to. And again, this was something that the Director was working on right around the same time, about the March Council meeting, right before I came on board. We have six new subcommittees. The structure includes Emergency Preparedness, Hiring and Succession Planning, the Human Capital Workforce, the HR Line of Business, Learning and Development, and Performance Management.

The six subcommittees -- really the Director looked at the structure that we had previously, and some of the subcommittees are the same, some of them are split up and combined in different ways. But really, the current structure is intended to ensure that we focus on the most pressing human capital issues facing the government.

And we've been very, very active with all of the subcommittees. Each of the subcommittees meets on a monthly basis, and we've been working very diligently toward meeting the goals and objectives that we've outlined in the FY 2007 strategic plan for the subcommittees.

Mr. Morales: Now, on the same topic, the subcommittees released their new mission statements and operational goals, which are obviously sponsored by the CHCO Council. Can you talk about how and why this document was developed, and more specifically, how the subcommittees plan to accomplish their goals?

Mr. Salamone: Sure, absolutely. The subcommittee's strategic plans were really born out of a conversation that Director Springer had, and she thought that the best way to get the Chief Human Capital Officers engaged and have the subcommittees work on things that are meaningful is to give the subcommittees and the subcommittee chairs the autonomy to develop their own strategic plans and things that they want to work on to accomplish the goals for the Council.

We've really taken a bottom-up approach. The Council members and the subcommittees had a great deal of autonomy to draft their own mission statements and their own goals. I will say that I played a role in that to the extent that I provided each of the subcommittees with a draft mission statement, because I felt that it was better to give them something to react to rather than starting from scratch. But when it comes down to the goals and objectives that they've put together, really, those were conversations that happened at the subcommittee meetings to really drive the agenda for each of the subcommittees.

Let me add to this and talk a little bit about how the subcommittees plan to accomplish their goals, to get back to your original question, Al. Each of the subcommittees, as I'd indicated, meets on a monthly basis. And I bring the OPM staff with me to the relevant subcommittee meetings. The listeners can go on the website -- as I indicated, it's -- to pull up our strategic plan. And you will see that, you know, the goals -- for example, the Emergency Preparedness subcommittee, one of their goals was to assist OPM in the development of a communication plan for pandemic influenza. This subcommittee was extremely active with OPM when we were developing our guidance last summer from May to August. They helped us develop our guidance, and they helped us pre-clear our guidance before we went through the OMB clearance process.

So we're working very collaboratively between OPM and their subcommittees to accomplish the goals and objectives that they've put forward.

Mr. Kamensky: John, in 2006, the Office of Personnel Management issued its strategic and operational plan, so that's separate from what the Council's plan is. But it includes outcome and goals that are focused on human capital results that agencies have to implement. What role does the Council play in helping OPM achieve those kinds of goals?

Mr. Salamone: That's a great question, John. Actually, if the listeners look in the back of our strategic plan, the Council strategic plan, they will see that we have linked OPM's operational goals and objectives, the relevant operational goals and objectives, to the subcommittees as well.

So not only do we have OPM staff that go to the Council meetings or subcommittee meetings to talk about the goals and objectives that the subcommittees have put together, but we have staff that goes to the subcommittee meetings to talk about OPM's goals and objectives so we can partner and collaborate with the Council to accomplish the goals and objectives that OPM has set forward.

We've had some very good successes. As I mentioned, the Emergency Preparedness subcommittee, working with OPM on the pandemic influenza guidance. But we've also had the Hiring and Succession Planning subcommittee work very closely with OPM to develop more targeted job fairs for college students for our job fairs.

Mr. Kamensky: The Council and its members seem to operate maybe a bit as a federation of independent agencies. They obviously have diverse views and stuff because they come in from different programmatic areas. But what's the biggest challenge for OPM and the Council to work together on achieving common goals?

Mr. Salamone: That's a really good question. And yes, I think operating as a federation of independent agencies is probably a good descriptor. But I think we really do, fortunately, have a very open and collaborative working relationship with the Council and the Council members. And I think we're very pleased with the progress that we've been making so far.

But to really answer your question, John, I think we'll continue to find ways to strengthen and enhance those relationships so that we can work together to secure a positive legacy for the Council so that the next set of leaders coming into their CHCO roles will have a solid foundation for working with OPM, and building on what we've been able to put in place for the Council.

Mr. Morales: John, one of the other elements of the CHCO Act was the establishment of the CHCO Academy. Can you talk a little bit about this academy, as well as why it was established, and what role does it play in relation to the Council and the agencies?

Mr. Salamone: I'd be happy to. And actually, the academy was originally intended to serve as a way for the Chief Human Capital Officers to learn about and share best practices. With Director Springer opening up the Council meetings to Deputies as well, we now have Deputies come to the meetings. But I've worked on several training academy sessions. I serve, I guess, as the dean of the training academy. But when I came on board, the training academy sessions were relatively low turnouts. Six -- maybe five, six, seven Chief Human Capital Officers would show up.

My first meeting, we had Deputies on board, so I think we had close to 17, 18 members. But I took a look at the training academy sessions and felt that we may actually be missing an opportunity. In getting back to the link to the federal human resources community and the practitioners, I thought it was a good idea really to open up the academy sessions to allow each Chief Human Capital Officer to bring three staff members with them to the training academy sessions.

And in the last couple of sessions that we've had, we've had between 60 and 70 attendees. And that is 10 times what we were originally having when the Council first set up the training academy sessions. And in this year alone, we had in January a training academy session on the SES Pay-for-Performance System, where we had 70 agency representatives attend and hear best practices. OPM kicked off the meeting, talked about the system, talked about the requirements, talked about the certification process. And then we had the Department of Labor, the USDA, Department of Agriculture, and the Department of Treasury share best practices with those 70 attendees on things that they've done to help improve their SES Pay-for-Performance System.

And in February, we had a training academy session on Telework. And we talked to some agency -- some agencies brought some agencies in to talk about things that they are doing in their agency to enhance and promote Telework, which is obviously extremely important to the federal workforce, and quite frankly, an area where I think we need to focus a little bit more attention on. But really the training academy sessions I think is one of our biggest successes.

I am going to look to possibly webcasting the training academy sessions as a way to reach an even wider audience, something that I'm talking to the OPM staff about and will be talking to the Council members about as well. It may not make sense to webcast every single training academy session. But certainly there are some that we could webcast, and if the issue was hot enough, we really could reach a very, very wide audience.

I'm going to have to give credit to a DHS staffer, Department of Homeland Security staff member. I was talking about the training academy sessions at a recent presentation I gave at the National Academy of Public Administration. And they actually suggested that we webcast the training academy sessions. So it was an excellent suggestion. And one of the benefits I think about getting out there and talking about the mission and the successes of the Council is to hear from the community on what we're working on and how we can make improvements.

So certainly that was a worthwhile suggestion. And I'm hoping that we're going to be able to pull that off.

Mr. Morales: That's a fantastic forum for sharing best practices across a wide variety of agencies. That's great. Are they typically run by Council members?

Mr. Salamone: Actually, I work with the Council members to pull together the training academy sessions, the topics -- sometimes the Director, Linda Springer, will suggest topics. And she actually suggested the SES topic, and I thought that Telework was the next logical thing for us to be working on, or the next logical issue area for us to highlight. But we're open. And I talk to the Deputy Chief Human Capital Officers, I talk to the subcommittee members, and I talk to the members of the Council, about what future topics would be relevant and timely for the Council to showcase as an academy session.

Mr. Morales: That's fantastic.

What are the some of the key human capital challenges facing the federal government? We will ask John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

John, what are some of the biggest human capital challenges facing the federal government? And mind you, we only have an hour to discuss this. And what are OPM and the Council doing to address these challenges?

Mr. Salamone: I think, Al, you know, one of the biggest challenges that we have facing the federal agencies today is hiring. The federal government must continually look for ways to recruit, hire, and retain top talent. You know, as I indicated, we do have a Hiring and Succession Planning subcommittee. The subcommittee has several goals. But really where we need to start is federal agencies have to take a look at the processes that they have in place for hiring their employees, and make sure that they are utilizing to the fullest extent possible all of the flexibilities available to them.

The Chief Human Capital Officers Act included several flexibilities such as category rating instead of having agencies use the Rule of Three. And OPM actually is working and positioning themselves to help the federal community to streamline the hiring process as well. For our listeners that are interested in the federal hiring process, they can go on the OPM website,, and there, they'll find OPM's Hiring Toolkit.

The Hiring Toolkit is an excellent, excellent resource for federal human resource professionals, and it's really intended to help the federal human resource community and the managers navigate the hiring process and identify any bottlenecks that they have within their agency. Human resource professionals go on the Hiring Toolkit, they'll see that we've mapped out the 45-day hiring process, and we identify how long it should take in each step of the process. And then agencies can map that against how long it takes them to identify or hire an employee.

And what the Toolkit will do is identify where there may be very large gaps, and it will give the agencies helpful hints on how they can close those gaps to streamline the hiring process. In addition to hiring, I think the federal government must also focus on succession planning initiatives to ensure that we have the right talent to fill in for the loss of institutional knowledge when our federal employees retire. OPM has a plan to help agencies fill mission-critical occupations through our Federal Career Day job fairs.

And as I indicated, our Hiring and Succession Planning subcommittee on the Council has been working very, very closely with OPM on targeting those job fairs for mission-critical occupations. So that's another I think very big challenge that we have for the federal government. And as long as I am serving as the Executive Director of the Council, I'll really do my best to ensure that we have OPM and the Council working together to solve the biggest and most pressing challenges that we have in the human capital world and facing our federal government.

Mr. Morales: John, I'm sure that these challenges of hiring and succession planning are further exacerbated by projections on the retirement wave and the loss of talented and skilled individuals. What's the Council doing to recruit and retain the next generation of federal workers? And specifically, I'm interested in what is the Council doing to attract the younger generation, those that are perhaps still in college today, and may have some interest in working for the federal government?

Mr. Salamone: I think the first thing obviously is the Federal Career Day job fairs, but that's certainly something that the Council is looking at. And actually in our January meeting, full Council meeting, we had a briefing from the Gallup Organization and the Council for Excellence in Government, talking about their study that they had released earlier in the year: Understanding the Workforce of the Future. And they surveyed the general public and got some feedback from the general public on what were the perceptions of working for the federal government.

And I think that there is some really good news in that report, that they identified that we have an opportunity to go after and recruit Generation Y, the 18-to 29-year olds. There are specific findings. They said 34 percent of the Generation Y cohort are interested in working for the federal government. I think that is extremely promising. So the federal government has not done in the past 10 years or so a lot of recruiting. Recruitment has been ramped up in the past couple of years.

But we really need to see how we can target the Generation Y through colleges and university visits, through certain intern programs, to recruit and get some talent in the door, get some excitement about federal work and having the younger generation answer the call to serve. So I think there are some good new stories out there, and there are some opportunities for us to go after and recruit that Generation Y.

Mr. Morales: That's a surprising statistic. 34 percent is a very large number.

Mr. Salamone: Yeah, it is extremely large and something we're very very excited about.

Mr. Kamensky: Last year, OPM and the Council actually conducted a couple of hiring satisfaction surveys to try to improve the federal hiring process. Can you tell us a little bit about what these surveys were and the kind of results you saw, and what agencies plan to do to address the issues that surfaced?

Mr. Salamone: Very good question, John. And actually, the surveys were implemented prior to my coming onboard. But I will say that OPM staff did brief the Council on these issues during our November 2006 Chief Human Capital Officers Council meeting. The goal of the survey really is to improve the hiring process and assess management applicant satisfaction with the agency's hiring process in key areas. On the management side, the surveys look at things like job announcements, r�sum� contents, applicant quality and quantity, and hiring flexibilities.

For the applicant survey, we look at things like job announcements, r�sum� building, applicant storage and retrieval, job search, and just overall satisfaction. The findings that we discussed at the November meeting included on the management side, we're finding very high percentages of managers -- 90 percent to be exact -- believe that the vacancy announcements that they write for their agencies and for positions in their agencies accurately reflect the jobs at hand. So I think that was a very good statistic.

However, only 34 percent feel that they have the flexibility to use pay-setting flexibilities. And that's something that we want to take a look at and work with the agencies on to try and get that number up a little bit. But agencies are setting targets to date, and they've chosen to focus on improvements in several areas. And I'll just name some of those areas.

Things like hiring satisfaction; the appropriate number of applicants on the certificate; job announcements; the quality of the applicants; receiving certificates in a timely manner, again streamlining that hiring process to make sure that we are getting the certificates in the hands of the hiring manager fast enough so we don't lose that talent when we're competing against someone that may be interested in the government but we lose them to the private sector.

Again, just working on the job announcements and the application process, really making the job announcements more appealing to the applicants, putting catchy language in there, getting away from things that say "the incumbent will serve in this capacity," and just kind of improving the way that we write vacancy announcements.

Mr. Kamensky: In addition to hiring, another challenge that seems to be facing a lot of agencies is performance management; in particular, pay-for-performance. That's been a hot topic in the public sector, as agencies are looking to link individual and organizational performance. What's the Council doing to make sure agencies have the systems in place to support strong performance management programs, and that the agencies and the managers have the skills to manage them?

Mr. Salamone: That's an excellent question, John. And if you look at the recent survey results from the Federal Human Capital Survey, this was one of the -- and I think the lowest scoring result that we had for the federal government -- that employees felt that their pay raises were based on performance. And it's something that our subcommittee on Performance Management is looking at. I mentioned the academy session on the SES pay-for-performance system. That's one component.

But what we really need to do a better job of in the federal government is linking the agency's mission and driving that down to the goals and objectives that we set forward for the employees, that line of sight -- creating a line of sight that employees know what they're working on contributes to the mission of their agency or the mission of their organization, and that they are paid based on that performance, and based on how well they contribute to the mission of the agency.

If you look at the goals and objectives of the subcommittee, they're looking at identifying best practices for performance management. And I'm going to be working with the subcommittee to identify those agencies that have done a good job, those departments and agencies that are doing a good job, finding those best practices and showcasing those best practices in a document that we'll be putting together at the end of the year. So there's a lot going on. It certainly is a hot topic for the federal government. GAO recently issued their 2007 High-Risk Report, and it did include human capital as a high-risk area.

There's been a lot of work that's been done on human capital. But they mentioned as a first step toward human capital improvement that Congress must pass a pay-for-performance system for the federal government. So it's not only incumbent upon the agencies, but we can't do it alone. We need some help from Congress, and I don't know how likely it's going to be that that's going to happen. But it's certainly something that we will be looking at and hoping will happen to give us the flexibility to create a system that levels the playing field for the agencies.

Mr. Kamensky: That's interesting, as performance management has obviously been an enduring topic for a lot of things. There's a initiative this administration has taken up in the past couple of years called the HR Line of Business, the Human Resources Line of Business. And you have one of your subcommittees devoted to that. Could you explain a little bit about what is a Line of Business, and sort of what is the subcommittee doing, and how are they going to help move this initiative along?

Mr. Salamone: Sure. Actually, the mission of the Human Resources Line of Business is to support the governmentwide effort to ensure that the line of business meets the needs of the agency in their strategic management of human capital. The Human Resources Line of Business was established to really take a more central approach for some of the backroom day-to-day paperwork processes of the agencies, and consolidate those and centralize those into certain lines of business.

And really what we're trying to get to for the federal government is moving away in human resources -- moving away from just the day-to-day paperwork processing of the Standard Form 52s, the paperwork that you need to process, federal applicants, and the paperwork that you need to process for individual personnel files, and really move human capital or human resources in the direction of being more strategic partners, more strategic consultants in the agencies, so that an HR professional in the government can go and work with the manager and say here's how we can help you streamline the hiring process, here's how we think you would benefit from a different vacancy announcement, or using different language in your vacancy announcement.

So the Lines of Business will actually free up our HR professionals and help us develop the skills and competencies we need to make the human capital professionals in the government be more strategic. Now, we did not have a Human Resources Line of Business subcommittee in the Council. This was something that was new that the Director added. And really their first goal and most important goal is to provide more visibility of the Human Resource Line of Business to the Chief Human Capital Officers Council.

Gail Lovelace, from the General Services Administration, serves as our subcommittee chair. And the subcommittee is working extremely close with Norm Enger, who is the program manager at OPM for the Human Resources Line of Business. So we have a very good working relationship between the subcommittee and Norm Enger's office.

Mr. Morales: John, we only have about 60 seconds left. But over 90 percent of the federal employees are actually located outside of the Washington, D.C. area. What role does the Council play in reaching out to these employees that are beyond the immediate reach?

Mr. Salamone: That's a great question. And, you know, I think one way that we are looking to improve that coordination out to the field is to work through the federal executive boards and push information out through that infrastructure. But we're also hoping that the Chief Human Capital Officers and Deputy Chief Human Capital Officers will take what they learn and take what we discuss at the Council meetings and push that information out to their human resources professionals in the field.

I've made a pledge and offer to the Chief Human Capital Officers that I'd be happy to come and speak to their human resources team, whether they have an all-hands meeting here in D.C. that's broadcast out to the field -- to just introduce the Council to them, talk about what we have going on, talk about the things that we're working on in the Council. So I think I can play a role in that. But really, we're looking at working with the FEBs, working with the Chief Human Capital Officers and then seeing what role I can play in filtering information out to the field as well.

Mr. Morales: Great. What does the future hold for the Council?

We will ask John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

John, can you talk a little bit about the role the Council plays in the area of emergency planning? You alluded to this a bit earlier. Specifically in the areas of preparing for the pandemic threats, or responding to natural disasters such as Hurricane Katrina.

Mr. Salamone: I'd be happy to. And actually as I'd indicated, the subcommittee was extremely instrumental to OPM when we were working on our human capital guidance for pandemic influenza. And listeners can go to to pull up our human capital guidance. And they'll see what OPM has been working on and the guidance that we've delivered to the community.

But I'll say that not only with the human capital guidance for pandemic influenza, the Council was extremely helpful during Hurricane Katrina. Now, that was prior to my tenure on the staff of the Council, but OPM Director Springer held several conference calls immediately following Hurricane Katrina to discuss with the Council members existing personnel flexibilities to help the employees out in the Gulf region. And actually, there's a summary of those conference calls and what was discussed on the Council's website on our documents page; it will detail what the Council members talked about and things that we were working on to really help the employees in that region.

Mr. Kamensky: John, the Council's been in existence for, what, four years now. What challenges did OPM and the agencies face to get it off the ground? And how has the Council evolved to respond to those challenges?

Mr. Salamone: I think, John, that's a great question. And with your background in government, you know that whenever you start anything new in government, it's always difficult to start from the ground up. My predecessor, Mike Dovilla, who was the Executive Director prior to my tenure, really did an outstanding job setting up the Council, starting from scratch, and getting a very solid foundation in place.

My goal really when I came on board looked at my roles and responsibilities as the Executive Director, set some short-term and long-term goals for myself. And really my long-term goal is to make sure that I'm doing everything that I can to build on that foundation, work with the Director of OPM, work with the Council members, work with our stakeholders, to raise awareness and secure that positive legacy for the Council so that the next generation of Chief Human Capital Officers that come in have a good solid foundation and know that they're coming into a Council that serves a wonderful purpose for the human resources community, and has done some very good and innovative things for the community, and they can take it and build upon our successes.

Mr. Kamensky: In doing that and looking out to the future, how does the Council stay current on human capital issues? And what role do you guys play in anticipating or planning for future trends?

Mr. Salamone: That's a very good question. And actually, to Director Springer's credit, she's changed the structure of the Council meetings to make sure that we have more engagement and more involvement from the Chief Human Capital Officers. And beginning with the January meeting this year, we are breaking the meetings -- they're two-hour meetings, and they happen -- we have six meetings a year; they occur every other month. The first hour of the meetings really is to focus on the business of the Council. OPM will give briefings on cutting-edge issues that are coming up or things that we're working on at OPM. The subcommittees will conduct briefings. But that last hour is really for the Chief Human Capital Officers to volunteer and discuss cutting-edge topics that they have going on in their agency.

For example, our March meeting, which is coming up in a couple of weeks, Dr. Reginald Wells from the Social Security Administration is going to talk about Social Security's distance learning process, and how they've implemented strong distance learning procedures for the Social Security Administration, something that we can share as a best practice at the Council, something that fits in very well with the mission of our Learning and Development subcommittee, something that we hopefully will be able to showcase at the end of the year in a best practices document.

Mr. Morales: John, along the same lines, one of the trends that we're seeing is this transformation of the human resource workforce from what was traditionally a transactionally based organization to a more strategic business partner. Can you talk a little bit about what the Council is doing to address this transformation? But more importantly, to ensure that the HR workforce has the necessary competencies.

Mr. Salamone: Al, that's a great question, and I alluded to it a little bit before with the Human Resources Line of Business dialogue that we were having. And actually this particular issue dovetails very well with the HR Line of Business. Our human capital subcommittee is working on this very problem. And, you know, their mission is to make sure that we have the skills and competencies in the human resources community to serve as a strategic consultant for federal agencies, and making sure that we're hiring a new generation of human resources professionals that have those competencies to service as a consultant.

Mr. Morales: John, we started this show talking a little bit about your background and your experience on the Hill and at OPM, which shows a real commitment to public service. What advice would you give to a person perhaps still in college who is interested in a career in public service?

Mr. Salamone: Al, I'm happy you asked that. And I will have to say that I have been extremely fortunate, very lucky, and I am extremely honored to have served in all of the positions that I have had. You know, starting in Senator D'Amato's office part-time three days a week making $9,000 a year, I know I was not going to get rich, but I knew that it was a wonderful experience. I would not trade one day of my 15 years of federal service for anything.

I'm sitting here with you today; I never in my wildest dreams would have imagined that I would be on the radio talking about very important human capital issues that are facing the federal government. I would say to college students out there, give the federal government a chance. You could rise up very quickly, make an impact, and really do a great service to your nation by serving as a federal employee.

I'm going to work as hard as I can to continue my federal service, and we'll see where this job takes me. But I'm very excited about the future. And I think all the college students that are out there -- really think about it, because federal service is a noble profession, and you'll have an opportunity to do great things for the United States.

Mr. Morales: That's fantastic. And with that, we hope that the next Gallup poll shows a couple of more points increase in that 34 percent population.

Mr. Salamone: Hope so.

Mr. Morales: John, we have unfortunately reached the end of our time. I do want to thank you for fitting us into your busy schedule. But more importantly, John Kamensky and I would like to thank you for your 15 years of dedicated service to our country.

Mr. Salamone: I appreciate that Al, John. Thank you very much for the opportunity to come here today. If any of your listeners are looking for information on the Chief Human Capital Officers Council, they can visit our website at And in addition, too, they can go to the OPM website if they're interested in the Office of Personnel Management, at And finally, for those college students or those of you in the audience that are interested in federal employment, please visit our website, And there, you will find vacancy announcements and job opportunities that are available to you in the federal government.

Mr. Morales: Fantastic. Thank you.

This has been The Business Of Government Hour, featuring a conversation with John Salamone, Executive Director of the Chief Human Capital Officers Council at the U.S. Office of Personnel Management.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business Of Government Hour, I am Albert Morales.

Thank you for listening.

This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs, and get a transcript of today's conversation.

Until next week, it's

A Model for Increasing Innovation Adoption Lessons Learned from the IRS e-file Program

Thursday, April 12th, 2007 - 16:20
Posted by: 
Transparency is one of the current buzzwords, which is notnecessarily bad. A keystone of democracy is accountabilityand transparency, i.e., providing information is one way forthe government to be accountable. Since no one wants tolook bad, transparency can be a major impetus for programimprovement.

Forum Introduction: Toward Greater Collaboration in Government

Thursday, April 12th, 2007 - 15:43
Posted by: 

Leading the U.S. Coast Guard

Thursday, April 12th, 2007 - 15:31
Posted by: 
Profiles in LeadershipAdmiral Thad W. Allen Commandant, United States Coast Guard

Vice Admiral John Harvey, Jr interview

Friday, March 30th, 2007 - 20:00
"I [the Navy] can offer an incredible array of training that prepares young men and women for a future that's theirs to make."
Radio show date: 
Sat, 03/31/2007
Intro text: 
Human Capital Management; Strategic Thinking...
Human Capital Management; Strategic Thinking
Complete transcript: 

Originally Broadcast Saturday, December 16, 2006

Washington, D.C.

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Vice Admiral John Harvey Jr., Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education.

Good morning, Admiral.

VADM Harvey: Good morning.

Mr. Morales: And joining us in our conversation is Bob Bleimeister, partner in IBM's human capital practice.

Good morning, Bob.

Mr. Bleimeister: Good morning. Glad to be here.

Mr. Morales: Admiral, can you tell us about the mission of your office and how it supports the mission of the department, and the Navy specifically?

VADM Harvey: Certainly. I think the best way to think of it is I am the Navy's people-guy. I represent every aspect of the people part of our Navy, the best talent that our nation has to offer, and how we bring them into the Navy, how we take them through the Navy -- their training, their education, their assignments -- and then how we either retain them up to the point where it's time to retire or they separate and go on to another career. So it's a pretty all-consuming version or view of the people in the Navy and everything about their lives with us in uniform.

Mr. Morales: Admiral, I probably should have asked you this to start with, but perhaps you can give us a sense of the scale here. When you say Navy, how big is the Navy -- the military, the reserves, civilians -- and can you relate this size to the scope of your efforts and how your office is organized? And perhaps you can tell us a little bit about the budget that you manage.

VADM Harvey: Sure. The numbers will I think make clear that we stay pretty busy. On active duty today, in the active duty force, we have about 350,000 sailors -- that's officers and enlisted. About 50,000 officers and about 293,000 enlisted, with 4,400 midshipmen at the Naval Academy on our books. For the reserve component of the Navy, for the ready reserve, it's a total of about another 130,000, with 70,000 in our selective reserve who we have in a drilling status, who we still see in Iraq, in Afghanistan, and around the world in various places, and then in our individual ready reserve who are on standby working through their lives but on our books as potential to serve, that's about 60,000. When you look at the civilian component, which I am not strictly responsible for, that's another 175,000 individuals. So when you total it all up, we've got close to 900,000 folks in the Department of the Navy doing the nation's business every day. Now in terms of my budget, I spend about $30 billion a year in terms of direct costs in our military personnel accounts -- that's paid allowances, training costs, et cetera. So it's a pretty hefty sum to take care of all those folks.

Mr. Morales: So just to clarify in terms of the scope, it is the men and women in uniform, both active and in reserves, but not the civilians.

VADM Harvey: Correct. That is correct.

Mr. Bleimeister: Admiral, you've got a dual title: Chief of Naval Personnel, and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education. Could you describe in a little more detail your personal role and responsibilities?

VADM Harvey: Absolutely. When you look at the title "Chief of Naval Personnel," that's rooted in law and deeply rooted in our history. The first chief of the Bureau was put in office in 1862, and that was in result to the growing demands of a rapidly expanding navy in the Civil War, when you used to just bring in and pay off the crew members on the ship and never worried about anything beyond that immediate tour of duty. When they expanded the Navy to fight the war, they realized that model was not going to be a model for success.

So today, the Chief of Naval Personnel is responsible for the recruiting function of all our officers enlisted, the training function across the board, getting them ready for what we want them to do, distributing them throughout the Navy to where we need them to be, and then again retaining those that we want to keep in for their career, who want to stay with us who we want to stay, up to the point where it's time to either retire or separate. So that's kind of the today job.

There's a future look to it, which is the Deputy Chief of Naval Operations, where I look ahead and say, "Okay, here's what the Navy's structure is going to be 5, 10, 15 years from now. What do we have to lay in in terms of our plans and policies to ensure we have the right kind of people to match that kind of structure for the global environment we expect to face out at that time frame." So that's the future look, if you will. And making sure we have those roadmaps in place to get us from today to what we believe will be our future that will match up with what we think the Navy's going to look like at that time as well.

Mr. Bleimeister: Admiral, you've had a very interesting career up until you took over this job about a little over a year ago. Could you talk about how your career in the Navy started, and leading up a bit to before you took this role?

VADM Harvey: Certainly. Like so many others, it started at the Naval Academy, and I graduated from there in 1973 with a degree in political science, but I don't want to go into too much detail. It's important because one of the really big things I learned there set me on the path that has carried me through for 33 years. I was a political science major and I loved it, and the math and science and technology, the physics, electrical engineering, didn't come that easily to me, and because it didn't I sort of avoided it and didn't perhaps make the level of effort I needed to along the way. But I went on a summer cruise and realized that at its heart, this was a technologically-oriented Navy, and that to make the most of the ships, the aircraft, and the systems that we operate, you really do have to have a deep understanding of what it is -- the fundamentals of what you're doing.

And so I looked around and said getting into the nuclear propulsion program would be a way of helping to really upgrade the technical side of my education, and that was putting it mildly. I was lucky enough that I had a good enough foundation to go and be interviewed by Admiral Rickover, be accepted into the nuclear propulsion program, and since that time, I've been able to blend together my desire to command a ship with a career of working my way through the surface side of the nuclear propulsion program, where I ended up as a reactor officer on board an aircraft carrier, as well as being able to go on to command a destroyer and a cruiser. So I blended the nuclear side -- the nuclear propulsion side -- of our Navy with the surface side and that sort of defined my at-sea career.

And then on the shore side of the house, when you weren't at sea, just by accident I developed a sub-specialty in the people business, and it was purely just a random assignment when I was younger, but I really loved it. I really enjoyed every aspect of dealing with the individuals and finding out what makes them tick and how do we find the best fit for their knowledge, skills, abilities, and talents in our great Navy. And so I stayed with that on the shore side and worked the personnel piece and then the manpower policy piece, and so it just so happened I ended up ready to be given the job that I have today. So a combination of good fortune, good experiences, and great teachers made this all happen.

Mr. Morales: For someone who admitted that he didn't care for math or physics too much, that leap into the nuclear program must have taken a lot of courage.

VADM Harvey: It was a non-trivial event, let me tell you.

Mr. Morales: It's one of those life-defining moments.

VADM Harvey: Right, it really was. It was a very challenging program, and I just can't overemphasize what it meant, the sense of accomplishment that it gave me when I came through the program. And I didn't just sort of reach the finish line and collapse, I went through well and it really gave me a lot of confidence for the future. I have always felt one of the best decisions I ever made was one of the first ones I ever made.

Mr. Morales: Admiral, you have served in a variety of roles, and you've just described some of them, but can you tell us, based on some of these experiences, how have they prepared you for your current leadership role and have informed your management approach and your current leadership style?

VADM Harvey: Well, I think one of the very important things I do today is to convey to our Chief of Naval Operations, to our senior leadership, the Secretary of the Navy, a sense of the force, a sense of the people -- how do they view themselves and their Navy, their place in the Navy, their future, their opportunities, are their capabilities being exploited to the maximum that there is? And so that's a very important thing for me to understand and be able to pick up on what that is, and then turn that into something coherent for our CNO -- here's what we need to be worried about, here are things we need to be focused on, and here's where we need to be headed for the future. So my experiences in command of a battle group, of a cruiser, of a destroyer, and then my experiences ashore in the people business I think have really helped me be able to develop that sense for where the force is, and what we need to be worried about, thinking about, and doing. And that's the first big thing.

The second big thing is really getting a bead on the future, having a good understanding of where the rest of the Navy is headed so we can integrate the human capability with the technological capability we're building, understanding the global environment we're going to be in, and then pushing that forward. And so I've been very fortunate to have some tours, whether it's my postgraduate education, my experiences when I worked in the office of the Secretary of Defense for Policy, getting a global view of that, and then some other jobs I've had on the Navy staff, where I've understood what the future is in our ships, our airplanes, and our weapons systems. So to blend that together to help give that good, coherent picture that the people need to fit into.

Mr. Morales: Excellent. How is the Navy transforming, maintaining, and shaping its force structure?

We will ask Vice Admiral John Harvey Jr., Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education, to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Vice Admiral John Harvey, Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education.

Also joining us in our conversation is Bob Bleimeister, partner in IBM's human capital practice.

Admiral, would you tell us about the Navy's strategy for our people? How does this enable the Navy to assess, train, distribute, and develop its manpower to become a mission-focused force that meets the warfighting requirements of the Navy?

VADM Harvey: Sure. There are two very distinct but interrelated components on the strategy for our people. The first part, the people side, starts with understanding and defining the workforce of the future -- what is the work that our sailors will have to do, what are the knowledge, skills, and abilities that they're going to need, and then how will these knowledge, skills, and abilities be utilized on our ships and aircraft and systems? So that's the people side, and understanding the work that those people will have to do.

Then there's the business side, which is how will we transform our existing processes that govern all those activities I just described to ensure that we deliver the skilled sailors we need to have who can do the work we believe we're going to have to do? Now the goal of the people side, or the strategy for our people is to define the future Navy workforce, and then what is that human capital strategy that will govern how we recruit, train and manage them for mission accomplishment? And the business side is taking a look at my domain, if you will, the manpower, personnel, training, and education, bringing those together into a single value chain, and focusing that value chain on getting the best value from the people we bring in. So it's two pieces put together, and that would comprise the total strategy for our people.

Mr. Morales: Along this same theme, Admiral, could you elaborate on the Navy's new Sea Warrior program? How does this enable a more flexible and responsive development and deployment of the total Navy workforce and provide sailors with more control over their careers?

VADM Harvey: Sea Warrior is how we brought together the training, education, and career management systems that provide and govern the growth and development of our people. Sea Warrior is how we look at this in a holistic fashion. At the heart of it is giving the individual a real input into their own career development, their buy-in, if you will, to the Navy. For 200 years, we sort of told people where to go, what to study, and what to do. What we need to do for the future is bring these individuals in and make them part of that process -- put them at the heart of it -- because it's their future that we're trying to bring together with the Navy's future. And if we get that kind of buy-in in terms of career management development, then I think we really unlock the full potential of these folks when they commit to us for a career. And so that's the growth and development of our people.

Then there's that piece I talked about -- better understanding the work and what it is that the future's going to demand of us, and then relating that work to the mission and to the capability that our ships and aircraft have to provide. So at the end of the day, I don't want to just say that a sailor delivers on a particular job, I want to be able to say that this sailor delivers this capability to the Navy and to the nation.

Mr. Bleimeister: Admiral, you've talked a bit about this -- it's really a newer focus on skills, capabilities, competencies, as some people call them -- can you elaborate a little more on how you think that's going to impact the future force, and what are some of those skills and capabilities you think are going to be more in need?

VADM Harvey: Oh, sure, and this is really exciting stuff, and I mean that in the fullest sense of the word. Since 9/11, we have been coming to grips with the rapidly changing global security environment that we're going to have to deal with today, three years from now, ten years from now. And so you have these kinds of rapid changes, and these very new demands on our sailors of what they're going to have to be able to do and where they're going to have to be able to do it. And we look at where we've been traditionally -- we've sailed to the Pacific, to the Atlantic, we've sailed in what I think people have as this vision of the victory-at-sea Navy, their view of what we did in World War II -- and now we have to expand that so dramatically in places we haven't gone before, in mission sets we haven't done before, and that type of thing.

And so as we bring that together, how do we look at the capabilities that have changed that are going to be demanded of our sailors? And within those different capabilities, what are the bundles of competencies -- those knowledge, skills, and abilities -- that we have to bring together? Because we're getting beyond "single sailor, single job" -- this is the real breakthrough concept, I think. We're looking at single sailor brings a competency, a group of competencies, that enable that individual to go in many different directions for us. Because that's the kind of flexibility and agility that our force is going to have to have, so therefore, it must be the flexibility and agility that our people are going to have to have as well.

Mr. Bleimeister: Great, and if we take that down to a specific ship, there's a relatively new ship coming to the Navy, the littoral combat ship, and a program called Train to Qualify that will help enable those sailors that man those ships to be fully ready when they arrive. Can you talk about that?

VADM Harvey: Well, absolutely, because this is a dramatic change that is driving a lot of what we've just been talking about. The littoral combat ship is our newest ship. We've just launched the first one, the Freedom. We expect to commission it and place it in service in July of next year. That ship will have a basic crew of about 40 sailors doing what used to take a ship of that size between 180 and 220 sailors to do. Obviously, when you change the math like that, you have to change some other things very dramatically as well. One of the things that we no longer have the luxury of doing is putting a sailor on board that ship and then taking the four to six months to qualify on all the various jobs that that sailor may have to do. Because there are only 40, and because they operate as such a coherent and cohesive team, that sailor must show up ready to go in all respects, with the knowledge and the ability to deal with all different watch stations, to do the specific functions and skills that we require. A very different concept, and so we call it "Train to Qualify" -- train before you get there, be qualified when you get there. So we get the maximum out of that sailor right from the minute he or she shows up to the ship.

Mr. Morales: So there's really no more on the job training with this new model.

VADM Harvey: Well, there's always on the job training, no matter where you are and what you do, but it's going to start from an incredibly high level of proficiency, and so I would call it not so much on the job training, but really the enhancement of the team that would start when you get there. The training, we're going to have to provide before that individual shows up.

Mr. Bleimeister: Great. There's another dimension to development: the Navy's professional military education continuum. Could you talk a little bit about that, what that consists of?

VADM Harvey: One of the things that we've talked about so far in this show is the rapid pace of change across the board that we're having to deal with. And so one of the ways we deal with that is recognizing that at every step in a career, we want to be sure we're investing in the individual -- officer or enlisted -- and that investment is in education. How do we keep that individual current? How do we help enable the critical thinking for that sailor that enables her to do what we need them to do in a very uncertain world? And so it starts with a required reading list that we now have. Wherever you are in the food chain -- at the lowest level of our enlisted ranks or the most senior officers -- we have a required reading list we think you need to execute and absorb in order to be proficient in what we expect you to do.

And then at every step in the career, we feel there's going to be some points for professional military education, for particular graduate education, and then for joint military education, because now we fight as a joint force. There are no Navy-only or Army-only battles anymore. So we try to blend this in across a career, both for our officers and enlisted, so that we're always bringing them more new topical knowledge to help them develop and be more effective in the jobs we expect them to do.

Mr. Morales: Admiral, you referenced the dramatic changes in the landscape that occurred since 9/11, and I would imagine that the Navy is seeking to develop and enhance its foreign language skills, its regional expertise, and its awareness of foreign cultures. Could you tell us about some of the key initiatives that fall under this effort, specifically your language, regional expertise, and cultural strategy?

VADM Harvey: Yeah, this has been a very significant line of effort for us since 9/11. It was really in the most recent quadrennial defense review, and this is the big review that went through in the last year within the Department of Defense saying, "okay, what does our future look like and how do we as a Defense Department respond to that?" Obviously we were part of all that, and the big piece of this was understanding what our language requirements are to be effective in the future. We don't just go to Europe anymore, or we don't go to Hong Kong where they speak English. We're now going throughout Indonesia, we're going into Africa, we're going all around the globe in places we never really used to engage that much before. So how do we do that? It's not just language, it's the expertise, the cultural awareness, those things you've just mentioned.

So we've stood up a new foreign area officer program, where we will educate specialists in each one of these areas that we have strategic interests in for the nation and the Navy. And we'll build around them. They will serve as naval attach�s; they will serve in key policy positions to be sure they bring that detailed area knowledge into our policies, our programs, and the decisions about what we do and where we do it.

We're realigning our personnel exchange program. If you looked at where we sent our officers and enlisted on the exchange programs that do so much to develop a really good mutual understanding with other navies and other nations, you would see we were perfectly aligned to the foreign policy of 1806. So we need to get that up to 2006, and that's what we're doing right now in terms of our exchange programs. We're heading south and east; we're not so much focused on north central Europe any longer. Languages: we just finished about 138,000 individual assessments of our sailors in 274 different languages. I was stunned at what I learned about what our sailors already know.

And now we're taking that baseline and saying, okay, where are these strategic areas that we have to have a far better linguist capability, which is really native-speaker type capability, and then just awareness where you can engage with someone but not necessarily in a perfectly-translated way? What are those requirements, where are they, and how do we fill them? And so we're very focused now on developing that program to be sure we cover all those areas. We've stood up down in Pensacola in our training command a center for language, regional expertise, and cultural awareness to help centralize how we train throughout the Navy on just those very particular areas.

The first test case of that is we're sending a riverine squadron over to Iraq, so they're getting language, they're getting the cultural piece, the tribal culture that exists over there, the obviously different ethnic backgrounds that we're reading about so much every day today. Making sure that they go in understanding the fundamentals of language and the fundamentals of culture within which they'll be expected to operate.

Mr. Morales: How is the Navy transforming its personnel function?

We will ask Vice Admiral John Harvey, Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education, to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I am your host, Albert Morales, and this morning's conversation is with Vice Admiral John Harvey, Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education.

Also joining us in our conversation is Bob Bleimeister, partner in IBM's human capital practice.

Admiral, can you elaborate on how the Navy is transforming from the largely blue water force from the Cold War to a much more broadly and joined, engaged force to meet the challenge of an ever-changing world? And specifically, what are some of the key components in terms of infrastructure and force capability associated with this transformation?

VADM Harvey: Sure. The first and most important piece of that is that we stood up a naval expeditionary combat command that took all these types of forces that we found being used over the last four years to support our efforts in Afghanistan and Iraq, that aren't those mainline blue water forces that we all kind of grew up with and understand so well. So it's the CBs, or the construction battalions, civil affairs, the intelligence specialists or master at arms, the riverine force I talked about, maritime security, small boat detachments, and all these types of forces that we brought together in one command so that we can focus their efforts, their training, their development, and their deployment in the right way and what's demanded by our support of the joint fight.

When I took the job, if someone had told me three years ago that I'd have 10,000 sailors on the ground in Iraq and Afghanistan today doing all kinds of missions that they're uniquely qualified to do in support of our fight there, I would have looked at you and said, "c'mon, go back where you came from." But it's true. We have 10,000 sailors on the ground doing all types of things, leading the electronic warfare battle against the IEDs, providing security at prisons, all the things that we're so talented in, that we have so much talent and so much ability to do, and providing that to the joint force in those areas. So a huge investment in our people, in our effort, and our resources to make that happen.

We have 180 sailors on provisional reconstruction teams high in the Hindu Kush in Afghanistan working to bring that country back into the 19th and 20th centuries from where the Taliban took them. So it's just amazing stuff that's going on and we have reorganized and reshaped and recruited and changed who we bring in and how we bring them in in order to be able to be relevant and ready and responsive to these demands that we're seeing now.

Mr. Morales: Admiral, could you describe for us some of the key retention and recruitment efforts being pursued by the U.S. Navy as it transforms itself to a leaner, more agile force?

VADM Harvey: One of the very big things to understand is that we were about 382,000 strong in November of 2002. Today, as I said at the outset of the show, we're about 350,000, and we're going to head down to about 340,000 at the end of this next fiscal year. So as you lean that force, you have to be far more precise in who you bring in and ensure you have the right skill sets available to you at the right time, because you won't have the luxury of just throwing numbers at a particular situation anymore. So we're very, very focused now on the right sailor coming in with that right skills set and qualifications, so that we can train them up and get them out and into the field or into the fleet where we need them right away.

The biggest challenge I have -- this is really with our special warfare communities, our SEALs -- the War on Terror, this long war that we're in now, has demanded a significant growth in our special warfare and special operations skills sets. You don't just go out and find a SEAL on the street here in Washington or anywhere else. We have to go out and find them. It takes a lot of effort, and then it takes a lot of effort for them to get through our training, as you might expect. So that's a very, very tough nut to crack for us -- increasing those numbers from where we are today to about twice the size of the force we have right now, and making that a reality that we sustain over the long haul. Our explosive ordnance disposal specialists, our special operations folks, again very, very unique skills sets, unique individuals, incredibly valued, so big changes for us in the skills sets that we're looking for, in addition to sustaining the ships and the aircraft that we've been doing for so long.

Mr. Morales: Admiral, if I may, on this topic of recruitment, what role do things like bonuses or other incentives, as well as the sailors' quality of life issues, enhance your ability to successfully recruit and retain these types of individuals?

VADM Harvey: Well, I think they're incredibly important. You can image that we have a sustained unemployment rate in this country now of about 4.75 percent, and that defines our recruiting battle space. The job creation market is very strong, and businesses are going for the same very talented young men and women that we are. So one thing that I can offer, though, is an incredible array of training that prepares these young men and women for a future that's theirs to make. And so to help focus that possibility for them, I have a very good array of bonuses that I can pay for enlistment, if you are the type of person we need in our nuclear propulsion plants, or for the SEALs, or for a wide variety of other skills sets, I can put a bonus out there, get their attention, talk to them about the training they're going to receive, the education, and what it means for their future, and generally when we get their attention, when we have this conversation, I can get a pretty good result out of that.

So the bonus structure enables, really helps us get the attention and get the conversation started. I don't think anybody truly just comes in for the money. They come in for the opportunity. That join the Navy, see the world, learn a skill, get educated, build for the future whether in the Navy or outside of it -- that's been true since John Paul Jones took the Bonhomme Richard to sea back in 1775, so it's true today.

Mr. Bleimeister: Admiral, I imagine there's a linkage between sailor and family-readiness and combat-readiness in the Navy as a whole. But with ongoing deployments, how is the Navy helping sailors and families maintain a balance?

VADM Harvey: Well, this is one of the great a-ha moments that we've had over the last couple years. With the increased pace of operations and the lack of predictability of operations in our post-9/11 world, we've recognized that the old paradigm that you took a set amount of time to get the ship ready, to get the sailor ready, and the family ready for deployment no longer meets the mark. What we have to do is get the sailors ready sooner individually, and keep them ready longer, and so that means that families need to be prepared as well sooner and maintained at a higher level of preparedness for short-notice deployments, or deployments that were thought to be going this long in this place and now they're going a different length of time in a different place.

So the family preparedness becomes equal to sailor readiness, which then becomes obviously equal to our unit readiness. So that's that whole paradigm we have to shift to, and we have to solve that equation together. You can't just focus on the sailor, you can't just focus on the ship, you need to focus on the family, the sailor, and the ship at the same time, get them all ready together, keep them ready longer, and make sure that we're paying equal attention to all component parts of our overall fleet readiness.

Mr. Bleimeister: And one of the components of readiness for the sailor, I imagine, is fitness. Can you talk a bit more about the Navy's culture of fitness initiative?

VADM Harvey: Absolutely. We talked about the lack of predictability in our lives right now, whether you're in the Navy or outside of it. And so one of the things we found was that in terms of being ready, we used to be on this long stair-step approach -- take a fitness test twice a year, check the block, and then go back to whatever your lifestyle was until a couple of weeks before the next fitness test. That doesn't meet it for our demands these days. So we have really refocused our commanding officers on saying, "you are responsible to have a program where your sailors are maintaining a much higher level of fitness across the board," and that means they have a better level of wellness across the board, because there's a direct correlation between your physical fitness and your ability to sustain it and your overall health, which has obvious impacts on your overall job performance over a career. So we want to be ready in a physically fit type of way. It's the foundation for getting back into this idea. Think about it -- I've got 10,000 sailors on the ground carrying 60-pound packs in 120 degree weather out there in the desert. You have to be fit to be able to do that. And you may not get a whole lot of notice that you're going to have to go do that. So we've refocused our efforts to say we want to be at a higher level of fitness across the board all the time than what we sustained in the past.

Mr. Morales: Admiral, the Navy has a commitment to maintaining personal links with its seriously injured sailors. To this end, would you tell us a little bit about the recently established Navy's Safe Harbor program?

VADM Harvey: Yes, as you could imagine, when you have some of our sailors -- and there are equivalent programs for all the services, and it's really the right thing to do -- you have some of these sailors who have been very severely injured in the events in Iraq and Afghanistan, and how do you bring them back? Not only just sustain them medically but help them rebuild their lives, rebuild their abilities to function in our society, and then fulfill our moral obligation to help them make whatever transitions they're going to have to make to get on with their future and keep their families in the equation as well? There's a wide array of things that these sailors and their families have to deal with. There are our own fleet and family service centers, there's the Department of Veterans Administration and the wide array of services that they offer, there's the Department of Defense, their pay, Department of Labor programs -- it's really a dizzying array of initiatives, policies and programs that you just can't dump somebody into and say, "Good luck and figure it all out."

So Safe Harbor keeps them within the family, and keeps us engaged with these sailors and their families, help them navigate this very, very difficult process they're going to have to follow, where either they're able to return to duty at the end of a long recovery/recuperation period or transition to another aspect in the civilian world and help them get off to a good start there. It's not simple, it's very challenging, it's demanding physically and emotionally. We owe them this, it's a Navy family thing, and we're going to stay with them right through 'til when they can take care of themselves on their own.

Mr. Morales: That's fantastic.

What does the future hold for the Navy? We will ask Vice Admiral John Harvey, Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education, to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I am your host, Albert Morales, and this morning's conversation is with Vice Admiral John Harvey, Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education.

Also joining us in our conversation is Bob Bleimeister, partner in IBM's human capital practice.

Admiral, as you take a look over the next ten years, what type of personnel concerns do you think the U.S. Navy will face?

VADM Harvey: There are three big things that I focus on when we take our long look and try to match our people to the demands that the nation's going to place on our Navy. The first one is the changing nature of warfighting. Now, I'm not saying "the changing nature of warfare" -- that I think will stay pretty stable, but the characteristics of warfare obviously are changing -- have changed dramatically. And I think they will continue to do so. We face far more diverse, globally networked adversaries and families of adversaries -- state, non-state, loosely-allied, loosely-allianced actors -- it's a very dynamic situation. And so you're going to have to have a force that can deal with that. Not necessarily the set piece -- there's the Soviet navy, that's what we focus on, that's what we study, and you spend years and years studying that and focusing on that. We really have to widen our aperture and be far more flexible in our ability to understand the threats we face. And so we need people with different skills and knowledge and abilities to do that for us. So that's very important to me.

The second thing that's really important is the changing nature of the society that we serve, and the society from whom we draw our sailors. The demographics of this country are changing dramatically. It's not just a guess; the science of demographics really gives you some very good, hard results that are going to unfold -- a rapidly growing Hispanic population, the shrinking of our Caucasian young males in the age group between 18 and 25. So our methods of recruiting are going to have to change. We have a generational shift going on -- the millenials are coming in and the aging baby-boomers are on their way out, and Gen-X, and so we have to look at this new labor market, if you will, understand where our sailors are coming from, where the talent is, and how we reach that talent and not only bring it in to our Navy, but then make sure that they understand, these wonderful young men and women, that they have a future with us, with the kind of a Navy that we're going to be. So it's that whole nature of the people that's changing, and how we have to change as an organization to get the most out of them.

And then the third thing -- this is Washington so we're going to talk about money -- and what are the fiscal constraints that I'm going to be under. People are more expensive -- it's true in the Navy, it's true at IBM. Anywhere you look, people costs have just exploded over the last 10 to 15 years. I grew up in Baltimore, Maryland and I can remember this big huge industrial complex called the Sparrow's Point, Bethlehem Steel. It doesn't exist any longer, and it was done in partly because of extraordinary labor costs that were locked into the people and the way that their workforce was shaped. We can't afford to have something like that happen. We can't be a dinosaur and have a dinosaur approach to this, so we're going to have to find some pretty innovative ways of dealing with the fiscal constraints, the cost of people, the capabilities we have to deliver, and how we bring those together in a sustainable way for the future. So those are the three big ones that I spend a lot of time worrying about right now.

Mr. Morales: Let's talk a little bit about the base realignment and closure recommendations and the quadrennial defense review decisions. How is personnel and manpower involved in helping to ensure a seamless transition to new structures and missions while preserving its uniquely vital capabilities?

VADM Harvey: Well, this is really a pretty challenging process. One thing, I'm very glad that we had this base realignment closure. I fully understand a lot of the pain it can bring to individual regions, but if we haven't had this to rationalize our support structure, then I am using a lot of people doing things that don't return as much to the Navy in terms of capability as they should. So it's very, very important to us to get the most out of our people, to have the most efficient structure we have from all our supporting bases and installations. The QDR helped to clarify our future and what it is I need to focus on and what my priorities are. So it's given me that impetus to say, "okay, here's what we have to do more of; here's what I have to do less of," and then how we apportion our resources accordingly.

The one thing is that -- I'll take one exception to the wording -- is no transition to anything is ever seamless. If you talk about one of my lessons learned from 33 years, there are seams but how do you recognize them and how do you mitigate them? I think that's the key, and so it's how we work the people piece, how we work this process piece to be sure we're driven by the capabilities we must provide, and taking advantage of the technology, and then putting those together and saying, "okay, what is the infrastructure we require to deliver on these capabilities?" That's what the BRAC has given me, that's what the QDR has helped do for me, and then we're putting that together to make sure that we have that right balance between our capabilities, our force structure, our people structure, if you will, and the fiscal resources I have to sustain them.

Mr. Bleimeister: Admiral, with all this change going on, the Navy's civilian workforce is also going to undertake some transformation with DoD's National Security Personnel System. Could you tell us how NSPS will affect the Navy's civilian workforce?

VADM Harvey: Yes. You heard me use the words through the course of this interview "changing," "agile," "flexible," "adaptable," and "uncertain environment." Well, that applies to our civilian workforce as well. They face the same environment that the uniformed sailors do. So how do we best prepare them -- how do we help shape them to deal with that same type of uncertain world, with that same level of response that we require out of our sailors?

And I think this is what the national security personnel system, which is NSPS for short, does for us. It focuses on individual performance goals that are aligned with the organization's goals. Tell them why we need them to be performing at certain levels in certain areas. And so you keep the people aligned with the mission and aligned with the organization. I think that's a huge step forward. And then it gives me the ability to be far more agile in how I move this workforce around and put the capabilities that these wonderful people have against the problems we need to address. And so it gives you that kind of flexibility that's so important to us in the future. So I think this is tough, it's big change -- it is real deep change, but it is right change and it's the right thing to do.

Mr. Morales: Admiral, you've given us just a wonderful window into the exciting personnel transformations going on within the U.S. Navy. I'm going to give you an opportunity here to put on your recruiting hat and tell us, what advice would you give to a person who's interested in a career, say, in public service, especially in the military? And finally, what do you say to that young sailor out there about the career opportunities and climate of the future Navy?

VADM Harvey: Well, that's a terrific segue and I really appreciate this, because I do have some very deeply-held feelings about both those issues. Number 1, this is a democracy; it is a participatory democracy, and our armed forces across the board and our Navy will only be as strong as the investment that our people make in them. And the most crucial investment the people of the United States are going to make in their Navy is who they send to be in that Navy. And so recruiting is at the heart of everything we do. We need the best young men and women this country has to offer to defend this nation 365 days a year, around the globe, against a dazzling array of very, very deep and dangerous threats. So public service for me is service to your nation. I hope that people think about this and look at the enduring contribution that this Navy has made to this nation for the last 231 years. We are a maritime nation. Our commerce, our economy depends upon the free flow of goods and services and resources across the seas. It did in 1776 and it does today. So we need to make that investment, sustain that investment in our people, in our Navy. I think that's of paramount importance.

To the sailors today, they know and I want them to have confidence in our ability and our commitment to their future with us. They have extraordinary opportunities. We will invest in their training, we will invest in their education, and we will invest in their future. And we are committed to them being able to unlock all the opportunities and potential they have within them, to be the kind of person they want to be, to be the kind of sailor we need them to be, and to recognize that a future in the Navy is a bright one, it is a promising one, and one that offers them tremendous returns individually as well as the ability to say at the end of the day, "I served my nation, I served my Navy, I wore the uniform, and I did it proudly."

Mr. Morales: Admiral, thank you very much. Your passion is very exhilarating. Unfortunately, we have reached the end of our time, but I do want to thank you for fitting us into your busy schedule. But more importantly, Bob and I would like to thank you for your dedicated service to our country in all the roles you've held within the United States Navy.

VADM Harvey: Well, thanks very much. It was great pleasure to be here today, and I look forward to continuing this dialogue any time in the future.

Mr. Morales: Fantastic. This has been The Business of Government Hour, featuring a conversation with Vice Admiral John Harvey, Chief of Naval Personnel and Deputy Chief of Naval Operations for Manpower, Personnel, Training, & Education.

Be sure and visit us on the web at There, you can learn more about our programs and get a transcript of today's conversation. Once again, that's As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving our government but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

Michael Ryan interview

Friday, January 5th, 2007 - 20:00
"MCC provides assistance in a manner that promotes economic growth and the alleviation of extreme poverty and strengthens good governance, economic freedom, and of course, investments in people."
Radio show date: 
Sat, 01/06/2007
Intro text: 
Financial Management; Managing for Performance and Results; Missions and Program ...
Financial Management; Managing for Performance and Results; Missions and Program
Complete transcript: 

Originally Broadcast Saturday, January 6, 2007

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created this center in 1998, to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the center by visiting us on the web at

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Michael Ryan, vice president of the Administration and Finance with the Millennium Challenge Corporation.

Good morning, Michael.

Mr. Ryan: Good morning.

Mr. Morales: And joining us in our conversation is Pete Boyer, Director in IBM's federal consulting practice. Good morning, Pete.

Mr. Boyer: Good morning, Al.

Mr. Morales: Mike, perhaps you could start by giving us an overview of the Millennium Challenge Corporation. Tell us a little bit about the mission and give us an overview of the Millennium Challenge Act of 2003, and some of its key requirements.

Mr. Ryan: That would be my great pleasure.

The MCC mission is simply to reduce poverty by supporting sustainable economic growth in developing countries -- in those countries which create and maintain sound policy environments.

The Millennium Challenge Act established MCC to administer the Millennium Challenge account. This was established in January of 2004 as a result of President Bush's commitment at the Monterey summit. And that summit focused on financing for development, and the purpose, as stated, was to provide greater resources for developing countries, taking greater responsibility for their own development. It sometimes been referred to as assistance with accountability.

The act itself mandates that MCC provide assistance in a manner that promotes economic growth and the alleviation of extreme poverty and strengthens good governance, economic freedom, and of course, investments in people.

The MCC program, of course, is only one component of our overall foreign assistance strategy, but it is an important and an innovative one. It's something new, and our work draws on lessons learned from international development organizations over the past 50 years, and it focuses on the long-term mission of reducing poverty, as I mentioned, through economic growth.

In short, we work in partnership with some of the poorest countries to create country ownership instead of long-term dependence on assistance. We want to give assistance in order for countries to take over the job of their economic growth and alleviate poverty within their borders.

Mr. Morales: Mike, this is certainly a non-trivial challenge in mission. Could you tell us a little bit about how your organization is organized, the size of your budget, and how many people are employed in your organization?

Mr. Ryan: MCC was designed as a small and a federal corporation and is meant to ensure accountability for the aid we administer. As a federal corporation, it's managed by a chief executive officer, who's currently Ambassador John Danilovich, and he's appointed by the president and confirmed by the U.S. Senate.

What makes us a little bit different is we're overseen by a board of directors, who make the major decisions, what countries to give assistance to and the like. And that board of directors is chaired by the secretary of state. The vice chair is a secretary of the treasury. Other members include the -- the United States trade representative. The U.S. aid administrator. And it is has interestingly two public members currently, although, there may be more in the future.

Kenneth Hackett, who's the president of Catholic Relief Services, and Governor Christine Todd Whitman, who in addition to being the governor of New Jersey, was also a former EPA administrator and now is a president of the Whitman Strategy Group.

We have a number of departments. We have operations, we have a department of accountability, a department of policy and international relations. Of course, we have congressional public affairs and an office of the general counsel. And then we have the department that -- that I head up, administration and finance.

As far as our budget goes, the commitment had been to rise to $5 billion a year. The current request is for $3 billion. The House passed a bill, and now is at $2 billion. I don't know where that's going to end up. And clearly, one thing that gives us a good deal of flexibility is that all of our MCC funds are no-year funds, which means that we can obligate funds for a five-year compact at the beginning of the five years, and it's available until it's expended on that -- that compact. It saves us from year-to-year ups and downs and countries can rely on this -- this assistance.

As far as the -- the level of staff, as I said, we're small and we're -- we aim to be small. We want to arise to a staff of -- of 300 in Washington, D.C. Currently, we have 20 people stationed overseas that are above that 300 number, and that number overseas should rise as we established additional contacts in other countries. At the present time, we have approximately 280 people in Washington.

Mr. Morales: So, almost 300 people managing $3 billion in assets?

Mr. Ryan: That's right.

Mr. Boyer: Now, Mike, what are your specific responsibilities and duties as a vice president of administration and finance, and could you tell us about the areas under your purview?

Mr. Ryan: Sure, Pete. I -- I'm essentially a chief financial officer in the federal mold. I'm responsible for the same areas that many CFOs are responsible for, financial management and reporting, financial services, budget formulation execution, development of annual performance plans, oversight of financial systems, and producing the annual performance and accountability report and procurement.

I also have oversight of HR, Human Resources, recruiting in development. Facilities management, both in Washington and overseas. IT and personnel security. So, it's just a full range of administrative and financial duties that you'd expect to see in an organization with my title.

Mr. Boyer: Now, Mike, you clearly had a very interesting career. Could you describe your career path for our listeners? Specifically, how did you begin your career?

Mr. Ryan: Well, I should start off by saying that I -- I had been a civil servant until my current appointment with MCC for many, many years, but my first position actually was a mathematics teacher in Baltimore City schools. After I earned an undergraduate degree at St. John's College in Annapolis. But I left teaching math and went to -- to Harvard where I got a -- a PhD in near eastern languages and civilizations. I got that degree in 1981, after having joined the federal government in 1979.

During my studies on -- on that degree, I spent three years researching Egypt and traveling around the Middle East under a Fulbright at Smithsonian and the Center for Arabic Study Abroad fellowships.

I've had several positions in the Department of Defense and Department of State. And when I first joined in 1979, as I mentioned previously, I was a Middle East analyst for the Department of Defense. I've also had senior-level positions, including deputy director of a plans directorate under the Defense Security Assistance Agency. I've been the acting deputy assistant secretary for International Narcotics in Law Enforcement Affairs in the Department of State. I was also the executive director and comptroller of that same bureau in the Department of State.

I also worked at EPA, where I first met Governor Whitman, and I mentioned before, when she was the administrator. And I first started as a comptroller there in 1997, with responsibility for budget formulation and execution. As all -- as well as all aspects of financial management in operations.

I became the deputy CFO of EPA then in 2000, and I had that job until 2006. May, actually, when in joined MCC. At EPA, I also managed their strategic planning, budgeting, financial management, performance measurement analysis, and their accountability functions.

Mr. Boyer: Mike, that's a very broad set of experiences. I'm curious, how have these experiences prepared you for your current leadership role at MCC, and have formed your management approach and leadership style?

Mr. Ryan: I guess being deputy CFO at EPA and acting CFO during periods when EPA did not have a Senate-confirmed CFO in place was the best preparation for my technical duties at MCC. Having a practical experience in managing a CFO shop, including problem-solving in all areas normally reporting to a CFO, and also extremely useful contacts within the CFO counsel, helpful opportunities to share experiences across the federal CFO community.

Previously, I think overseas experiences in the Department of -- of State and Defense, where I was based in Washington, but did extensive travel, in addition to my -- my work, as I -- I -- on my degree that I -- I referred to previously, helped me understand other country's governments and -- and cultures, and how you deal with countries in their own terms and -- and not necessarily bring your own cultural assumptions to play.

So, it was a useful body of knowledge overseas and -- and in the CFO environment because I had to deal with a wide variety of people and -- and people who approached tasks from different angles, and it's tremendously useful in the federal workplace, which is, as you know, wonderfully diverse.

Another useful leadership lesson from defense was that you really have to build a team from the people that you inherit, and then you get to the task of recruiting others. And everybody brings skills to the task. It's a leader's responsibility really to find the best way to use each team member's skills to support the mission and target your recruiting to fill any areas where skills need reinforcement.

I think it's another example of why it's important to appreciate the diversity of abilities and backgrounds represented in the federal workforce based on all the talents that federal employees bring to work everyday, I think we're well equipped for problem-solving from a variety of perspectives, and we're especially well set up to deal with foreign governments, many of whose children, if you will, came to the United States either recently or in the distant past as immigrants and deal very well with those cultures.

Another lesson learned from my experience in defense, state, and EPA, and especially now at MCC, is the importance of public/private partnerships. The private sector has a depth of talent and knowledge that's always refreshed, and government can make good use of private sector expertise to augment its workforce to accomplish the civic tasks without institutionalizing that expertise when it might not be appropriate. To the next set of tasks that lie ahead. It helps to keep public sector organizations more nimble by allowing us to take on specialized talent as needed, while maintaining a basic core of skills in the career ranks.

For example, when EPA was assigned to a government center of excellence to host financial systems, my staff and I argued successfully for a public-private partnership along private sector centers of excellence to compete for technical services in the IT area and in accounting.

This competition, I understand, here at the beginning of December is still going on at EPA. OPM is -- is now, I understand, going to do something similar, and I think that's a good model for a small lien organization like MCC. That is reaching out to the private sector for help in those areas that the private sector does especially well, and can tailor its support for the needs of the day without institutionalizing that support and fixing it in place.

Mr. Morales: That's fantastic. I can -- I can see now why you are focusing on solving some of the world's greatest challenges. Thank you.

What kinds of innovations are being pursued by the Millennium Challenge Corporation? We will ask Michael Ryan, vice president of Administration and Finance with the Millennium Challenge Corporation to share with us when the conversation about management continues on the Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Mike Ryan, vice president of Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, director in IBM's federal consulting practice.

Mike, in pursuit of its mission to reduce poverty by supporting economic growth as you described in the first segment, the MCC has identified and defined three key principles to guide the efforts.

Can you elaborate on those guiding principles and what is new about the MCC approach to international development?

Mr. Ryan: Well, thank you. The three principles are first of all, to reward good policy. Countries are selected based on their performance, as shown on objective indicators. Not indicators that -- that MCC develops, but that NGOs of the private sector, someone outside, an objective measurement is done on governing justly, which means investing in their citizens and encouraging economic freedom.

The second thing, in addition to rewarding good policy, is that we operate as partners. Countries are responsible for identify the greatest barriers to their own development, ensuring civil society participation in planning and developing a Millennium Challenge account, or MCA program.

Then, to participate in -- in a MCA program requires a high level commitment from the host government. Now, when I say "MCA," of course, I mean the Millennium Challenge account, which is the appropriate that MCC uses.

Each country enters into a public compact with MCC. That includes a multi-year plan for achieving development objectives and identifies the responsibilities of each partner in achieving those objectives.

The third principle, the first being rewarding good policy, and the second, to operate as partners, is to focus on results. MCA assistance goes to countries that have well-designed programs with clear objectives, benchmarks to measure progress, procedures to ensure a fiscal accountability per the use of the Millennium Challenge account assistance, and a plan for effective monitoring and objective evaluation of results.

Because we focus on rewarding good policy, we are seeing something new, and this is where the innovation comes in. Something new in international development, which our CEO calls the MCC effect.

We are seeing examples of countries making important policy changes on their own in order to qualify for funding for the Millennium Challenge account. This is extremely encouraging because we are seeing positive change even before MCC investment begins. I could give one example of this that happened fairly recently in the last couple of months.

We had one country that had a policy. Actually, it was written into their constitution, that married women couldn't inherit property in their own name. And we determined early on that this would mean that only 50 percent of the population would get any benefit out of the --economic benefit out of -- out of our policies, and we told the government, no, this is just not acceptable. You know, we can't continue our conversations if this stays in place. Although it was a longstanding policy and it was rooted in -- in culture and -- and in -- in prior law, they went ahead and changed that law, and they did that without receiving a nickel from us. And one got the feeling at the end of the day that there was something in just getting the stamp of approval that they had passed the test.

That's one anecdotal account, but a very real one. Two Harvard economists studied the MCC effect in a report released earlier this year, and they concluded that countries are responding to MCC's clear and actionable incentives. This is -- was -- was done in the Kennedy School of Government; it was called "Can Foreign Aid create an Incentive for Good Governance: Evidence of the Millennium Challenge Corporation."

Then there was another one from the manager of the World's Bank's "Doing Business Project," And the quote there I think is a good one, in which they stated that we have seen a number of reforms around the world in both rich and poor countries, but in many of the developing countries, the reform has actually been primarily as a result of the inclusion in the Millennium Challenge account.

Now, I would note that we often see reforms, as I -- as I mentioned before, in anticipation of the funding of the Millennium Challenge account, and not just as a result of projects in those countries.

Mr. Morales: That's a powerful story. Now, you used the word "compact." Can you describe the MCC compact development and implementation process, and what are the criteria methodology for determining eligible countries and establishing these compacts? And can you tell us a little bit about the composition of the projects that make up the portfolio?

Mr. Ryan: Surely. I think around the compact development, you get a lot of the innovation that -- that you asked me about before. I mean, what is different? Well, for example, for the fiscal year 2007, the candidative countries, you know, were identified on the basis of a per-capita income, and they must be in the low-income, preferably, for a lower/middle-income categories established by the World Bank. By law, only 25 percent of our funding may be used for lower/middle-income countries, assuring that most of our support goes to the poorest nations in the world. And I might add that we make every effort that if a lower/middle-income country makes a -- a proposal for a compact, and it is for some of the poorest people in their country, we find that to be a very compelling argument for going to that lower/middle-income country.

We report to Congress on our selection methodology, and our board of directors that I mentioned before, base a selection on specific performance indicators developed by independent, third-party institutions. We also seek public comment on selection methodology.

Right now, we're using 16 indicators in three broad categories, and countries must score above the median to be eligible. These indicators come from organizations including the World Bank, the World Health Organization, Freedom House, and UNESCO. And again, the indicators are -- are in the three areas that I mentioned before, ruling justly, investing in people, and -- and I think I mentioned economic freedom.

And by "economic freedom," we -- we mean things like the costs of starting a business or the days to start a business, trade policy, those things that might be either barriers or spurs to economic development we want to see.

Investing in people, you could have public expenditure on immunization, public expenditure on primary education, and -- and interestingly, girls education completion rate, which we see -- think to be extremely important.

Ruling justly, I think we're more familiar with. I mean, civil liberties, political rites, voice and accountability, rule of law, and significantly control of corruption.

The MCC board selects eligible countries using the above methodology and submits a report to Congress, and the selective countries are then eligible to begin developing a compact proposal for MCC consideration. At this time, we have 11 signed compacts in place, representing a total of nearly $3 billion, supporting programs in agriculture, infrastructure, land tenure, healthcare, and other sectors. Most compacts extend over a five-year period.

Mr. Boyer: Mike, does the MCC dedicate any funds for those countries that do not specifically meet the compact criteria, but are moving in the right direction? And if so, how?

Mr. Ryan: We do, Pete. We offer a threshold program that provides financial assistance to help improve a score on one of our -- of the 16 indicators that I mentioned.

The board of directors selects the countries for the threshold program based on their overall performance on all 16 indicators and their demonstrated commitment to improving the scores and their ability to undertake reform. Countries selected for threshold consideration must create a plan that identifies miserable ways to improve a specific indicator score and they must submit that plan for MCC review and approval. We make threshold program agreements with countries whose plans demonstrate meaningful commitment to reform and a high likelihood of successful implementation. And, of course, the measurement of that success is, again, done outside of MCC. I'll just give you two examples.

In the first case is the government of the Philippines, which actually passed the corruption indicator, but both the government of the Philippines and MCC felt that we would like to work more on this. And so, we made $21 million in threshold funds available to the Philippines in 2006 for anticorruption efforts. And what was really exciting about this was that the government made a decision to match those funds fairly closely so that it doubled the amount that was available, and we view this as a real commitment to reform on behalf of the people of the Philippines.

Another example that's not corruption was in 2005, Burkina Faso in Africa became the first threshold country to be approved for a compact funding. Burkina Faso was awarded $12.9 million for its threshold country plan, which was designed specifically to improve girl's primary education completion rates.

Mr. Boyer: Those are powerful examples. What does it mean for compacts to enter into force, and how does it relate to the actual disbursement of committed MCC funds to recipient countries?

Mr. Ryan: Well, this is another term of art. A compact is a contract is between MCC and a foreign government. It sets out the terms of the programs to be funded along with the funding to be dedicate in each year -- in each compact year for specific project components.

For example, a compact might set out dollar amounts anticipated to be spanned in each five years on a component such as improvement of a particular set of rural roads to get products to market, for example. The compact also outlines the general terms of the road improvement work to be undertaken. The signing of the compact commits the full funding for the specified project in a given country. After the signing, we continue to work with the country, we do due diligence, and we make sure that all conditions are in place to support a proper disbursement of funds.

When those conditions are met, then we declare the compact ready to enter into force, we obligate the funding and technical terms and the disbursements begin thereafter.

Mr. Boyer: Mike, to supplement its organizational structure in assisting caring out its mission, MCC has several formalized interagency agreements, or IAAs, with other federal government agencies. Could you elaborate on these collaborative relationships?

Mr. Ryan: Well, I think that -- that with a small organization, it must be clear to everyone that we can't do everything that is necessary for us to succeed. So, we have a number of these kinds of agreements.

For example, the National Business Center of the Department of Interior pays the MCC employees and provides financial systems and some accounting support. We also work closely with USAID, and to some extent, with the Department of Justice for the threshold programs that we discussed earlier. Treasury also provides technical assistance, especially in the banking sector, and from time to time, no doubt will sign other IAAs with other federal entities as the need arises.

Mr. Morales: Excellent. How is the MCC managing its program development efforts? We will ask Michael Ryan, Vice President, Administration and Finance for the Millennium Challenge Corporation to share with us when the conversation about management continues on the Business of Government Hour.


Mr. Morales: Welcome back to the Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Michael Ryan, Vice President, Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, director in IBM's federal consulting practice.

Mike, how does the MCC make sure that compacts with partnered countries are going to produce the results that will satisfy the U.S. taxpayers and meet the goals of the MCC?

Mr. Ryan: Well, I think that the U.S. taxpayer has shown the willingness to fund humanitarian assistance and assistance to poor people, as long as the overhead is not too high, and as long as the goals are worthy, and the people that really need the assistance receive it.

To ensure that we meet some of these expectations, MCC forms a transaction team whose members work closely with representatives from the country developing a compact proposal. Our teams include people with a range of a pertinent expertise in economics, law, and the appropriate technical areas, such as engineering or agriculture. We may also have someone who's an expert on gender issues, for example, or other social issues, or even the environment.

Partner country representatives are expected to engage in wide consultation with members of the public in a civil society in their own countries to ensure their compact proposals reflect needs identified by their own people and the poorest among them, and that the solutions are likely to work best for them.

MCC transaction team members evaluate all parts of a proposal and work with partner country representatives to develop practical, well-designed programs that incorporate steps to measure and evaluate results. MCC's investment committee, on which I have a vote, also plays an important role. It's chaired by the deputy CEO and is composed of MCC's senior officials.

The MCC committee considers all aspects of compact development and votes up or down any aspect along the way. MCC's board of directors, of course, has the final vote on a compact. The best designed compact programs are in the support of the investment committee first, and then the board of directors by incorporating meaningful evaluation of results and showing the promise of reducing measurably the number of people living in poverty. And, I might add, all of our discussions of the size of our staff and the amount of money that we put into overhead I think is an important one because we try to keep the overhead fairly low.

Mr. Morales: Now, Mike, as the -- as the CFO, many of our listeners may find it interesting that the MCC has identified that Chief Financial Officers Act of 1990 and the Federal Financial Management Improvement Act of 1996, and various other financial laws and regulations did not cover your operations.

What is MCC's basis for this position and does the MCC plan to follow at least the spirit, if not the letter, of those laws because they make good business sense?

Mr. Ryan: Actually, Al, we do manage our business according to the mandates of these laws and regulations. As we've said several times, we're small and organized as a federal corporation, rather than as a typical independent agency. And we were established after many of these laws were enacted. But we comply with them, however, and because we're part of the executive branch, and because they make good business sense.

For example, we issued our financial statements on November 15th with the rest of the federal government, and I might add, we got a clean opinion on that, and we intend to do similar things in the future.

There have been a number of government management reforms enacted in legislation in recent years. Most of them aimed at focusing agencies on managing for results and enhancing accountability for program outcomes. I'd like to think that MCC was designed to accomplish both of these ends, so it is not a stretch for us to follow the course outlined in legislation.

Mr. Boyer: Mike, on a similar topic, a key element of all compact development and execution is fiscal accountability. You know, the mechanisms and processes that assure that funds are managed properly and procurements are undertaken in a fair, open, and transparent manner. However, some of the compact countries do not perform accounting on a accrual basis by recording commitments and obligations.

Would you elaborate on the guidance provided to compact countries and requirements placed on those countries, and how has MCC handled this situation?

Mr. Ryan: Well, Pete, that's a question that's going to warm accountants' hearts all over the city this morning. MCC has a department of accountability which is responsible for these matters, and my department, of course, supports their work. Consistent with our model of country ownership of MCC-funded projects, compact countries must have internationally recognized system of accounting in place. It does not have to be identical to the U.S. model, but has to be recognized. We're constantly refining our approaches to this and expect to see continued improvements in the future.

For example, we require compact countries to have a fiscal agent and a procurement agent that we consider to be technically qualified. But while some countries might not use accrual accounting, the accountable entity, which is the organization set up in the country to carry out the compact by the government of that country, the accountable entity, often referred to as an MCA, set up by the government of a compact country must provide us with regular estimates of their cash needs. And these actually can serve as a surrogate for accruals, and indeed, we did an accrual in our financial statements just like every other federal entity on November 15th, as I mentioned before.

Mr. Boyer: Well, Mike we're -- we're glad we can get the -- the hearts of the accountants warmed up this morning.

Mr. Ryan: Let's not warm them too much.

Mr. Boyer: The USAID Office of Inspector General identified vulnerabilities affecting the MCC program in several criteria areas, including procurement, cash management, and disbursement that may adversely impact its financial operations. For example, the IG identified that the MCC Cape Verde compact had problems in the areas of cash management and procurement.

Could you elaborate on the MCC strategy for mitigating such risks and vulnerabilities? Specifically, has the MCC established policies and procedures for evaluating disbursement requests submitted by recipient countries to ensure that the amounts disbursed are only for immediate cash needs?

Mr. Ryan: Sure. First of all, I -- I have to point out that we have a very collaborative relationship with our IG. And I personally engage in conversation with IG staff on many issues, including the one you're -- you're asking me about. And while we do not always agree, we receive many useful recommendations that have caused us to improve our procedures. And we've been working on some exciting -- at least exciting to me, possibilities to enhance mechanism for getting funding out to compact countries.

Our current approach requires quarterly disbursement requests from a country. It comes into MCC, we consider it, and we say yes to the -- to the funding, its justified under the compact or -- or we ask questions. But we disburse on a monthly basis, asking the country to project their cash needs for the coming month, as I mentioned before.

However, we are in consultation with the Department of Treasury right now to see if we might use their Web-based online system for making payments worldwide. They call this system ITS. This would enable us to require that fiscal agents I mentioned previously overseas to request payments based on specific invoices and to justify disbursements in a systematic way in -- in real time. In addition, we're investigating to see if there might not be a private sector that would provide a -- a global payment solution, as well.

Treasury is interested in working with us on a solution in either case, and if we can't do this, I believe it would address the IG's concerns that you've -- that you've mentioned before. I'd also like to be able to try a pilot as early as January of 2007, so quite soon with -- with one or two countries to see how this actually might work in -- in reality.

Mr. Morales: Michael, we talked earlier about some of the interagency collaboration, and we know that the MCC has outsourced much of its administrative functions, including human resource and payroll management.

But does the MCC recognize the value of implementing an integrated human resource and payroll system, and can you elaborate on the status of this effort and the overall strategy to forge an integrated system that reduces the reliance on manual processes and enhances your interface with the NBC systems?

Mr. Ryan: Well, that's a great question. I mentioned before our -- our interest in keeping overhead down and of course manual processes are done by people, and people are overhead. So, we want to cut down on these things. They also introduce errors, as everyone knows, and -- and we'd like to do as much as possible automatically and with an -- with an integrated system.

We get great service from Interior's National Business Center, but it does not have an integrated system at this time. I understand they have long-term plans to make it integrate in the future, but at the current time, it's simply not.

The benefits of integration are especially important for a small organization like MCC. We do not have the personnel to make the multiple entries required by a non-integrated system, especially as we take on more compacts and more countries. We will be engaging consults soon to perform an analysis of how MCC might best achieve full integration of its financial management. And also, I hope a reasonable timeframe for achieving it.

You know, I am intrigued by efforts to engage private sector organization as -- as a center of excellence to supplement governmental centers of excellence. I am very familiar with the competition that's been going on at EPA, and I'm -- I'm looking forward to see the results of that competition for running their financial system. It's something that I saw at the beginning of when I was -- when I was at EPA. And now, I read recently that OPM is -- is also looking for a private public competition in this, and I think that's really healthy and something that might work very well for MCC.

Mr. Morales: What does the future hold for the Millennium Challenge Corporation? We will ask Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation to share with us when the conversation about management continues on the Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, Director in IBM's federal consulting practice

Mike, in its rather brief existence, the MCC has had some significant achievements, and we've certainly talked about many of those today.

What do you envision for the MCC over the next 5 to 10 years, and what are some of the key challenges and major opportunities facing the organization?

Mr. Ryan: Well, our overwhelming challenge is going to be compact implementation. We've been talking about performing the compacts, and that's what the corporation (off mike) spending its first two and a half, three years of existence doing. But making sure that results that we envision are achieved is our next challenge. Most of the work will be undertaken by partner countries, as they own the projects. So, it's really more of a challenge to them. And the real beneficiaries -- if -- if both us, that is to say MCC and the host governments are successful, the real beneficiaries are the poor people of our partner countries.

Mr. Morales: Mike, with such a small organization, I can only imagine that every single individual has a critical role and -- and is critical to the organization.

To that end, what steps are being taken to attract and maintain a high -- high-quality technical force, and can you elaborate on initiatives to ensure that you have the right skill and the right staff mix?

Mr. Ryan: First of all, let me say that I don't think any organization in my federal career can claim a higher quality workforce than MCC. And we owe that in part to the attractiveness, I think, of our mission, but also we've talked a lot today about public/private partnerships.

We have a partnership with Korn/Ferry International, in particular their Futurestep Division, which ahs been supporting our recruiting and hiring efforts. We've also been energizing our recruiting efforts through partnerships with targeted non-profit organizations who subscribe to our belief that, and this is a term we think has some power, that a diverse workforce can make a world of difference. And as far as training goes, I've been tasked by our CEO to create an overarching training plan for MCC. Everything from language skills to management skills. And we're beginning with training for all our transaction teams in partnership with the Federal Executive Institute.

Mr. Boyer: Mike, you mentioned MCC's focus on low overhead, and we've talked about it on a number of questions today, but how do you respond to people in a developing community that have expressed that MCC's proposed staffing level of 300 is very lean for an organization planning to disburse $2 billion or more per year?

Mr. Ryan: Well, you know, when the road is -- is twisting and turning and you're in a race, you'd rather have a sports car. So, we're -- we're -- MCC is based on a new organizational model. And we think our -- our leanness is an asset rather than a liability.

The key to our ultimate success has got to be related to our ability to identify the right countries with the right governance and respect their responsibility for their own development. We believe this approach is more likely to give arise to sustainable efforts and lasting reduction in poverty.

If we were to increase our own numbers, we might be -- just might be more tempted to give ourselves a larger role in other countries' efforts, and we really don't want to do this. Having said that, we are concerned with the growing workload, and we're constantly looking for ways to streamline our work and procedures.

In fact, it's interesting as far as this question goes that as I left MCC to come to this program this morning, we'd had a little meeting in which we talked about our model and whether we should change it, what aspects we should change to meet the challenge of the growing workload that's -- that's certainly coming. But I'm confident that this is a problem that we can meet square on, and we aren't going to go above 300 people in Washington.

Mr. Boyer: I like the race car analogy, Mike. MCC's compact pipeline seems to be robust and growing. Could you give us a sense of the current and future pipeline, and is there a point at which expansion becomes too much for a fairly new organization like the MCC?

Mr. Ryan: Well, obviously, I can't predict how much the pipeline will develop, and because so much of our future activities will depend on congressional funding, and that again will depend on what we do in our measurements of success. But we've been signing. This past year, we've signed six compacts, and I would think that this year, I would hope we'd sign three or four. But beyond that, it would be difficult to speculate.

We've learned a great deal about what works and doesn't work based on our experience with the 11 compact countries so far and recognizing that individual circumstances make each nation unique in its capabilities and the development issues that it seeks to address, we know that we found some approaches that are replicable, and we may identify some efficiencies as a result.

Finally, I really think being a new organization is a benefit because we can implement new ideas without being burdened by our past. Perhaps a real challenge is to remain, as the song goes, "every young," and avoid the bureaucratic impulse.

Mr. Morales: Michael, you've had a highly distinguished career in public service spanning some 25 years, as you indicate.

Is there any advice that you would give to an individual who is perhaps considering a career in public sector, or who may have a specific interest in the efforts at the MCC?

Mr. Ryan: I think the most important question might be why should someone want to work for the United States government? Because, after all, MCC, even though we're different and new, is part of the -- is a part of the federal community. The answer, I think, has to be, because it's the largest, most ambitious, and most diverse enterprise in history. Working for the federal government means upholding the principles on which the country was founded in the form of the Constitution, which is still the model for many countries, and many of the countries we deal with. The federal mission is also large enough to accommodate just about any interest or skill.

What's the best preparation for a federal job? I think everybody has their own concept, but I always recommend that people get the best general education available to them, especially in the liberal arts. But, to me, that means science, math, history, and language, before they specialize.

USA Jobs is a central Web site for all federal jobs openings, and it really does contain something for everything. Our Web site also provides the ability for individuals to go on and do online applications for our jobs, and actually anybody who comes to talk to us, no matter who they are or where they come from or what their background, ultimately, we ask them go back to our Web site,, and fill out an online application.

With respect to jobs at MCC, we find a variety of technical skills useful, much like the other federal agencies in the development community. But I would encourage people to focus on foreign language skills, with French, Spanish, and Portuguese, the most useful to MCC at this time.

To work with representative other countries, there is an obvious benefit to being able to speak and understand their languages. Of course, it's not just language; we can never have too many employees with skills that include communicating across cultural lines, regardless of what their technical expertise may be.

Mr. Morales: That's fantastic. Mike, we have reached the end of our time, and that'll have to be our last question.

I do want to thank you for fitting us into your busy schedule this morning, but more importantly, Pete and I would like to thank you for your dedicated service to our country.

Mr. Ryan: Well, thank you. It's a great honor for me to be here. It's a great pleasure.

I'd like to invite everybody who would like to learn more about MCC, certainly more than -- than I was able to give this morning, to go to our Web site,, and there you can see information about countries, about our programs, and also apply for a job if you want, as I mentioned before.

Thanks a lot; I appreciate being here this morning.

Mr. Morales: Fantastic. Thank you.

This has been the Business of Government Hour featuring a conversation with Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation.

Be sure to visit us on the Web at There you can learn more about our programs and you get a transcript of today's conversation. Once again, that's

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Radio Hour, I'm Albert Morales. Thank you for listening.

Rear Admiral James J. Shannon interview

Friday, December 22nd, 2006 - 20:00
The Navy and Marine Corps' move toward Open Architecture; Technical and engineering aspects...
Radio show date: 
Sat, 12/23/2006
Intro text: 
In this interview, Shannon discusses: his role as the U.S. Navy's major program manager for Future Combat Systems Open Architecture; Open Architecture defined; The Navy and Marine Corps' move toward Open Architecture; Technical and engineering aspects...
In this interview, Shannon discusses: his role as the U.S. Navy's major program manager for Future Combat Systems Open Architecture; Open Architecture defined; The Navy and Marine Corps' move toward Open Architecture; Technical and engineering aspects of Open Architecture; Business aspects of Open Architecture; and the Benefits and key accomplishments of Naval Open Architecture. Missions and Programs; Leadership; Strategic Thinking; Technology and E-Government; Collaboration: Networks and Partnerships
Complete transcript: 

Originally Broadcast Saturday, September 9, 2006

Arlington, Virginia

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Captain James Shannon, Major Program Manager for Future Combat Systems Open Architecture of the United States Navy. Good morning, Captain.

Captain Shannon: Good morning. How are you doing?

Mr. Morales: And joining us in our conversation, is Bob Reeve, partner in IBM's DoD practice, and a retired officer of the Naval Supply Corps. Good morning, Bob.

Mr. Reeve: Good morning. Good morning, Captain.

Mr. Morales: Captain Shannon, for those who are unfamiliar with the Navy and Marine Corps acquisition community, can you briefly discuss the mission of the Program Executive Office Integrated Warfare Systems, otherwise known as PEO IWS?

Captain Shannon: Sure. PEO IWS, still fairly new PEO, and it's not necessarily a traditional PEO because in the past all of our programs were aligned to platforms. And in 2002, the Navy decided that they had to figure out a better way to integrate across ship platforms, aircraft, and even submarines, and PEO IWS was stood up. Then the leadership was Mr. John Young, who was the Service Acquisition Executive. And the focus for IWS is to ensure that there is commonality among systems in what we invest in across platforms, primarily on ships and submarines.

Mr. Morales: Great. Can you tell us about your role specifically as the Major Program Manger for Future Combat Systems Open Architecture?

Captain Shannon: Yes, again, because we're still a fairly young PEO, I was in the summer of 2004 the Deputy Program Manager for Integrated Combat Systems, which was the program that brought together all of our AEGIS combat system, every combat system we have on all of our ships and also other various and sundry associated programs. When Mr. Young, in that summer, came out with a new policy that required that all Navy programs had to become open, in the sense of adopting Open Architecture principles, we were not necessarily aligned or to do that we had to reorganize the PEO.

So, PEO IWS 7, Future Combat Systems Open Architecture, was created. And I had been the initial Major Program Manager for that. My role is to look across the family of systems in the Navy and not just a specific system. And by a family of systems, my responsibility is to see how aircraft work with ships, how any elevated sensor may pass information to other elevated sensors. So I tried to work those kind of integration challenges. I also look at future in missile defense threats, and make sure we have the right resources towards building programs towards those things. And what's taking up most of my time is what we're here to discuss today, is this open architecture policy.

Mr. Reeve: Captain, can you give us some background about yourself, and how your career path led you to become the program manager for OA?

Captain Shannon: Sure. I'm a surface warfare officer by profession, and spent most of my career going to sea, primarily in cruiser or destroyer platforms. Early in my career, I was an engineer, below-deck engineer. And as I became more senior and served in different ship platforms, different types of combat systems, my training kind of led to combat system development and training. Eventually I commanded two guided missile frigates, and in between my executive officer tour and my command tour, I became very interested in the acquisition of systems. I felt that I could contribute in that way. After my command, I led a project, the evolved Sea Sparrow missile, and I've had a couple of other projects since then, and it's led to this program manager job.

Mr. Reeve: Excellent. You talked a little bit about your role as the program manager, but can you expand on that and tell us what it's like to be the Navy OA Program Manger?

Captain Shannon: Well, I'm defining it day by day. In my role as the program manager for Open Architecture, I'm trying to help establish policy and processes that other program managers can use and adapt to use Open Architecture to help them move forward and follow through RDA's policy, RDA being the Service Acquisition Executive for Research Development and Acquisition. My role as a program manager is to be a leader, to understand the vision of the Navy leadership, and make sure the people on the deck plates can go out and execute the things that we're told to do. We're treading new ground here. We're blazing a new trail. We're learning everyday on how to do it, but my role is to try to manage people in processes and new developments, new systems, new hardware even, and see how we can share that information across programs.

Mr. Morales: Captain, I realize that we've now been talking a lot about your role in the program that you manage. But we haven't specifically addressed what is Open Architecture. When we use that term, exactly what does that mean and what are the business drivers behind Open Architecture?

Captain Shannon: Right. I love that question, by the way, because I think the best way to describe Open Architecture is first to ask what is a closed architecture. And by closed, it's an architecture that only the developer will share within its own specific community or within its own specific company. And it won't be shared outside of that company or outside of that program. When you start talking about opening things, you're letting non-traditional partners develop, and you're allowing some sort of collaboration to happen. So, there is no single architecture in the Navy. There are many architectures to do the various things that the Navy has to do. How we share these architectures, how we understand the interfaces between them is only going to happen as we open them up, and let people look in and see those interfaces. And so the role in Open Architecture is to make that happen.

Mr. Morales: So it sounds like this is really a fundamental shift in the thinking of the way systems are built.

Captain Shannon: It's a big change in the business model, not just for the Navy, but also for industry, and that's what makes it really hard because it requires a cultural change. First thing that people respond with is, what's wrong with the way we're doing it now? Because, don't we have a great Navy? Don't we have great programs in place? Why do you want to break something that's good? And that's tough to answer because the fact is we do have very good ships, we have very good systems and very good programs. But the challenge is not in terms of performance. The challenge is in terms of cost. We simply cannot afford the fleet that we want, and to do that, to get that fleet, we need to change the way we do business.

We have to change it in-house in the Navy, and we have to ask industry to follow us along the way. And that's tough for industry. You know, we're not trying to dismiss this as something that's not important, because industry relies on stockholder investment, it relies on them being able to prove that they're making a profit that they have the right revenue, and for us to simply say, "Change your business," is really not that easy to do. So we're trying to work with industry to do it, but I always try to describe things as either an issue or a problem, or a fact of life. And when you have a problem, that implies a solution. If there is no solution, you have a fact of life, and the way we are doing business today, it's a fact of life we have to change.

Mr. Morales: Great. How is the Navy moving toward Open Architecture across systems? We will ask Captain James Shannon to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I am your host, Albert Morales, and this morning's conversation is with Captain Jim Shannon, Major Program Manager for Future Combat Systems Open Architecture of the U.S. Navy. Also joining us in our conversation is Bob Reeve, partner in IBM's DoD practice. Captain Shannon, why did the Navy decide it needed to move towards Open System Architecture and when was that determined?

Captain Shannon: Well, first there has been, I think, a movement at first in the technical community for several years about moving towards Open Architecture. But nothing in government really moves until there is an instruction or a policy that comes out, and first it came from OSD. The Department of Defense came out with a policy towards Modular Open System Architecture, and some of the listeners may have heard of MOSA, which is the acronym for that. And that requires some sort of test or evaluation of a program before any one of its milestones, and they run through a tool to do that. And the group under acquisition technology, ATNL, OCATNL, they have a program called the Open System Joint Task Force, and they lead this MOSA strategy. So that's how we've been ongoing, but the Navy particularly started looking heavily at Open Architecture in the '90s.

First, it happened in the submarine community.There is a program called ARCI, Acoustic Rapid COTS Insertion, and the Navy had a challenge in that we had an increasing threat to be concerned about, and at the same time an affordability problem on our submarine systems. And the investment in submarine systems is, first always in safety and in the hull and mechanical and electrical part of it. And we had to do some trades, system trades, in the combat system piece of submarines. So they looked at the acoustic processing, and wanted to figure out how we can improve performance there. And so they tested Open Architecture in that program and it was successful over a period of time.

As we learned from that program, the surface Navy then realized that they needed to be able to take advantage of COTS processors. COTS is Commercial Off The Shelf processor, computing technology. And they had to get away from the monolithic legacy development that we have done so well, and is to perform well for us in many of our ships.

And through a series of meetings in the 2002-2003 time frame, the Navy realized that we shouldn't just focus on the surface Navy community of interest, but we had to approach this as an enterprise, really looking at the Navy as a business, and across the whole Navy. And so that's when PEO IWS got the role in 2004 officially to do that, and we set up this enterprise and broke it down across five different communities of interest.

We call them domains, but a community of interest is probably a better way to term it.

One community of interest is the surface. PEO IWS is the lead for that, and we work with the other PEOs, and PEO Ships, PEO Carriers, and PEO Littoral Mine Warfare. Then on the air community of interest, that's the other domain, and that's led by PEOT, and they work with the other PEOs in NAVAIR, the Naval Air community. And then it's a little bit easier to break up the domains for the next three. One is submarine or undersea warfare, and that's PEO Subs. Then there is communications, what we call, C4I & Space and that's the PEO out in San Diego. And finally, PEO Space. So those five communities of interest were set up, and that's when we kicked off the effort that I laid down.

Mr. Morales: Captain Shannon, by any measure, we've established our Navy as the most technologically advanced in the world. And you referenced the AEGIS combat system earlier, and you did talk about some of these points. But why do we need to change the way we're doing things today?

Captain Shannon: You've probably heard the term "stove-pipes" before. The computing infrastructure we have today in the fleet is performance-limited, and it's very expensive to upgrade. And by a stove-pipe system, it's built from the ground up, and it doesn't take into consideration like systems on other types of platforms. The reason we had to change is because that's just too expensive, and we had to figure out a way to take advantage of what's going on in the computing industry. Instead of relying on building our own computers, the question is why can't we take advantage of what we're witnessing out in industry? The demand for computers is so great, that the speed of computers, the processing capability of computers, is better than many of the computers that we had onboard ships to do some of our most difficult combat system problems. So it didn't make sense to continue down that path. It only made sense to take advantage of COTS processors.

Mr. Reeve: This sounds like an awfully large endeavor for one program manager to be responsible for, and I understand you've recently picked some additional duties as well. And your office is setting up the infrastructure that will help change the way the entire Navy enterprise does business. What other organizations are a part of the transformation effort, and how do you manage all of this?

Captain Shannon: You're right. You know, a captain, by himself or herself, cannot do this alone. It requires everybody in the Navy, especially from leadership, making sure that everybody at my level and below are working together. You mentioned that I have a new responsibility. The program manager in Integrated Combat Systems, Mr. Reuben Pitts, was detailed down to the Naval Surface Warfare Center, Dahlgren Division, to work some organizational challenges down there. And my PEO, Admiral Frick moved me over to fill that gap. So my responsibility in that role is I'm responsible now for the computing infrastructure onboard all of our ships, and also the integration effort of our sensors and our weapons through that computing infrastructure.

Again, one person alone can't do this sort of thing. One of the things that we set up in the OA side of the house was something called the OA Enterprise Team. And it's among the five different communities of interest that I already said. We have representatives at the captain or senior government level, GS-15 level. And we meet regularly and discuss things often because each community of interest has their own path forward, and it's too hard and too unwieldy to make everybody travel down the same path together. Somehow, we have to share information where we can build synergy. At the same time, we need to be able to go off and do what we're chartered to do, whatever that may be.

So we set up this organization, the OA Enterprise Team, and from that enterprise team, we've been able to work out issues. And it has required a lot of the typical new organizational challenges, the storm and form and norm kind of thing. But after two years a lot of same people are still around. We're working very well together. We've built a trust. It's, you know, like any family, sometimes there are problems, and sometimes we have to work out those problems. But the thing is we are all headed down the path together, and so that's the good news.

Mr. Reeve: What are the technical and engineering aspects of developing an open system architecture?

Captain Shannon: Well, I kind of described the legacy systems that you had, and when you have a closed architecture, typically the applications, the algorithms, the codes, the source code that's tied to that closed system are unique to that system alone. It might be a specific language. It may be some nuance just associated to that specific system. When you say, "Okay, we want to introduce COTS into the combat systems onboard our airplanes, and submarines, and ships," the companies out there, they're building computers today like Dell or IBM, or any other company like that, you know, they're not building military applications and selling them out to the general consumer.

So we have legacy applications which are unique military applications that we have to then write onboard these COTS processors. So the challenge there is how you make that happen, how do you translate the languages of something very unique and military-specific to write on something that's designed to be used maybe even in the workplace with a commercial technology. The way we do it today is first by breaking apart the operating system code from the unique military code, and we're using Middleware to do that. And we've been fairly successful in doing that. Even in the AEGIS Combat System today, the most recent baseline, they've been able to test that and out in the fleet today actually have systems that are open in the sense of modular openness. Not total business openness, but certainly in the technical side.

Mr. Reeve: And is OA just technical, or are there business aspects or business architecture that goes along with that?

Captain Shannon: No, again, I probably didn't say that well enough in earlier questions, but that was probably the biggest thing that we learned when we set up this OA process. When I took on the job and talked to many industry leaders and people within the Navy, and various engineers, they said, "Hey Jim, all you have to do is get the standards down. Just get the standards straight, and everything will solve itself." They made it sound very easy to me and actually very attractive. Unfortunately, nothing is that easy. And I found soon enough that that technical solution is exactly the way people have tried to approach it for several years, and they were failing because that's all they were trying to do.

Business in industry does exactly what we tell them to do, and they do it well. And that happens only by getting your contract language correct, your business models correct, and setting it up in the way that makes the ultimate product successful. The industry has always done exactly what we've asked them to do. But we have not asked them contractually to open up their business lines, and they're not going to do that until we get that business part set up. There is no forcing function. There is no incentive. There is no way to award them for that type of behavior that we want. So we have to change the business model as well. And it turns out, that's probably one of the key things in this whole policy as we move forward.

Mr. Morales: Typically, we also hear the words "Net-centricity" and "Interoperability." And it sounds like optimally that this effort around Open Architecture would extend beyond just the Navy and Marine Corps. And that the Army, Air Force, and other national defense and intelligence agencies should be doing projects like these as well. Are they, and do you work with them regularly?

Captain Shannon: Yes, and yes. Let me describe it this way. A few years back you may have heard the term Sea Power 21 when Admiral Clark came out for the future of the Navy, and kind of gave us a strategy to focus on the Navy of the future. And one of the elements in that was something called FORCEnet. And people at times have a very difficult time describing what FORCEnet is, but there's really a simple definition for it. FORCEnet is the integration of people and systems, and systems of systems, and family of systems to give some sort of distributive capability by the latter half of next decade.

So when this policy came out or when this strategy came out, there was time to figure what this all meant because we weren't even working the Palm processes or the budgeting process for the latter half of next decade, but we are doing that now. And the budget cycle that starts in 2008, it ends in 2013. And what you build in 2013 gets fielded in 2015, latter half of next decade. So with FORCEnet, the focus there is on this distributive capability which requires some level of interoperability. But you cannot engineer FORCEnet. It's too futuristic. It's something that we still truly do not understand. So you need some sort of tool. You need some sort of enablers to make FORCEnet happen, and Open Architecture is certainly one of those enablers, maybe not the only one, but we're out front on Open Architecture, and it's going to help us along the way.

Mr. Morales: Great. How is the current budget environment impacting the Navy system development efforts? We will ask Captain Jim Shannon, Major Program Manager for Future Combat Systems Open Architecture of the U.S. Navy, to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I am your host Albert Morales, and this morning's conversation is with Captain Jim Shannon, Major Program Manager for Future Combat Systems Open Architecture in the U.S. Navy. Also joining us in our conversation is Bob Reeve, partner in IBM's DoD practice. Captain, what is the Navy's current budget, and how much do you expect the Navy to save through Open Architecture?

Captain Shannon: Navy's budget, what's appropriated, and really anyone of your listeners can get this information off the Internet I'm sure, is about $30 billion per year. That's in the fiscal year 2006 National Defense Authorization Act, and I think in 2007 it's going to be roughly the same amount. There is no single dollar amount in savings to the Navy that we'll be able to directly attribute to the implementation of Open Architecture. In fact, when you talk about Open Architecture and return on investment, sometimes people are overly sensitive. They're looking for cost savings to move money around and spend it on other things, but there are other ways to measure return on investment that Open Architecture can help.

And we've already talked about one of them, which is interoperability. Certainly greater interoperability is a return on investment. Cost avoidance is a return on investment. There's different ways to measure it, and one of my challenges is to come up with those metrics, which we're trying to develop now.

Mr. Morales: Are you beginning to see, in fact, some of these benefits as you deploy this program? And if not, what are some of the key accomplishments and specific efforts of the OA approach?

Captain Shannon: There are pockets of goodness throughout the Navy in Open Architecture, and I don't want to come off sounding like I'm the first one to be really leading the way in Open Architecture. There have been program managers before me who already understood the benefits of it and have preceded down a path to make Open Architecture work for them.

I already talked about the program ARCI, or A-R-C-I, the Acoustic Rapid COTS Insertion program. It's already there. They're leading the path, and actually they've evolved that into the Virginia class submarine combat system processes. So we're seeing that happen. We're seeing great return on investment in those areas. And in other programs, we're coming along the way. The Advanced Hawkeye Program, the E2Delta -- that's its designation. They've made some tremendous strides in mission computer development using the tenets of Open Architecture. And I would say, in most things involving the anti-submarine warfare communities of interest, they tend to be blazing the trail there because of what they learned from ARCI. And that is now crossing into the surface ship Navy because of sharing of information, being more open, and making our overall performance in synergy and undersea warfare across any kind of platform, because of this openness, improved.

So I'm seeing that. As far as key accomplishments go, I kind of just hit on a couple, but we've recently come out with a program manager's guide. In fact, it's on our website. But through this program manager's guide, which we just released, we had our legal and contract community to help us develop these guidelines, so that everybody has an equal understanding of what kind of things the Navy is looking for in terms of Open Architecture.

From that, and from all the efforts that led to that program manager's guide, we've seen improved coordination with and across domains to better aligned programs, and develop their domain-specific Open Architecture roadmaps. For example, the C4I domain is synchronizing requirements with resources and mapping programs to joint capability areas to better support Open Architecture. The air and surface domains are undertaking similar efforts. We are really working to build an enterprise view of Open Architecture. So we're learning as we go. And like I said, today there are many pockets of goodness. What we need is an enterprise view, and we're still not there yet.

Mr. Reeve: Navy and Marine Corps ships, planes, ground vehicles, and the accompanying combat systems last a long time. You mentioned the ARCI program. Is this the approach about how you integrate those platforms that are already in service as opposed to just working on the new systems in the future?

Captain Shannon: Yes, that technology insertion is really one of the fruits of our labor. We have to figure out a way to not just focus on new development, but also the legacy systems that we have. I actually don't like the word legacy. It implies old and used. Many of our ships and platforms are going to be around for many years. And we have to make sure that we have the tactical edge with these systems. We have to make sure that our sailors are on ships that are safe and can perform, whatever the threat may be. So we are trying to determine where are the opportunities to open up these systems.

In the surface Navy, we're looking at the AEGIS computing plan. We're focusing first on just breaking apart the hardware from the legacy applications. I mentioned that earlier. And we're finding success in that. But we're maybe not moving as fast as we would like to, and we have to, as we understand the technical openness and we are learning more about the business openness, we're moving out even faster. We're at a time now where we have to step on the accelerator in this process, and really take advantage of the opportunity. There are great challenges in budgeting. The whole nation is feeling these challenges and the Navy owes it to the nation to figure out the best and most efficient way to invest in our ships and airplanes and submarines.

Mr. Reeve: How does the Navy then evaluate which programs can cost-effectively be migrated over to open systems? You know, which programs are these that you're working on today?

Captain Shannon: Super question. One of the ways we are addressing that is we came up with something called the Open Architecture Assessment Model. This model was agreed upon throughout the Navy in the winter of 2005. And to make this model easier and user-friendly for program managers, we came up with a tool, the open architecture assessment tool, which helps baseline any discussion in terms of openness. So every program in the Navy has to run through this tool and from this tool you get a sense of how open you are on both the business and technical side. Any of our listeners will be able to have access to this tool through our website and I'll even say the website right now, just it's and that anybody could get into that website and you can look at this tool and it walks you through, it's user friendly, and it gives you a sense of the questions that we're asking.

From that, a program manager then has to make a business case if he or she finds out that, "Hey, I'm not as open as I thought I was," or, "I may be less relevant if I don't open up more." They have to make a business case to move forward and that's the traditional way that program managers compete among themselves on where should the investment be. But in Open Architecture, as you open up and share information, the idea is to do your system engineering and make your trades in a more global manner.

To be able to make them so that everyone understands why this trade is better than that trade instead fighting each other to get the resources you need, making the best decision based on sharing of information and good collaboration, making the right investment decision. And that's going to be a great benefit and a change in the business model that the Navy should see.

Mr. Morales: Captain Shannon, we've talked a lot about the technical aspects of OA. We've even touched upon some of the business aspects. However, I would imagine that it takes significant amount of organizational and cultural change throughout an organization like the Navy and the Marine Corps to really bring this to life. What are you doing to help change behavior within the Navy? And I don't mean you specifically.

Captain Shannon: Yes. Well, it's very hard. Cultural change is always difficult. You see it your whole life, you see it as you grow up, you see how some people are left behind just because they won't make a change. We're working through a variety of outreach programs. Coming here today and talking to you is one way. Going to conferences is another way. Putting out the program manager's guide.

We've also developed a continuous learning module that Defense Acquisition University has helped us develop. That all of our workforce could get actual two hours of credit because we have the counseling due training and they could do that at home on a web-based tool. We have worked with the Naval Post Graduate School and one of their system engineering curriculums has adopted a lot of the things that we are advocating and actually getting some of our young officers to understand Open Architecture and how they can apply it.

So, you have to start at a young level. You have to get your current work force to change. And you have to go out and talk and help people understand what you're doing. It's not easy. But education training and a lot of outreach to our industry partners is important. And hearing good news and good stories from industry partners who have been successful by opening up their systems.

You know, that's always fun when I can sit in a room with a specific company who says, "I don't understand I could do it." I can say, "Hey, company X, you need to talk to company Y because they did it and if they could do it, why can't you do it?" And there's no one way to skin this cat. It's just a matter of trust, it's a matter of understanding that we have to get a little greater balance between intellectual property and intellectual capital.

Mr. Morales: It's interesting you bring that up, because based on what you've told us so far, it sounds like it's not just the Navy personnel that need to change, but really the entire defense industry that develops and builds these security systems as well. What has been the reaction so far of industry as you move down this path?

Captain Shannon: To answer that question, depends on which industry member you're talking about. All of them are listening. Some are more cautious. Some are very excited. Small business today is very excited at the opportunities to get into system designs or system work that they before felt that they were not allowed to get into. We are working this together. We're trying to understand the challenges that industry is facing. But they're listening to us and they're trying to answer our needs.

Mr. Morales: As you mentioned earlier, it's certainly a partnership, right?

Captain Shannon: It is definitely a partnership. We can't be successful without industry being successful. That's important. And everybody understands that in the Navy. You know, we don't want to see businesses suffer. We don't want to see companies suffer. But this is also a national problem. It's bigger than any individual company. It's bigger than the Navy. We have to change the way we do that for us to remain the edge that this nation is used to.

Mr. Morales: What does the future hold for Navy systems? We will ask Captain Jim Shannon, major program manager for Future Combat Systems Open Architecture in the U.S. Navy to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Captain Jim Shannon, major program manager for Future Combat Systems Open Architecture of the U.S. Navy. Also joining us on our conversation is Bob Reeve, partner in IBM's DoD practice. Captain Shannon, what are the major challenges that you see our Navy and military in general facing over the next ten years?

Captain Shannon: The biggest thing, and you read this in the paper, it's weapons proliferation. Proliferation of rapidly advanced weapons systems based on low cost, ubiquitous technologies in the hands of unstable entities. I mean, we read about it in the paper every day. Potential enemies that are flexible and dynamic. That's what we're dealing with in the improvised explosive device challenge that we have in Iraq. Rising cost of our weapons systems to counter those threats. I think that in a nutshell is what the public reads about every day.

Mr. Morales: So this really is a lot of the impetus behind OA. So what are some of the biggest obstacles that you've encountered in your efforts to implement OA and can you share some of the lessons learned?

Captain Shannon: The most significant obstacle is frankly the fear of change, of the unknown. Naval Open Architecture and the things that we've been talking about today is disruptive. It represents a new business model for how our Navy acquires complicated systems. It requires a new way of designing these systems and demands new skills and processes from a wide variety of stakeholders. Communication is a critical element of change. Communication and documentation, I guess, for that matter.

Today, we've conducted a couple Open Architecture industry days. We've spoken to numerous conferences. We've held and attended symposia, and we've created and maintained a public Open Architecture website that had seen over 13,000 hits. And that's only 11 months since when we started it. So that's how we're learning from it, that's how we're implementing it.

Mr. Reeve: How does OA fit in with all the changes to, and modernization of the military that the Secretary of Defense, Donald Rumsfeld, is interested in implementing?

Captain Shannon: Open Architecture directly supports defense modernization and simply put, we cannot continue to do the business the way it's done today. That's the message I'm giving you. Open Architecture breeds innovation. It breeds competition. It ensures that we get the best product out there at the right time. Beyond the considerations of affordability, the traditional way of doing business simply cannot react fast enough to get the new capability in the hands of our war fighters as quickly as it is needed in the world environment we have today.

Today's environment is different than the environment that I came in. When I was a young officer, I came in and there was a single threat. It was the Cold War. And what we face today is much more complex. The integration of all these challenges and all these threats and trying to solve these problems, I refer to as the mother of all calculus problems. It's incredible and it's hard and we need Open Architecture to enable us to solve these problems.

Mr. Reeve: Captain, you talked about innovation and competitiveness, and there is a lot of talk nowadays about how important that is to business and to American global competitiveness. That sounds like it fits very well with what you're trying to do in the OA movement. Does OA enable or inhibit that innovation and how can smaller firms -- as you mentioned, they're excited about this -- how do they participate in this movement?

Captain Shannon: Well, by adopting Open Architecture, the Navy and Marine Corps will be able to take advantage of the substantial ongoing investments by commercial industry that's driving advances in many areas in the computing technology. And I kind of hit on that earlier. Open standards and open business practices will lead to better compatibility between the Navy systems and the available COTS technology, the commercial, off the shelf products I mentioned earlier.

And improving compatibility will result in opening competition up to many new providers. Our efforts are focused at opening up opportunities for any qualified vendor to participate. Now the term, when I say "qualified," it's just not anybody coming off the street. There are certain qualifications that are listed in our federal acquisition regulations. But any qualified vendor, and any-sized company should be able to play.

Sometimes I hear people say, "We need small business," and I actually say, "any business." I like competition. David-and-Goliath-type competition is okay. The point is to get the best product out there. It's important that modular software components with fully disclosed interfaces give us the agility and ability for us to get the product that we need. When we talk about Open Architecture, I'm not talking about getting the source code or the niche product or that thing that's truly intellectual property out there.

I don't think that's fair to any company. But the interfaces to those modular systems we need to understand. The government should own the data to do that. We should be able to just provide that information to anybody we want to and we are walking down that path. We're trying to understand how to build our repository or our library, if you will. And this library will require people to have a library card. Some kind of qualification just like when you get a book out, you have to be a citizen of that town where you are.

Well, we need some sort of qualification and somebody comes in and we'll sign out a license and share this information with them, and the government ought to be able to that. And it shouldn't be by program. It should be across all programs. And we don't have that today. And that's one of the challenges in the requirement that I'm trying to define for leaderships, so that we understand how to do that.

Mr. Morales: Captain Shannon, you've enjoyed a very distinguished career in the U.S. Navy and in public service. And I understand that your son is embarking on an equally distinguished career. What advice could you give to any individual out there who is perhaps interested in a career in public service?

Captain Shannon: You mentioned my son. He's a midshipman at the Naval Academy. I'm really proud of where he is going and he joined the Navy in spite of anything I've done wrong in the past. So I'm really happy with that. But my advice to anybody who wants to embark on public service is public service is not just the military service. There are many ways to serve the public and it doesn't always have to be in a government position. You could serve the public by coaching a little league team or a soccer team.

I have three children, actually, and I tell all of them that they need to serve in some way and they need to dedicate their life with some level of service. Because that is the only way that we can work together, that we can survive as a community. So my advice is figure out what your talents are and figure out how to share those talents, and if government service is the way to do it, I encourage you to do it. And there is civilian government service as well. And in the business I'm in, there is more civilian government servants that there are military government servants.

Mr. Morales: Great. That's an excellent perspective. Unfortunately, we have reached the end of our time and so I do want to thank you for joining us this morning. But more importantly, Bob and I would to thank you for your dedicated service to the public and our country in the various roles you've held in the U.S. Navy.

Captain Shannon: Thank you very much for having me. This was a great opportunity for me to help get the message out. I'm proud to be in the Navy and I'm proud to continue to serve and help the Navy get on this path. I'd like the listeners just to write down this website if you didn't have an opportunity to do that already. The website is And thank you again.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with Captain Jim Shannon, Major Program Manager for Future Combat Systems Open Architecture in the U.S. Navy. Be sure to visit us on the web at There you can learn more about our programs and get a transcript of today's conversation. Once again, that's

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support. For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

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