Rear Admiral James J. Shannon interview

Tuesday, January 12th, 2010 - 20:00
He assumed command of Naval Surface Warfare Center (NSWC) in October 2008.
Radio show date: 
Thu, 01/07/2010
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
Magazine profile: 
Complete transcript: 



Mr. Keegan: Welcome to another edition of the business of government hour.  I'm your host Michael Keegan and managing editor of the business of government magazine.  Combat differs significantly from just a decade ago.  Anticipating the future is key and the US armed forces continue to prepare for future conflicts evolving to meet emerging challenges.  It does this by engaging in rigorous science and technology research.  With us to discuss his efforts in this area is our very special guest Rear Admiral James Shannon, commander of the naval surface warfare center.  Admiral, welcome back to the show.


Adm. Shannon: Michael, it's great to be here.


Mr. Keegan: Also joining us is Kevin Green, IBM's defense industry leader.  Welcome, Kevin.


Mr. Green: Thank you, Michael.  Good to be here.


Mr. Keegan: Admiral, for those unfamiliar with the naval sea system command, would you briefly describe the mission and the evolution of the surface warfare center?


Adm. Shannon: Well, the surface warfare center first is not just one place.  It comprises 10 major commands geographically situated across the United States, and the warfare center does the full spectrum of research, development, test evaluation, engineering, whatever the fleet needs and also supports the Marine Corps.


Mr. Keegan: What can you tell us about your role as the commander?


Adm. Shannon: Well, my job is traditionally, I'm a echelon three commander, report to commander of naval sea systems command, vice admiral Kevin McCoy.  And, my job is to lead people.  I lead 14,000 people.  I'm responsible for the infrastructure for all these warfare centers.  And, I provide a supporting cast role, if you will, to the other admirals in the Navy that are responsible for product.


Mr. Keegan: I was wondering, could you give us a sense of the scale of the operation?  What does the command look like?  Where is it located?  What is the geographical footprint?


Adm. Shannon: Okay.  We are located principally very close here to Washington, DC.  We have five commands within this region.  And, that's right here in Carderock right off the beltway, Dahlgren, Virginia, which many people are familiar with, Indian Head, which was really one of the first proving grounds for the Navy.  There is a explosive warness disposal technology activity in Stump Neck, Maryland, very close Indian Head, and then up the road we go to Philadelphia for ship systems, all mechanical and electrical systems.  We go down the road to Dam Neck, Virginia, for combat direction support activity.  And, then we have a coastal warfare systems site in Panama City.  We do a lot of work in Crane, Indiana.  And, then,  out in California we have Port Hueneme where we do a lot of missile and radar testing.  And, then, also Corona, California, which is in Riverside County, we do a lot of operational analysis on the systems that we have.


Mr. Green: Admiral, that's a wide array of responsibilities.  With that in mind, what have been the top three challenges you face in your position and how have you begun to address those challenges?


Adm. Shannon: Well, I would say the top three really starts first with having a diverse workforce.  That's not just my priority but you hear the CNO talk about that, Admiral McCoy has made that clear that's a top priority in the naval sea systems command.  And, I'll get to back to diversity in a moment.  But, we are also very interested in maximizing total ownership cost.  That, again, is something that's being discussed a lot within the Navy to understand really what our costs are for our ships and to get the most return on investment in whatever we're doing.  And, then, the third thing that I'm certainly a large advocate for is transparency in our product and what we do and open architecture and things like that. 


With diversity really is the priority and  something that were building on right now.  There's a lot of congressional interest in what we're doing to hire our workforce to make sure that our acquisition workforce is robust.  And, that starts with making sure that we have a workforce that represents the people of the United States.  We have a very diverse young workforce, but we don't have a very diverse older workforce.  And, that's because of just the way we hired people over the years.  We really want to bring in more diversity, more cultures, and more innovation.


Mr. Green:.  Well, you have a wide array of responsibilities.  One of your roles is as the surface warfare chief technology officer.  What does that role entail?


Adm. Shannon: That's a great question.  Because, I'll tell you, a year ago, when something called me up and said, surprise, you're now the chief technology officer for the surface warfare enterprise, I had to Google chief technology officer and find out what it is.  Because, it's really nothing that, it's not a term that we typically use within the uniformed force in the military.  And, when I looked up what a CTO was, a chief technology officer, I was happy to learn that there is many different definitions. 


So, that gave me the ability to come up with my own definition of a chief technology officer.  And, what I'm primary responsible is to be the advocate for the surface warfare enterprises, surface warfare community, and work with the chief in naval research who has a large responsibility for science and technology across the entire Navy, not just the surface Navy.  Today, Rear Admiral Nevin Carr is the chief of naval research.  He is a surface warfare officer but he has to look at aviation, he has to look at sub-surface satellite communications - everything. 


So, I'm a fellow flag officer who advocates for the surface Navy, and my role is really to look out way into the future to see that the technologies that are there and try to be a bridge between the operators and the research analysts, the scientists, the technologists, and help a dialog happen about where do we want to take the Navy in the future.


Mr. Green: Sure.  Now, in that role, do you also work closely with folks in industry who might have the same title or have responsibilities in research?


Adm. Shannon: Well, we're not as far along as we should be, is the short answer to that question.  And, one of the things that I found out when I took this job is we did not have that kind of dialogue happening.  A year ago, I spent the first six months probably trying to understand what my role was going to be and making sure the senior leadership in the surface Navy agreed with that.  But, what I've been working on for the past several months is trying to understand where is the Navy putting their money internal to the Navy.  And, then, my plan is in a few months to have an industry day to really be transparent with industry and let industry know, hey, this is where the Navy's putting their money inside the Navy.  It would be a good idea if you were researching things in the same area.  And, then, sharing ideas and sharing technology to really be able to come up with the best solutions.


Mr. Keegan: Could you give us some background about yourself and how your career path led you to become the first chief technology officer for the surface warfare enterprise?


Adm. Shannon: Well, throughout my early career, I was a  below deck engineer who served primarily on destroyers.  Then, as I grew up in the surface warfare community, I got into anti-submarine warfare systems, missile defense systems.  I had the great opportunity to command a couple ships.  Following my command tours, I got into program management where I managed the evolved sea sparrow missile project and took it through its tests and evaluations.  I got involved into the naval integrated FiRe control project and then was lucky enough to be selected to be the program manager for future combat systems open architecture.  And, that all came together to the position I'm in today.


Mr. Keegan: Admiral, you have a robust portfolio, an  import mission.  Could you tell us what makes an effective leader?  And, how has your previous experience formed your leadership style and your management approach?


Adm. Shannon: The biggest thing that you have to do, I think, to lead is to listen.  You have to listen, not just to your people, your subordinates, but you have to listen to your superiors.  And, so, my job is to understand where, what our superiors want.  And, in the position I'm in today that's  primarily listens to the chief of naval operations, and to the secretary of the Navy, and to the Secretary of Defense, and, of course, my own immediate superior, Vice Admiral McCoy.  And, then, I have to go out and listen to the subordinates and understand what their knowledge is and to help focus them and  focus their energy and get them to move in the direction that the superiors told me to move. 


So, as a leader, your job is to lead somebody in a certain direction.  You have to understand the requirement, what is needed, listen to what that need is, and take all those good ideas and point them all in the same direction and get on a path to success.


Mr. Keegan: Is there any particular leaders out there that have informed you?


Adm. Shannon: Well, Vice Admiral McCoy is doing a great job right now of keeping me informed.  But, I would tell you, in this business, probably the person that we often refer back to is Admiral Wayne Meyer, who recently passed away.  He's often referred to as the father of Aegis.  And, it was his idea to build a little, test a little.  And, to really embrace system engineering and to discuss the different trades that you can make to get the best product.  And, to really integrate all your systems so that, that when one system trade is made, that you understood the repercussions to all the following systems.  Admiral Meyer is credited with making the Navy understand that concept, and we still try to build off of that.


Mr. Keegan: Terrific.  What about the Navy's approach to science and technology?  We will ask Rear Admiral James Shannon, commander of the naval surface warfare center, to share with us when our conversation continues on the business of government hour.



Part 2



Mr. Keegan: Welcome back to the business of government hour.  I'm your host Michael Keegan, and our conversation continues with Rear Admiral James Shannon, commander of the naval surface warfare center.  Also joining our conversation from IBM is Kevin Green.  Admiral, could you describe the Navy's approach to science and technology?


Adm. Shannon: Investments in science and technologies are wide ranging, but highly focused on ensuring that the people out there in the fight have the advantage over our enemies in any battle space against all threats.  You'll hear people talking about finding sometimes and saying the term we have to have a fair fight.  When you're really involved with fighting, you don't want a fair fight.  You want that asymmetrical advantage.  And our Navy's comparative advantage to any potential adversary  is our competitive will and our innovative drive.  And, that's where it comes in the science and technology piece.  We continuously operate.  We continuously listen to our operators,  and we try to apply the science and technology that we know well and apply it to whatever systems that we need to improve.


Mr. Keegan: Given the rapidly changing threat our nation faces today in conjunction with the pace of global technological innovation, what are some of the challenges the Navy faces in getting the right technology to our war fighters?


Adm. Shannon: The absolutely biggest challenge is affordability, and I'm sure that's not going to surprise any of the listeners out there.  We are constantly combating the affordability challenge.  And, affordability, though, gets often misunderstood, because sometimes the affordability is driven because the requirement is too great, and the engineers and scientists out there are always going to default to giving you the absolute best solution they can give.  It's not in their intellectual makeup to give you a system that isn't the absolute best.  So, it's imperative that the people that write the requirements and oversee the requirements manage that, such that we can expect exactly what we want.  And, then, at the same time make sure the affordability or the prices come down.  It's, it's a really tough calculus.


Mr. Keegan: Kevin mentioned, in your role as the CTO, collaborating with maybe somebody from industry.  What about collaborating with the other armed services in this regard?  In your approach to science and technology, could you tell us a little bit about that?


Adm. Shannon: We do collaborate with the other services.  And, I would tell you at the working level, it's done much better than at the more senior levels across the warfare centers.  At the deck plate level, as we say in the Navy, we do a very good job collaborating with other services, with academia, with industry.  The tough part gets when you get up to the more senior ranks when money gets involved and people are trying to determine who pays for what.  And, that's been something that I've often try to work on very closely in terms of architecture, and making sure that you have an open architecture and not to worry so much about the cost of it but just to come to agreement on what that architecture is. 


So, in my own role right now, I do a lot with the Kenner IED systems to build, that's to defend against the improvised explosive device threat that is in the current wars that we face today.  I work very closely with all the services, with the Department of Homeland Services, with the FBI, trying to collaborate on the best ideas to meet that threat.


Mr. Green: It's quite clear that the Navy is engaged and deployed globally in pursuit of missions in support of global  stability and the New World order.  What lessons have we learned from the multitude of missions the Navy is supporting today in Iraq, Afghanistan, and even off the coast of Somalia?


Adm. Shannon: Well, we've learned a lot, especially in this era of what we call irregular warfare with this IED threat, the improvised explosive device threat.  You know, that was a threat that was really based off of commercial technology.  And, it's a threat that, it was always out there.  It was right in front of us.  We recently, I think a year ago, celebrated 25 of the cell phone industry.  And, so, it wasn't anything new.  And, I'm sure many of our great scientists and engineers in our  warfare centers knew how that threat could be used against us.  But there was no forum, there was no way to bring that potential threat to our attention until it happened.  So, we were sort of surprised by that.  And, I think in the future, what we have to really learn from the Afghanistan war and from the Iraq war is that we have to understand the commercial technology is out there and how it can be applied. 


Historically, we've already learned these sorts of lessons many years ago.  I always like to refer back to over a hundred years ago the great white fleet was sailing in 1908.  At the same time, you had a couple brothers out there on this thing called a flying machine.  You know, nobody really thought of how to use that really in warfare.  But, by the end of World War I, ten years later, it was definitely clear that you could use it.  But, we never really even understood the power of airplanes until Pearl Harbor was attacked.  So, today, we have the IED.  Twenty years from now, what's the IED going to look like?  We've got to be ready for that.  And, we have to understand the power of that kind of threat and other technologies that are out there.


Mr. Green: Sure enough.  And, you've described the fact that the Navy operates with other services and other partners.  Are there any issues associated with interoperability that your office is engaged with, or your command is working on?


Adm. Shannon: Interoperability is always a very big challenge and we certainly are working on it.  In my specific role as the single manager, one of my additional duties is I am the single manager for the counter radio electronic warfare systems that we use to defeat radio-controlled improvised explosive devices.  I am responsible, regardless of the service  feeling the system, to look at the interoperability and compatibility of those systems with other systems that put out radio waves such as radios, and to make sure that they're compatible and interoperable.  So, we have a process in place to look at that.  And there's a lot of processes in government to make sure we have that sort of thing. 


Recently, the Navy has also reorganized the organization to bring a lot of our electronic systems all underneath one resource sponsor with the new N2N6 organization, which is going to be responsible largely to make sure that the interoperability challenges will be vetted very early in the process and resourced appropriately.


Mr. Green: That sounds like an awfully large endeavor to undertake.  You're describing very significant change across the Navy and, in fact, across the joint technical community.  Are they any other Navy organizations that will be standing up or taking a larger role going forward?


Adm. Shannon: We're still trying to understand what other organizations' responsibilities are going to be in terms of acquisition and requirements.  But, certainly in the new organizational setup, the CNO created something called the Tenth  Fleet.  And, they're going to play a large role in understanding this interoperability challenge.  The reason the Tenth Fleet was chosen, by the way, was back in World War II, we had the submarine threat out there that we were really not very familiar with in how to defeat that challenge.  So, the leadership in the Navy in those days created the Tenth Fleet just to focus on that one threat, and we obviously did well and were able to mature our anti-submarine capability through the decades.  Admiral Ruffet  is doing the same thing in the cyber world and creating the Tenth Fleet to help shape the discussion, shape the requirements, and make sure we require the right things with the new Tenth Fleet he's standing up.


Mr. Keegan: Admiral, you mentioned earlier one of your challenges is the cost calculus.  You also referenced the fact that, you know, anticipating the future.  I was wondering what changes in the acquisition process may be required to facilitate the deployment of advanced technologies in accelerated manner?


Adm. Shannon: Well, that's a really good question.  And, it's... I think this one is right down my alley to answer.  First, really need to cultivate a culture of innovation that's built on collaboration.  That was what the whole open architecture initiative was about.  It wasn't plug and play or getting the standards right, it's like getting people to talk with each other and collaborate on the best ideas.  And, the way we need to do that is to increase transparency in our science and technology investments.  A large portion of our fielded systems have traditionally come from the same DOD laboratories or the same large Department of Defense companies or universities. 


We need to broaden that to bring in many different industries together to make sure we get the right ideas.  We have to protect our investment in basic research.  The numbers I've been looking at show that in terms of research and development investments, basic research has actually gone down where some of our advanced research has gone well.  But, you need to get the basic research and the understanding of the science down for people to be able to mature it to the next level.  And, finally, we really need to develop a more efficient path for technology transition to the fleet.  Some of this acquisition takes way too long, and we don't have the stomach to be able to do that. 


One of the things that we did well, I would say heroically in this current war, is the way we rebounded from the IED threat.  We were able to recognize the threat and then form up very large, both operational communities as well as technical communities, and to be able to come up with systems and field those systems, put the logistics behind them, and really be able to take on that threat.  And, the results were just magnificent, and lots of lives were saved.  So, we were able to do it but it took a lot of commitment and it took some money and it took resources and talent to make that happen.


Mr. Keegan: Speaking of talent, the federal civilian sector of the government is also looking at this acquisition contracting, getting the right people in there, the actual human resources to do this is an issue.  Do you foresee that as a part of the problem in your area?  Do you have a plan to maybe bolster the acquisition workforce?


Adm. Shannon: I don't have a personal plan.  The Navy has a plan to build up that capability.  There's been a tremendous amount of hiring going on to bring in more people as contract specialists.  But, the one thing in contracting.  It takes time and experience, and you just can't come out of school and expect to be a great expert negotiator in contracts.  So, we have to build that force.  We have to maintain that force and not lose these people.  So, we have to make sure we keep them in the Navy and educate them along the way.


Mr. Keegan: How is the Navy fostering a culture of innovation?  We will ask Rear Admiral James Shannon, commander of the naval surface warfare center, to share with us when our conversation continues on the business of government hour.



Part 3



Mr. Keegan: Welcome back to the business of government hour.  I'm your host Michael Keegan, and our conversation continues with Rear Admiral James Shannon, commander of the naval surface warfare center.  Also joining our conversation from IBM is Kevin Green. 


Admiral, you mentioned one of the changes needed in the Navy's approach to science and technology is to build a culture of innovation based on collaboration.  What does the Navy need to do in order to forge this culture of innovation?


Adm. Shannon: Well, first, you know, I think what we always need to remember and remind ourselves every day that the Navy needs to remain flexible and adaptable to change.  Whenever you look at history and you look at navies that didn't succeed and are no longer maybe with us today, it's because they did not remain flexible and adaptable to change.  That's, the good news is that's part of our Navy.  We tend to always come up with innovative ways that are not written in the book, and I think we need to maintain that sort of thing.  But, yesterday's requirements were fairly stable and understood.  We understood the threat.  We knew how to deal with it.  It was a single threat, in many cases monolithic.  There was clear lines of control and accountability.  But, today, those kind of options are relatively few. 


And, I think what really need to understand is watch what's going on with the rest of society.  Because the Navy is a microcosm of society, and we need to, not be so rigid or shouldn't be rigid with our military view of things and really see how the society is working.  And, you see that with social networking.  You know, things like Facebook and blogs, and that type of communication is starting to creep into our workplace.  And, I think it's a very good thing because it's  sharing ideas.  It's a good opportunity to be innovative and to figure out things before you actually have to bring them up for a decision.


One of our commands out in Port Hueneme is actually creating their own internal Facebook kind of page just building off of a good idea.  But, I would tell you all of our warfare centers are trying to figure out the best ways to do that.


Mr. Keegan: If you don't mind me asking, we have  interviewed Admiral Allen, Thad Allen, of the Coast Guard, and he is really a champion of social networking and has the iCommandant blog.  Do you have anything similar to that?


Adm. Shannon: I'll tell you, I am sort of concerned about some of the things that I do, just like any parent that I see on Facebook.  And, before I start applying myself to that technology, I want to make sure I understand it fully.  What I do like, though, is the energy that I see on it.  And, I like the fact that it's fairly open and there's a way that you can control the information.  I would say that Admiral Allen is, you know, he is a great leader and he is leading the way, and guys like me need to follow him.  And I need to figure out how to do it better.


Mr. Keegan: Well, you mentioned earlier that sort of visionary role of a chief technology officer.  Would you tell us what role that part of your responsibility plays in building the  culture of innovation?


Adm. Shannon: As far as the chief technology officer, I think what my main role is to get people out of their comfort zone.  That has been one of the ways I've approached it recently.  We have some great scientists, some great engineers in the warfare center family of commands.  But, they've been fairly comfortable in how they've tried to solve problems.  And, they've always talked to the same people. 


What I'm trying to do is to stretch that a little bit, to get beyond their comfort zone, and to challenge them to share their ideas with other people than they may have, because, when they do that, their ideas are going to be challenged.  And, maybe the things that they think are a great idea are maybe not so great.  But, when you bring all the ideas together and you listen to what people have to say, I really think we will get a better product in the end.  So, I'm pushing that.  I'm pushing people beyond their comfort zone.


Mr. Green: Well, you're clearly very close to your customers who encompass the entire Navy and other partners within the Department of Defense as well.  So, how do you get an organization the size of the Navy, I mean, well beyond the technical community, to change the way that it thinks and behaves to forward or to improve innovation and innovative processes and approaches?


Adm. Shannon: One of the best ways we've been doing, and we've been doing this for a while, is education.  Is, get out there and make sure that we get the information out there that we want people to behave the way we want them to behave.  We have to reward people for doing a good job.  We have to reward  people when they are paving new ways of doing business.  And, those are the ways I think we need to get there. 


Mr. Green: It's often been said that innovation and technology need to move away from the silo model and toward a more collaborative and multiplatform model.  What forms of collaboration need to happen to drive this kind of innovation?


Adm. Shannon: Well, the silo model is a traditional top-down approach.  And, if you want innovation to work, I think  the way you need to do it is you need to work from the bottom up.  Diversity in our workforce is the way we need to do it.  Open architectural implementation is a big part of that.  And, all open architecture means is not being a closed architecture.  It means sharing ideas.  It means allowing people to see what's going on. 


One of the things that we have not done well in the Navy or in government is control the data, though.  We have to make sure that the data that we buy, we share throughout industry, throughout academia, with other services.  And, controlling that data is something we haven't done well.  So, we have to understand the data we have and figure out a way to make sure it's available to everybody out there.  We have to improve the government contractor relationship by making people be more accountable to each other.  So, it's not just a one-way street here.  The government has to be accountable to the industry as much as industry has to be accountable to government. 


When I speak to people in industry, they sometimes feel like it's only the government firing the questions at them and blaming them for whatever product is.  The government has to stand up and be accounted for as well.  I think we just need to share ideas and technologies that in the past were held as proprietary, because it was easy to say they were proprietary.  You know, some things we need to challenge as being whether really proprietary or not. 


Mr. Green: Well, as a defense technology leader, I think it's fair to say that you're one of our leading subject matter experts on open architecture.  In your view, how well has industry responded to your call for more of a technical approach that folds more into the open architecture model?


Adm. Shannon: I think that's a really great question.  And, how you answer it depends on where you sit in this play we call open architecture.  Small businesses have aggressively come out and addressed open architecture, because they are looking at this as an opportunity for them to be able to play without having a larger company suck them in and tell them how to do the business.  Small businesses, by their nature, really want to be independent.  Then, there's also companies that have not traditionally played in defense industry are looking at opportunities to compete and they're looking for fair competition.  The only way that can happen is if they can have the same access to that information that, in the past, may have been shut out to them.  And, then, there's the traditional partners that we have within industry.  I think, to a large measure, I give them credit for listening to us and trying to figure out really how to address this openness.  At the same time, they don't want to lose their proprietary goods because they have a lot of investment in those sorts of things. 


So, we're working really closely with them to try to understand, you know, how we can branch out, how  we can be more collaborative.  At the same time, it's very important, in my point of view, that everybody that's a player   has the ability to make a profit, to be able to stay in the game as long as they want to stay in the game. 


So, not everybody is equally addressing the open architecture initiative.  It depends on the business model for each industry that's involved.  The old way of, if you've got a niche product keep everybody out, still applies if that's your business model.  What we're most interested in in the Navy is getting the best ideas, getting the collaborative approach.  And, the other thing you've got to recognize the billions of dollars of taxpayers have invested in in the products that we buy.  We ought to own some of it.  We ought to be able to claim that we own those, that data because we're the ones putting the money behind it. 


So, that's one of the challenges I have in some of my conversations that I have with industry members.  That's one of the things I like to bring up is we ought to get something out of it.  Now, on the other hand, government has not done a good job controlling that data and controlling that information and making sure that we share it with all vendors who are qualified to do that kind of work.  There's a lot of responsibility to be shared but it takes a lot of energy and it takes everybody participating and not trying to go back to the old way of doing business.


Mr. Green: That's a very powerful statement, and you really seem to believe that collaboration is an important element of innovation.  Within the surface Navy, how is that community moving to address collaboration and innovation as a cultural issue?


Adm. Shannon: Well, we regularly meet on the issue and what my role as a chief technology officer in the surface warfare enterprise is, I'm really working with the resource sponsors, in this case Rear Admiral Frank Pandoff, who is responsible for resources in the surface Navy.  And, he leads what's called a future capabilities team.  And, we meet regularly to talk about the different things that we want to invest in and understand how we can link those investments to the strategy that he's trying to follow that the CNO is putting out.  So, facilitating discussion is really the main thing that we're looking at.  We're really trying to understand the total ownership cost; what's difference between readiness and the actual cost of the systems that were buying.  So, it just is a lot of discussion.


Mr. Keegan: Just stepping back a bit, we talked a lot about technology, science and research, and collaboration, but also innovation.  I was wondering, before you assumed command or as you anticipated assuming command, was there anything you did to kind of look at the idea of innovation and how, are there any lessons learned from different industries, the federal civilian space?  Did anything inform you as you took over your current role?


Adm. Shannon: I think we're living in a great age of innovation today just because of what we're all experiencing with the Internet.  You know, just 10 years ago we didn't have the same power of the Internet, and 15 years ago, a lot of people didn't even know what the Internet is.  So, we're still in the discovery phase, I think, in understanding this kind of innovative power that's out there.  And, if our head was in the sand and we didn't take advantage of it, then shame on us. 


So, what I've learned is what we have all learned is to be open-minded to different ideas.  Ideas that are not typical within your own organization.  Listen to what people's ideas are, and see that there's something behind there and see if you can use them.  What has changed from days gone past is we are more open-minded today.  We used to only have one way of doing business.  Tradition was one of our major core values.  I would tell you today tradition is not a core value.  Tradition is very important, but it's not a core value of our organization.  So, because we have to be adaptable and flexible to that kind of change.


Mr. Keegan: Well, most achievements in government, especially in the armed forces is not a solo act.  Would you elaborate on your approach to empowering your staff, the folks under your command?


Adm. Shannon: Yeah, it's again a great question.  My thing is to always delegate down to the lowest level.  And, just a short anecdote on that.  Recently, I had to go away for six weeks of training to what's called capstone training.  It's training required by law for flag officers and general officers to learn more about what's going on in the military organization.  So, for six weeks I was away.  And, when I came back, I realized nobody missed me.  Okay?  So, the fact is we have a very good organization in the warfare center and everybody knows how to do the job for the person one up and one down.  And, we empower people by trusting people.  And, that's the biggest thing you have to do in any organization is build trust.  We build trust internal to the warfare center, we build trust across the whole naval sea systems command.  And, whenever that trust breaks down, that's when you find we have other problems.  So, you have to always build trust.


Mr. Keegan: What does the future hold for the U.S. Navy science and technology research?  We will ask rear admiral James Shannon, commander of the naval surface warfare center, to share with us when our conversation continues on the business of government hour.



Part 4



Mr. Keegan: Welcome back to the business of government hour.  I'm your host Michael Keegan and our conversation continues with Rear Admiral James Shannon, commander of the naval surface warfare center.  Also joining our conversation from IBM is Kevin Green.


Admiral, let's transition to the future.  What new technologies or trends in information technology do you see the Navy adopting in national security systems to benefit the future?


Adm. Shannon: The trend in technology has a lot to do with computers and the computing base.  And, in terms of national security and defense, the term you're hearing a lot is called cyber war.  We really need to get our hands around that.  And, that was something I alluded to earlier in the radio show when we were talking about Tenth Fleet and what they're trying to do there.  But, we really know, I think, in the future that personal computers are going to become smaller, more people are going to have access to a computer, and then you hear that term cloud computing going on where computers will be less of a tool and that will be more of a portal to the information that's out there.  And, controlling that information and the volume of data and information is something that really nobody fully has their  hands around and being able to control that value will be really important. 


So, what technologies are going to be out there to power those sorts of things and how can we use that technology in warfare systems?  You have to look at power and electricity.  How are you going to make that system work?  Is it going to be used solely with batteries or are we tapped out on batteries and we have to look at other forms of energy, such as the sun, or heat, or just motion?  And, then, when you look at how you can use it to your advantage, how can a potential adversary use that against you?  Such as motion being used to power a system to defeat you.  It's passive all the time and all of a sudden your motion make something happen.  We're going to have to really get our hands around that type of thing. 


And, of course, we have to look at energy in the form of conserving energy.  That's a major initiative in today's Navy.  I referred earlier in the show about great white fleet.  I think we're going to hear something about the great green fleet in the future with Secretary Mabus.  He's really challenged us in our community to come up with ways to conserve fuel and energy, because the cost of fuel and energy is so great that it's hurting our ability to get underway and to train.  As anyone who's gone to sea knows, you have to be at sea to really become experienced at that business.  You can't be good at it if you're always tied up.  So, we have to figure out ways to be efficiently get our fleet underway to do the missions that we want to send them on. 


There's a lot of challenges there.  Autonomous systems.  You see that in today's fight with what's going on with unmanned aerial vehicles.  Other autonomous vehicles, robotic systems.  We're doing a lot in that now but we had to look at nanotechnology.  And those are all the areas that where I'm trying to shape the discussion.


Mr. Keegan: Can I pick up on the green aspect?  Are you folks adding that to your portfolio specifically or is it just something that's understood in the way you operate?  That you're going to go in that direction?


Adm. Shannon: On no, it's definitely in our portfolio.  The big thing going on today up in Philadelphia at our warfare center up there is the electric drive.  We're looking at how to apply electric drive on our ships.  We'll be doing that in the not-too-distant future and it's a way to cut down on fuel.


Mr. Keegan: The evolution of war fighting has undergone historic shifts within the last decade alone.  What other shifts you anticipate in the military in the next decade?  And how do you envision your role in office shifting to adapt?


Adm. Shannon: Well, I think we're in the right place in the warfare centers in adapting to this.  One of the things that we're really looking at is hypersonic technology and directed energy systems such as lasers.  Certainly, there's been a lot in the press over the past 10 years or so with regard to directed  energy and how to use that, but, we need to understand it better.  I think technology has really gone fast and far.  We're seeing where we can actually start applying directed energy in some of our systems.  But, it's all about speed in this business.  One of the acronyms I learned as a young officer was called MATES, and that stood for mission, asset, threat, environment, and speed.  And speed is life in our business.  So, how fast we can come up with this technology, how we can apply to do things faster is really the idea that we need to understand.


Mr. Green: With respect to the people in the Navy who conduct research and development, science and technology, the population has been shrinking since mid-1990s.  Do you see the trend reversing, and, if you do, why?  And, to that end, what steps are being taken to attract and maintain a high-quality technical and professional workforce?


Adm. Shannon: I don't know if the trend has yet reversed.  I think the trend is stabilized, though, in that perhaps we're at that tipping point.  Not quite tipped over yet.  And, I think a lot of it has changed just due to commercial technology and social networks.  More people seem to want to get into the game.  They want to get into the service.  The current young generation sees value in government service, they want to live a life of consequence, they understand that they have a voice in government, they see equal opportunity in our employment and working with us.  So, right now government we have a very aggressive hiring process going on.  Recently, we went up to Detroit to hire some of the engineers out there that were looking at losing work.  We're bringing in a lot of talent from Detroit and at the mid-level because you just can't bring everybody in at the younger level.  You've got to bring some people in at mid level who have experience in other areas that can be applied to our systems. 


We had a major hiring event out in Corona, California, where we brought in lots of people there, over 1000 people attended, and the talent is just simply amazing.  So, I think we're starting to see that tipping point and we're going, the trend's going to reverse itself.


Mr. Keegan: Admiral, for those young system engineers and architects just completing their education who have an interest in the military or in public service in general, what advice would you give them in pursuing a career in public service or the military in science and technology, or, ideally, all three?


Adm. Shannon: Well, first of all, service doesn't apply to the military, and I always like to remind people that you can serve in many different ways.  I've said this before publicly, but I do even tell my own kids this.  It's important to serve because you're giving back.  But, the great thing about government service is when you are in government service, you are living a life of consequence.  The decisions you make will not just only impact the organization that you're in, it will impact everybody in the nation and possibly the world.  And,  even the young people that are making decisions can make decisions that are very consequential and very important to what this nation has to offer. 


So, I always like to tell people that service is not about them.  It's about giving back, and it's being a part of something bigger and feeling or being on a winning team.  And, that's purely an American viewpoint.  But, that's one of the things I feel in the United States of America that we are a winning team and everybody wants to be a part of that.  When you serve in government, you're guaranteed some sense of purpose, some sense of duty, a real sense of honor.  And, you get to follow the path of other great Americans that we've studied in history.  It's a very much exhilarating and it's what Teddy Roosevelt spoke about when he spoke about the man in the arena.  You're in there, you're doing something, you win some battles, you lose some battles, but you're in there  doing the battle, you're not sitting on the sidelines watching what's going on.  So, that's what this kind of service offers you.


Mr. Keegan: That's wonderful advice.  I want to thank you for your time today, but, more importantly,  Kevin and I would like to thank you for your dedicated service to our country.


Adm. Shannon: Thank you very much.  You know, it's really a great opportunity for me to be able to speak to your listening audience and explain what the naval surface warfare center is all about.  We go back a long time.  A lot of people think the warfare center is just one location in Dahlgren, but, as I  mentioned in the earlier part of the broadcast, we're all over the country.  And, we are a legacy of the Navy from back in the 1850s and 1860s when we first created some of our proving grounds in Annapolis and Indian Head and Dahlgren, and then through the two great wars in the last century it kind of got a lot larger and created these laboratories to the early 1990s.  We actually created the warfare centers in 1992. 


And, we've created them to become more efficient and to reduce costs, to get our control around the total ownership cost.  Even back in 1992, that was talked about.  And, when you look at the indicators of what we've accomplished between 1992 and today, our overhead costs in the warfare centers have gone down by 30 percent.  Our productivity has increased by 30 percent.  We have close to 20 percent more scientists and engineers per capita in our work force.  The cost, the hourly cost of labor is less today than it was just a few years ago, because there's so many efficiencies in what we're doing.  We're getting more bang for the buck, or return on investment, less direct labor hours spent on overhead, more spent on actual labor.  And, that's because of the great ideas.


Whoever was leading the Navy in 1982 when they said let's create this warfare center enterprise, it was a good decision.  Because, the total ownership costs have come down as a result of them.  So, I like to be able to tell that story.  We've got a lot more work to do.  We have a lot more efficiencies to find, but we have a very spirited and innovative workforce who are really the intellectual capital of the Navy.  And, they're out there doing their best every day, not just for the Navy today, but building the Navy of tomorrow.


Mr. Keegan: An important mission.  This has been the business of government hour featuring a conversation with Rear Admiral James Shannon, commander of the naval surface warfare center.  My co-host has been Kevin Green, IBM's defense industry leader.  Be sure to join us next week for another informative, insightful, and in-depth conversation on improving government effectiveness.  For the business of government hour, I am Michael Keegan.  Thanks for joining us.


Six Practical Steps to Improve Contracting

Tuesday, April 7th, 2009 - 13:57
Posted by: 
Rethinking How to Improve Contracting Contracting issues will be on the front burner of the Obama administration, and the stakes are large. The Administration has already committed to greater transparency, stronger ethics, more competition, and rethinking the roles of contractors and government employees.

Rochelle Granat interview

Friday, December 26th, 2008 - 20:00
"We need to develop our human capital practitioners as strategic business partners. We need to move away from the focus on transactional processing -- technology is increasingly making that easier, but we're moving to shared services for those types of functions."
Radio show date: 
Sat, 12/27/2008
Intro text: 
Rochelle Granat
Complete transcript: 

Originally Broadcast September 13, 2008

Washington, D.C.

Announcer: 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.

The U.S. Department of the Treasury acts as steward of the U.S. economic and financial systems, including the role of the U.S. as an influential participant in the international economy. Treasury also performs a critical and far-reaching role in national security, coordinating financial intelligence, targeting and imposing sanctions on supporters of terrorism, and improving the safeguard of our financial system. Managing these complex tasks requires expanded capabilities in the pursuit of an effective resource management and workforce strategy.

With us this morning to discuss her efforts in this area is our very special guest, Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer at the U.S. Department of the Treasury.

Good morning, Rochelle.

Ms. Granat: Good morning.

Mr. Morales: Also joining us in our studio is Solly Thomas, associate partner in IBM's Human Capital Practice.

Good to see you again, Solly.

Mr. Thomas: Good morning, Al. And good to see you again, Rochelle.

Mr. Morales: Rochelle, many of our listeners will be familiar with the Treasury, but let's start by taking a moment to provide them just a quick overview. Could you tell us a bit about Treasury's history and its mission today?

Ms. Granat: Sure. I actually enjoy talking about Treasury's history, because Treasury was one of the first four original departments of the Executive Branch of government. And looking at Treasury's history is really an opportunity to look at how the growth of the domestic functions of government developed over the years, because many of the functions that today are in other agencies actually grew out of Treasury. Treasury's mission has always been around the public purse: managing the money resources in the United States as its primary function. And all of the functions it has today in some way tie to government finances and the economy.

The basic functions of Treasury -- you recited some of them, but it's managing federal financing; collecting the taxes and duties and monies paid to the United States; paying all the bills of the United States; producing currency and coinage; managing the government accounts and the public debt, supervising national banks and thrift institutions; and advising and establishing domestic and international financial policies and economic and trade and tax policy. So that's quite a hefty mission and a varied mission, and involves many different job skills and job sets, from manufacturing to accountants to tax attorneys and attorneys in many different functions.

An interesting point in the history, of course, is fairly recent, and that was that the creation of the Department of Homeland Security in 2003 resulted in Treasury losing four of its enforcement bureaus. Treasury did have four bureaus that originated in Treasury: Customs, Secret Service, ATF, and the Federal Law Enforcement Training Center. There actually is a money resource aspect to all of those that some people forget. The U.S. Secret Service was actually established to deal with counterfeiting and to protect our currency and coinage. And Customs, of course, was collection of duties, as was ATF, was revenue-raising.

But with that change, that was a significant change for Treasury, a new enforcement responsibility grew and developed, and that was around terrorist financing and financial intelligence.

Mr. Morales: So it sounds like the mission continues to broaden at Treasury. So Rochelle, just to put a finer point on the scale of this broad mission, could you provide us some specifics in terms of how Treasury is organized, the size of the budget, and number of full-time employees of the Department?

Ms. Granat: The Department has over 100,000 employees. The bulk of them are the Internal Revenue Service employees. We have among the permanent staff 114,000 employees. And they're working across the United States, and we also have folks posted in 16 countries and in 3 U.S. territories, so we really do have an involvement throughout the world.

The budget is, combined, roughly $16 billion. A major portion of that is the Internal Revenue Service, which is about $11 billion. The $16 billion figure includes our bureaus that are non-appropriated bureaus: the Mint, the Bureau of Engraving and Printing, Office of Thrift Supervision, and the Office of the Comptroller of the Currency fund their operations through revenue-raising. The bureaus of the Treasury operate independently, with Headquarters exercising oversight and policy over the bureaus. And they are organized around their functions. We do have -- a piece of the former ATF is now the Alcohol, Tobacco, Tax, and Trade Bureau. It's one of our smallest bureaus.

We, of course, have the manufacturing bureaus: the Bureau of Engraving and Printing and the Mint. We also have two fiscal service bureaus. The Financial Management Service, they pay our bills, issue our checks. When we get a paper check, it's from the Financial Management Service. When we get an electronic payment or Social Security payments or tax refunds, those are from the Financial Management Service. The Bureau of the Public Debt is the second fiscal service bureau, and they track the public debt, they issue and do transactions in government securities which represent the debt.

We have the two banking regulators: the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

Mr. Thomas: So with that overview of the Department, Rochelle, could you tell us more about your role as the Deputy Assistant Secretary for Human Resources, and as the Chief Human Capital Officer at Treasury? What are your specific responsibilities and duties? And how does your program support the overall mission of the Department?

Ms. Granat: Well, my responsibilities have different aspects. One major aspect is Department-wide policy and oversight around human capital programs, to include EEO and diversity. When I talk about human capital programs, I'm also talking about the EEO and diversity programs as well. Each of our bureaus have human capital offices and EEO offices that operate independently, but through our policy and oversight. There are certain functions that do have to come up to the departmental level, and they would come up to my office.

In addition, I have a responsibility that's a little bit anomalous or unusual, and that's oversight of the D.C. Pensions Program, which administers the Department's responsibilities for certain pension programs of the District of Columbia for teachers, police, firefighters, and judges.

I exercise that responsibility through a collaborative effort with the human capital officers at the bureaus. I chair a Human Capital Advisory Council that involves the leadership of those offices, the EEO office and the HR offices at the bureaus.

Mr. Thomas: Rochelle, regarding your responsibilities and duties, what are the top challenges that you face in your position, and how have you addressed these challenges?

Ms. Granat: Well, I'd say the top challenges are ones that I think most agencies share. Certainly recruiting and retaining the talent we need to accomplish our mission is huge, especially in the face of the changing demographics and the realities of an aging workforce. In that light, succession planning and knowledge transfer are also very significant challenges.

And I'd say the third challenge influences both of those, and that's really a challenge of resource limitations. We are all operating under very tight budget constraints and the challenges are significant, and we really need to be creative in leveraging across the Department our efforts to develop new initiatives to tackle some of these challenges.

Mr. Morales: Now, Rochelle, I understand that your history at Treasury goes back to about 1985. I believe you started at the Bureau of Public Debt. Could you tell us a little bit about your career path? How did you get started in public service?

Ms. Granat: Well, I actually started while I was in law school, and I do have a little less traditional path to a human capital occupation. In law school, I was a law clerk, working part-time. One of the reasons why coming to law school in Washington was attractive to me was that I was interested in public service. I was interested in public policy. And soon after finishing law school, I did move from the Department of Labor to the Bureau of the Public Debt, which is, as I mentioned earlier, a bureau of the Department of the Treasury.

And over time, I developed a concentration, and my work was largely around personnel and labor relations, EEO, all those areas of the law, as well as other sort of mission support, general law functions.

I really developed an interest in not just the legal issues, but really the policy issues. And the nature of the way in which one works as what I would call in-house counsel in an agency is really a collaborative relationship with your clients and working together to resolve problems, to avoid problems.

I actually spent a little bit of time -- 2-1/2 years -- at the creation of the Transportation Security Administration. I went over in the Chief Counsel's Office. And one of the attractions in taking that opportunity was what it stood to offer in terms of starting an organization from the ground up and working to develop a new organization, develop policies.

But I always wanted to look for and did look for an opportunity to step outside of the legal office and work on the management side, in June of '04, when the director of the D.C. Pensions Program was contemplating retirement and encouraged me to come back and become the director of that program. As I was back at Treasury, I was being increasingly brought into things within management but outside of the Office of D.C. Pensions. And when the Chief Human Capital Officer and Deputy Assistant Secretary position was vacant, I was asked to step in in an acting capacity, and did that and realized that I enjoyed it quite a bit.

Mr. Morales: Great, great. So as you sort of reflect on all of these experiences going back to your clerkship, what has shaped your leadership style and perhaps influenced your management approach today?

Ms. Granat: Well, I would say that the role I played in a significant aspect of what I did as counsel was really an advisory, collaborative member of a team with non-attorneys, with the client and with program managers. And I think that really fostered an appreciation and a management style and a leadership style that really was collaborative. And I see that as a strong aspect of my leadership style, that I really believe strongly that we solve problems best when we recognize and respect the expertise that a diversity of people bring, and that we work together to solve problems. I'm very much not a command-and-control leader, and I think that much of what I learned and what I think of being good counsel shaped that leadership style in a different role.

Mr. Morales: Great.

What is Treasury's human resource strategy? We will ask Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer, 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 Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer at the U.S. Department of the Treasury.

Also joining us in our conversation from IBM is Solly Thomas.

Rochelle, I want to spend some time talking about Treasury's human capital strategy. Can you tell us a bit about your four human capital strategic goals, and how does this strategy align with and support Treasury's broader mission, goals, and objectives?

Ms. Granat: Well, we're actually at a transition phase. Our human capital strategic plan covers the period 2005 to the end of this year. We actually are in the process of issuing our new human capital strategic plan that is a follow-on to the new department strategic plan, which was issued last year.

And there were four key goals: organizational effectiveness, recruitment and diversity, employee retention and employee satisfaction, and technical skills. And what we're talking about with respect to technical skills is enhancing workforce capabilities to support the use of current, new, and evolving technology. So we're really talking about making sure our organization is aligns its human capital plans with the strategies and systems to achieve organizational effectiveness in the mission of the agency.

And a key aspect of that is obviously being able to recruit the right people at the right time with the right skills, and at the same time, employee retention and employee satisfaction is critical. It's great if we can recruit the people and get them in the door, but if we are not growing and developing them and doing those things to ensure engagement and satisfaction, we're not going to keep them. And that would also make it more difficult for us to recruit new employees, because our best recruiters are our current workforce who say this is a great place to work.

Mr. Morales: Sure.

Ms. Granat: Last year, the Department issued its new departmental strategic plan, and a major goal in that plan is management and organizational excellence. Human capital is a major, major player in that goal. And without fulfilling that goal, we can't accomplish the key aspects of the strategic plan, which are all mission -- those remaining three aspects are mission-driven.

In developing our revised human capital strategic plan, which would run from this year to 2013, goals slightly revised, but not dramatically. One is broaden and diversify the talent pool. And we're talking there about creating effective recruitment strategies and utilizing all available flexibilities to attract a diverse pool of highly qualified candidates. Again, developing and retaining the workforce; it's going to be a constant. Making sure that we're effectively managing and utilizing human capital. Again, that's really focused on organizational effectiveness, through enhanced employee engagement and supporting and leveraging the Department's workforce.

And then the one goal that is new and actually grew out of efforts in the last year around our human capital operating plan, which we will -- as of this fiscal year, our intention is every year to have an annual operating plan that is based on the strategic plan. And in that operating plan for Fiscal Year '08, we had a goal and strategy around it to really transform the human capital occupation. We need to develop our human capital practitioners as strategic business partners. We need to move away from the focus on transactional processing, and you always have to do that. Hopefully, technology is increasingly making that easier, but we're moving to shared services for those types of functions.

And what's really critical if human capital is going to be at the table with the leadership of the agency in ensuring that our human capital strategies are aligned with our mission and our goals, we really need to be business partners and be able to converse and strategize and come up with solutions as real business partners.

Mr. Morales: Great. Now, I also understand that you've defined some human capital and business drivers that will shape the future. Could you tell us a bit about these drivers? And to what extent does cross-bureau coordination play into your plan going forward?

Ms. Granat: Well, the drivers are really probably the drivers that are facing most agencies. One key one is modernization. It's the recognition that we are dealing with increased use of constantly changing and evolving technology, and to really look at revising our business practices and obtain the necessary skill sets to deal with the benefits of this new technology.

Another business driver is the critical importance of customer service expectations and public scrutiny. Thirdly, it's the need for efficiency and accountability. And accountability for results has been a major driver in the last many years, most prominently under the President's Management Agenda. The PART exercises. So it's really driving a focus on results and performance, changing to a performance culture.

And then finally, it's dealing with continuous change. Every day, we face changes in our business requirements because, simply, as we know today, market changes and world events that affect what we need to do and the skill sets we need.

Mr. Morales: So given the complexities of the Treasury Department, which we talked about in the first segment, how does your organization evaluate the HR field performance and drive best practices across the entire HR community? And specifically, what steps are you taking to ensure that policies and procedures are implemented and monitored across such a vast and complex organization?

Ms. Granat: There are several ways in which we evaluate how our human capital programs are operating and how they operate within the bureaus. And as I think I've alluded, each of the bureaus is its own organization and its own culture and have their unique needs given the nature of the particular missions of those bureaus. So there's not a one-size-fits-all answer to a lot of things. But that said, we do evaluate bureau performance and effectiveness in human capital areas in several ways.

We do have a series of metrics that are developed based on the human capital strategic plan, an outgrowth of the President's Management Agenda, as well as our human capital system for accountability that was tied to our human capital strategic plan. And also, the Federal Human Capital Survey. The metrics that are involved there are -- measuring the closing of skills gaps in mission-critical occupations, gaps in leadership positions. We look at closing resource gaps. We look at assessing employee satisfaction through the Federal Human Capital Survey and other tools. We measure the time to hire, et cetera.

In addition, there are any number of ad hoc ways that we get a handle on how well our programs are running at the bureaus. And that's because of the relationship we have on a day-to-day basis with those offices, they look to us for policy guidance. They will call us for help in resolving unusual issues in problem cases. There's certain things that need to come to us for approval, some things that need to come to us before we go to OPM. And that gives us significant insight into how those programs are running.

There are some very formal ways in which we are able to measure the effectiveness of these programs, and one of those is our accountability program. We are now conducting independent audits of the programs at the bureaus, a few each year. We're measuring against the human capital accountability and assessment framework. And there are a series of areas in which we are measuring program effectiveness based on OPM standards in that area. We've completed several of those audits, and we will be expanding those audits in the future to also include the EEO programs.

Mr. Thomas: Now I want to switch gears for a minute to have you talk about workforce planning. Could you tell us about your efforts to enhance and institutionalize workforce planning within Treasury? And could you also elaborate on your workforce plans and how Treasury has addressed closing skills gaps in the mission-critical occupations?

Ms. Granat: Well, workforce planning is an extremely broad term. It can be done in many different ways, and certainly in a combination of ways. It certainly involves an understanding of what the workforce requirements are. It involves assessing your current workforce and where their competency gaps are, where basic resource gaps are. We have a workforce analytics tool that has been able to give us exact numbers on employees in mission-critical occupations, forecast attrition, and that allows us to strategize on how and where to find new employees and how to focus our efforts around which mission-critical occupations at which levels. And also, it focuses us on what internal training or re-training we need to do with our existing workforce.

It also informs what tools we might need in that workforce planning effort, such as strategic use of voluntary early retirement authority and incentive payments, where we see that the workforce restructuring really requires the elimination of certain positions. And we always are looking to avoid a reduction in force, and so we really need to use those authorities strategically and reduce involuntary separation actions.

We also need to, in workforce planning, strategically use some of the flexibilities that are available in recruitment. A lot of those flexibilities involve monetary resources, and they may not necessarily be able to be used across the board.

In closing skills gaps, we've focused significantly on mission-support occupations. Those exist in all of our bureaus. They're the common areas, especially around IT and procurement specialists. But then some of our bureaus have their bureau-unique, mission-critical occupations that have significant challenges. In IRS, we're talking about tax resolution representatives, for example.

Mr. Thomas: Rochelle, a recent global human capital study conducted by IBM showed that over 75 percent of the human resource executives interviewed believed that they are having difficulty developing future leaders. Can you talk about some of the efforts of Treasury to ensure continuity of leadership through succession planning and executive development?

Ms. Granat: Sure. One of the major focuses of our -- as I mentioned, we have an annual human capital operating plan. And one of those goals is developing talent. And a major aspect of that is around leadership skills and leadership development, and ensuring that we have brought up through the organization future leaders. And one of the things we've learned is we don't reach down early enough in employees' careers to develop those leadership skills. It shouldn't be the case that someone's going to their first significant leadership development program when they are in their 25th year of service, especially given the current demographics and the realities of our aging workforce.

So we do have an effort underway to develop a department-wide leadership development model that would have core aspects to it, and then obviously each bureau has its own unique needs that would go around that. A number of the bureaus have candidate development programs. The IRS has a robust leadership development program that has many different levels starting much earlier in folks' careers, and they have a very important candidate development program. And much of that is driven by its size and its critical needs. We really want to use the measuring of leadership skills gaps to drive the development of new efforts around leadership programs to ensure that we're able to close these gaps.

Mr. Morales: Great. What about Treasury's best place to work initiative? We will ask Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer, to share with us when we return to the conversation 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 Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer at the U.S. Department of the Treasury.

Also joining us in our conversation from IBM is Solly Thomas.

Rochelle, as you know, employee feedback can be a very valuable tool for understanding the work environment. Could you elaborate a bit on the Best Places to Work Initiative and the annual employee survey? How have you implemented any of the insights that you've gathered from this survey?

Ms. Granat: It was really driven in part by the recognition that if we are going to attract and retain the talent we need to accomplish our mission, we really need to focus on employee engagement and employee satisfaction. Treasury really needs to be one of the best places to work, and that is a huge selling point for agencies who rank high on the Partnership for Public Service's best places to work rankings.

Based on the 2006 survey, Federal Human Capital Survey upon which the rankings are based, in the 2007 rankings, we were 14 out of 30, and we want to get into the top 10. The Partnership for Public Service was very interested in helping agencies make improvements, and Treasury's quite eager to work with the Partnership. And the Partnership did an analysis of the results of our 2006 survey.

And they assessed where did we score well and continue to score well on, build on those strengths; and where was the area on the survey where if we could improve in our scores in those areas, we would make a significant difference in our overall score. And what they concluded was the area we had some weakness was the area that's referred to as "leadership effectiveness." And that doesn't mean that our leaders aren't effective. But what it means is in those questions around the survey that go to issues around how do employees perceive the way in which their senior leaders -- not their immediate supervisors, but their senior leaders -- communicate with them, share information, value their input, and things like that, we didn't score quite as well as we might. And so we developed a work group that involved folks from across the Department, especially those bureaus that scored perhaps not as well as other bureaus, and engaged this task force in developing a plan around the best places to work, and focusing largely, not exclusively, but largely around those leadership effectiveness issues.

There were some key aspects to the program. One was the workforce needs to know that we take these surveys seriously, and that we learn from the information they provide, and we work to improve in those areas where we need improvement and build on the positive aspects. And each bureau developed action plans around those areas that needed particular work. And we also convened focus groups of managers and focus groups of line employees. And there were facilitated discussions around key questions that sort of drove at the root causes for the perceptions around leadership effectiveness.

One of the areas around leadership effectiveness that's key is that things get communicated to the workforce, that lines of communication throughout the organization, at all levels of the organization, are sound.

So some of what the work groups are doing is developing tools around that, including work on a video, on new orientation materials that really focus on the organization mission. We've done that a lot in our performance management system in ensuring that they understand how what they do supports the mission. It's helpful for them to understand and appreciate what others in the organization are doing.

We also held a Best Places to Work Symposium, which was attended by the senior leadership across the Department. It was also simulcast and videotaped so that employees could see it and they could see it on their desktop computers. Secretary Paulson spoke around employee engagement, employee satisfaction, to share those best practices. And we also brought in senior leadership, largely the Chief Human Capital Officers, of several agencies that scored very well in the Federal Human Capital Survey or had marked improvement, and they shared their best practices.

That was a very well-received symposium that was at the end of March, and I think it reflected senior leadership commitment to these issues.

Mr. Morales: That's great. So I wish you success in getting into the top 10, as you mentioned.

So along similar lines, given the high rate of federal employees who may be eligible for retirement in the upcoming years, this certainly is going to create a loss of a lot of the institutional expertise and memory. And as you mentioned, I believe in our first segment, that becomes a challenge for the organization. Could you tell us how you're mitigating the pending retirement wave within Treasury?

Ms. Granat: Well, I should give you a sense of what we're facing. It's not dramatically different than a lot of other agencies of our size. The average Treasury employee is 48 years old and has over 16 years of experience. Based on recent running of our data, 21 percent of our employees will be eligible to retire this fiscal year. And in 2010, that number will increase to 29 percent, and then increase to 39 percent in Fiscal Year 2012. Now, of course, that's based on our current data, so obviously new folks are going to be coming in, so these are somewhat shifting stats, but it still is a daunting number.

It's especially daunting because there was a period of I'd say significant attrition and little hiring in the '90s, so that we really do have people in the beginning of their careers in somewhat large numbers. We do have a bit of a gap around those midlevel folks who would go into key leadership positions. And that certainly factors into our analysis of our leadership gaps and our succession planning.

One of the key things that we are doing to meet that challenge is, first of all, we're recognizing that we very much need to enhance our ability, the tools we use to recruit talent. That includes a Department-wide marketing strategy to build on the great marketing efforts that come of the bureaus have been able to develop, with the recognition that we really need to be recruiting at all levels. We're not just recruiting entry level.

We've recognized that we really should tap into second career folks, who would come in mid-level and even senior level. And one of the interesting things we're doing in that regard is the Experience Project with IBM and the Partnership for Public Service, where we're tapping into the folks who are retiring from the private sector. And as a pilot, we're focusing on IBM and we're focusing largely on those mission-support occupations, where folks who have had careers in the private sector in skills and areas that are relevant to our work, they want to make a contribution, they want to continue working, and they're looking for new challenges, and we really need to tap that resource.

So we have a series of things we're doing. And of course, one of the things that we need to do in the hiring arena is not just marketing, but it's really improving the way in which we recruit and hire. Simplifying the hiring process. Just simplifying vacancy announcements and having model vacancy announcements that are used across the board around those occupations that are mission-critical occupations for which we are doing recruitment across the Department. So those are just a few examples.

Mr. Thomas: Now, Rochelle, along the lines of potential retirements, what can you tell us about Treasury's knowledge management strategies to retain that knowledge?

Ms. Granat: All the Treasury bureaus have their own internal leadership development programs, which, if done well, are a critical way and an excellent way to ensure that we transfer institutional knowledge. If we use mentoring programs well, if we use developmental assignments well so that as we're developing people, they get experience within their organization and outside their organization, we are doing a good job about transferring institutional knowledge.

We've deployed automated tools around training. And our learning management system is one way in which we do that. That system allows us to do training across the Department in key areas. It allows us to both input our own type of training, but also make accessible to employees very easily other automated online training. And it also allows us to track development programs and track training efforts on an individual level to ensure that employees who we anticipate or want to groom to move to different positions are getting the training and knowledge that they need to move into those positions in the future.

We're ensuring that we're doing that knowledge transfer. Of course, we use what flexibilities we have to incentivize folks not to leave. That has limited success, and some of the constraints there revolve around the current retirement rules and systems. And there are some changes that we are seeking that OPM, the administration has been seeking, but those have not yet been enacted.

Mr. Thomas: Now, Rochelle, given the expanded complexity of your office workload, could you tell us more about Treasury's efforts to analyze workload requirements?

Ms. Granat: Within our office itself, we are constantly struggling with changing workload requirements and significant resource limitations. And one of the ways in which we've tackled that, sort of I would almost say in extremis, is really leveraging the expertise of folks across the Department, and some re-training efforts around our existing staff.

A good example, however, around changing workload requirements really comes from our business areas. And I think the best example is at the Internal Revenue Service, where we've had an evolving and significant shift in some workload demands as a result of the increased effort to encourage taxpayers to file electronically. And it's something that Congress has mandated. It's something that is beneficial to the government to encourage as many taxpayers to file electronically as possible. That, of course, results in a significant reduction in the need for employees to handle the paper processing of tax returns.

Mr. Morales: Rochelle, I want to go back to the topic of retention for a moment. Could you tell us about Treasury's efforts to develop and implement an agency-wide performance management system? Specifically, what have you done to link pay with performance as a means to enhance your ability to compete and retain a highly effective executive group?

Ms. Granat: Why don't I discuss that in two parts, because it's a different experience and implementation on the executive level from the non-executive level.

As you may know, in 2004, a new pay system, a pay-for-performance system, was implemented government-wide for the Senior Executive Service. And at Treasury, like all agencies, we took shifting to that system very seriously, and really changed the way in which our performance management was done department-wide.

Where previously each bureau had its own executive performance plan and system, we developed, through -- again, a collaborative effort across the Department -- a single SES performance plan that had three standard competency-based responsibilities, and provided for five to eight results-based performance commitments which are unique to each executive, which must be tied to organizational performance and the strategic plan. That was a shift in culture, a need to educate executives on what that meant to be measured that way and what that meant to measure their subordinate executives that way, and really developing and enhancing a performance culture that was measured in a way that hadn't quite been measured before.

But that said, it did change the way in which pay decisions were made. They had to be linked to performance. They needed to take into account not only individual performance, but organizational performance, and it was very focused on results. And we developed tools to assess organizational performance. We developed a tool that was used by each bureau that sort of rolled up data from across the fiscal year around performance measures, even including things around the Federal Human Capital Survey, PART scores and things like that, and a bureau head assessment of the bureau as a whole's accomplishments during the course of that fiscal year. And that information is shared with the performance review boards, et cetera.

One of the challenges here to making significant change with respect to incentivizing performance with the pay as a carrot is the reality of pay compression in the SES. You can have the most outstanding performer in your bureau who delivered the most significant results, and the pay increase that you can give is rather insignificant because of pay compression.

And so of course, that then shifts the focus to the bonus system. We have developed a system where we have standards for what ratings drive certain levels of flexibility around performance bonuses. And the performance review boards are very much a part of assessing that across their organizations. And senior leadership at the Department, at the Deputy Secretary level, has a role in ensuring that the ratings and pay adjustments and bonuses are consistent with organizational performance.

We have greater flexibility at the GS level. We do have some bureaus that have exception from the GS scale and do have pay-for-performance systems similar to the SES. But more importantly, even within the GS system, we have really driven a shift at the bureaus to ensure that their performance management systems, which are unique to each bureau but are focused on results and a results-based performance culture, and have systems that are able to tie to the strategic plan so employees understand where they are in helping the agency meet the strategic plan and strategic goals and organizational goals, but also that they understand that their performance rating and performance awards, whether they're cash awards or other types of incentives, time-off awards, that it is very much driven by performance and by delivering results.

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

We will ask Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer, to share with us when we return to the conversation on The Business of Government Hour.


Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer at the U.S. Department of the Treasury

Joining us in our studio from IBM is Solly Thomas.

Rochelle, I understand Treasury is trying to create a results-oriented performance culture. Could you tell us a little bit about some of the bureau's success stories in forging this type of a performance culture?

Ms. Granat: I think the model that we created for the SES in developing the assessment tool that integrates a series of program measures into a snapshot of organizational performance and feeds that into the assessment of individual performance was a great vehicle to really communicate how critically important organizational performance is, and therefore, performance culture, is to an executive's performance. If our leadership is effective in communicating the importance of organizational performance, I think that will go a long way in driving that as we improve upon our performance management systems for our non-executive employees.

IRS at the moment is very focused and is working with a contractor to assist them in developing a new and more effective results-focused performance management program for their approximately 92,000 non-supervisory employees. And you can imagine that's a daunting task. So I think that's really the major successes in really ensuring that we filter down that focus on results throughout the workforce.

Mr. Thomas: Now, Rochelle, you also sit on the Chief Human Capital Officer Council, chaired by the Office of Personnel Management director. Can you tell us about your roles on the Council and the subcommittees?

Ms. Granat: Sure. The Council meetings as a whole are really an excellent opportunity to really exchange information and keep the Chief Human Capital Officers informed of where OPM and the administration is on any number of issues.

There's a sort of different level of communication and activity at the subcommittee level. Treasury sits on the Subcommittee on Hiring and Succession Planning and the Subcommittee on Performance Management. Those subcommittees have largely focused on sharing best practices in those two areas, in working with OPM staff as they develop or implement new initiatives, giving them feedback, perhaps challenging them on the design and implementation of moving some initiatives forward. It's really the most direct opportunity we have to influence initiatives that are going to be government-wide.

For example, in the Subcommittee on Performance Management, we had an influence on the SES survey that was sent to all executives in the last fiscal year, and the results came out recently. And we've been working with OPM on the evaluation of the SES performance management system through the assessment tool for the SES. In hiring and succession planning, we've been trying to drive some efforts to improve the hiring process and to advocate for some changes in some of the flexibilities that are available to agencies.

Mr. Thomas: Now, Rochelle, there's much talk about commercial best practices in the federal government, particularly in the service areas, such as human resources. What emerging technologies do you see holding the most promise for improving the federal management of human resources?

Ms. Granat: I alluded just in the last question to the fact that Treasury is actually in the HR line of business through our HR Connect automated personnel system. We are always actively engaged in assessing that system and improving and enhancing that system.

One of the things that's a particularly exciting initiative that we are developing right now is to really harness technology to improve the entrance on duty process, the on-boarding process. We recognize that this is a process which gives new employees, prospective employees entering the agency their first impression of what -- and in some cases, this is their first federal job, their first exposure to federal employment. And we realize that that's really both for our own efficiencies, but also for the experience that the employee has coming on duty, is really critical that we maximize the tools that technology can give us.

We've developed a strategy to develop an on-boarding system that really is a bit of a paradigm shift. It moves from paper-intensive forms to information-based processes -- as we do our electronic filing of our tax returns, we're providing data that gets populated into forms, we're not filling out the form. It looks at reducing our dependency on HR specialists to doing web-based self-service. Moving from disparate points of entry, looking at single points of entry and one-stop shopping.

And most importantly, it moves from what's now a day one paper-intensive processing experience to day one focused on learning about the agency and learning about their new job and having the tools in place when they come to their office. And we think that this will also be the foundation to using that system for agency branding.

Mr. Morales: So, Rochelle, continuing to look towards the future, how do you envision Treasury's human capital needs evolving in the next two to three years? And how do you envision your office will need to evolve over that same period of time?

Ms. Granat: The challenges that I articulated that we face are only going to increase in terms of what's at stake if we are not able to simplify the hiring process and improve our marketing of Treasury as an employer, and ensuring that we're tapping the right resources from which to recruit. We are going to need to do that at an increasingly intensive level. It really means transforming the human capital occupation to be more focused on this business partner strategizer and develop those skills that are needed to do that. So we need to identify those sources and really maximize wherever we can the benefits of technology, but also make sure that that technology is not off-putting to our potential candidates.

I really think it's important that as a new administration comes on board, that they really focus on the fact that in order to accomplish all those mission-related initiatives and address all the challenges, that they also focus on the infrastructure. And I'm not just talking about human capital, but of course, the human capital piece is especially important to me. But we really need to make sure that our institution has the infrastructure that it needs in order to help the new administration accomplish all its goals.

Mr. Morales: That's a great perspective. Now, at the beginning of the hour, you told us just a wonderful story of how you got started in public service. So I'm curious, what advice might you give someone who's out there thinking about coming to public service or perhaps to the federal government?

Ms. Granat: Well, I think the most important message to say to folks is a combination of this is an opportunity to do interesting and challenging work that's important to the public. It should be important to them personally, and it's important to the nation as a whole. I hope that most folks coming into the workforce or thinking about a change in their career are thinking about I want to do something that's making a contribution. I want to do something that's challenging to me, in which I will learn something, that I have an opportunity to have responsibility and do good work. And I think the government really does offer so many different opportunities that you come in the government and you are doing one thing, as in my career, and you wind up evolving over time and, you know, taking opportunities that lead you in another direction or in a complementary direction, I would say.

And I really think that one of the things that government service offers, and sometimes it takes finding the right position or finding the thing that works best for you, but we really do some fascinating things. Many of us pick up the paper in the morning and that tells us what might happen to our day because what we do is on the front page of the paper. And I think that that has got to be -- should be exciting and interesting to folks entering the workforce.

Mr. Morales: That's a great perspective. Thank you

Rochelle, we, unfortunately, have reached the end of our time together. I do want to thank you for fitting us into your schedule, but more importantly, Solly and I would like to thank you for your dedicated service to our country across your many roles at Treasury.

Ms. Granat: Well, thank you. I enjoyed this. And I think the important thing to say is no one, especially no leader, in government does anything by themselves, and what they do is really representative of what their organization does. And I have a great staff. And the human capital professionals across the Department are part of everything we do to make Treasury a best place to work and to move forward to tackle the challenges we have. And I think it's a great team and I want to thank them.

I want to encourage folks to look at the Treasury website and see all the interesting things Treasury does. It's, and through that, you can look at Treasury careers, opportunities at all the bureaus, and, of course, there's always the USH Ops website.

Mr. Morales: Great, fantastic. Thank you.

This has been The Business of Government Hour, featuring a conversation with Rochelle Granat, Deputy Assistant Secretary for Human Resources, and Chief Human Capital Officer at the U.S. Department of the Treasury.

My co host has been Solly Thomas, associate partner in IBM's Human Capital Practice.

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 may not be able to 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.

Announcer: 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

Linda Jacobs Washington: Supporting Mission-Critical Operations

Saturday, April 12th, 2008 - 9:09
Posted by: 
The quality of our lives, the shape of our communities, andthe productivity of our nation’s economy rest on the existenceof a safe, secure, and efficient transportation system.

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.

Richard Burk interview

Friday, July 13th, 2001 - 20:00
Richard Burk
Radio show date: 
Sat, 07/14/2001
Intro text: 
Richard Burk
Complete transcript: 

Tuesday, June 26, 2001

Arlington, Virginia

Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment and its programs by visiting us on the Web at

The Business of Government Hour features a conversation about management with government executives who are changing the way government does business. Our conversation today is with Dick Burk, Associate Deputy Chief Information Officer for IT Reform. Welcome, Dick.

Mr. Burk: Hi, Paul.

Mr. Lawrence: And Mark McCloy, Director Office of Information Technology Reform. Welcome, Mark.

Mr. McCloy: Thank you, good afternoon.

Mr. Lawrence: Both Dick and Mark are in the Office of the Chief Information Officer at HUD.

Well, as you can tell from our introductions, today's guests are going to talk to us about dealing with technology but first let's start by finding out more about HUD. Could you tell us about HUD and its missions?

Mr. Burk: Certainly. HUD is the cabinet-level agency that's charged with the responsibility for providing a decent home and a suitable living environment free of discrimination for every American and a relatively small federal agency, only 10,000 in number, compared to most other federal agencies but we have a fairly large budget, 32 billion a year, to carry out this mission.

We carry this out through alliances with state and local governments, with nonprofit community-based organizations, with about 3,400 housing authorities around the United States, and with several thousand lenders. So it's a large operation even though we're relatively small. So we partner a lot which has implications for the technology we utilize and for other management decisions that we make.

Mr. Lawrence: And tell us about the office of the Chief Information Officer.

Mr. McCloy: Basically the Office of the Chief Information Officer handles the technology at HUD. We run the systems. We build a lot of the software along with our contractors. We're responsible for the operating systems, the technology of the future for HUD, the technology of the present for HUD, and we still have a lot of technology in the past at HUD.

Mr. Lawrence: And let's bring it all the way back, then. What are the activities under the purview of the Office of IT Reform?

Mr. McCloy: I think that's probably easily summarized. We try to make sound business judgments for information technology investments, things like software, things like hardware, things like tele-communications networks. What is the best return on investment for the government? What is the best investment for HUG in general? You can look at a lot of dollars that we actually do spend but those dollar are in short supply because they're appropriated dollars and the idea is to get the best for HUD on any given year and get a project that can improve the general welfare of the people who use our services, the people who receive grants from HUD.

So it's a challenging job because we don't have enough money in any one to do everything that we'd like to do so we try to figure out what's best. A group of us get together often and analyze information technology, what we want to do, what can serve the public, what can serve our other business partners, other government agencies, and how we would get from one place to another in a short period of time with a reasonable return on the federal dollars that we invest.

Mr. Lawrence: Give us a sense of the order of magnitude. How many people at HUD are working on technology and what type of people are they? Are they just the stereotypic computer science folks or are there other disciplines?

Mr. McCloy: A lot of our folks are not the computer scientists. A lot of our folks are people who run contracts. We have an incredible amount of contractors within our organization so our job is to clearly understand a requirement from a user community and to build the system that would actually make that job profitable for the federal government. "Profitable's" not maybe the right word but when can we get a system deployed, when can we get an actual benefit to the people that we actually work with on a daily or a weekly basis?

Mr. Lawrence: And tell us about your careers.

Mr. Burk: Well, my career with the federal service actually started back in 1974 at HUD. I tell people sometimes, you know, I came to HUD when Nixon was in office. I tell that to some of the interns and they almost die thinking how early that was. But I was in the United States Peace Corps overseas and knew I wanted to spend some time in public service, came back, got a graduate degree in public administration, worked for the City of Columbus, Ohio, and anytime you're in the public sector you ought to spend sometime with the feds. So I came to Washington, D.C., and came to work at HUD, mostly in the program area.

The majority of my career is in running grant programs, housing rehabilitation. Housing finance is probably my deep skill. And coming into the information technology field, which I only really did about six years ago, mid-nineties, what you come to is you really bring the program side to this. And I have a bias, obviously, toward the business end of our endeavor.

So getting IT, information technology, to support the business area is properly what I bring to this and I got started several years ago with a geographic information system that we developed at HUD and it was very successful and then parlayed that into enterprise-wide systems and now into a cheap architect role at HUD.

Mr. Lawrence: And, Mark, how about you?

Mr. McCloy: A long time ago in a place far, far away at Social Security Administration I started to build the first COBOL programs for Medicare Part A and Medicare Part B. So a lot of my early experience was with large master files and in the federal service. I'm in the federal service because it's a good job. It's an honest day's pay for an honest day's work. There have been very many long days. I mean, most people say well, when was the time that you were at 3:00 a.m. in the morning on the job and I can remember some of those days at IBM running benchmarks on computer programs.

From Social Security Administration I moved into the private sector for a short bit of time and then back into the government at the Department of Commerce. One of the projects that I was involved in at Commerce had to do with the NEXRAD (?) radar. NEXRAD radar is the weather radar that's used throughout the United States and in our territories which actually brings us day to day weather.

I think that the crowning achievement of that was that we were able to forecast weather fairly accurately. Within four hours we were dead center on accuracy. We were able to predict tornadoes before they killed people. We were able to save lives. So that to me was probably one of the crowning achievements that I helped manage.

I was actually the program manager and fielded the first ten units for the NEXRAD radar. And the other 162 units fielded at that time were throughout the country while I moved onto another project.

Went back into the private sector and played IPO in a time that might not have been a good IPO time. So I had a very good offer from HUD to come in and help run the Office of Information Technology Reform, which is an interesting commodity in government because now you're applying business rules to the federal government and trying to make wise financial decisions when you're going to invest money.

That's something that when you're looking at an IPO and some of the different problems that you have are very, very similar in nature. So if you put the two together I'm a dead ringer for something called IT reform and how do you do a project, how do you build the system.

I was fortunate because I'm one of the older folks that have actually done a real web-type program. I've been involved with the Internet and we've made some money through the Internet in the company that I was involved in which at that time became a little bit difficult as the market did its topsy-turvy things.

But smart business people can survive in any kind of a market. Why did I come into the government? It's a good job. Don't kid yourself. I mean, we make good bucks and we have a good time doing it and plus there's some incredible challenges in working with people and working with systems that are 20 years old and working with systems that are one minute old.

So it's an interesting place to be and the folks I work with are very interesting, also.

Mr. Lawrence: Well, it's time for a short break. When we come back we'll be talking with Dick Burk and Mark McCloy about innovation at HUD, find out more about the information technology that they're using when The Business of Government Hour continues.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and our conversation is with Dick Burk and Mark McCloy of the Office of the Chief Information Officer at HUD.

We know that HUD has completed an enterprise architecture plan in the last year. Could you tell us what this is and how you went about completing the plan?

Mr. Burk: Well, I might take just a second to say we didn't complete the plan. We've just begun, in fact. There isn't really a plan per se when you talk about enterprise architecture as much as it is a process for bringing all the relevant parties together to make sure that the information technology appropriately supports the business mission and does it in a way, as Mark points out, that we get a decent return on that investment.

That return is that we're able to deliver the message, get the information to whomever needs it at the right time, and get the right information there. So the architecture helps you do that in the sense because it's basically divided up into four layers as we characterized it.

You have the business architecture itself. What is HUD's business from a functional point of view? Then what information does it need in order to support those business lines? So you have an information layer, if you will, and that is architected in a particular way, then the applications that those data are manipulated by, and then the systems and the technologies that are utilized that those applications reside on.

And you want to be able then clearly to interrelate those four layers and so one of the processes that we were able to develop to help was a tool that we borrowed from the Customs Office, where it was initially developed, and this was a way to give us a picture of our current state of the architecture. And then you could go into any one of those levels and look up, let's say, if I went in the applications layer and I took a look at all of the applications that HUD has. We have 241 information systems at HUD. That tells you something, a little bit.

So you want to be able to look up to see well, what data do those systems manipulate and in support of what business line and then look down to be able to see well, what is the architecture that it resides on. And you can come in at any layer and take a look at those aspects.

So if you want to then go in to modify the systems or develop a new system or eliminate one of the systems or achieve other goals, end obsolescence, reduce redundancies where appropriate, or introduce new technologies you then have an ability to be able to say okay, I want to carry out that project. How does that now impact my whole architecture, and how am I now bringing that whole system along because this is a moving target, we have additional drivers, we have new laws that get passed, new policies by the new administration.

You want to be able to accommodate those and to accommodate them quickly because you cannot have these long 12-, 18-, 24-month window of opportunity. For most of the folks that come to HUD that are in political positions that's their term here and they want to get a response fairly quick.

So you have to be able to be able to respond quickly. You have levels of complexity here within, as anybody who deals in this field understands, so responding to both of those plus the changing technology really force you to need to do this with engineer principles, with architecture in mind, and not simply happenstance as perhaps it has been done in the past.

Mr. Lawrence: What are the implications of enterprise architecture on IT capital investment?

Mr. Burk: Anytime you want to make a decision with regard to a particular project, and Mark really heads up this area, you want to be able to say is this in conformance with where we as an organization, as an entity, want to go in information technology. And you need to be able to answer that question at a variety of levels.

It may be in support of the business line appropriately but it's not in tune with appropriate technology. We may be collecting a lot of that information. As you well know, as most people in large organizations know, we collect a lot of different kinds of information and sometimes we don't even know the data that we collect.

And so in a response to developing a new system we may say okay, let's develop a whole brand-new system and we'll go out one more time to the public and we'll ask those kinds of questions and get that data in when we are already doing that. So we need to know already what data that we have. And in every one of these areas, you want to be able to do it as intelligently as possible, in line with new technology, and at a cost that is reasonable.

Mr. Lawrence: What lessons have you learned from this process?

Mr. Burk: How tough it is to get everybody on the same sheet of paper because this is a collaborative effort. This is not a group of architects who sit in the room and decide by themselves and then come out with a set of standards or guidelines. If anybody attempts to do that we know that will fail.

So it must be a collaborative effort with the business side as well as the IT side and, as I was saying beforehand, coming from the business side I appreciate that very much and in order to get buy-in from the business area they need to participate in the development of the standards themselves and then approve them.

So I think that is one big lesson that you learn, plus it's very important to make sure that there is a process, again I go into that, for having the individual business areas come together and see the commonalities that they have. So at HUD we have public and Indian housing, we have the Office of Housing, which is single-family and multi-family, and we have community planning and development. Lots of times they operate in their own particular stovepipes. The systems get built appropriately as well.

So to afford them the opportunity to come together to see some of the same common issues that they're dealing with some of the same clients and need to be addressed and need to be supported in IT with the common platforms, the common data elements, with common systems.

Mr. Lawrence: We also know that HUD has recently completed an e-government strategic plan. Could you tell us about this plan?

Mr. Burk: What we've done is gone out and taken a look at both our business partners and the citizens and HUD folks themselves internally and say how can we better connect with them utilizing the Internet. We did a couple of things, took a look across the entire panoply of programs that we have and identified certain particular areas that were appropriate that worked for us and then tried to project out into the future what are some other things we could do.

For example, we sell 70,000 properties a year at HUD that come into our portfolio and we have a lot of people who come to our Internet page and say gee, I've had a life-changing experience. I've got divorced or just got out of jail or something along that line. Can the federal government help me in terms of does it have a house that I might be able apply to?

So having that connection with the public directly is part of our Internet strategy. As I mentioned beforehand, most of our business, though, is done through outside organizations, business partners. So the whole issue of how do we work with those business partners to serve citizens becomes critical for us.

So for us it becomes very much government to business or government to government and our e-strategy emphasizes those areas in particular.

HUD is very location-specific. We are in 90,000 locations every day. So knowing where we are working across the entire enterprise is critically important so one of the things that we have developed and we'll just be rolling out this month in fact will be a presence on the Internet on our home page, geographic information system, that ties together a variety of data sources within HUD and answers the question what is HUD doing in my area, in my congressional district, or my city, or even my neighborhood? And go in and zero on down to that, answer those kinds of questions across the entire range of HUD's programs. That's useful. Those are some parts and elements of the strategy itself.

Mr. Lawrence: HUD has also taken steps to improve its financial management of the IT capital investment process. Could you tell us more about these activities?

Mr. McCloy: I think I can help on that. Last year we really got into it heavy. My boss, Deborah Stoffer, actually was the leader in putting the programs together supported by our Chief Information Officer, Gloria Parker. But the idea in capital planning and what we've done over the past is we try to establish a baseline.

A baseline's established on schedule, a baseline's established on cost, and a baseline is established on risk and technical involvement. And effectively every quarter we sit down with about 200 different projects and their project managers and find out how folks are doing against those plans that they originally created and we use a term called "earned value."

The term "earned value" means where are you when you said you would be someplace in time and dollars expended. If you're behind schedule and have got some problems then we try to help by slowing the project down some. If you're ahead of schedule and you need more money then we're happy to try to move more money around within the organization so that you can make the day and your project a little bit better.

So it's an involved process. It's checked often through technical reviews and these control reviews, and we try to do what's best globally for HUD.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with Dick Burk, Associate Deputy Chief Information Officer for IT Reform, and Mark McCloy, Director, Office of Information Technology Reform, in the Office of the Chief Information Officer at HUD.

Well, let me follow up on our last segment. The Information Technology Reform Office supports the Technology Investment Board Executive Committee. Could you tell us about the Technology Investment Board?

Mr. McCloy: Yes, and maybe the way to describe it is through a process. I had mentioned on a quarterly basis we got together and reviewed projects and on a yearly basis we get together and review what is going to be funded. But after we review it we make recommendations to what we call the Technology Investment Board Executive Committee. This is the committee headed by the Secretary of HUD and all the assistant secretaries are members of the Board.

So once we've made technical decisions these folks can sit down and apply whatever decisions or priorities they wish. If they disagree with us then they change whatever they want to change.

It could be that the Secretary of HUD decides that he wants to put emphasis on Project X or bring in his own project and he wants to apply different funds for that. Obviously that is a go at that point but the issue would be we only have so many dollars. So we try to figure out where the dollars will be subtracted and how we can do a secretarial or an assistant-secretarial initiative at that point.

So we recommend to the Executive Committee exactly what we think is best for HUD and they either agree or disagree. Most of the time they do agree but, as I said, if they have some priority that they want to make happen or put more emphasis or more dollars on something then they do it.

And the system actually works. It gets a little difficult because there are limited dollars and on an average year we probably have 30 to 40 percent more requests for dollars than we actually have dollars so obviously we've got to figure out what is the best process to make this happen.

We try to do it. We recommend where the best returns on investment are and the Executive Board chaired by the secretary actually make it happen. Until their approval, nothing is real.

Mr. Lawrence: We understand that the Office of IT Reform is charged with developing and implementing an IT performance measurement program. Could you tell us about the program you're currently using?

Mr. McCloy: Basically we're in the process of developing the performance measurement program. That is the tail end of the process. When we put together an investment portfolio what we sit down and say is that we need X dollars and at some point in time something will happen. That something is measured after the system is delivered.

We're in the process of trying to put it together with other federal agencies, how you measure performance at the end of the process, but it really isn't the end. This is the many years, the operational dollars that are important to the government on a year to year time frame.

If we said that we're going to process 10,000 new housing applications in six months are we doing that? Does the system meet up to that? Does it need more dollars to do it? Is the system that we have in place the wrong system, meaning that it might have been aged technology because it takes a while to field some of the systems out there and we might need new technology.

Obviously there's new software released every day and we might have to upgrade it.

It continues the process through the entire life cycle by measuring it when we actually have an operational system and it's done by establishing a baseline and then reporting against the baseline that you've already established.

Mr. Lawrence: Well, let me skip back to the beginning of the process because the Office of IT Reform is charged with conducting economic and risk analysis of proposed IT projects. What lessons could you pass along to other government leaders about undertaking these types of reviews prior to committing to an IT project?

Mr. McCloy: First thing, pay attention to your mission. Don't go outside of the mission of the department. A lot of folks we talk about creeping requirements. Don't do that. I mean, do what the mission says.

If it's housing, stick with housing. If it's safe housing, stick within the parameters of safe housing. Understand clearly what your requirements are and don't go monkeying around with them and get user buy-in. Too many projects in the federal government we haven't had a clear understanding of what the user said and we chase the project all the way around the scoreboard and can't figure out what the actual requirement was.

You have to put those in concrete and you have to make sure that senior management has a positive buy-in, they understand what you're going to do, and then do it, and don't keep changing the requirements. So effectively the lesson learned is hold the folks to the task that they agreed on before they got the capital venture from the United States Treasury.

That's it. They made a deal with a requirement and you don't go changing it in the middle unless you get senior-level approval that you're going to pitch a different way. And, I mean, when you don't it doesn't work. I mean, we have too many projects in government that just don't work.

Mr. Lawrence: Other guests have discussed the difficult --

Mr. McCloy: Of course, we don't have them at HUD.

Mr. Burk: No, that's right. Yes, HUD to the contrary notwithstanding.

Mr. Lawrence: Other guests have discussed the difficulties in implementing large IT projects or even halting the momentum of an expensive project. How do you deal with those two issues?

Mr. McCloy: One of the things that we've learned about building software over the last ten years is small teams work very, very well; large teams don't work. To me if a project is off-track cut the dollars, slow it down, get different management running the project.

Bring in a superstar or two or a technical wizard or genius. They're few and far between but when you bring them in, I mean, there are folks that are gifted and talented in the government doing fellowships, et cetera, or you could bring in a Lincoln Lab. You can bring in a very, very credible organization that has faced the same problems in another place and let them help you and don't be so "prideful" is the right word that you won't listen to some of the advice that they give you.

Go back, make sure that your users are happy. If your user is unhappy, take a hike. I mean, it's the bottom line. Dick?

Mr. Burk: Well, I think experience is the key factor here that you're looking for. Even if somebody is terribly bright and understands a particular field, whether it be data warehousing or whatever it happens to be, but if they haven't walked through that once before, if they haven't walked through that in a pretty good-sized organization and understood not just the technology or it but the other side of it, how do you get and maintain user buy-in to the project at hand and extend it over a period of time?

Some people use it as terminology is marketing. I don't know if I would really talk about that but there's an educational process in it and there is a constant feedback loop back to the business owners and to the people affected that has to happen as you move through the development of the project in order to sustain that kind of support.

In those instances where the project is going South you can have the best policemen in the world but I will tell you that the end user, the project buyer, will let you know soon enough if that thing is going wrong.

Then what you need to have is a mechanism in place so that issues around that project can get surfaced and get dealt with. Some folks talk about having an enterprise-wide project management office, some office where you can go to say hey, I've got a serious problem here. I've had changing requirements or the user-owner has changed and therefore has a different set of requirements or we've run into a snag here technically and we need to get this resolved.

We either need to bring in somebody stronger or we need to reconfigure the integrated product team or a whole variety of other factors. We need to take a look at the new technology because something's gone wrong with the firm or something's gone wrong with the technology in a place where the project director can get that resolved and then move on and do it quickly.

So much of the real problems that I have experienced and seen, some firsthand, I might admit, have been simply that these things have let go and there's not a resolution of the issue quickly.

Mr. Lawrence: What's the relationship between strategy and IT modernization?

Mr. McCloy: I think when you're trying to do a strategy you're trying to look at a process that will get you to a location in time and place and equipment. Where IT modernization is you just might have to crank something up that actually is more compatible to the technology of the day. You really have to sit down and think before you act.

I learned something from NASA a long time ago. And what I learned is if you have ten seconds to solve a problem use the first nine to think about it and do it in the tenth.

Mr. Lawrence: That's a good point for a break. Coming up, we'll discuss the expected wave of retirements and find out whose going to be running HUD. More of The Business of Government Hour in just a minute.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with Dick Burk, Associate Deputy Chief Information Officer for IT Reform, and Mark McCloy, Director, Office of Information Technology Reform, in the Office of the Chief Information Officer of HUD.

One of the many challenges facing organizations is recruiting and employees, especially in the technology sector. How do you find this at HUD?

Mr. Burk: Yes, it is a serious problem, to restate it. We lost a large cadre of our technology folks several years ago as HUD moved from approximately 17,300 down to 9,300. Similarly, at that same time, as I mentioned earlier, you go from 3,400 loans per day to 5,400 loans per day. In an earlier time we were not making any homeless grants. We now make close to 5,500 grants a year.

So the work has gone up exponentially while the staff has been cut in half and if you really have IT supporting the business that means IT grows, the number of systems, the size, the complexity of them enormously, and the need to move quicker and at the same time you don't have the people around.

So we've relied heavily on contractors. We've made certain issues clear to the contractors who do come on board with us and that is that we are in a partnership role. We will try as best we can to define precisely what it is we want, the deliverable out of every task and contract, and hold contractors responsible.

We ask them to take a little bit broader view of the role. We can't write into every contract exactly this partnership role, although we try to articulate it, but, as one of the examples I used earlier, when you think about well, what is going to be the buy-in to this particular piece of technology that I am preparing and developing, how is that organization going to adapt accordingly, I expect a contractor to think through that. I expect a contractor to make suggestions to me with regard to all right, now would be an appropriate time now to begin to approach these levels. At HUD we see that they are responding or have the potential to respond or need to buy into the technology or buy into the solution right now and so that's what we do.

Mr. Lawrence: There's a lot of talk about partnership and even you talked about it broadly when you said think broadly. What does partnership mean to you?

Mr. Burk: Well, to understand HUD in its broader context, not just the 9,300 people in the 88 field offices, to understand our business and our business is working with these business partners and so when a contractor comes in I expect them to understand that concept.

It is a special relationship. I don't know if it is unique in the federal government but certainly working with state and local government folks we offer them maximum feasible participation in deciding where those dollars go and how HUD business is developed and worked. That is a critical piece to the way we work. Understanding that is part of being a business partner.

I think there are other aspects to it as well. I suppose maybe it's similar to other areas of the government where you really are sitting side by side at the table together and you ask them to participate, be critical. This is not just a one-sided relationship. I expect this is a two-way conversation. I will be critical of them but I expect them to also come back to us and say we don't see it that way at all. Here's the way we see it type of thing.

That's an honest relationship. That's an honest partnering relationship and we look for it. I might add I think that's exactly what we've gotten from PWC and other contractors.

Mr. Lawrence: Are you concerned as the skills of the technologists at HUD change from perhaps people who were hands-on doing all the work before to now the people who monitor contractors?

Mr. McCloy: Our skill base has changed. I mean, clearly I grew up in an environment where I was a programmer and now I'm having to give those instructions to a contractor and it's difficult because there's a ton of rules and regulations and codes that have to be followed and the penalty for not following some of those can be career-ending.

And it's important, this partnership, that you work with a team, that everybody understands the same general guidelines, the same general rules, that you have to play by and then you try to make it work the best.

I mean, I always try to explain it like the 4 by 100 relay. When you pass that baton the Olympic team's done it 1,000 times and when you're passing information, data requirements, hopefully you're passing it friendly to the contractor, the contractors are working in a friendly environment with you, and that it's a team effort.

And every once in a while I always like to say when I've screwed up something my team knows what to say. They say what Mark really meant to say was, and that's the indication, Mark, you just blew it. Let's try something else.

And it has to work that way. You can't be afraid to say if something is really off the wall or something is really good, and they don't want to be in a position when something's really good to let it go by the board. I mean, you don't want to have somebody in a meeting who's a dynamic super-star but out of his field for that day dominate a meeting. So it's interesting.

Mr. Burk: Getting back to that issue about the partnership, there are times when a contractor needs to come in and say look, for the dollars that you're asking for and for what you're looking for you're not going to get there, given our best experience. Now, that is very tough for a contractor, particularly because they're going to say well, the likelihood here is they may terminate the contract and I'll be out and I just spent a lot of money bidding on this thing.

So I fully understand the pressures on the both sides. There is another day and this is a relationship that is being built between a contractor and HUD and we want to maintain that and I think the contractor does, too.

The worst thing that can happen is for the contract to go forward, HUD not to be satisfied or the government entity not to be satisfied, and the thing falls on its face. And you go back to the contractor, the contractor says well, this is what you asked me for. You've articulated and you say well, okay, fine, we'll deal with someone else from now on, thank you.

Mr. Lawrence: What kind of advice would you give to a young person who's interested in a career in public service?

Mr. Burk: Oh, come in. It's very interesting. Everybody's talking about the dearth of folks who want to come into the federal government. I don't believe that's true at all. We announced 700 positions, I think, back in the fall or back last year and we had 27,000 applications. I mean, it was just phenomenal.

So I think people do want to come into public service. It's a challenge. Where else would you find this kind of breadth moving from all of the different fields that are represented even just in one agency like, HUD?

I've found it fascinating over the years as I've moved around within HUD from policy development and research to the program areas into IT, into the Office of Administration. And the ability to move around and move up and have increasingly challenging positions, I think, is very appealing.

Mr. McCloy: Let me sum it up maybe a different way. Federal employees led the mission to put a man on the moon and federal employees put thousands of people in homes along with our partners in government and in housing authorities have put thousands and thousands of people in homes. What an incredible challenge to make the planet a tad bit better.

Mr. Lawrence: What kinds of skills would you recommend a young person have or what were you looking for in those 27,000 applications?

Mr. Burk: Well, the breadth of capabilities. It's hard to be specific about that. I don't think it's any different from in the private sector. You're looking for some deep skill, some skill that a person feels associated with and comfortable with, whether that be budgeting or finance or IT in a particular area but some grounding and then the ability to remain flexible and the willingness to continue to learn because I hate to hear this but when I came into the federal service the thought that I would be in IT later on was the most foreign thing in the world.

And so the willingness to learn and the ability to then stay current, those are some qualities. I think you have to be creative and that's a funny word to use. A lot of people don't think about that in the federal government but I think you have to be creative, particularly, like, in the scenario I painted beforehand where you have twice the work and one half the people and you still need to make things work and work better than they had earlier. You have to be creative to be able to do that.

Mr. McCloy: And they would be working with dynamic personality people like Dick and myself and that is a real plus.

Mr. Burk: Oh, my gosh, we just lost thousands of people who potentially would come to HUD, Mark. Watch out.

Mr. Lawrence: Well, that's probably a good point to end because I'm afraid we're out of time. Dick and Mark, I want to thank you very much for our conversation today. It's been fascinating.

Mr. Burk: Thank you, Paul, very much.

Mr. McCloy: Thank you, have a good day, and Go, Redskins.

Mr. Lawrence: This has been The Business of Government Hour featuring a conversation with Dick Burk and Mark McCloy of HUD.

To learn more about our programs and research into new approaches to improving government effectiveness visit us on the Web at And at the site you can also get a copy of today's transcript of this interesting and insightful conversation.

See you next week.

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