April 1, 2012  

Acquisition reform … for real

What the Pentagon can learn from NASA’s ‘faster, better, cheaper’ approach

The U.S. Army is “the best equipped in the world.” That’s the assessment of the 2010 Army Acquisition Review report, released in July 2011. Had the authors looked across the entire Defense Department, they would no doubt have reached a similar conclusion for the other services.

The Army acquisition community has reason to be proud of this situation, but let’s not start the back-slapping too soon. The report — also called the Decker-Wagner review — went on to explain that the Army’s gear superiority came about “in spite of the shortcomings in the acquisition processes,” not because our acquisition system is so awesome. (The report also noted, for example, that the Army had been spending roughly $3.5 billion annually on programs that were eventually canceled.)

Credit for American preeminence in equipage goes to the “rapid acquisition processes employed during the last nine years,” rather than the widely maligned Joint Capabilities Integration Development System (JCIDS) or the DoD 5000 series of instructions. Again, this is not unique to the Army. For the past decade, each military service chiefly relied on faster, simpler approaches and rapid acquisition organizations for developing their best new tech.

These speedy processes and organizations don’t just deliver world-class kit. As Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey pointed out, they also effectively manage cost and schedule, avoiding the overruns and delays that are nearly permanent attributes of the methodical, formal acquisition system. In a Federal News Radio report from May 2011, when he was still the Army chief of staff, Dempsey suggested DoD “figure out why do we do so well in some of these rapid acquisition procedures and not so well in the very deliberate DoD 5000 series.”

Shift The Default

Yes, it would be interesting to determine why the rapid approaches work so much better than the slower approach dictated by DoD Instruction 5000.02. But perhaps we already have enough data to support a shift in our default approach. If rapid processes consistently produce the most effective, relevant war-fighting capabilities — and do so without extensive cost and schedule growth — perhaps that fact alone justifies a move away from the slow, expensive, complicated approach and toward the faster, simpler, less expensive methods we’ve been using to such great effect.

In a clear endorsement of this course of action, the Air Force last May assigned its new stealth bomber program to the Rapid Capabilities Office (RCO) instead of to the Aeronautical Systems Center (which has since been consolidated into the Air Force Life Cycle Management Center). Air Force Undersecretary Erin Conaton cited RCO’s “more streamlined” approach and “faster and simpler” processes as reasons for the move. But is there any way to apply this shift more widely?

The Decker-Wagner report offers 76 improvement recommendations for the Army acquisition community. Throughout the years, other reports, within all the services and at the DoD level, offered similarly detailed lists of prescriptions. If the history of acquisition reform is any indication, the latest round of improvement ideas is likely to have a marginal impact at best. This is not a commentary on the quality, wisdom or worth of the specific Decker-Wagner recommendations, just an observation that DoD has been down this road many, many times before, with underwhelming results.

In case that last claim needs validation, consider the Harvard Business School’s 2011 assessment of reform efforts from 1960 to 2009, titled “Defense Acquisition Reform: An Elusive Goal.” This report summarizes nearly 50 years’ worth of reform initiatives, observing: “The problems of schedule slippages, cost growth and technical performance shortfalls on defense acquisition programs have remained much the same throughout this period.”

If we can be so bold as to judge reform efforts by their results, it is difficult to avoid the conclusion that reform has consistently failed to make a persistent difference.

One thing that seems to be missing in many reform efforts is an overarching framework that connects the various activities in a coherent, accessible manner. This is not to say the leaders of historical reform efforts lacked vision, just that the vision was not always communicated in a way that tied the efforts together. Great ideas are easily lost in the shuffle unless they are explicitly connected to an even greater whole. Accordingly, a laundry list of 76 recommendations can be overwhelming and difficult to implement apart from a larger context.

Even worse, the recommendations can be easy to implement piecemeal, with each portion deviating from the grand vision just enough to cause the whole thing to fizzle.

Fortunately, it need not be this way.

Three Key Pieces

There are three key components of an organization’s improvement effort: Vision, decisions and work.

Vision represents communication tools and ideas that leaders (at all levels) can use to cast the vision. This might include a catchy acronym and an iconic image, which serve as the initiative’s touchstone and guide star, showing the way forward in accessible and memorable terms. These elements provide an overall context, something between a corporate brand identity and a commander’s intent, and provide the plumb line against which the other activities can check their alignment. Doing this part well is much harder than it looks.

The decisions component is less abstract. It represents the principles and practices that drive consistent, quality decision-making throughout the organization. They help translate the overall vision into context-specific guidelines and generally require a fair amount of subject-matter expertise to create and implement.

The work portion is the least abstract and most diverse of the three. It represents the practical tactics, tools and procedures people use to do the work and pursue the vision. This portion encompasses the specific initiatives and tasks being undertaken. This is where designs are produced, code is written, wrenches are turned and metal is bent.

Each component is necessary but insufficient on its own. For example, the vision portion in isolation produces superficial sloganeering, which makes for neat sound bites that lack depth and do not actually improve operations. As the immortal bard said, the result is “sound and fury, signifying nothing.”

The decision component is little more than hand-waving apart from the other portions. Translational elements in this “glueware” component are hugely important when integrated with the rest of the activities, but alone, they are unable to either cast a compelling vision or perform any practical work. If you’re only going to do one component, don’t do this one.

Finally, the work portion on its own devolves into a distractingly long list of “things to do” which, absent an anchoring vision, tends to drift away from the true objective. The result is uncoordinated activity without forward momentum, creating the illusion of progress based on business. Even worse, it can lead to situations where pieces of the enterprise are improved at the expense of the whole.

It Can Be Done

Even the briefest scan of reform efforts shows how rarely the acquisition community effectively implements all three pieces. However, organizations like Skunk Works, the Air Force’s Rapid Capability Office or the Army’s Rapid Equipping Force demonstrate it can be done. And once upon a time, not too long ago, a government agency managed to make a significant leap forward in the area of rapidly developing, fielding and operating low-cost, high-tech systems to perform cutting-edge missions, by using all three components across its whole enterprise. Despite popular misconceptions, it got great results.

I’m talking about NASA’s “Faster, Better, Cheaper” (FBC) initiative from the 1990s. Although data about FBC is just a Google search away, most people aren’t aware of what NASA achieved in that decade. Let’s take a closer look.

According to Howard McCurdy’s 2001 book “Faster, Better, Cheaper,” NASA spent less money on 16 FBC missions than it spent on the non-FBC Cassini mission to Saturn. Between 1992 and 1998, nine out of the first 10 FBC missions were great successes, including the Pathfinder mission to Mars. Overall, NASA got 10 successful missions for the price of one. This means FBC delivered more bang per buck than the slower, more expensive, traditional approach. That fact alone makes it worth further evaluation.

Trashing FBC

Unfortunately, four prominent failures in 1999 led to intense political pressure to abandon FBC, which some commentators renamed “too much, too cheap, too soon.” By 2003, powerful critics such as Sen. Kay Bailey Hutchison, R-Texas, said “FBC should be thrown in the waste basket.” In a moment of bipartisan unity, Democratic Rep. (and fellow Texan) Nick Lampson agreed, saying, “Let’s throw out faster, better, cheaper in the garbage can.” The Texan legislators were not alone in this recommendation, and ultimately, that’s exactly what NASA did.

The decision to abandon FBC was made despite the 10-wins-for-the-price-of-one results. This decision also ran counter to the 2001 recommendation by NASA’s inspector general that the agency “fully incorporate FBC into the strategic management process.” Similarly, the final report by NASA’s Faster, Better, Cheaper Task Force opined that NASA Administrator “Dan Goldin is right on with this FBC thrust,” and talked about the need to “instill this cultural change throughout the complete organization.”

The point is, well-informed agents who thoroughly investigated FBC called it a success and recommended its continuance. Unfortunately, things didn’t work out that way and today the phrase “faster, better, cheaper” tends to be followed by the words “pick two,” even though NASA’s data does not in any way support that course of action.

A Closer Look

Other organizations also experimented with FBC during that time frame, and their results were less positive. For example, Gen William Shelton, the commander of Air Force Space Command, was absolutely correct when he told the Space Symposium in July that faster, better, cheaper did not work when the Air Force treated it as a PowerPoint slogan. One might make the case that anyone who puts their faith in shallow sloganeering gets what they deserve, but more to the point, FBC was far more than a slogan at NASA. It was a deep practice, incorporating all three components of the aforementioned circle.

For example, Alexander Laufer and Edward Hoffman published a paper titled “99 Rules For Managing Faster, Better, Cheaper Projects,” which documents some of the profoundly effective keys to NASA’s success. These rules represented a portion of the decisions component and were supported by a robust collection of technical, experimental, bench-level skills that anchored the work component. The Air Force’s failure to implement FBC in depth explains its disappointing outcome.

NASA’s hugely successful Near Earth Asteroid Rendezvous mission is a model of FBC at its best. Project leaders acted in line with the overarching vision (Faster! Better! Cheaper!), were guided by sound principles (avoiding requirements creep by only incorporating design changes that represented “negligible or minimal disruption”), and implemented specific programmatic techniques (three-minute reports, a 12-line schedule) along with FBC technical approaches to simplify and streamline their spacecraft. No single practice, principle or slogan was responsible for the spacecraft coming in $78 million under budget or collecting 10 times more data than originally expected. The secret was applying FBC across the full spectrum of decision-making for that mission.

As McCurdy explains, the failures of 1999 were in large part the result of failing “to institute the full scope of techniques” and instead reverting to slower, more complex, more expensive management and engineering approaches while continuing to superficially wave the FBC flag. In other words, FBC mission failures were primarily caused by not using FBC methods, rather than the result of some intrinsic flaw in the method. This is further proof that Shelton was right: FBC fails if it is just a bumper sticker plastered on top of the traditional approach. However, when implemented thoughtfully and comprehensively, the results were amazing.

Those three little words — faster, better, cheaper — have far too much baggage to resurrect and reapply them today, and all the data in the world is unlikely to change popular opinion. As with any method, there is even room for improvement among the FBC principles and practices. Nevertheless, NASA’s experience might serve as a model for our next attempt at improving the way DoD does technology development and acquisition.

What we need is an updated approach that incorporates the lessons of FBC (and other successful rapid methods) and provides a comprehensive model to inform the leadership, management and technical activities within the acquisition community.

Fortunately, such a model exists. It’s called FIST.

Enter The FIST

FIST stands for “Fast, Inexpensive, Simple and Tiny.” Like FBC, the main idea behind FIST can be summed up easily: speed, thrift, simplicity and restraint are good attributes for acquisition programs. The key is to apply these four values across the whole spectrum of acquisition decision making — to the organization, technology, processes, documentation, etc. When implemented holistically, this concept shapes the way project leaders define success and influences the way they pursue their objectives.

FIST provides a catchy acronym and an iconic image, along with an easily accessible guiding principle. But it doesn’t stop there. My “FIST Manifesto,” published in the November/December 2010 issue of the Defense Acquisition University’s Defense AT&L magazine, first summarized some of the key principles and practices of this approach. A few dozen conference presentations, journal articles and research papers further rounded out the concept.

Most critically, FIST also incorporates a large technical tool kit, portions of which are original DoD artifacts (such as the Modular Open Systems Approach) while others are borrowed from industry or academia (such as Agile and TRIZ). These tools, when guided by the decision-making principles, enable pursuit of the overall vision — and thus the circle is complete.

This is not theoretical. Projects across the DoD, Department of Homeland Security and industry have applied FIST, producing everything from space hardware to intel systems to software to aircraft. While many of these projects are still in work, the initial results and the completed projects closely align with Dempsey’s observation that rapid approaches perform well — operationally, technically and programmatically.

Along with a solid basis in practical experience, FIST also has a growing academic foundation. Researchers at the Air Force Institute of Technology and Arizona State University are collaborating to expand previous FIST research and further develop the model in an effort to change the way the DoD views acquisitions. Several instructors at the Defense Acquisition University are also on board, advocating for this approach. So FIST is mature enough to use right now, and it’s also continuing to be developed.

If DoD were to launch a reform initiative using the FIST construct, the existing rapid acquisition organizations and methods Decker-Wagner praised would easily be included in the overall umbrella as exemplars of the approach. However, superficial imitation of these models is not advisable. (“They all wear blue hats! We should wear blue hats, too!”) Applying the lessons and deeper practices across a wider range of the acquisition community will require careful observation, reflection, mentoring and collaboration, along with a willingness to genuinely change behavior. This would be difficult, but it is certainly possible.

FIST is no silver bullet and, like any other approach, will undoubtedly produce some failures. But if past results are any indication, it would be a million times better than business as usual.

The objective is to shift the default away from methods that take too long, cost too much and underdeliver, and toward methods that produce affordable systems that are available when needed and effective when used. These methods already exist and have been used successfully for years. It makes no sense to leave them in isolated pockets and only use them in exceptional circumstances, rather than make them the preferred approach.

Whether DoD adopts the specific FIST approach or not is immaterial. No doubt there are plenty of other ways to provide a comprehensive reform road map that covers all three wedges of the circle. So pick FIST or pick something else.

What we must not do is settle for another round of vague sloganeering, ineffective hand-waving or endless laundry lists of loosely connected initiatives. Such an incomplete approach will certainly produce another decade where problems will, to requote the Harvard Business School report, “remain much the same.” And that would be a real shame.

LT. COL. DAN WARD is an Air Force acquisitions officer currently deployed to Kabul, Afghanistan. The views expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of the Air Force or Department of Defense.