Posted on by steve blank
Last week the Department of War finally killed the last vestiges of Robert McNamara’s 1962 Planning, Programming, and Budgeting System (PPBS).
The DoW has pivoted from optimizing cost and performance to delivering advanced weapons at speed. Taking decades to deliver weapons is no longer an option. The DoW has joined the 21st century and adopted Lean Methodology.
Two organizations ought to be very concerned – China and the defense prime contractors.
Secretary of War Pete Hegseth unveiled the biggest changes in 60 years of how the Department of War (DoW) plans for and buys weapons and services. These changes aren’t a minor attempt at reform. It’s a top-to-bottom transformation of how the DoW plans and buys weapons, moving from contracts that prioritize how much a weapon costs to how fast it can be delivered.
Instead of buying custom-designed weapons, the DoW will prioritize buying off-the-shelf things that already exist, and using fast-track acquisition processes, rather than the cumbersome existing Federal Acquisition Regulations. To manage all of this, they are reorganizing the entire Acquisition ecosystem across the Services. These changes implement every piece of good advice the DoD had gotten in the last decade and had previously ignored.
The DoW is being redesigned to now operate at the speed of Silicon Valley, delivering more, better, and faster. Our warfighters will benefit from the innovation and lower cost of commercial technology, and the nation will once again get a military second to none.
It’s big, bold and brave and long overdue.
Background
In 1962 Robert McNamara, the then-Secretary of Defense (and ex CFO of Ford), discovered he had inherited a Defense Department whose spending was out of control. During the 1950s the Air Force built five different types of fighter planes, three generations of bombers, and three generations of ICBMs. The Navy had created a fleet of nuclear-powered attack and ballistic missile submarines and aircraft carriers. The Army bought three generations of its own nuclear-capable missile systems. Many of these systems duplicated capabilities of other services. But most importantly, the Services, in their rush to buy new technology, hadn’t adequately budgeted for the cost of operating, training, maintaining, and sustaining what they had bought.
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