[Senate Hearing 114-726]
[From the U.S. Government Publishing Office]








                                                        S. Hrg. 114-726

                   IMPROVING STRATEGIC INTEGRATION AT
                       THE DEPARTMENT OF DEFENSE

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                         TUESDAY, JUNE 28, 2016

                               __________

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                      COMMITTEE ON ARMED SERVICES

                      JOHN McCAIN, Arizona, Chairman
                      
                      
JAMES M. INHOFE, Oklahoma              JACK REED, Rhode Island
JEFF SESSIONS, Alabama                 BILL NELSON, Florida
ROGER F. WICKER, Mississippi           CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire            JOE MANCHIN III, West Virginia
DEB FISCHER, Nebraska                  JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas                   KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota              RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa                       JOE DONNELLY, Indiana
THOM TILLIS, North Carolina            MAZIE K. HIRONO, Hawaii
DAN SULLIVAN, Alaska                   TIM KAINE, Virginia
MIKE LEE, Utah                         ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina         MARTIN HEINRICH, New Mexico
TED CRUZ, Texas                      
   
   
                     Christian D. Brose, Staff Director
                    Elizabeth L. King, Minority Staff Director

                                  (ii)

  
































                            C O N T E N T S

                               _______

                         Tuesday, June 28, 2016

                                                                   Page

Improving Strategic Integration at the Department of Defense.....     1

Edmondson, Amy C., Ph.D..........................................    11
McChrystal, General (Ret) Stanley................................    19
Locher, James R., III............................................    26

Questions for the Record.........................................    52

                                 (iii)

 
      IMPROVING STRATEGIC INTEGRATION AT THE DEPARTMENT OF DEFENSE

                              ----------                              


                         TUESDAY, JUNE 28, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:32 a.m. in Room 
SH-216, Hart Senate Office Building, Senator John McCain 
(chairman of the committee) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Ayotte, Fischer, Cotton, Rounds, Ernst, Tillis, Reed, 
McCaskill, Manchin, Shaheen, Gillibrand, Blumenthal, Donnelly, 
Hirono, Kaine, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Well, good morning. The committee meets 
this morning to receive testimony on improving strategic 
integration at the Department of Defense.
    Last year, this committee conducted a series of 13 hearings 
on defense reform, receiving testimony from many of our 
Nation's most respected and experienced national security 
leaders. We
determined that perhaps the top organizational challenge facing 
the Department of Defense is the subject of today's hearing. We
included important provisions to address this challenge in the
National Defense Authorization Act [NDAA] for the fiscal year 
2017, which was recently passed the Senate with 85 votes. Now, 
we've done all of this work on a bipartisan basis, in keeping 
with the best traditions of this committee.
    We're honored to have a distinguished group of witnesses 
this morning who are prepared to help us build upon the 
committee's important work to date:
    Jim Locher, distinguished Senior Fellow at the Joint 
Special
Operations University, was the lead staffer on this committee 
who helped to bring Goldwater-Nichols into being. We've 
benefited yet again from his experience over the past year, and 
we're pleased to welcome him back today.
    Jim, welcome back.
    Dr. Amy Edmondson, Novartis Professor of Leadership and 
Management at the Harvard Business School, who has written 
eloquently and extensively on breakthroughs in organizational 
learning, leadership, and change.
    General Stanley McChrystal, former Commander of Joint 
Special Operations Command and Commander of U.S. and 
international forces in Afghanistan. He is now managing partner 
at the McChrystal Group and a leading expert on organizational 
reform from the battlefield to the boardroom.
    As most of you know, this is General McChrystal's first 
congressional testimony since retiring from the military.
    General, I know you've missed us.
    [Laughter.]
    Chairman McCain. So, on behalf of all of us----
    [Laughter.]
    Chairman McCain.--so, on behalf of all of us, let me 
express this committee's gratitude and appreciation to you and 
your family for your decades of distinguished service and for 
your willingness to join us today. I'm pleased that we will 
benefit again from your wisdom and expertise.
    As we have stressed from the start of this inquiry, our 
Nation is blessed by the many fine hardworking personnel, both 
military and civilian, in the Department of Defense. These are 
patriotic Americans who wake up every day to do difficult jobs, 
often foregoing easier careers and more lucrative opportunities 
because they care about the mission of keeping America safe. So 
many gave their all to it. Unfortunately, the organization in 
which they labor is not optimally structured to take full 
advantage of their talents.
    In particular, previous witnesses before this committee 
have identified the following flaws in our defense 
organization: hierarchical planning and decisionmaking 
processes that too often
result in lowest-common-denominator recommendations to senior 
leaders, what Michele Flournoy called ``the tyranny of 
consensus''; misaligned bureaucratic incentives and a culture 
that too often
rewards parochialism, inertia, risk avoidance, and the deferral 
of decisions; and layering of management structures in 
functional silos that too often result in decisions being 
forced to higher and higher levels of management. These and 
other organizational impediments do not only inhibit 
efficiency, they also pose an obstacle to greater 
effectiveness.
    This is not the world of 30 years ago. America no longer 
has the margin for error that we once enjoyed. We no longer 
confront a single adversary, which an Industrial Age 
bureaucracy could manage. Instead, we face a series of global 
and enduring strategic competitions that all cut across our 
defense organization, which is often aligned around functional 
issues, regional geography, and separate warfighting domains.
    As multiple witnesses have testified here, the only 
officials at the Department of Defense with the authority to 
integrate these activities at a strategic level are the 
Secretary and the Deputy. In an organization as vast as the 
Pentagon, that is an impossible burden to put on two people, no 
matter how capable. We must face the uncomfortable fact that 
too often, in too many cases, our enemies are getting the 
better of us. It's not that they're better led or better 
equipped or better positioned to succeed, or in possession of 
better strategies. In fact, the opposite is true. The problem 
too often is that we are simply too slow--too slow to adapt to 
changing circumstances, too slow to gain the initiative and 
maintain it, too slow to innovate, and too slow to do the vital 
work of strategic integration, marshaling the different 
functional elements of our defense organization to advance 
unified strategies and implementing them effectively.
    These problems are not unique to the Department of Defense. 
Many organizations have adopted reforms to overcome similar 
challenges, especially in the private sector, but also in 
government, from the National Counterterrorism Center to 
General McChrystal's transformation of the Joint--excuse me--of 
General McChrystal's transformation of the Joint Special 
Operations Command to similar reforms now unfolding at the 
National Security Agency and the CIA [Central Intelligence 
Agency].
    All of these efforts have one idea in common, the idea of 
cross-functional teams, or, in military terms, joint task 
forces. The premise is simple. To succeed against our present 
and future challenges, we need flatter, faster-moving, and more 
flexible organizations. We've found that an effective cross-
functional team has a few key things in common. It is focused 
on a discrete priority mission, it includes members from every 
functional organization and bureaucracy that is necessary to 
achieving that mission, and it empowers a team leader to 
organize the team's efforts, build a collaborative culture, and 
provide clear accountability for results.
    As a result, the NDAA would require the Secretary of 
Defense to create six cross-functional teams to address our 
highest-priority defense missions. A related provision would 
direct the Secretary to identify one combatant command and 
organize it around joint task force headquarters rather than 
service headquarters. The goals of both provisions are the 
same, to improve strategic integration.
    Now, judging by the Department's histrionic response, you 
would think that we had eliminated parking at the Pentagon. 
We've been
attacked for micromanaging the Department, when this 
legislation is no more intrusive, and arguably less, than 
Goldwater-Nichols. We've been attacked for growing this 
bureaucracy, when the legislation would not add one billet to 
the Department. We've been attacked for not understanding 
cross-functional teams, when the examples of such teams that 
the Department gives in its defense are anything but. Most 
bizarrely, we have been attacked for undermining the 
Secretary's authority, when the legislation would do the 
opposite. The Secretary would identify the missions of the 
teams, pick their leaders, approve their membership, and direct 
their
efforts.
    Though disappointing, this reaction is not surprising. 
Change is hard. Reforms that empower the Secretary and improve 
the mission at the expense of entrenched bureaucratic interests 
are often resisted. This is how it was with Goldwater-Nichols 
and other reforms. But, of all the things that Congress is 
criticized for nowadays, often legitimately, this committee, at 
its best, has consistently identified strategic problems facing 
the Department of Defense [DOD] that it either could not or 
would not address on its own. When this committee has 
approached these problems seriously and rigorously, and 
proposed reforms on a bipartisan basis, even disruptive but 
necessary reforms, we've made the Department better in ways 
that it could not do by itself. In the fullness of time, it has 
often come to celebrate these efforts. I'm confident that the 
same will be true of the reforms in this year's NDAA.
    I thank our witnesses for helping us with their testimony 
today.
    My--I apologize for the length of my opening remarks, but I 
had to mention the visceral and emotional reaction that we're 
getting from these reforms from, particularly, the top levels 
of the bureaucracy at the Pentagon.
    I thank you.
    Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. I 
want to join you in welcoming our distinguished panel of 
witnesses.
    Thank you all very much. You are uniquely qualified to 
discuss these proposals, given your vast expertise in so many 
different ways.
    As the Chairman indicated, Jim Locher is a former committee 
staff member, was the principal author of the Goldwater-Nichols 
Act as well as the legislation that created Special Operations 
Command. In the period since those seminal achievements, he has 
continued to study and document management issues and reform
opportunities for the Department of Defense and for the 
national
security interagency process.
    We look forward to your testimony and thank you, already, 
Jim, for your advice and assistance as we've moved forward.
    General Stan McChrystal has significant knowledge and 
experience in Defense Department management and decisionmaking 
processes from his service as Director of the Joint Staff, the 
Commander, Joint Special Operations Command in the battle 
against al Qaeda in Iraq, with courage and great personal 
example and leadership--thank you--and, of course, Commander of 
Coalition Forces Afghanistan, and as a commander in the 504th 
Parachute Infantry Regiment. So, all of these things have given 
him the
expertise needed for today's hearing. Since that time, as the 
Chairman has indicated, he has used his post-Active Duty 
service to apply these lessons in the context of other 
agencies, and teaching at Yale.
    So, thank you very much, General McChrystal.
    Finally, we're indebted to Professor Edmondson for agreeing 
to share with us her insights about the power of teams and what 
it takes to build and sustain them inside--over years of 
academic
research at Harvard and reflected in many publications. I 
particularly have to thank you, and I think the committee does. 
Dr. Edmondson was informed last night that her plane was 
canceled, so she scrambled, grabbed her bag, and took off late 
last night so she could be here.
    So, thank you, Dr. Edmondson, for this.
    As the Chairman indicated, this is a very important 
hearing. The Office of Secretary of Defense and Department of 
Defense as a whole is organized around differentiated 
functions, just like most other enterprises. Large-scale 
organizations have struggled, since the Industrial Revolution, 
to find ways to effectively integrate across these silos of 
functional experts. DOD's burden in this
regard is heavy. Its ability to integrate horizontally to 
create sound strategies and effectively execute missions 
acutely affects the
national security.
    During the same time as the Goldwater-Nichols Act was 
passed, in an effort to create jointness in the U.S. military, 
businesses around the world began to implement effective new 
methods for horizontal integration, methods that produced 
better outcomes in less time at lower levels of management. A 
principal innovation took the form of small empowered teams of 
experts from the functional components of an enterprise whose 
members were incentivized and rewarded for collaboratively 
behaving in the interests of the whole enterprise. These cross-
functional teams ideally are the antithesis of committees or 
working groups whose members staunchly defend the narrow 
interests of their parent organizations. This teaming mechanism 
and the cultural changes necessary to support it has become 
highly developed in many organizations, and it's been widely 
adopted in the private sector.
    Despite this long and broad experience, it still isn't 
easy. Even accomplished businesses that purposely pursue cross-
boundary teaming often fail to do it right. But, when it is 
done correctly, the results can be remarkable. DOD and the 
government generally has not yet implemented such innovations. 
There are notable exceptions. General McChrystal has had 
success with cross-functional teams, which has enabled agility 
and integrated operations across a large-scale enterprise in 
his operation in Iraq. Also, Secretary [of Defense] Gates, 
himself, created a series of special task forces to address 
critical issues when the Pentagon's standard processes failed 
him, task forces that closely aligned with classic cross-
functional teams.
    Furthermore, the Directors of both the CIA and the National
Security Agency, with the guidance of the consultant group, 
McKinsey, have undertaken major organization reforms at their 
agencies that have cross-functional teams at their core.
    At this time, Defense Department leadership has concerns 
with the committee's proposal which is set forth in section 941 
of fiscal year 2017 National Defense Authorization Act. They 
have stated that the Department already uses cross-functional 
teams routinely and that the committee proposal constitutes 
micromanagement.
    I understand that the Department is going to have concerns 
over any external directive for changing its management and 
decisionmaking processes. However, I think that many of their 
concerns may be from a misunderstanding of the intent and scope 
of the committee's provision 941. I believe that the committee 
and the
Department have a shared goal, and the committee wishes to see 
the Department push the envelope for the teams it already uses, 
building upon successful models of cross-functional teams that 
have been used in and outside of government. I would hope that 
the committee and the Department can have a dialogue to find 
common ground on ways to maximize the effect of this proposal 
so that national security benefits from an efficient management 
tool will be derived by the Department of Defense.
    I believe this is a--hearing is an excellent first step in 
that dialogue, and I look forward to the witnesses' testimony. 
Thank you very much.
    Thank you, Mr. Chairman.
    Chairman McCain. Before I call our witnesses, since a 
quorum is now present, I ask the committee to consider the list 
of 1,676 pending military nominations, including this list of 
the nominations of General David L. Goldfein, USAF [United 
States Air Force], to be General and Chief of Staff, United 
States Air Force; Lieutenant General Thomas D. Waldhauser, USMC 
[United States Marine Corps], to be General and Commander, 
United States
Africa Command; Lieutenant General Joseph L. Lengyel, Air 
National Guard, to be General and Chief of the National Guard 
Bureau.
    Of these 1,676 nominations, 85 nominations are 3 days short 
of the committee's requirement that nominations be in committee 
for 7 days before we report them out. No objection has been 
raised. These nomination--I recommend the committee waive the 
7-day rule in order to permit the confirmation nominations of 
these officers before the Senate goes out before the 4th of 
July recess. I think there's one additional--one additional 
that we may look at--we may ask the committee later on.
    Is there a motion to favorably report these 1,676 military 
nominations?
    Senator Reed. So moved.
    Chairman McCain. Is there a second?
    Senator Inhofe. Second.
    Chairman McCain. All in favor, say aye.
    [A chorus of ayes.]
    Chairman McCain. The ayes have it.
    [Information referred to follows:]
 Military Nominations Pending with the Senate Armed Services Committee 
 Which are Proposed for the Committee's Consideration on June 28, 2016.
     1.  In the Navy there is 1 appointment to the grade of lieutenant 
commander (Justin C. Legg) (Reference No. 418)

     2.  BG Matthew T. Quinn, ARNG to be major general (Reference 
No.659)

     3.  In the Army there is 1 appointment to the grade of colonel 
(Bethany C. Aragon) (Reference No. 1102)

     4.  In the Army there is 1 appointment to the grade of colonel 
(Brian T. Watkins) (Reference No. 1105)

     5.  In the Army there are 12 appointments to the grade of colonel 
(list begins with Susan M. Cebula) (Reference No. 1109)

     6.  In the Army there are 89 appointments to the grade of colonel 
(list begins with John S. Aita) (Reference No. 1111)

     7.  In the Army there is 1 appointment to the grade of colonel 
(Jason B. Blevins) (Reference No. 1141)

     8.  Capt. Phillip E. Lee, Jr., USNR to be rear admiral (lower 
half) (Reference No. 1241)

     9.  Capt. Alan J. Reyes, USNR to be rear admiral (lower half) 
(Reference No. 1242)

    10.  Capt. Mary C. Riggs, USNR to be rear admiral (lower half) 
(Reference No. 1243)

    11.  Capt. Carol M. Lynch, USNR to be rear admiral (lower half) 
(Reference No. 1244)

    12.  Capt. Mark E. Bipes, USNR to be rear admiral (lower half) 
(Reference No. 1245)

    13.  Capt. Brian R. Guldbek, USNR to be rear admiral (lower half) 
(Reference No. 1246)

    14.  Capt. Louis C. Tripoli, USNR to be rear admiral (lower half) 
(Reference No. 1247)

    15.  Capt. Robert T. Durand, USNR to be rear admiral (lower half) 
(Reference No. 1248)

    16.  In the Navy Reserve there are 6 appointments to the grade of 
rear admiral (lower half) (list begins with Shawn E. Duane) (Reference 
No. 1250)

    17.  Capt. Thomas W. Luscher, USNR to be rear admiral (lower half) 
(Reference No. 1251)

    18.  RADM(lh) Brian S. Pecha, USNR to be rear admiral (Reference 
No. 1252)

    19.  RADM(lh) Deborah P. Haven, USNR to be rear admiral (Reference 
No. 1253)

    20.  RADM(lh) Mark J. Fung, USNR to be rear admiral (Reference No. 
1254)

    21.  In the Navy Reserve there are 3 appointments to the grade of 
rear admiral (list begins with Russell E. Allen) (Reference No. 1255)

    22.  LTG Joseph L. Lengyel, ANG to be general and Chief of the 
National Guard Bureau (Reference No. 1290)

    23.  Capt. Ronald R. Fritzemeier, USNR to be rear admiral (lower 
half) (Reference No. 1295)

    24.  In the Marine Corps there are 9 appointments to the grade of 
major general (list begins with Charles G. Chiarotti) (Reference No. 
1331)

    25.  In the Navy Reserve there are 8 appointments to the grade of 
captain (list begins with Timothy M. Dunn) (Reference No. 1351)

    26.  In the Navy Reserve there are 2 appointments to the grade of 
captain (list begins with Suzanne M. Lesko) (Reference No. 1352)

    27.  In the Navy Reserve there is 1 appointment to the grade of 
captain (Andrew F. Ulak) (Reference No. 1353)

    28.  In the Navy Reserve there are 3 appointments to the grade of 
captain (list begins with Kenneth N. Graves) (Reference No. 1354)

    29.  In the Navy Reserve there are 3 appointments to the grade of 
captain (list begins with Steve R. Paradela) (Reference No. 1355)

    30.  In the Navy Reserve there are 18 appointments to the grade of 
captain (list begins with Charles M. Brown) (Reference No. 1356)

    31.  In the Navy Reserve there are 2 appointments to the grade of 
captain (list begins with Robert K. Baer) (Reference No. 1357)

    32.  In the Navy Reserve there are 70 appointments to the grade of 
captain (list begins with Brian S. Anderton) (Reference No. 1358)

    33.  In the Navy Reserve there are 14 appointments to the grade of 
captain (list begins with Christopher J.R. Demchak) (Reference No. 
1359)

    34.  In the Navy Reserve there are 3 appointments to the grade of 
captain (list begins with Janette B. Jose) (Reference No. 1360)

    35.  In the Navy Reserve there are 4 appointments to the grade of 
captain (list begins with Eric R. Johnson) (Reference No. 1361)

    36.  In the Navy Reserve there are 6 appointments to the grade of 
captain (list begins with Jarema M. Didoszak) (Reference No. 1362)

    37.  In the Navy Reserve there is 1 appointment to the grade of 
captain (Conrado G. Dungca, Jr.) (Reference No. 1363)

    38.  In the Navy Reserve there is 1 appointment to the grade of 
captain (Alexander L. Peabody) (Reference No. 1364)

    39.  In the Navy Reserve there is 1 appointment to the grade of 
captain (Jason G. Goff) (Reference No. 1365)

    40.  General David L. Goldfein, USAF to be general and Chief of 
Staff, US Air Force (Reference No. 1388)

    41.  LTG Thomas D. Waldhauser, USMC to be general and Commander, US 
Africa Command (Reference No. 1392)

    42.  MG Charles D. Luckey, USAR to be lieutenant general and Chief 
of Army Reserve/Commanding General, US Army Reserve Command (Reference 
No. 1426)

    43.  In the Navy there are 5 appointments to the grade of captain 
(list begins with Olivia L. Bethea) (Reference No. 1440)

    44.  In the Navy there are 64 appointments to the grade of captain 
(list begins with Roger S. Akins) (Reference No. 1441)

    45.  In the Navy there are 14 appointments to the grade of captain 
(list begins with Richard S. Adcock) (Reference No. 1442)

    46.  In the Navy there are 31 appointments to the grade of captain 
(list begins with Andrew M. Archila) (Reference No. 1443)

    47.  In the Navy there are 13 appointments to the grade of captain 
(list begins with Shane D. Cooper) (Reference No. 1444)

    48.  In the Navy there are 30 appointments to the grade of captain 
(list begins with Johannes M. Bailey) (Reference No. 1445)

    49.  In the Navy there are 31 appointments to the grade of captain 
(list begins with Susan L. Ayers) (Reference No. 1446)

    50.  In the Navy there are 12 appointments to the grade of captain 
(list begins with Michael D. Brown) (Reference No. 1447)

    51.  In the Navy there are 14 appointments to the grade of captain 
(list begins with John R. Anderson) (Reference No. 1448)

    52.  In the Navy there are 5 appointments to the grade of captain 
(list begins with Rachael A. Dempsey) (Reference No. 1450)

    53.  In the Navy there are 10 appointments to the grade of captain 
(list begins with Ann E. Casey) (Reference No. 1451)

    54.  In the Navy there are 10 appointments to the grade of captain 
(list begins with Claude W. Arnold, Jr.) (Reference No. 1452)

    55.  In the Navy there are 9 appointments to the grade of captain 
(list begins with Albert Angel) (Reference No. 1453)

    56.  In the Navy there are 9 appointments to the grade of captain 
(list begins with Thomas L. Gibbons) (Reference No. 1454)

    57.  In the Navy there are 215 appointments to the grade of captain 
(list begins with David L. Aamodt) (Reference No. 1455)

    58.  In the Navy there are 5 appointments to the grade of captain 
(list begins with Michael B. Bilzor) (Reference No. 1456)

    59.  In the Navy there are 15 appointments to the grade of captain 
(list begins with Paul D. Clifford) (Reference No. 1457)

    60.  In the Navy there are 8 appointments to the grade of captain 
(list begins with Errol A. Campbell, Jr.) (Reference No. 1458)

    61.  In the Navy there are 6 appointments to the grade of captain 
(list begins with Jeffrey J. Chown) (Reference No. 1459)

    62.  In the Navy there are 2 appointments to the grade of captain 
(list begins with Dewalt Brook) (Reference No. 1460)

    63.  In the Navy there are 4 appointments to the grade of captain 
(list begins with Aaron C. Hoff) (Reference No. 1461)

    64.  In the Army there is 1 appointment to the grade of major 
general (Robert P. Walters, Jr.) (Reference No. 1464-2)

    65.  In the Army there is 1 appointment to the grade of major 
(Shawn R. Lynch) (Reference No. 1480)

    66.  In the Army there is 1 appointment to the grade of major (Rita 
A. Kostecke) (Reference No. 1482)

    67.  In the Army there is 1 appointment to the grade of major 
(Helen H. Brandabur) (Reference No. 1483)

    68.  In the Army Reserve there is 1 appointment to the grade of 
colonel (Barry K. Williams) (Reference No. 1484)

    69.  LTG Edward C. Cardon, USA to be lieutenant general and 
Director of the Office of Business Transformation, Office of the Under 
Secretary of the Army (Reference No. 1494)

    70.  BG Timothy P. Williams, ARNG to be major general (Reference 
No. 1501)

    71.  Col. Joseph J. Streff, ARNG to be brigadier general (Reference 
No. 1502)

    72.  In the Army Reserve there are 3 appointments to the grade of 
brigadier general (list begins with Anthony P. Digiacomo, II) 
(Reference No. 1503)

    73.  LTG David H. Berger, USMC to be lieutenant general and 
Commander, US Marine Corps Forces Pacific and Commanding General, Fleet 
Marine Force Pacific (Reference No. 1504)

    74.  In the Air Force Reserve there is 1 appointment to the grade 
of colonel (Joseph H. Imwalle) (Reference No. 1505)

    75.  In the Army there is 1 appointment to the grade of colonel 
(Douglas Maurer) (Reference No. 1506)

    76.  In the Navy there is 1 appointment to the grade of lieutenant 
commander (Daniel L. Christensen) (Reference No. 1507)

    77.  In the Navy there is 1 appointment to the grade of commander 
(Howard D. Watt) (Reference No. 1508)

    78.  In the Navy there is 1 appointment to the grade of commander 
(Daniel Morales) (Reference No. 1509)

    79.  In the Navy there is 1 appointment to the grade of captain 
(Stefan M. Groetsch) (Reference No. 1510)

    80.  In the Navy there is 1 appointment to the grade of captain 
(Jeffrey M. Bierley) (Reference No. 1511)

    81.  In the Navy there is 1 appointment to the grade of lieutenant 
commander (Michael G. Zakaroff) (Reference No. 1512)

    82.  MG Jeffrey L. Harrigian, USAF to be lieutenant general and 
Commander, US Air Forces Central Command, Air Combat Command (Reference 
No. 1515)

    83.  LTG Tod D. Wolters, USAF to be general and Commander, US Air 
Forces Europe; Commander, US Air Forces Africa; Commander, Allied Air 
Command; and Director, Joint Air Power Competence Centre (Reference No. 
1516)

    84.  MG Stayce D. Harris, USAFR to be lieutenant general and 
Assistant Vice Chief of Staff and Director, Air Staff, US Air Force 
(Reference No. 1517)

    85.  MG Gwendolyn Bingham, USA to be lieutenant general and 
Assistant Chief of Staff for Installation Management (Reference No. 
1518)

    86.  RADM Michael M. Gilday, USN to be vice admiral and Commander, 
Fleet Cyber Command/Commander, TENTH Fleet (Reference No. 1519)

    87.  RADM Colin J. Kilrain, USN to be vice admiral and Commander, 
North Atlantic Treaty Organization Special Operations Headquarters 
(Reference No. 1520)

    88.  LTG Glenn M. Walters, USMC to be general and Assistant 
Commandant of the Marine Corps (Reference No. 1522)

    89.  MG Gary L. Thomas, USMC to be lieutenant general and Deputy 
Commandant for Programs and Resources, Headquarters, US Marine Corps 
(Reference No. 1523)

    90.  MG Lewis A. Craparotta, USMC to be lieutenant general and 
Commanding General, I Marine Expeditionary Force (Reference No. 1524)

    91.  MG Joseph L. Osterman, USMC to be lieutenant general and 
Deputy Commander, US Special Operations Command (Reference No. 1525)

    92.  In the Air Force there is 1 appointment to the grade of major 
(Lisa A. Seltman) (Reference No. 1526)

    93.  In the Air Force there are 2 appointments to the grade of 
major (list begins with Andrew M. Foster) (Reference No. 1527)

    94.  In the Army there is 1 appointment to the grade of lieutenant 
colonel (Ronald D. Hardin, Jr.) (Reference No. 1528)

    95.  LTG Terrence J. O'Shaughnessy, USAF to be general and 
Commander, Pacific Air Forces; Air Component Commander for US Pacific 
Command; and Executive Director, Pacific Air Combat Operations Staff 
(Reference No. 1533)

    96.  In the Navy there are 26 appointments to the grade of 
commander (list begins with Ron J. Arellano) (Reference No. 1534)

    97.  In the Navy there are 28 appointments to the grade of 
commander (list begins with Katie M. Abdallah) (Reference No. 1535)

    98.  In the Navy there are 31 appointments to the grade of 
commander (list begins with Matthew J. Acanfora) (Reference No. 1536)

    99.  In the Navy there are 44 appointments to the grade of 
commander (list begins with Kenneth O. Allison, Jr.) (Reference No. 
1537)

    100.  In the Navy there are 481 appointments to the grade of 
commander (list begins with Benjamin P. Abbott) (Reference No. 1538)

    101.  In the Navy there are 16 appointments to the grade of 
commander (list begins with Peter Bissonnette) (Reference No. 1539)

    102.  In the Navy there are 35 appointments to the grade of 
commander (list begins with Mylene R. Arvizo) (Reference No. 1540)

    103.  In the Navy there are 15 appointments to the grade of 
commander (list begins with David R. Donohue) (Reference No. 1541)

    104.  In the Navy there are 12 appointments to the grade of 
commander (list begins with Randy J. Berti) (Reference No. 1542)

    105.  In the Navy there are 6 appointments to the grade of 
commander (list begins with Jodie K. Cornell) (Reference No. 1543)

    106.  In the Navy there are 16 appointments to the grade of 
commander (list begins with Patricia H. Ajoy) (Reference No. 1544)

    107.  In the Navy there are 14 appointments to the grade of 
commander (list begins with Erin M. Ceschini) (Reference No. 1545)

    108.  RADM Marshall B. Lytle III, USCG to be vice admiral and 
Director, Command, Communications, and Computers/Cyber; Chief 
Information Officer, J-6, Joint Staff (Reference No. 1385)

    109.  LTG Stephen W. Wilson, USAF to be general and Vice Chief of 
Staff of the Air Force (Reference No. 1550)

    110.  MG Vera Linn Jamieson, USAF to be lieutenant general and 
Deputy Chief of Staff for Intelligence, Surveillance, and 
Reconnaissance, Headquarters, US Air Force (Reference No. 1551)

    111.  In the Air Force there are 44 appointments to the grade of 
lieutenant colonel (list begins with David B. Barker) (Reference No. 
1554)

    112.  In the Army there is 1 appointment to the grade of colonel 
(Edward J. Fisher) (Reference No. 1558)

    113.  In the Navy there is 1 appointment to the grade of lieutenant 
commander (Thomas W. Luton) (Reference No. 1559)

    114.  MG Thomas W. Bergeson, USAF to be lieutenant general and 
Deputy Commander, United Nations Command Korea; Deputy Commander, 
United States Combined Forces Command; and Commander, Seventh Air 
Force, Pacific Air Forces (Reference No. 1562)

    115.  BG Thomas W. Geary, USAF to be major general (Reference No. 
1563)

    116.  LTG John L. Dolan, USAF to be lieutenant general and Director 
for Operations, J-3, Joint Staff (Reference No. 1564)

    117.  MG Richard M. Clark, USAF to be lieutenant general and 
Commander, Third Air Force, US Air Forces in Europe (Reference No. 
1565)

    118.  In the Army there is 1 appointment to the grade of lieutenant 
colonel (David W. Mayfield) (Reference No. 1566)

    119.  In the Army there is 1 appointment to the grade of colonel 
(Michael P. Garlington) (Reference No. 1567)

    120.  In the Army there are 2 appointments to the grade of major 
(list begins with Noela B. Bacon) (Reference No. 1568)

    121.  In the Army there is 1 appointment to the grade of colonel 
(Elizabeth M. Miller) (Reference No. 1569)

    122.  In the Navy Reserve there are 4 appointments to the grade of 
captain (list begins with Jennifer L. Donahue) (Reference No. 1570)

    123.  In the Navy Reserve there are 3 appointments to the grade of 
captain (list begins with Steven D. Bartell) (Reference No. 1571)

    124.  In the Navy Reserve there are 2 appointments to the grade of 
captain (list begins with Nathan Johnston) (Reference No. 1572)

    125.  In the Navy Reserve there are 11 appointments to the grade of 
captain (list begins with Philip Armas, Jr.) (Reference No. 1573)

    126.  In the Navy Reserve there are 10 appointments to the grade of 
captain (list begins with Catherine O. Durham) (Reference No. 1574)

    127.  In the Navy Reserve there are 13 appointments to the grade of 
captain (list begins with James H. Burns) (Reference No. 1575)

    128.  In the Navy Reserve there are 3 appointments to the grade of 
captain (list begins with John M. Hardham) (Reference No. 1576)

    129.  In the Navy Reserve there are 8 appointments to the grade of 
captain (list begins with Philip J. Abeldt) (Reference No. 1577)

    130.  In the Navy Reserve there are 22 appointments to the grade of 
captain (list begins with Lauren P. Archer) (Reference No. 1578)
_______________________________________________________________________
                                                                  
TOTAL: 1,677

    Welcome, to the witnesses.
    Dr. Edmondson, we'll begin with you. Thank you for 
appearing today.

STATEMENT OF AMY C. EDMONDSON, NOVARTIS PROFESSOR OF LEADERSHIP 
            AND MANAGEMENT, HARVARD BUSINESS SCHOOL

    Dr. Edmondson. Thank you so much for the opportunity to 
offer my perspective on the use of cross-functional teams. Of 
course, I am coming largely, but not exclusively, from research 
in the business world. What I hope to do is briefly explain the 
extensive use of teams in business, why teams are considered a 
necessity for success in highly complex, fast-paced work; and, 
second, I want to explain the requirements for success of such 
teams, which are not to be taken for granted; third, I offer 
some results of successful cross-boundary collaboration; and 
finally, a quick assessment of the approach described in 
section 941.
    So, first, the use of teams in business organizations is 
undeniably widespread. Fast-moving global markets, disruptive 
technologies, and so forth, have forced technologies to find 
new ways to innovate in recent years, and teams play a central 
role in such innovation. But, teams are not new in the business 
world. In fact, since the 1980s, the implementation of teams 
has been recognized by both business leaders and business 
academics as a vital strategy. Most workplaces today find that 
almost 90 percent of people working in global corporations are 
spending at least half of their time in some kind of team or 
another. Whether it's production, sales, new product 
development, systems innovations, or strategy formation, work 
is increasingly carried out in teams.
    I think there are two basic motivations explaining the 
pervasiveness of teams:
    First, and probably most important, certain activities 
simply cannot be accomplished by individuals working in 
separate functional--in silos. This is because they simply 
require integration of disparate information, expertise, or 
interests, and hence, require realtime interaction.
    Second, research shows that participating in well-managed 
teams promotes buy-in and commitment. In large, complex 
organizations, people often feel a deep sense of loyalty to 
their team, and this loyalty binds them to the organizations. 
When they have the chance to work on an effective team, doing 
meaningful work on behalf of the organization, it leads to all 
sorts of lateral benefits, like engagement and commitment, in 
addition to high performance.
    Because it's central to my own research, I'll add that 
teams are a key mechanism for organizational learning. 
Analyzing existing processes and designing and implementing 
strategies and changes is fundamentally a team sport. It takes 
multiple perspectives to get it right. This is somewhat akin to 
the Army's after-action reviews, which, by the way, are widely 
celebrated by people in my field.
    Change, of course, means anything from small process 
improvements to dramatic organizational transformations, such 
as those that allow iconic American companies, like IBM and 
Ford, to
recover and thrive after extreme industry turmoil threatened 
their very existence, while other industrial giants, like DEC 
[Digital Equipment Corporation] or American Motors, disappear 
into
history.
    Now, I think it's important to note that teams come in many 
forms. I think the most widely celebrated and noted are self-
managed teams in manufacturing, in service, leadership teams at 
the very top of organizations, and, of course, cross-functional 
teams, which are the engines of innovation.
    So, consistent with section 941, I'm going to focus on 
cross-functional teams. These are teams that bring individuals 
together from different organizational units, or functions, to 
share responsibility for a specific deliverable. It's done 
because multiple areas of expertise or interests must be 
considered simultaneously in doing the work or solving the 
problem.
    The clearest example of such work in business is new 
product development. Several decades ago, new product 
development was accomplished by people in separate functions--
sales, marketing, design, engineering, manufacturing, 
accounting, and so on--each completing their respective tasks, 
and then effectively throwing them over the wall to another 
function to take over. Without back-and-forth discussion across 
expert fields, this led to poor-quality products and very long 
cycle times, because the complex problems of design, 
manufacturing, distribution, cost containment, and so on, can't 
be solved--certainly can't be solved in innovative and 
effective ways without that realtime interaction.
    So, consider what happened when the United States 
automotive industry encountered steep competition from leading 
Japanese car manufacturers in the 1980s. The Japanese 
advantages were based, in part, on faster and higher-quality 
product development processes. Ultimately, this sparked--not 
quickly enough, mind you, but this sparked a dramatic 
revolution in product development in the U.S. carmakers in the 
1990s, when cross-functional team approaches were implemented. 
As documented by some of my colleagues at Harvard Business 
School, cross-functional teams dramatically improved product 
innovation and development speed in the U.S. automotive 
industry, and brought them back into the game.
    Today, to meet market expectations for time and quality, 
cross-functional teams are simply considered a necessity in 
most industries. No successful company, for example, would 
consider returning to the functional hierarchy for new product 
development. But, cross-disciplinary teams have also improved 
performance in patient care, supply-chain management, airline 
service, to name just a few arenas that have been extensively 
studied.
    Yet, not every business task requires a team approach. For 
some activities, individuals, in fact, can work more 
effectively in--alone or alongside others in shared silos, 
which some people prefer to call ``cylinders of excellence.'' 
Functional hierarchies work well when problems are well 
understood and activities are routine.
    As General McChrystal will describe, I am confident, these 
management systems were designed based on a principle that 
managers at the top had all the information they needed to tell 
people what to do, when to do it, and what standards of 
performance were acceptable. This principle no longer holds 
when leaders lack the full expertise and information to design 
and control the work or when situations are moving too fast, 
and faster than communication can flow up and down the command-
and-control structures.
    So, for problems that are novel or need input or 
cooperation from multiple parts of the organization, it calls 
for a team approach. This is why people in my field 
increasingly call a company's ability to form and lead high-
performance teams absolutely critical to its long-term success.
    Now, my second point is more sobering, and briefer. Merely 
forming teams is not enough. Many teams fail because the 
necessary conditions for their success have not been 
implemented. These conditions are not outlandish or 
complicated. Rather, they will strike most of you as common 
sense. Yet, unless leaders invest the time and effort in 
setting teams up for success, the conditions will not be 
present.
    First, teams must be designed well. This means they must be 
given a clear, engaging direction for their work. They must 
have appropriate composition, the right mix and size of skills 
for the work. They have to have access to resources and 
information, and leadership and coaching to help them manage 
the process.
    Second, teams must have norms and processes and attitudes 
that enable teamwork. My own research emphasizes the impact of 
team-leader actions on this. For instance, in studies in 
several industries, I found that a climate of psychological 
safety is critical.
Psychological safety means respect and trust, and basically an 
expectation that candor is welcomed. Psychological safety, 
however, matter most for teams with diverse backgrounds, 
whether that's functions, profession, status, nationality, and 
so forth. It matters especially in teams that are working on 
innovation projects.
    A widely publicized recent study at Google found that 
psychological safety was, quote, ``far and away the most 
important of five dynamics in explaining team performance.'' 
The other four, by the way, were team member dependability, 
structure and clarity of roles and goals, meaning--meaning that 
the people saw the work they did as personally important--and 
impact--people believe that the work they were doing mattered 
for the organization and,
indeed, for the world.
    In this Google study, as in many others, a major factor in 
whether teams had psychological safety was leader behavior. For 
teams to work, the organization's culture must be supportive of 
collaboration and teamwork. In my experience, organizations 
that try to change the culture by focusing on the culture often 
come up short. Rather, to create a collaborative culture, the 
key is to identify
important work that requires collaboration to be accomplished, 
assign strong individual contributors to a team with a clear, 
engaging directive, and give them support and resources. It is 
through doing that kind of work in a new way that a new culture 
starts to take shape around it. In my view, shifting the work 
drives culture change, rather than the other way around.
    Cross-functional teams will no doubt be intentioned with 
preexisting functional structures, especially at first. This is 
exactly why it should be done. A part of their job is to force 
the organization to make changes in how things get done, and it 
can work well if the teams are supported from the top and if 
they're framed as a way to help educate and shift the 
organization from its current to its new state. This may sound 
like a lot of work, and it is, but it's good work, and it's--
when it's done well, the results are worth the effort. It's not 
just the occasional wild new product development success that 
shows what can happen when a group of people work well together 
across boundaries to overcome obstacles.
    So, my third task is to briefly describe such successes 
with the intent to tempt you to follow in their footsteps. The 
rescue of 33 miners in Chile suddenly and profoundly trapped 
between 2,000--beneath 2,000 feet of solid rock, following an 
explosion and collapse of part of the mountain, was one such 
example. Considered absolutely impossible at the outset, the 
rescue succeeded because of
astonishingly effective and unusual collaboration across 
diverse
experts. For 70 days, people from different organizations, 
sectors,
industries, and nations worked together to innovate on the fly, 
learning fast and furiously, mostly from failure, as they 
generated and tested new ideas. Reflecting on the details of 
that rescue as--which I studied extensively, it becomes 
stunningly clear that a top-down command-and-control approach 
would have failed utterly.
    What was required, facing the unprecedented scale of the 
disaster, was cross-boundary teaming, multiple temporary teams 
of people working on different types of problems, coordinating 
across these teams, as needed. It also required remarkably 
effective leadership at the level of the individual teams and 
at the very top of the organization.
    The leader of the rescue operation, Andre Sougarret, came 
from Codelco, the state-owned copper mining company. He was 
invited by Chile's President, Sebastian Pinera, to help. 
Sougarret is technically brilliant, but, more importantly, he 
has astonishing organizational and interpersonal skills, and he 
knew how to lead complex teaming.
    In the far less dramatic context of business, companies 
like Cisco and Google view cross-disciplinary teams as critical 
to their success, to shorten product life cycles, so forth. The 
remarkable business turnaround at Nissan in the early 2000s 
from the brink of bankruptcy to renewed market leadership is 
one of the best examples I know of how a very small number of 
cross-functional teams working with clear direction from the 
top can accomplish remarkable business results.
    Very specifically, CEO Carlos Ghosn formed nine cross-
functional teams early in his tenure. Each was asked to address 
a specific
organizational and business problem. The teams were composed of 
middle managers and experts from different functions. Each was 
headed by a team leader, and each had direct access to two 
senior executives for direction, feedback, resources, and more. 
Each was challenged to come up with a specific proposal 
supported by clearly demonstrable financial impact. They worked 
tirelessly for months, and they succeeded beyond anyone's 
expectations, except perhaps Ghosn's. Team members reported the 
experience as exhausting, but rewarding and meaningful. Within 
2 years, the organization was on its way to recovery, with 
impressive market and financial success.
    Lastly, I briefly comment on the recommendations in section 
941, which struck me as highly reasonable and arguably overdue. 
Several of the objectives were--are particularly admirable and 
consistent with current best practice on the use of cross-
functional teams in business. Notably, the desire to integrate 
expertise and capacities for effective and efficient 
achievement of Department missions, and to enable the 
Department to focus on critical missions that span multiple 
functional issues to frame competing and alternative courses of 
actions, and to make clear and effective strategic choices in a 
timely manner to achieve success.
    I do agree that, if well implemented, cross-functional 
teams could help the Department to anticipate, adapt, and 
innovate rapidly to changes in the threats facing the United 
States, and to exploit the opportunities to counter such 
threats offered by technological and organizational advances. 
It's also reassuring that the section recognizes impediments, 
such as sequential hierarchical planning and decisionmaking 
processes oriented around functional and bureaucratic 
structures, and more. With awareness of these impediments, I 
think progress is far more likely through leaders taking 
precautions to plan and educate others.
    In closing, great leaders in both business and government 
recognize the complexity and uncertainty in which their 
organizations are forced to operate today. It's their job to 
bring the organizational structures and cultures along so that 
they, too, can recognize and thrive in this new world. Teams 
are, by no means, a panacea; but, when well designed, well led, 
and motivated by the greater good, the results can be awe 
inspiring.
    I hope that this brief perspective from a management 
researcher adds something of value to the discussion. It's an 
honor for me to offer my insights in the service of this 
effort.
    So, thank you.
    [The prepared statement of Dr. Edmondson follows:]

             Prepared Statement by Amy C. Edmondson, Ph.D.
    Chairman McCain, Ranking Member Reed, Members of the Committee:
    Thank you for the opportunity to discuss the utility of cross-
functional teams in business as input for the Department of Defense. My 
goal is to explain the extensive business use of teams, and why they 
are considered a necessity for success in today's highly complex, fast-
paced world. I also wish to explain why many cross-boundary 
collaborations fail, along with what is known about the requirements 
for success. Finally, I will describe the exciting results of 
successful cross-boundary collaboration and teaming in modern 
organizations.
    As background, my expertise is in Organizational Behavior. I am on 
the faculty at Harvard Business School, where I teach and conduct 
research on organizational learning, and leadership for the past 25 
years.
                  the extensive business use of teams.
    The use of teams in business organizations is widespread. Fast-
moving global markets and disruptive technologies have forced companies 
to find new ways to innovate, and teams play a central role in 
innovation, as elaborated below. But teams are not new to the business 
world. Starting in the 1980s and gaining momentum in the 90s, the 
implementation of team-based structures has been long recognized by 
business leaders and academics as vital to organizational 
effectiveness. By 1998, 70% of workplaces with 50 employees or more 
employees had implemented teams. \1\ In a recent survey, 88% of 
managers in global corporations reported spending at least half of 
their time working in teams. \2\ In sum, work in today's companies--be 
it production, sales, new product development, systems innovations, or 
strategy formation--is increasingly carried out in teams.
---------------------------------------------------------------------------
    \1\ M. Gittleman, M. Horrigan, and M. Joyce (1998). ``Flexible'' 
Workplace Practices: Evidence from a Nationally Representative Survey. 
Industrial & Labor Relations Review, October 1998 52: 99-115.
    \2\ The Ken Blanchard Companies (2006). Research findings: The 
Critical Role of Teams. Accessed at www.kenblancard.com, June 24, 2016.
---------------------------------------------------------------------------
    Two basic motivations explain the pervasive use of teams in the 
private sector:
    First, and most important, certain organizational activities cannot 
be accomplished effectively by functional hierarchies because they 
require people to integrate diverse information, expertise, or 
interests, through back-and-forth sharing of ideas, information, and 
constraints. When well-managed, diverse teams can accomplish this kind 
of work effectively and quickly.
    Second, research has shown that participating in well-managed teams 
promotes commitment and buy-in. Indeed, teams are seen as a crucial 
element of high-commitment work organizations. In large, complex 
organizations, people often feel a deep sense of loyalty to their team 
members rather than to the company as a whole, and it is this loyalty 
that binds them to the organization. When individuals build 
relationships across functions or departments by participating on a 
team doing meaningful work for the organization, it leads to positive 
outcomes including better employee engagement, retention, and 
performance. In short, when teams work, both the technical and human 
dimensions of the organization are well served.
    Teams also function as a key mechanism for organizational learning, 
itself a crucial source of competitive advantage in a fast-paced 
environment. Most companies use teams to analyze current processes and 
performance, and to design and implement necessary changes. This 
reflection-action capability is akin to the U.S. Army's after action 
reviews (AARs) widely celebrated by organizational researchers. This 
collective learning capability is important because today's business 
leaders consider ongoing organizational change a necessity for 
continued success in a changing world. By organizational change, I 
include small process improvements as well as the periodic major 
organizational transformations that allow iconic companies like IBM and 
Ford to recover and survive after extreme industry turmoil threatened 
their very existence, while other firms, such as DEC or American 
Motors, disappear into history.
   cross-functional teams, collaboration, and collaborative cultures
    Teams come in many forms in the corporate sector, most notably 
self-managed teams, leadership teams, and cross-functional teams. The 
related terms, collaboration and collaborative cultures, describe 
attributes of effective teams, but do not directly indicate the 
existence of formal teams of any kind. Collaboration refers to the 
willingness of people, within and across company functions or 
departments, to help each other to solve problems or carry out work on 
behalf of the organization, especially in horizontal relationships. 
Collaborative culture describes an atmosphere and behaviors of 
cooperation trust, and mutuality an organization.
    For the purpose of today's hearing, I focus on cross-functional 
teams, which are teams created for the express purpose of accomplishing 
work requiring multiple areas of expertise or interest to be considered 
concurrently. A cross-functional team brings individuals from different 
organizational units or functions to work together, with shared 
responsibility for a specific deliverable. The clearest example of such 
work in business is new product development (NPD). Several decades ago, 
NPD was accomplished by people working in separate functions--sales, 
marketing, design, engineering, manufacturing, accounting, and so 
forth--each completing their respective tasks and ``throwing them over 
the wall'' to the next function to take over. This was not only slow, 
it produced poorer quality products and services. Without what 
organizational scholars call ``reciprocal coordination''--or back-and-
forth discussions of merits, constraints, challenges and 
opportunities--complex problems cannot be solved in innovative and 
effective ways. In the U.S. automotive industry, blindsided by 
dramatically faster and higher-quality product development in leading 
Japanese car companies, a revolution in NPD occurred in the late 90s, 
when a cross functional team approach was implemented. As documented by 
Steve Wheelwright, Kim Clark and other scholars at HBS, cross-
functional teams dramatically improved product innovation and speed of 
development in the US automotive and other industries. \3\
---------------------------------------------------------------------------
    \3\ Wheelwright, S. C., & Clark, K. B. (1992). Revolutionizing 
product development: Quantum leaps in speed, efficiency, and quality. 
New York: Free Press.
---------------------------------------------------------------------------
    To satisfy market expectations with respect to time and quality, 
cross-functional teams are considered a necessity in most industries 
today. No successful company would consider returning to the functional 
hierarchy for NPD, for instance. Yet, crossdisciplinary teamwork is not 
solely for new product development. Such teams have also improved 
performance in patient care, supply chain management, and airline 
service, to name just a few that have been extensively studied.
    Not every business task requires a team-based approach. For many 
activities, individuals can complete work more effectively alone and 
teams can slow down progress. Hierarchical management systems were 
designed based on the principle that managers had the necessary 
knowledge and perspective to tell people what to do, when to do it, and 
what standards of performance were acceptable. This principle no longer 
holds when leaders lack the full set of expertise and information 
needed to design and control the work, or when situations change faster 
than communication can flow up and down command and control structures. 
Functional hierarchies are a good design for efficiency, scale, cost 
control, and accuracy when managing routine and well-understood 
problems and activities. But certain problems--those that are novel 
and/or need input or cooperation from multiple parts of the 
organization--demand a team-based approach. This is why people in my 
field increasingly consider a company's ability to form, lead and 
nurture high-performance teams as critical to its long-term success. 
\4\ Whether a business serves consumers (``B to C'') or businesses (``B 
to B''), cross-functional teamwork is increasingly considered vital to 
the delivery of high quality products or services in a timely manner to 
customers.
---------------------------------------------------------------------------
    \4\ J.R. Katzenbach & D.K. Smith, (2006) The Wisdom of Teams: 
Creating the high performance organization. New York: Harper Business; 
Deloitte University Press: Global Human Capital Trends 2016, ``The new 
organization: Different by design,'' accessed at www.deloitte.com, June 
24, 2016.
---------------------------------------------------------------------------
    Merely forming a team does not guarantee its success. Good design 
and good leadership are both crucial to ensuring that a team's 
potential performance translates into actual performance.
         the requirements for successful cross-functional teams
    Even when people agree about the need for teams (and/or the need 
for change), teamwork and change are difficult to implement. Existing 
culture, habits, processes, systems (including IT systems) and rewards 
can be barriers to success. Many people may sincerely agree with the 
case for change but fear losing power, or fear feeling incompetent in 
the proposed new organization. Or, people may not be given the 
resources to implement the change. A frequent culprit is leaders who 
fail to ``walk the talk''--to model behaviors that demonstrate that 
they value collaboration. It is well known that people attach more 
importance to what leaders do than to what they say.
    Many teams fail because the necessary conditions for their success 
have not been implemented. These conditions are not outlandish or 
complicated; rather they will strike most listeners as common sense. 
Yet, they cannot be taken for granted in organizations, because leaders 
may fail to invest the effort in setting teams up for success for a 
variety of reasons.
    In short, team success starts with effective team design, including 
establishing a clear, engaging direction for the team's work, 
appropriate team composition (including the right size and skill mix 
for the work), access to necessary resources and information, and team 
leadership and coaching to help manage the team process. Next is the 
effort to develop the norms (attitudes and behaviors) and processes of 
healthy teamwork.
    My own research examines both factors, design and process, but has 
particularly emphasized process, and the impact of team member beliefs 
and behaviors. Specifically, in multiple studies across industries, I 
have shown that a climate of psychological safety is an important 
factor in shaping team learning and team performance. Psychological 
safety refers to a climate characterized by mutual respect and 
interpersonal trust, in which candor is expected and welcomed. 
Psychological safety matters especially in teams characterized by 
diversity (of expertise, status, or demographics), and in teams working 
to innovate or create new processes. A widely publicized study at 
Google earlier this year found that psychological safety was ``far and 
away the most important of . . . five dynamics'' in explaining team 
performance at Google. The other four ``dynamics'' were team-member 
dependability, structure and clarity of roles and goals, meaning 
(people saw work they were doing as personally important) and impact 
(people believed the work mattered and created change in the 
organization). \5\
---------------------------------------------------------------------------
    \5\ Duhigg, C. (2016) What Google learned in its quest to build the 
perfect team. The New York Times Magazine February 28, 2016.
---------------------------------------------------------------------------
    Cross-functional teams will be in tension with the pre-existing 
functional structure, especially at first. This is exactly why they 
should be created. A part of their job is to force the organization to 
make changes in how things get done. This can work well for creating 
necessary changes, if the teams are supported from the top (with 
resources and support) and if they are framed as `learning teams' to 
help educate and shift the organization from its current to a new 
state.
    In my experience, organizations that try to change the culture by 
focusing on the culture often come up short. Rather, to create a more 
collaborative culture, the key is to identify important work that 
requires collaboration to be accomplished. Assign strong individual 
contributors to a team with a clear and engaging directive, and give 
them support and resources. It is by doing the work in a new way that a 
new culture starts to take shape. In my view, shifting the work drives 
culture change, rather than the other way around.
    the impact of successful cross-boundary collaboration on modern 
                             organizations
    The results of successful cross-boundary collaboration can be truly 
remarkable. The dramatic rescue of 33 miners in Chile in 2010, trapped 
beneath 2000 feet of rock was one such example; the rescue involved 
collaboration across multiple areas of expertise, organizations and 
even industries, in which people had to work together to innovate on 
the fly through fast learning cycles. \6\ Reflecting on the details of 
the rescue, which I studied extensively, it becomes stunningly clear 
that a top-down, command-and-control approach would have failed. What 
was required, facing the unprecedented scale of the mining disaster, 
was cross-sector teaming--multiple temporary teams of people working 
separately on different types of problems, and coordinating across 
these teams, as needed. It also required remarkably effective 
leadership--at the level of individual teams and at the very top of the 
rescue organization.
---------------------------------------------------------------------------
    \6\ Edmondson, A.C. (2012). Teaming: How organizations learn, 
innovate and compete in the knowledge economy. San Francisco: Jossey-
Bass.
---------------------------------------------------------------------------
    In the less dramatic context of business, leading companies like 
Cisco and Google view cross-disciplinary teams as critical to their 
success--to shorten project lifecycles and ensure that multiple 
perspectives are used to identify and serve client needs. In the public 
sector, breaking down silos can unleash improvements. A recent study 
conducted by Deloitte and the Harvard Kennedy School showed how public 
officials can mobilize people from different groups to work across 
boundaries to create value. \7\
---------------------------------------------------------------------------
    \7\ Eggers, W.D. and O'Leary, J. The power of cross-boundary 
collaboration. Accessed June 26, 2016 from http://www.governing.com/
columns/mgmt-insights/power-cross-boundary-collaboration.html
---------------------------------------------------------------------------
    Finally, a growing literature documents collaborations across 
companies and sectors that produce innovations and results that would 
be impossible for any organization to accomplish alone. \8\
---------------------------------------------------------------------------
    \8\ 8 A.C. Edmondson (2016) ``Wicked Problem Solvers: Lessons from 
Successful Cross-industry Teams.'' Harvard Business Review 94, no. 6 
(June): 53-59.
---------------------------------------------------------------------------
    The remarkable business turnaround at Nissan in the early 2000s--
from the brink of bankruptcy to renewed market leadership--is one of 
the best examples I know of how a small number of focused cross-
functional teams, working with clear direction from the top, can 
accomplish remarkable business results. \9\ CEO Carlos Ghosn formed 9 
crossfunctional teams early in his tenure; each was asked to address a 
specific organizational or business problem. The teams were composed of 
middle managers and experts from different functions. Each team was 
headed by a team leader and had direct access to specific senior 
executives for direction, feedback, resources, and more. Each was 
challenged to come up with a specific proposal supported by a clearly 
demonstrable financial impact; they worked tirelessly for months, and 
succeeded beyond anyone's expectation (except perhaps those of the 
company's confident CEO!). Team members reported the experience as 
exhausting but rewarding and meaningful. Within two years, the 
organization was on its way to recovery, with impressive market and 
financial success.
---------------------------------------------------------------------------
    \9\ M. Yoshino, and M. Egawa, (2006). Nissan Motor Co. 2002. 
Boston. Harvard Business School Case # 9-303-042.
---------------------------------------------------------------------------
                comments on the elements of section 941.
    The recommendations of section 941 strike me as highly reasonable 
and arguably overdue. The following objectives in section 941 are as 
particularly salient and admirable; they are consistent with current 
best practice and theory on the use of crossfunctional teams.

      To enable the Department to integrate the expertise and 
capacities of the components of the Department for effective and 
efficient achievement of the missions of the Department. (p. 694 
bottom)
      To enable the Department to focus on critical missions 
that span multiple functional issues, to frame competing and 
alternative courses of action, and to make clear and effective 
strategic choices in a timely manner to achieve such missions . . . (p. 
695)
      To enable the Department to anticipate, adapt, and 
innovate rapidly to changes in the threats facing the United States, 
and to exploit the opportunities to counter such threats offered by 
technological and organizational advances (p. 695)

    It is reassuring that the section recognizes the following 
impediments:

      Sequential, hierarchical planning and decision-making 
processes oriented around functional bureaucratic structures that are 
excessively parochial, duplicative, resistant to integration, and 
result in unclear, consensus-based outcomes that often constrain the 
ability of the Department to achieve core missions effectively and 
efficiently
      Layering of management structures and processes that 
result in decisions being made by higher levels of management where the 
authority for cross-functional integration exists but detailed 
substantive expertise is often lacking or being reduced to lowest 
common denominator recommendations to senior leaders that suppress 
rather than resolve disputes across functional organizations.

    With awareness of these impediments, progress is far more likely, 
through leaders taking necessary precautions to plan and educate senior 
leaders and others.
    I believe this important recommendation (from solutions) provides 
essential guidance. The goal should not be to create more task forces 
or committees to discuss and advise leadership about organizational 
challenges but to create cross functional teams, advised and empowered 
by top leadership to make decisions.

      ``Mission teams are decision-making organizations rather 
than advisory bodies'' (p. 699)

    Great leaders in both business and government recognize the 
complexity and uncertainty in which their organizations must operate 
today. It is their task to bring their organizational structures and 
cultures along, so that they too can recognize and thrive in this new 
world. Teams are by no means a panacea. But when well-designed, well-
led, and motivated by the greater good, the results can be awe 
inspiring. I hope that this brief perspective from a management 
researcher adds something of value to the discussion.
    It is an honor for me to offer my insights in the service of this 
effort. Thank you.

    Chairman McCain. Thank you very much.
    Before we continue, there's one additional nomination to be 
added to the military nominations. If there's objection--
without objection, so ordered.
    [Information referred to on page 6.]
    General McChrystal, welcome back before the committee.

    STATEMENT OF GENERAL STANLEY A. McCHRYSTAL, USA (RET.), 
               MANAGING PARTNER, McCHRYSTAL GROUP

    General McChrystal. Thank you, sir. Chairman McCain, 
Ranking Member Reed, members of the committee, probably not 
surprisingly, I've slept very soundly for the last few years.
    [Laughter.]
    General McChrystal. But, I woke up this morning, about 3:00 
in the morning, bathed in sweat, and I sat up suddenly, and my 
wife, Andy, reached over, and she grabbed me, and she says, 
``What's wrong?'' I said, ``I'm having a nightmare. I think 
I've got to go testify in front of the Senate Armed Services 
Committee.''
    [Laughter.]
    General McChrystal. But, thanks for having me here today. I 
really appreciate the opportunity to discuss the potential 
value of cross-functional teams to the Department of Defense. I 
believe they offer great potential for the Department to cope 
effectively for what I think is a dramatically more complex 
operating environment that it currently faces, and it will face 
increasingly in the future.
    As background, my experiences on the Joint Staff and in 
both Afghanistan and Iraq led me to conclude that we uniformly 
move forward with the best of intentions and often develop a 
potentially successful strategy, but encounter structural, 
institutional, and cultural obstacles to achieving the 
collaboration and synergy necessary to prosecute those policies 
and strategies effectively. This is not a new problem. Robert 
Komer's 1972 narrative on Vietnam, entitled ``Bureaucracy Does 
Its Thing,'' argued that, ``Independent of the wisdom or folly 
of our strategy, America's inability to effectively execute 
largely preordained failure.'' I reread his words in 2009, when 
I was in Afghanistan, and it felt like he was writing from 
Kabul.
    It's not a lack of competence, courage, or commitment. 
We've honed a force of seasoned professionals, peerless in the 
mechanics of combat. But, Clausewitz reminded me that, at its 
heart, war is politics, and there's far more to achieving 
victory than tactical skill. We simply cannot forge the 
multiple components of our national power together into the 
kind of commitment--or teamwork needed.
    Cross-functional teams are not the panacea for all the 
challenges of national security, but they represent an 
opportunity for fundamental change that should not be ignored. 
My belief in the power of these cross-functional teams was 
strongly reinforced when, in 2003, I took command of the Joint 
Special Operations Command, probably the best special 
operations force ever fielded. On paper, we had everything we 
needed to succeed--quality people, generous resourcing, and 
aggressive, thoughtful strategies. In Iraq, we were losing. 
Designed to conduct carefully planned raids against targets 
that had been exhaustively studied, our force was almost 
elegant in its precision, carefully crafted to combat 
traditional target sets.
    But, 2003's al Qaeda in Iraq was fundamentally different 
from its namesake, Osama bin Laden's 1988 creation. Leveraging 
information technology to achieve a level of organic 
adaptability, they reflected characteristics, attributes, and 
capabilities never before seen in a terrorist organization. 
Against this constantly changing enemy, we found our insular 
collection of exquisitely honed skills unequal to the task. We 
were impressively capable for a war different from that which 
we found ourselves fighting. To win, we had to change.
    So, we changed the way we did business. Traditionally built 
around a culture of secrecy, we aggressively shared 
information, delegated authority to more junior commanders, 
invited liaisons from other departments and agencies into our 
force, and formed a range of cross-functional teams. Together, 
these efforts enabled us to harness all the resources of the 
enterprise in support of our strategy.
    But, it's important to make a small caveat. Much of the 
historical attention given to this evolution is placed on the 
procedural changes I just described. You'll often hear it said 
that we became a network to defeat a network. That's a half-
truth. It implies we threw away the hierarchy, which we did 
not. Many think there's a binary choice in today's world: be a 
stable, but slow, hierarchy or an agile, but less controllable, 
network. We actually became a hybrid of both models. We 
retained the stability of the hierarchy, but moved with the 
speed of a network, when needed. Cross-functional teams enabled 
that.
    The cross-functional teams that we built during this time 
accomplished this feat by lowering the cultural and 
institutional barriers that had hampered us during the early 
days of the war. Removing these barriers enabled those teams to 
push information, share critical assets, such as air support, 
and, most importantly, built trust. This trust led to a common 
purpose that has historically eluded larger hierarchical 
organizations. The combination of trust and common purpose 
permeated everything we did as an organization. Information and 
asset-sharing would not have been possible without the 
knowledge that partners' forces were working toward the same 
goal and committed to the same fight. Interagency partners 
would not have shared information and resources if they did not 
trust our operators and analysts, and also known that we were 
all after the same goal. Trust and common purpose were the 
foundation upon which we could experiment with new processes. 
The result was the evolution of an elite tactical command into 
a networked, adaptable team of teams capable of strategic 
effect.
    Since leaving the military, I've worked with industry 
leaders, many of whom have found themselves in complex 
environments that have silently overwhelmed their traditional 
ways of operating. Twentieth-century business practices, 
famously articulated by Frederick Winslow Taylor in ``The 
Principles of Scientific Management'' that relied on process 
optimization and workforce efficiency, are simply no longer 
effective. While Taylorism seems an antiquated relic of the 
Industrial Age, effects of this school of thinking have been 
surprisingly pervasive and insidious. While there have been 
some challenges to Taylorism and its precepts, the central 
belief that effective enterprise is a function of efficiency 
and the role of management is to provide directions on how best 
to advance this enterprise has been, until recently, relatively 
unchallenged. Quite frankly, Mr. Chairman, this approach has 
worked to varying degrees in a complicated world.
    But, the complication has given way to the complex. The 
environment we exist in today is radically different from that 
of the 20th century. Mr. Chairman, members of the committee, 
it's worth spending a bit of time on the significance of 
operating in a complex environment, because we've entered into 
an age and an environment for which we are dramatically under-
prepared.
    We're used to operating in an environment where we expect 
that our actions will have a predictable and consistent effect. 
We no longer live in that world. In today's complex ecosystem, 
events are driven by causes that are so numerous, so 
intertwined that they elude our traditional attempts for 
prediction and planning. Transformation is essential to 
survival.
    I've spent the last 5 years witnessing these kinds of 
transformations in the private sector, transformations akin to 
those that I saw with the Joint Special Operations Command. 
But, these transformations begin with a choice. Organizations 
that effectively adapt to complexity make the conscious 
decision to assess their business and workforce against four 
capabilities, and, in my opinion, define adaptable teams: 
trust, common purpose, shared consciousness, and empowered 
execution. Only when they make the choice to honestly assess 
themselves against these criteria can they set the foundation 
for structural, institutional, and cultural change.
    Before any procedural or structural effects can be taken, 
managers that have historically issued directives have to 
transform themselves into leaders that empower their workforce. 
No longer are they managers of efficiency; rather, they have to 
learn how to trust their employees, build trust among their 
employees, and enable their workforce, and set the conditions 
for their success. These efforts, when coupled with continued 
leadership and workforce training, result in an adaptable, 
resilient organization and business that has the ability to 
harness all the resources of the enterprise in support of a 
strategy. In essence, those that succeed in this transformation 
have invested in a movement away from a command structure to 
one defined by teams.
    We've silently entered into a world of complexity, but have 
mired ourselves in a legacy approach that is no longer 
effective in affecting desired change. Many societal 
institutions have not evolved to adapt to this evolution. The 
Department of Defense, in particular, has responded with ever-
increasing bureaucracy and procedures. I've seen, time and 
again, that additional policies and guidelines will not lead us 
to victory; rather, it's time to build the teams we need that 
can adapt to ever-increasing complexity. The willingness to 
implement these changes from senior leadership will have a--
will determine success from failure in the years ahead.
    Thank you.
    [The prepared statement of General McChrystal follows:]
       Prepared Statement by General (Retired) Stanley McChrystal
    Chairman McCain, Ranking Member Reed, Members of the Committee:
    Thank you for having me here today to discuss the potential value 
of the use of cross-functional teams to the Department of Defense. As a 
general rule, I believe strongly that they offer great potential for 
the Department to cope effectively with the dramatically more complex 
operating environment it faces--and will increasingly face in the 
future.
    As background, my experiences during two tours on the Joint Staff, 
and as Commander of the Joint Special Operations Command, and later 
NATO's International Security Assistance Force in Afghanistan, have led 
me to conclude that we uniformly move forward with the best of 
intentions, but often focus on the wrong thing. We fixate on finding 
optimal solutions to discrete problems, searching for the `right' 
policy or strategy to a given challenge, and then find ourselves unable 
to effectively execute it.
    I've concluded that identifying a compelling answer or clever 
strategy is easier than performing the actions necessary to implement 
it. The Department of Defense has bright and committed people who are 
dedicated to advancing American security interests and are 
intellectually capable of devising sensible and effective answers. But 
there are structural, institutional, and cultural obstacles to 
achieving the collaboration and synergy essential to prosecuting these 
policies and strategies effectively.
    Let me be clear: this is not a new problem. While in Afghanistan in 
2009 I re-read Robert W. Komer's 1972 searing narrative on Vietnam 
entitled ``Bureaucracy Does Its Thing'' in which he concludes that 
``whatever the wisdom of the various United States decisions to 
intervene in Vietnam, there is also much to be learned by the way we 
went about it . . . This does much to explain why there was such an 
immense disparity between the cumulatively massive effort mounted and 
the ambiguous results achieved. It also helps explain why such a gap 
emerged between policy and performance--between the guidelines laid 
down by the policymakers and what was actually done in the field.'' As 
I read his words in 2009, I felt as though Komer was reporting from 
Kabul.
    A conclusion that I draw from these and other historical examples 
is that often it is not the conflict that is unwinnable; or even the 
crafting of an effective strategy; rather, it is our inability to 
execute that prevents our victory.
    To be sure, we rarely struggle with the technical or tactical 
aspects of war. We have honed a force of seasoned professionals 
peerless in the mechanics of combat. But Clausewitz reminded us that, 
at its heart, war is politics, and there is far more to achieving 
victory than tactical competence.
    Today we are discussing the potential value of Cross Functional 
Teams and they are clearly not the panacea for all the challenges of 
national security--far from it. But they represent an opportunity for 
fundamental change that should not be ignored.
    My belief in the power of Cross Functional Teams was strongly 
reinforced when, in 2003, I took command of the Joint Special 
Operations Command--probably the best Special Operations Force ever 
fielded. On paper, we had everything we needed to succeed: quality 
people, generous resourcing, and aggressive, thoughtful strategies. Mr. 
Chairman, in Iraq we were losing.
    Designed to conduct carefully planned raids against targets that 
had been exhaustively studied, our force was almost elegant in its 
precision--carefully crafted to combat traditional target sets. But 
2003's al Qaeda in Iraq was fundamentally different from its namesake, 
Usama Bin Laden's 1988 creation. Leveraging information technology to 
achieve a level of organic adaptability, they reflected 
characteristics, attributes, and capabilities never before seen in a 
terrorist organization. Against this constantly changing enemy we found 
our insular collection of exquisitely honed skills unequal to the task. 
We were impressively capable for a war different from that which we 
found ourselves fighting.
    Iraq held up a mirror to our forces and we realized that we were 
incapable of achieving the necessary synergy at the required speed. Our 
elite forces, we discovered, would not be able to execute our strategy 
unless we fundamentally changed the way that we operated. Like most 
organizations, the special operations community was proud and 
courageous, but the product of legacy structures, processes, and 
culture. To win we had to change.
    We set about changing the way that we did business. Traditionally 
built around a culture of secrecy, we aggressively shared information 
with each other and with our interagency partners. Hierarchically 
structured, we delegated authority to more junior commanders and 
empowered them to take the necessary action to pursue the enemy. 
Historically separated from our interagency partners by an antiquated 
set of sclerotic bureaucratic processes, we invited liaisons from other 
Departments and Agencies and collocated them with our operators in an 
effort to overcome parochial infighting and increase common purpose.
    These efforts, when taken in tandem, enabled us to harness all of 
the resources of the enterprise in support of our strategy. We would 
spend years refining this approach but the ultimate result was a 
tapestry of partnerships and information sharing that would fundamental 
change the way that we executed the fight.
    But it is important to make a small caveat. Much of the historical 
attention given to this evolution is placed on the procedural changes I 
just described: you'll often hear it said that we became a network to 
defeat a network. That's a half truth. It implies that we threw away 
the hierarchy--which we didn't. Many think there's a binary choice in 
today's world--be a stable, but slow, hierarchy; or an agile, but less 
controllable, network. We actually became a hybrid of both models. We 
retained the stability of the hierarchy, but moved with the speed of a 
network when needed.
    The cross-functional teams that we built during this time 
accomplished this feat by lowering the cultural and institutional 
barriers that had hampered us during the earlier days of the war. 
Removing these barriers enabled these teams to push information, share 
critical assets such as air support, and most importantly--build trust. 
This trust led to a common purpose that has historically eluded large 
hierarchical organizations.
    The combination of trust and common purpose permeated everything we 
did as an organization. Information and asset sharing would not have 
been possible without the knowledge that partner forces were working 
towards the same goal and committed to the same fight. Interagency 
partners would not have shared information and resources if they did 
not trust our operators and analysts and also known that we were all 
after the same goal. Trust and common purpose were the foundation upon 
which we could experiment with new processes. The result was the 
evolution of an elite tactical command into a networked, adaptable team 
of teams capable of strategic effect.
    After I left the military, industry leaders wanted to learn how 
they too could create and use cross-functional teams. Many industry 
leaders found themselves in complex environments that had silently 
overwhelmed their traditional ways of operating. 20th century business 
practices that relied on process optimization and workforce efficiency 
were no longer effective. Much like my experience in Iraq, today's 
complex world held a mirror to industry leaders. They too realized that 
they were structurally incapable of operating at the speed required for 
success.
    Much as we had relied on precision military strikes, many industry 
leaders had come to rely on antiquated notions of reductionist 
thinking. My team and I found that businesses were also subject to 
their environments--and the 20th century was squarely defined by the 
precepts of scientific management. This school of thought, epitomized 
by Frederick Winslow Taylor, emphasizes the need to optimize business 
processes by identifying a singular best practice that maximized 
efficiency and would be a requirement for all workers. Under this 
paradigm, creativity, flexibility, and the use of historical artisan 
practices by individual laborers were be replaced by systematically 
studied standards.
    Beyond transforming industry processes, Taylor also changed the 
relationship between management and workers. In The Principles of 
Scientific Management, Taylor leaves little ambiguity regarding his 
thoughts on the relationship between the two when he wrote, ``[A 
laborer] shall be so stupid and so phlegmatic that he more nearly 
resembles in his mental make-up the ox than any other type . . . he 
must consequently be trained by a man more intelligent that himself 
into the habit of working in accordance with the laws of this science 
before he can be successful.''
    When said like this, Taylorism seems antiquated and a relic of the 
Industrial Age. But the effects of this school of thinking have been 
surprisingly pervasive and insidious. While there have been some 
challenges to Taylorism and its precepts, the central belief that 
effective enterprise is a function of efficiency and the role of 
management is to provide directives on how best to advance this 
enterprise has been, until recently, relatively unchallenged. Quite 
frankly, Mr. Chairman, this approach has worked to varying degrees in a 
complicated world. But the complicated has given way to the complex. 
The environment we exist in today is radically different than that of 
the 20th century.
    Mr. Chairman, Members of the Committee, it is worth spending a bit 
more time on the significance of operating in a complex environment 
because we have entered into an age and an environment for which we are 
dramatically underprepared. It is easy to focus on discrete problems or 
issues but what we are encountering as a society is much more 
fundamental.
    We are used to operating in an environment where we expect that our 
actions will have a predictable and consistent effect. That is not the 
world we live in any longer. In a complex system, events are driven by 
causes that are so numerous, so intertwined, that they elude our 
traditional attempts for prediction and planning.
    Many businesses are still structured for 20th century problems. I 
come across leadership teams that operate using antiquated management 
practices, trying in vain to master a complicated environment that has 
silently given way to complexity. Despite their best efforts, they have 
found that they cannot scale and adapt at the speed required to stay 
competitive. Many have learned what I concluded in Iraq: doing the same 
thing, but harder and with more intensity, will not lead to victory.
    As the Special Operations community saw in Iraq, complexity cannot 
be confronted using antiquated methods. But redefining structures, 
processes, and cultures can enable an organization to work as a 
network. Building trust and common purpose across a team will ensure 
that the foundation is in place to have all resources leveraged towards 
the same problem--and any other problems that may arise out of this 
newly complex environment.
    I have spent the last five years witnessing these kinds of 
transformations in the private sector--transformations akin to those 
that I saw with the Joint Special Operations Command. But these 
transformations begin with a choice. Organizations that effectively 
adapt to complexity make the conscious decision to assess their 
business and workforce against four capabilities that, in my opinion, 
define adaptable teams: trust, common purpose, shared consciousness, 
and empowered execution.
    Only when they make the choice to honestly assess themselves 
against these criteria can they set the foundation for structural, 
institutional, and cultural change.
    Before any procedural or structural efforts can be taken, managers 
that have historically issued directives have to transform themselves 
into leaders that empower their workforce. No longer are they managers 
of efficiency; rather, they have to learn how to trust their employees; 
build trust amongst their employees; and enable their workforce and set 
the conditions for their success.
    I've come to believe these managers will have learned how to lead 
like gardeners by tending to their workforce, providing the conditions 
for success, and allowing teams to grow to meet their business 
challenges. They know when to get involved and, just as importantly, 
they know when to step back and give their teams space and freedom to 
operate.
    Once leaders have critically assessed themselves, they need to 
assess the organization. Leadership needs to understand the level of 
trust within the organization because all future cooperation and 
collaboration stems from individual and organizational trust. They also 
need to honestly assess whether employees and business units are 
working towards a common purpose, or whether legacy compensation 
structure incentivize individuals and business units to watch out for 
themselves. Executive teams should know whether teams have the 
requisite information to accomplish their goals, and whether these 
teams are empowered to act on timely and sensitive information.
    These foundational efforts enable companies to create the processes 
and structure that link strategy to execution. Much as the efforts of 
the Special Operations community led to the organic creation of cross-
functional teams, building trust and common purpose throughout 
businesses allows them to operate as networks. Trust enables teams and 
individuals to honestly and constructively assess their goals, 
priorities, and efforts against those of the rest of the organization. 
Common purpose, built through leadership, education, and time, will 
align an organization towards an overall strategy.
    I have seen businesses create cross-functional teams using many of 
the same tools that the Joint Special Operations Command used in Iraq 
and Afghanistan. Businesses create clear plans that outline vision, 
mission, and guiding principles. Once they set the true north goals for 
the organization, executives encourage their business units to create 
supporting objectives, strategies, and initiatives. Following these 
efforts to strategically align the organization, leadership teams 
conduct an analysis of how to empower the workforce by determining 
decision-making roles and delegating authority to the lowest possible 
level.
    Business leaders then bring this construct to life through the 
establishment of information-sharing forums, very much like we did in 
the Special Operations community through the daily Operations and 
Intelligence briefs. These forums serve as both the lifeblood and 
connective tissue necessary to create a networked, adaptable 
organization. Executive teams have the opportunity to provide overall 
guidance to the organization while business units can provide feedback, 
best practices, and critical information to enable timely action.
    Much as Special Operations Forces partnered with interagency 
counterparts to quickly identify and act upon opportunities, the 
aggressive flow of information throughout the organization both enables 
the identification of business opportunities that may have otherwise 
been missed as well as the quick creation of cross-functional teams 
across business units to take advantage of these opportunities.
    In a previous life, I saw leads from intelligence community 
partners trigger a series of raids against a terrorist or insurgent 
network. Now I see sales teams providing insight to developers on 
customer requirements; financial advisors from different divisions 
collaborating on how best to service an important client; and insular 
technical researchers collaborating with one another on which tools can 
best advance their collective work.
    What is equally important is what I didn't see. During my 
leadership of the Joint Special Operations Command, I consciously took 
myself out of tactical-level decisions. This enabled my units to 
quickly pursue opportunities that my involvement would have otherwise 
delayed. Similarly, I see business executives similarly taking 
themselves out of lower-level business operations. They are allowing 
their teams to react quickly to fleeting opportunities. The rapid 
pursuit of these transient openings allows an organization to face 
complexity by mobilizing rapid responses based upon relevant and timely 
information--not the predilections of an executive team whose position 
is based on increasingly obsolete methods of planning.
    These efforts--when coupled with continued leadership and workforce 
training--result in an adaptable, resilient organization or business 
that has the ability to harness all of the resources of the enterprise 
in support of that strategy. In essence, those that succeed in this 
transformation have invested in a movement away from a command 
structure to that defined by teams.
    My experience in the military and advising industry has taught me 
that we can take the most brilliant people in the world, put them up 
against a problem, and they will fail if the structural, cultural, and 
institutional conditions do not support effective execution. I believe 
this is the case with the Department of Defense.
    We have silently entered in a world of complexity but have mired 
ourselves in a legacy approach that is no longer effective in effecting 
desired change. Many societal institutions have not evolved to adapt to 
this evolution. The Department of Defense in particular has responded 
with ever-increasing bureaucracy and procedures. I've seen time and 
time again that additional policies and guidelines will not lead us to 
victory. Rather, it is time to build the team we need that can adapt to 
ever increasing complexity. The willingness to implement these changes 
from senior leadership, however, will determine success from failure in 
the year ahead.
    It has been a great pleasure and honor for me to offer my lessons 
and experiences in the service of this effort.
    Thank you.

    Chairman McCain. A very strong and very informative 
statement, General, based on many years of experience, and we 
thank you.
    Mr. Locher, for the benefit of my colleagues, once served 
as staff director of this committee and was one of the key 
persons in the framing and passage of Goldwater-Nichols. He and 
I were together in the Coolidge administration.
    [Laughter.]
    Chairman McCain. Go ahead. Welcome back, Mr. Locher.

   STATEMENT OF HONORABLE JAMES R. LOCHER III, DISTINGUISHED 
       SENIOR FELLOW, JOINT SPECIAL OPERATIONS UNIVERSITY

    Mr. Locher. Thank you, Mr. Chairman. I'm delighted to be 
here for this important hearing.
    Mr. Chairman, I commend you and Senator Reed for your bold 
leadership on section 941. If enacted, this provision would 
initiate a long overdue revolution in defense organization. As 
with all major change efforts, legislative approval and 
Pentagon implementation will not be easy.
    Many similarities exist between the Goldwater-Nichols Act 
and section 941. In both cases, decades of evidence showed the 
need for fundamental organizational changes. Today, as in 1986, 
the Pentagon bureaucracy is in denial about its organizational 
defects, and is actively resisting congressional efforts. Just 
like in 1986, this committee needs to overrule this predictable 
initial response from the defense bureaucracy, work directly 
with Pentagon top leaders, who should be able to see the merits 
of this provision, press ahead with section 941, and revitalize 
the Pentagon.
    The committee's 13 hearings last fall revealed many 
organizational problems hampering Pentagon performance. Section 
941 addresses 4 of these problems:
    First, the rigid functional structure of the Pentagon which 
hampers collaboration, limits a focus on missions and results, 
demands more people and more management levels, resists new 
ideas, and sub-optimizes decisions. The Pentagon's nearly 
exclusive reliance on functional structure denies an ability to 
handle the complexity and pace of today's defense challenges.
    The second problem, Mr. Chairman, involves processes, such 
as the planning, programming, budget, and execution system. 
Pentagon processes are sequential, stove-piped, consensus-
driven, and Industrial Age. The Pentagon's bureaucratic culture 
and its functional orientation have shaped the design of these 
ineffective
processes.
    The third problem centers on weak civilian leadership 
traditions. The Office of the Secretary of Defense has given 
insufficient attention to leadership tasks and leadership 
development. The emphasis has been on technical and functional 
skills, not leadership skills.
    The fourth problem arises from the Pentagon's culture, 
which is too rule-oriented, bureaucratic, risk-averse in 
decisionmaking, and competitive among components. Although the 
Pentagon's culture is typical of most public sector 
organizations, it is misaligned with what is required for 
effective performance in today's complex, fast-changing 
security environment.
    Some of the organizational problems were identified at the 
time of the Goldwater-Nichols Act, quite a while ago. The 
Senate Armed Services Committee staff study observed, and I 
quote, ``Lost in the functional diffusion of the current 
Department of Defense organization is a focus on the central 
strategic objectives and missions of the Department of 
Defense.'' There have been efforts between Goldwater-Nichols 
and now to create cross-functional teams in the Department of 
Defense. Secretary William Perry tried so in 1995, and Deputy 
Secretary of Defense Gordon England, in 2006, sought to create 
these cross-functional teams, but did not succeed.
    In his testimony before the committee and his recent book, 
``A Passion for Leadership,'' Secretary Robert Gates registered 
his frustration with the bureaucratic hierarchy, its lack of 
lateral communications, and its consensus decisionmaking. Gates 
observed that the only way he could get things done was to 
create special multidisciplinary task forces equivalent to 
cross-functional teams. He related, and I quote, ``In every 
senior position I held, I made extensive use of task forces to 
develop options, recommendations, and specific plans for 
implementation. I relied on such ad hoc groups to effect change 
instead of using existing bureaucratic structures, because 
asking the regular bureaucratic hierarchy almost never provides 
bold options or recommendations that do more than nibble at the 
status quo.''
    Secretary Gates used crosscutting task forces, and I quote, 
``because so many different elements of the Pentagon were 
involved, and because they were,'' in his words, ``immensely 
useful, indeed crucial.'' Significantly, in his testimony last 
October, Secretary Gates concluded that periodic intervention 
by task forces with the intense personal involvement of the 
Secretary was not, to use his word, ``sustainable.'' He 
expressed regret that an institutionalized solution to this 
problem was not found before he departed the Pentagon.
    Mr. Chairman, section 941 provides the institutional fix 
that Secretary Gates sought. Four of the five major elements of 
section 941 are tightly linked to the Pentagon organizational 
problems I described. The other, and the one that appears first 
in section 941, is--requires an organizational strategy, an 
overarching blueprint to guide the four other elements and all 
other required organizational changes.
    The second element of section 941 would require the 
Secretary of Defense to establish cross-functional teams to 
manage major missions and other priority outputs that are 
intrinsically cross-functional. These mission teams must be the 
centerpiece of any plan for improving Pentagon performance.
    The third element of section 941 would require actions to 
begin to shape an organizational culture that is collaborative, 
team-oriented, results-oriented, and innovative. Culture is so 
important and difficult to change, it requires a persistent 
leadership emphasis and proper incentives for the rank-and-
file.
    The fourth element would prescribe training and personnel 
incentives to support these new approaches. Among its 
prescriptions, this element would require completion of a 
course of instruction in leadership, modern organizational 
practice, collaboration, and functioning of mission teams for 
Senate-confirmed officials in the Department of Defense.
    The fifth element would require the Secretary of Defense to 
take appropriate action 1 year after his or her appointment to 
simplify OSD's [Office of the Secretary of Defense] structure 
and processes. Once it is clearly established that empowered 
mission teams will be responsible for cross-functional work 
under the close supervision of the Department's top leadership, 
it should be much easier to identify unnecessary and 
duplicative organizational structures and ineffective 
crosscutting teams.
    As I mentioned, Mr. Chairman, the Pentagon has not yet 
endorsed the opportunity afforded by section 941. To date, the 
administration alleges that this provision is overly 
prescriptive and would undermine the authority of the 
Secretary, add bureaucracy, and confuse lines of 
responsibilities. These concerns are entirely misplaced and 
suggest a lack of understanding of collaboration and teaming 
concepts or a lack of understanding of the intent of section 
941. If section 941's prescriptions were faithfully 
implemented, they would empower the Secretary, streamline 
bureaucracy, and clarify responsibility for cross-functional 
integration.
    Organizations cannot normally reform themselves. The 
Pentagon has repeatedly demonstrated its inability to undertake 
organizational change, even when evidence of the need for 
change is compelling. As Secretary Gates and other Pentagon 
leaders discovered, they could occasionally override 
bureaucratic norms, but they could not reform the institution 
for lasting improvements in performance.
    Mr. Chairman, given the Pentagon's longstanding inability 
to correct its organizational defects, Congress would be fully 
justified, even obligated, just as it was in the Goldwater-
Nichols Act, to use its constitutional powers to make rules for 
the government in regulation of the land and naval forces. 
Congress has a right to demand that the Department of Defense 
adopt 21st century organizational practices, that it have an 
organizational strategy, that it employ cross-functional teams 
for cross-functional missions and work, that it have an 
organizational culture aligned with operating requirements, 
that it provide proper training and incentives, and that it 
employ simplified structure and processes.
    Section 941 contains the right ideas to launch the Pentagon 
on the use of cross-boundary collaboration. It provides better 
and faster ways of integrating expertise and making decisions 
that are imperative in today's complex, fast-paced security 
environment. It also finds the right balance between 
congressional mandate and freedom of action for the Secretary 
of Defense.
    In conclusion, Mr. Chairman, I congratulate the committee 
on this historic initiative. This is precisely the sort of 
well-researched, well-grounded, empirically justified 
intervention by Congress that is needed from time to time. In 
due time, it will be widely admired for its impact.
    The transformational changes envisioned in section 941 
would require inspired, committed leadership by senior Pentagon 
officials, and vigorous oversight by Congress. However, once 
instituted, pursued, and perfected, the use of cross-functional 
teams can have a positive impact every bit as great as the 
original Goldwater-Nichols legislation.
    To take this historic step, all the committee has to do is 
stay undeterred on its current course. For the benefit of those 
we send in harm's way and the entire Nation, I encourage you to 
do so.
    Thank you, Mr. Chairman and Senator Reed and all the 
members of the committee, for your visionary leadership on this 
critical issue.
    [The prepared statement of Mr. Locher follows:]

               Prepared Statement by James R. Locher III
    I commend Chairman McCain and Ranking Member Reed for their bold 
leadership on section 941 in the Senate's version of this year's 
National Defense Authorization Act. If enacted, this provision would 
initiate a long overdue revolution in defense organization. As with all 
major change efforts, legislative approval and Pentagon implementation 
of section 941 will not be easy, but if successful, resulting 
improvements in performance would be transformational.
    Many similarities exist between the Goldwater-Nichols Act and 
section 941. In both case, decades of evidence showed the need for 
fundamental organizational changes. In 1986, the Pentagon bureaucracy 
was in denial about its organizational defects and actively resisted 
congressional efforts. Senior Pentagon officials blasted the Senate 
Armed Services Committee's draft of the Goldwater-Nichols Act. The 
Secretary of the Navy said its proposed strengthening of combatant 
commanders ``would make hash of our defense structure.'' The Commandant 
of the Marine Corps said, ``I know of no document which has concerned 
me more in my 36 years of uniformed service to my country.'' The Chief 
of Naval Operations declared that the bill ``was terribly flawed and 
certainly not in the best interests of national security.'' The Army 
and Air Force Secretaries and Chiefs also criticized the committee's 
draft. Even after the Senate approved the Goldwater-Nichols Act by a 
vote of 95-0, Pentagon hardliners were urging a presidential veto. 
Since then, however, history has provided overwhelming evidence of the 
wisdom of Congress in overruling Pentagon objections and mandating 
sweeping defense reforms.
    This scenario is playing out again this year. The Senate Armed 
Services Committee has identified major organizational problems and has 
proposed in section 941 farsighted solutions. The issue is largely the 
same as in 1986, except that the proximate problem is not the inability 
to orchestrate cross-service collaboration at the strategic and 
operational levels. Instead, the problem is the inability to 
orchestrate cross-functional collaboration among the Pentagon's many 
bodies of functional expertise. The Pentagon's inability to manage 
cross-functional security problems quickly and authoritatively results 
in poor direction and support to our deployed military forces around 
the globe. This committee is intent on giving the Secretary of Defense 
the tools to remedy this deficiency.
    In response, the Pentagon has strongly objected to the committee's 
proposed provision, alleging it ``would undermine the Secretary of 
Defense's ability to exercise authority, direction, and control over 
the Department; blur lines of responsibility and control over 
resources; require the issuance of numerous unnecessary and burdensome 
policies, directives, and reports.'' Just like 1986, the committee 
needs to overrule this predictable initial response from the defense 
bureaucracy, work directly with the Pentagon's top leaders who should 
be able to see the merits of the provision, press ahead with section 
941, and renew and revitalize the Pentagon's headquarters.
                organizational problems and their causes
    Before discussing organizational problems in the Department of 
Defense (DOD), I would like to offer two important observations. First, 
arguing for dramatic changes in Pentagon organization does not 
represent a criticism of defense civilian or military personnel. They 
are working extremely hard and with unyielding commitment. 
Unfortunately, much of their hard work is wasted in an outdated system. 
Measures to enable Pentagon staff to work smarter, not harder, need to 
be put in place.
    Second, for all of its deficiencies, the Department of Defense is 
widely seen as the most capable Federal department. This is in large 
part due to the quality and drive of its workforce, and a military 
culture that values detailed planning processes to cover ``what if'' 
and ``what next'' contingencies. But because the Pentagon confronts the 
government's most dangerous and diverse challenges, being better than 
the rest of the government is not a useful yardstick for measuring 
performance. Instead we must ask whether the department is capable of 
effectively accomplishing the full range of its missions. The last 
fifteen years offer considerable evidence that it is not.
    The committee's thirteen hearings last fall revealed critical 
organizational problems hampering Pentagon performance. Testimony 
addressed many symptoms of these problems:

        A steady growth in the number of personnel.
        Excessive number of management layers and senior 
personnel.
        Poor information sharing.
        Processes are slow, cumbersome, and frequently over-
centralized.
        Inability to make clear strategic choices--Decisions 
watered down to achieve consensus. Consensus products avoid and obscure 
difficult trade-offs, clear alternatives, and associated risks.
        In the absence of a guiding strategy, the budget drives 
strategy, rather than vice versa.
        Slow rates of innovation--The Pentagon has repeatedly 
shown it is not a learning organization.
        The Pentagon cannot integrate its functional activities 
(e.g., manpower, acquisition, policy) along mission or outcome lines--
There is a weak mission orientation. The focus is on material inputs, 
not mission outputs. Limited cross-boundary collaboration has resulted 
in duplicative efforts and ``shadow organizations'' (parallel 
structures created because of distrust of other offices sharing 
information or being responsive). Integration can only be performed at 
the level of the Secretary and Deputy Secretary of Defense, and then 
only infrequently and often late to need.
        The Office of the Secretary of Defense (OSD) is 
increasingly unmanageable, unwieldy, and underachieving--Accountability 
is unclear, and decision rights are uncertain, especially for cross-
functional issues.
        Secretaries and Deputy Secretaries of Defense feel 
poorly supported by the OSD staff.
        Resistance to change, driven largely by denial about 
altered circumstances.
        Consequently, and of greatest concern, the inability to 
anticipate and prepare well to meet future challenges.

    These symptoms evidence four underlying problems. First, the rigid 
functional structure of the Pentagon hampers collaboration, limits a 
focus on missions and results, demands more people and more management 
levels, resists new ideas, and sub-optimizes decisions. Each 
headquarters staff in the Pentagon--OSD, Joint Staff, service 
secretariats, and military headquarters staffs--are organized 
exclusively along functional lines, that is along the major areas of 
input activity, such as logistics, intelligence, and health affairs. 
Functional expertise is absolutely essential; it provides the building 
blocks for more advanced organizational approaches. Thirty years ago, 
businesses were also organized exclusively by functional components, 
what are more popularly called silos or stovepipes because of their 
rigid boundaries and non-collaborative cultures. Since then, 
corporations moved away from an exclusive dependence on functional 
structure because it was ill suited to the complexity and pace of the 
changing business environment. Instead, they now emphasize means for 
cross-boundary collaboration and teaming.
    Unfortunately, the Department of Defense is still stuck with its 
antiquated structure. It is now, and has been for some time, 
experiencing the same performance shortfalls that businesses suffered. 
The Pentagon's outmoded vertical silos are unable to handle the 
complexity and pace of today's defense challenges. In futile efforts to 
make this functional structure work, the Pentagon has added personnel, 
management layers, and numerous ineffective cross-cutting committees. 
The additional people, layers, and unproductive committees have 
steadily increased the complexity of OSD's work.
    A second fundamental problem involves processes, such as the 
Planning, Programming, Budget, and Execution System. Pentagon processes 
are sequential, stove-piped, consensus-driven, and industrial age. The 
Pentagon's bureaucratic culture and its functional orientation have 
shaped the design of these processes. In addition, because leaders put 
a premium on coordination and consensus, processes are slow, and their 
products are watered down. The resulting outputs are more acceptable to 
the larger bureaucracy but at the expense of clarity and utility to 
senior leaders.
    A third problem centers on weak civilian leadership traditions. OSD 
has given insufficient attention to leadership tasks and leadership 
development. The emphasis has been on technical and functional skills, 
not leadership skills. Many OSD officials in leadership positions are 
superb individual achievers (e.g., lawyers, diplomats, analysts) who 
have never led and been held accountable for larger organizational 
effectiveness. They are incredibly hard working and dedicated, but they 
have not been prepared for their demanding leadership responsibilities. 
This problem is also exacerbated by promotion criteria that favor 
technical and bureaucratic skills and by the failure to make leadership 
skills a priority in hiring decisions.
    The fourth problem arises from the Pentagon's culture, which is too 
rule-oriented, bureaucratic, risk adverse in decision-making, and 
competitive among components. Although the Pentagon's culture is 
typical of most public-sector organizations, it is misaligned with what 
is required for effective performance in today's complex, fast-changing 
security environment. Culture--a below-the-surface but important 
element of organizational effectiveness--encompasses vision, values, 
norms, assumptions, beliefs, and habits and serves as the backbone of 
every organization. Of the importance of culture to organizational 
performance, Louis V. Gerstner Jr., former IBM Chairman and CEO, said, 
``I came to see, in my time at IBM, that culture isn't just one aspect 
of the game--it is the game.'' In noting ``Culture eats strategy for 
breakfast,'' management guru Peter F. Drucker was observing that even 
an excellent strategy would not succeed if the organization's culture 
does not support it.
    Among many causes of the Pentagon's cultural woes, foremost is a 
lack of shared values; it does not have agreement on vision, missions, 
or principles. Organizational and individual incentives and management 
styles and actions have reinforced the current culture. Excessive 
criticism of ``failures,'' especially by Congress, has served to 
inhibit justified risk taking. Assumptions shaping Pentagon staff 
behaviors have never been explicitly examined. This must be a starting 
point for productive changes in culture. It should be noted that 
Pentagon culture is long-standing and entrenched and will not be easily 
changed. A determined and sustained effort will be required.
                     long history of these problems
    Some of these four organizational problems were identified many 
years ago, and in fact understood at the time of the Goldwater-Nichols 
Act. In the mid-1980s, the Senate Armed Services Committee (where I was 
then working) worried about the lack of mission integration in the 
Pentagon's headquarters. A committee staff study observed, ``Lost in 
the functional diffusion of the current DOD organization is a focus on 
the central strategic objectives and missions of DOD.'' The committee 
found much truth in an observation made by Drucker in 1974:

        The functional principle [of organizational design] . . . has 
        great clarity and high economy, and it makes it easy to 
        understand one's own task. But even in small business it tends 
        to direct vision away from results and toward efforts, to 
        obscure the organization's goals, and to sub-optimize 
        decisions. It has high stability but little adaptability. It 
        perpetuates and develops technical and functional skills, that 
        is, middle managers, but it resists new ideas and inhibits top-
        management development and vision.

    To create a mission focus, the committee considered three options: 
mission-oriented under secretaries, mission-oriented assistant 
secretaries, and a mission-functional matrix organization. 
Unfortunately, the committee was unable to arrive at a viable solution 
to the lack of mission integration. Advanced organizational ideas, such 
as cross-functional teams, were not then known.
    Toyota was the first corporation to decisively tackle the problems 
and inefficiencies of a functional structure. It did so in the mid-
1980s, just as Goldwater-Nichols was being enacted. To design an 
automobile, Toyota augmented its functional structure by creating an 
empowered team of experts from each functional area. When this cross-
functional team produced a superior design with 30 percent of the 
effort, the age of cross-functional teams was born. Because cross-
functional teams provided such a competitive advantage, their use 
spread quickly in big business worldwide. Effectively employing cross-
functional teams is not easily done. There are many challenges. Yet 
today, more than 50 percent of the work and most important work in big 
businesses are done in cross-functional teams that operate at all 
levels, from field operations to production lines to corporate 
headquarters.
    In 1989, President George H.W. Bush appointed me to the position of 
Assistant Secretary of Defense for Special Operations and Low-Intensity 
Conflict ASD (SO/LIC). My experiences as ASD (SO/LIC) reinforced the 
Senate Armed Services Committee's observation about the lack of mission 
integration. Because I had worked in OSD for ten years beginning in 
1968, I had previously experienced the intense competition among the 
Pentagon's functional silos. A report of the Blue Ribbon Defense Panel 
in 1970 captured this ongoing organizational characteristic well. It 
said, ``Many of the difficulties result from the structure of the 
Department of Defense itself, which almost inevitably leads people to 
`adversary' relationships rather than toward cooperation in the 
interests of the department--and the nation--as a whole.'' This great 
insight is as true today as in 1970.
    In the Cohen-Nunn amendment, the Senate Armed Services Committee 
structured ASD (SO/LIC) to be a mission-oriented official. It assigned 
the assistant secretary the supervision of two mission areas--special 
operations and low-intensity conflict--including policy and resources. 
This mission responsibility brought my office into conflict with the 
OSD functional silos. They guarded their turf quite zealously. With few 
exceptions, efforts to collaborate with them were futile. Every issue 
and initiative resulted in exhausting, time-consuming, bureaucratic 
warfare. OSD was rampant with adversarial relationships, leading to a 
popular description of the office as a collection of feuding fiefdoms. 
ASD (SO/LIC) is confronting the same bureaucratic problems today.
    The problems of functional silos did not go unnoticed in the 
Pentagon. In 1995, Secretary of Defense Bill Perry directed the use of 
Integrated Product Teams (cross-functional teams by another name) in 
defense acquisition. Perry argued that DOD ``must move away from a 
pattern of hierarchical decision-making to a process where decisions 
are made across organizational structures by integrated product teams. 
It means we are breaking down institutional barriers.'' Unfortunately, 
Perry's mandate for multidisciplinary teamwork bore little fruit. It 
contained a fatal flaw: It permitted the heads of functional silos to 
carefully control their Integrated Product Team members. Moreover, it 
was narrowly limited to acquisition issues.
    In 1997, several colleagues and I worked closely with Deputy 
Secretary of Defense John White on a study of OSD. As in the Senate 
Armed Services Committee's Staff Study, we found functional 
differentiation immediately below the Secretary and Deputy Secretary 
preventing collaboration on broader issues. But in this instance, we 
saw the crippling consequences firsthand. The Deputy Secretary was the 
first point of integration for missions and other priority outputs. The 
number, scope, and complexity of issues made this an impossible task. 
The Secretary and Deputy Secretary could only intervene on a small 
number of issues, served up by the bureaucracy as it laboriously 
churned through the endless compromises involved in various processes. 
My study colleagues and I found ourselves in complete agreement with a 
1980 study of OSD by William K. Brehm, which observed, ``Management 
activities are also strongly vertical and compartmentalized, with 
little horizontal integration and teamwork.'' In our own report, we 
noted:

        The Secretary, Deputy Secretary, and their immediate assistants 
        too often find the support provided by OSD--despite staff 
        dedication and hard work--inadequate to the needs of the two 
        leaders. Criticisms of staff support and advice center on the 
        narrowness of perspective, lack of integrated multi-functional 
        advice, and excessive functional parochialism. OSD leaders 
        often feel that few on the OSD staff share their perspective 
        and can provide comprehensive advice on broad, complex issues.

    In 2005 to 2006, Deputy Secretary Gordon England favored the 
creation of cross-functional teams for major missions. He had reached 
this conclusion as a result of organizational performance studies in 
support of the 2006 Quadrennial Defense Review (QDR). Research for 
these studies revealed that Joint Staff personnel participated in more 
than 860 cross-boundary groups, but only a handful performed well the 
small task of sharing information, let alone making decisions. The 2006 
QDR report promised transformation represented by, among other things, 
``a shift from stove-piped vertical structures to more transparent and 
horizontally-integrated structures,'' but it failed to deliver this 
result. The department's leadership was unable to overcome the strong 
parochial opposition of the heads of the functional silos, and an 
effort to create meaningful cross-functional teams was again 
frustrated.
                     secretary gates's experiences
    In his testimony before the committee last October and in his 
recent book, A Passion for Leadership, Secretary Robert Gates 
registered his frustration with the bureaucratic hierarchy, its lack of 
lateral communications, and its detrimental tendency to default to 
consensus decision-making. Gates observed that the only way he could 
get things done was to create special multidisciplinary task forces 
(equivalent to section 941's cross-functional teams):

        In every senior position I held, I made extensive use of task 
        forces to develop options, recommendations, and specific plans 
        for implementation. I relied on such ad hoc groups to effect 
        change instead of using existing bureaucratic structures 
        because asking the regular bureaucratic hierarchy (as opposed 
        to individuals within it) if the organization needs to change 
        consistently yields the same response: it almost never provides 
        bold options or recommendations that do more than nibble at the 
        status quo.

    Secretary Gates used cross-cutting task forces ``because so many 
different elements of the Pentagon were involved,'' and because they 
were, in his words, ``immensely useful, indeed crucial.'' He said 
``They break down the bureaucratic barricades to change and . . . can 
also help build collaboration and relationships that will result in 
long-term benefits.'' He used the task forces to ``accomplish . . . 
priority tasks associated with turning the wars around,'' including 
``the MRAP vehicles, additional intelligence, surveillance and 
reconnaissance capabilities, shortened medevac times, counter-IED 
equipment, and even the care of wounded warriors.'' He noted the task 
forces became ``an essential instrument for me not just on matters 
relating to the wars but on other problems in the department as well.''
    Gates paid a lot of personal attention to the task forces, 
including the careful selection of their leaders. He also notes he had 
to delegate meaningful authority to the task forces. He said the task 
force leaders had to ``provide the freedom for members to offer options 
and ideas, incorporate what is helpful, and then gently but firmly . . 
. guide the majority to the desired change, even if they come up with a 
different way of implementing it.'' Most notably, Gates said he 
discovered that it ``routinely required my personal involvement to keep 
the bureaucracy from smothering their efforts.'' Finally, it is 
significant that in his testimony to the committee last October, 
Secretary Gates concluded that periodic intervention by task forces 
with the ``intense, personal involvement of the Secretary'' of Defense 
to override prevailing bureaucratic ethos was not, to use his word, 
``sustainable.'' He expressed regret that an institutionalized solution 
to this problem was not found before he departed the Pentagon.
               section 941--an institutionalized solution
    Section 941 provides the institutionalized fix that Secretary Gates 
sought. Four of the five major elements of section 941 are tightly 
linked to the Pentagon's organizational problems identified by the 
committee. The fifth element is an overarching blueprint to guide the 
other four elements and all other required organizational changes. It 
requires the Secretary of Defense to formulate an organizational 
strategy for the Department of Defense. The Pentagon does not have an 
organizational strategy defining how the department needs to change in 
order to improve performance and prescribing a plan of action for 
achieving that critical transformation. A key element of the required 
strategy is the identification of the department's most important 
missions and other outputs.
    It is worth considering the importance of organizational strategy. 
Too many Secretaries of Defense approach the job of running one of the 
world's largest bureaucracies as if it were unmanageable. In their 
limited tenures, they are faced with innumerable problems, many of 
which are exceedingly complex and some of which are urgent. Instead of 
taking responsibility for the overall performance of Pentagon 
headquarters, they decide, ``I'll do what I can to help solve the most 
immediate and important problems.'' This is understandable. It also 
explains why manifest Pentagon inadequacies have been left unaddressed 
for so long.
    If we are to have a better functioning Pentagon headquarters, it is 
imperative that the next Secretary approach the job intent on 
understanding why the Pentagon behaves as it does and determined to 
change those behaviors so that the organization can more routinely 
generate alternative, integrated solutions to complex problems and more 
routinely solve or at least manage complex security threats well. Only 
by translating this understanding and determination into an 
organizational strategy for improved performance will the next 
Secretary be able to communicate his or her common vision to the 
Pentagon's many functional elements and support staffs.
    The second element of section 941 would require the Secretary of 
Defense to establish cross-functional teams to manage major missions 
and other priority outputs that are intrinsically cross-functional. 
This work would start with the Secretary of Defense identifying the 
missions, other high-priority outputs, and important activities for 
which ``mission teams'' and sub-teams would be established. The second 
step would be issuance by the Secretary of a directive on the role, 
authorities, reporting relationships, resourcing, manning, and 
operations of mission teams and specifying that mission teams are 
decision-making bodies. The third step would require establishment of 
three teams within six months of the Secretary's appointment and 
another three teams 90 days later.
    These cross-functional mission teams must be the centerpiece of any 
plan for improving Pentagon performance. For decades, it has been 
recognized that the Pentagon's functional components war with each 
other to the detriment of the common enterprise. Cross-functional 
teams, which operate at all levels and in many guises, have overcome 
similar problems in private-sector organizations. The teams cull 
representation from diverse functional entities, are empowered and held 
accountable for real, measurable progress against an assigned mission. 
Although there are many nuances in precisely how these teams can and 
should function, there are a few well-established rules of the road. 
They cannot be merely ``advisory,'' or they will tend to make 
recommendations that are popular rather than take action to actually 
solve the problem at hand. They must be protected from the functional 
bureaucracies or they will be hobbled and degenerate into consensus 
decision-making. However, successfully managed with the attention, 
authority, and active support of the Secretary of Defense, they would 
revolutionize decision-making in the Pentagon to the initial discomfort 
of some, but the lasting benefit of our servicemen and women and the 
entire nation.
    The third element of section 941 would require actions to begin to 
shape an organizational culture that is collaborative, team-oriented, 
results-oriented, and innovative. These steps include preparation of a 
departmental directive on purpose, values, and principles for the 
operation of OSD. A second directive would specify the required 
collaborative behavior by OSD personnel. A third directive would 
describe the methods and means to achieve a high degree of 
collaboration between OSD and the Joint Staff. I have already explained 
why culture is so important and difficult to change. It requires a 
persistent leadership emphasis and proper incentives for the rank-and-
file staff. Once in a while, it may also require replacing functional 
leaders who prove too hidebound to change for the greater good.
    The fourth element would prescribe training and personnel 
incentives to support these new approaches. Among its prescriptions, 
this element would require completion of a course of instruction in 
leadership, modern organizational practice, collaboration, and the 
functioning of mission teams for Senate-confirmed officials in the 
Department of Defense. It would also require successful service as 
leader or member of a cross-functional team for promotion in the Senior 
Executive Service above a level specified by the Secretary. This 
element is really a corollary to the previous element and the 
imperative to transform the Pentagon culture over time.
    The fifth element would require the Secretary of Defense to take 
appropriate action one year after the date of his or her appointment to 
simplify OSD's structure and processes. Almost all Secretaries and 
Deputy Secretaries of Defense and innumerable studies support cutting 
if not slashing the Pentagon staffs. What must be remembered is that it 
is largely the inability of the Pentagon to generate cross-functional 
assessments of problems and corresponding solutions that fuels the 
growth of bureaucracy. Each functional entity, aware that it needs more 
diverse information and expertise, but unable to collaborate with other 
functional organizations that have them, tries to build its own ``in-
house'' supplementary bodies of functional experts. This is why so many 
regional offices have functional staff elements embedded in them, and 
vice versa. Once it is clearly established that empowered cross-
functional mission teams will be responsible for cross-functional work 
under the close supervision of the department's top leadership, it 
should be much easier to identify the unnecessary and duplicative 
organizational structures and ineffective cross-cutting groups where 
staff can be cut without hurting the chances of mission success.
              isolated cases of cross-functional successes
    A few critics of section 941 have argued that cross-functional 
teams may work for building a car or some other widget, but they won't 
work in the national security realm. This is demonstrably false. On 
occasion, the national security establishment has used cross-functional 
teams to good effect at all levels and diverse missions. At the 
strategic level, President Dwight D. Eisenhower employed cross-
functional teams in Project Solarium, the highly acclaimed effort that 
formulated a grand strategy for his administration. President 
Eisenhower was personally involved in conceiving the small, seven-
person, cross-functional teams, which had representatives from multiple 
department and agencies and unrestricted access to information 
throughout the government. He identified their leaders and members, and 
once the teams generated their output, Eisenhower personally reviewed 
the results with the entire top echelon of his national security 
leaders. In retrospect, Project Solarium has been a widely admired and 
much commented upon cross-functional model for grand strategy decision-
making. Unfortunately, it is not a frequently repeated exercise because 
it made the leaders of the functional departments and agencies 
distinctly uncomfortable, something Eisenhower well understood and 
embraced as necessary for getting worthy results.
    Another example of a strategic-level cross-functional team that 
generated incredible results is the Reagan Administration's team that 
countered Soviet disinformation. Today, one frequently hears that it is 
just too difficult to counter terrorist propaganda effectively. Many 
held the same view of Soviet disinformation in the 1970s and 1980s. 
However, a small cross-functional team with representatives from the 
CIA, DIA, FBI, NSC, Department of State, INR, and USIA produced 
reports, briefings, and press releases that exposed Soviet 
disinformation at little cost to the United States, but negated much of 
the multi-billion-dollar Soviet disinformation effort. I penned a 
foreword to a National Defense University study that lays out in 
exquisite detail just how effective this group was:

        The group successfully established and executed United States 
        policy on responding to Soviet disinformation. It exposed some 
        Soviet covert operations and raised the political cost of 
        others by sensitizing foreign and domestic audiences to how 
        they were being duped. The group's work encouraged allies and 
        made the Soviet Union pay a price for disinformation that 
        reverberated all the way to the top of the Soviet political 
        apparatus. It . . . changed the way the United States and 
        Soviet Union viewed disinformation. With constant prodding from 
        the group, the majority position in the United States national 
        security bureaucracy moved from believing that Soviet 
        disinformation was inconsequential to believing it was 
        deleterious to United States interests--and on occasion could 
        mean the difference in which side prevailed in closely 
        contested foreign policy issues. The working group pursued a 
        sustained campaign to expose Soviet disinformation and helped 
        convince Mikhail Gorbachev that such operations against the 
        United States were counterproductive.

Like Project Solarium, this interagency team worked its issues 
virtually non-stop with incredible dedication from its small group of 
experts. However, in terms of budget outlays, the group cost the United 
States almost nothing, demonstrating the amazing efficiency of 
collaboration when it is made to work well.
    At the operational level, Joint Interagency Task Force (JIATF)--
South is viewed as the gold standard for interagency collaboration and 
intelligence fusion. For over twenty years, the cross-functional 
leadership team at JIATF-South has been remarkably effective at meeting 
the demanding operational challenge of keeping pace with resource-rich 
and creative drug organizations. Year in, year out, their organization 
is responsible for 70-80 percent of all U.S. federal, state, and local 
law enforcement disruptions of cocaine shipments to the United States. 
By one recent count the organization successfully integrated the 
efforts of the four branches of the military, nine different agencies, 
and eleven partner nations, defying experts who claim such levels of 
collaboration are not possible among executive departments and 
certainly not on an international basis.
    Another cross-functional success at the operational level, albeit 
of much narrower scope than JIATF-South's enterprise, is the task 
forces orchestrated by Under Secretary of Defense Walter Slocombe in 
the Clinton administration during 1994-2001. The failure in Somalia in 
1993 and national embarrassment of the USS Harlan County being turned 
away from a Haitian port shortly thereafter were both largely the 
result of feuding between the Departments of State and Defense and the 
inability of the Pentagon to keep pace with events in the field and 
coordinate a common Pentagon approach to managing these operations. 
When Under Secretary Slocombe took office, he established small cross-
functional task forces to handle such complex contingencies and used 
them to good effect for the rest of the 1990s. These task forces were 
not as empowered or as cross-functional in representation as JIATF-
South, but they worked their diverse issues full-time and with the 
benefit of multiple experts drawn from around the Pentagon. They 
managed interagency frictions better and helped the department keep 
abreast of fast-moving and complex developments in Haiti and the 
Balkans among other places.
    In terms of field activities, a well-known example of a cross-
functional team is the Civil Operations and Revolutionary Development 
Support (CORDS) program in Vietnam. This pacification effort 
successfully integrated military and civilian components of the U.S. 
Government that previously had worked at cross-purposes. The program is 
now widely acknowledged as a major step forward, although it was, in 
the words of its dynamic and uncompromising first leader, Ambassador 
Robert W. Komer, ``too little, too late.'' It is not surprising in the 
least that it took a leader of Ambassador Komer's organizational acumen 
to decode and demonstrate the kind of field-level interagency 
collaboration that was required to defeat the category of multi-
functional security threat we now widely refer to as a ``hybrid 
threat.''
    A much more current example of effective field-level cross-
functional collaboration is the High-Value Terrorist Targeting Teams in 
Iraq, led by General Stanley McChrystal. We have the great good fortune 
and privilege to hear from General McChrystal during this hearing. 
Suffice it to say that his exquisite example of the power of cross-
boundary collaboration did not just involve interagency teams in the 
field. General McChrystal worked his collaborative approach at the 
highest echelons of the U.S. Government and inside the Pentagon to 
ensure his field teams received the support they needed from the larger 
national security bureaucracy.
    Unfortunately, these successes are as rare as they are impressive. 
Empowered, cross-boundary collaboration can be made to work at all 
levels and for a wide variety of cross-functional problems and 
missions. What we need to do is make them more the norm than the rare 
exception, and that requires institutionalizing a mechanism for senior 
leaders to employ.
               administration's concerns with section 941
    As I mentioned at the outset, the Pentagon has not yet endorsed the 
opportunity afforded by section 941. To date, the administration 
alleges that this provision is overly prescriptive and would undermine 
the authority of the Secretary, add bureaucracy, and confuse lines of 
responsibility. These concerns are entirely misplaced and suggest a 
lack of understanding of collaboration and teaming concepts or a lack 
of understanding of the intent of section 941. If section 941's 
prescriptions were faithfully implemented, they would empower the 
Secretary, streamline bureaucracy, and clarify responsibility for 
cross-functional integration. Let me address one-by-one the 
administration's concerns.
    Does section 941 undermine or empower the Secretary? Section 941 
explicitly guards against lowest-common-denominator consensus-seeking 
by giving the Secretary the wherewithal to ensure cross-cutting groups 
are unconstrained by the need to safeguard the equities of group 
members' organizations. The teams report to the Secretary and derive 
all their authority from the Secretary, who choses their missions, 
approves their charters, and specifies the scope of their authority. 
The Secretary can approve, reject, or modify team decisions, but if the 
teams are established as section 941 specifies, they certainly will not 
produce the kind of meaningless consensus outputs that former Secretary 
Gates warns against: outcomes where ``everyone agrees to say 
collectively what no one believes individually.''
    Does section 941 add or roll back bureaucracy? Teams that would be 
established under section 941 would be empowered to cut through the 
existing bureaucratic processes that protect functional equities at the 
expense of accomplishing cross-cutting missions efficiently and 
effectively. Section 941 would empower teams to overcome the currently 
time-consuming and energy-sapping consensus-building processes that 
exhaust so much human capital for so little effect. Consensus processes 
enervate not just the rank and file but senior leaders as well, 
including the Secretary. Secretary Gates said in his book, A Passion 
for Leadership:

        I cannot begin to calculate the time I have wasted in 
        meetings--and task forces--as the person in the chair strives 
        to get all participants to agree to a single recommendation or 
        point of view, instead of presenting several options to their 
        higher-up. This process inevitably yields the lowest common 
        denominator, the most bland of initiatives, which everyone can 
        agree to. Pap. A leader who seeks true reform will never get 
        bold ideas or recommendations from task forces or working 
        groups if consensus is the priority objective.

    Section 941 would obviate the need for activities that masquerade 
as horizontal integration but in reality waste precious time and 
expensive human capital.
    Finally, section 941 would require the Secretary of Defense to take 
action ``as the Secretary considers appropriate'' to ``streamline the 
organizational structure and processes of the Office of the Secretary 
of Defense.'' Thus section 941 actually requires a reduction of 
bureaucracy, but does so after the empowered cross-functional teams are 
working effectively and producing results not obtainable from 
consensus-driven committees. At that juncture, it would be easier for 
the Secretary to determine where the staff can best be reduced.
    Does section 941 clarify or confuse lines of responsibility? The 
Administration expresses concern that section 941 ``would give 
directive authority over other elements of the Department and authorize 
them to requisition personnel and resources from other parts of the 
Department without regard to competing mission requirements.'' The 
``without regard'' to competing requirements is not true. Section 941 
has a specific provision that allows the head of a functional component 
to appeal to the Secretary to review and modify decisions made by one 
of the Secretary's cross-functional teams. However, the 
administration's concern demonstrates that the bureaucracy correctly 
understands that section 941 teams would be truly empowered to pursue 
missions, unlike the existing consensus-based committees. Rather than 
being concerned that the section 941 teams would confuse lines of 
responsibility, the Pentagon bureaucracy is actually worried about the 
explicit responsibility and accountability section 941 confers upon the 
Secretary's mission teams. These teams would break the functional silos 
monopoly on advising and acting on behalf of the Secretary and Deputy 
Secretary.
    Section 941 specifies that the Secretary ``shall delegate to the 
team such decision-making authority as the Secretary considers 
appropriate in order to permit the team to execute the strategy;'' that 
within that delegated authority, ``the leader of a mission team shall 
have authority to draw upon the resources of the functional components 
of the Department and make decisions affecting such functional 
components;'' and that ``the leaders of functional components may not 
interfere in the activities of the mission team.'' That language 
clarifies rather than confuses responsibility. The efficacy of such 
teams was demonstrated by Secretary Gates, who created multiple cross-
cutting organizations to deal with vital issues that the Pentagon 
bureaucracy could not solve, including care for wounded warriors and 
priority warfighting acquisition programs. These groups functioned as 
genuine cross-functional teams and produced positive outcomes for the 
Secretary unconstrained by the functional hierarchy. They had clear 
authority to accomplish their missions and did not ``confuse the lines 
of authority'' for Secretary Gates.
    Does section 941 represent congressional micromanagement or 
legitimate use of congressional powers? Once it is clear that section 
941 actually empowers the Secretary, rolls back bureaucracy, and 
clarifies who will work cross-functional problems for the Secretary, it 
is not hard to challenge two more general criticisms aimed at section 
941. Asserting section 941 is overly prescriptive supports the 
administration's broader charge that the current National Defense 
Authorization Act ``micromanages'' DOD. Once it is clear that section 
941 is not overly prescriptive, but instead provides the Secretary with 
a tool he controls and directs at his discretion, the micromanagement 
allegation withers. Congress is simply asking the Secretary to use 21st 
century organizational practices well established in the private sector 
whose efficacy is strongly substantiated by research literature.
    Can Secretaries of Defense achieve section 941's objectives without 
a legislative mandate? Thirty years of evidence argue convincingly they 
cannot. Even Secretary Gates, one of the most skillful secretaries, 
proved unable to engineer an institutional solution for the Pentagon 
bureaucracy's tendency to produce least-common-denominator consensus 
positions. Even so, both critics who level the micromanagement charge 
and supporters, like Secretary Gates, of empowered cross-cutting 
mechanisms often wonder whether the use and management of cross-
functional teams ought to be left entirely to the discretion of the 
Secretary of Defense. They sometimes add, correctly, that the teams 
cannot succeed without strong support and careful oversight from the 
Secretary anyway.
    However, this point just underscores the importance of 
strengthening the Secretary's ability to use cross-functional teams. 
Few Secretaries understand the importance of cross-functional teams, 
much less how to create and manage them well. Secretary Gates stressed 
the critical importance of such groups, but otherwise, senior Pentagon 
leaders have largely overlooked their potential.
    Legislating the use of cross-functional teams would ensure the 
department pays close attention to their potential. It would also 
reinforce the legitimacy of the teams and increase the willingness of 
career civil servants to support them. Perhaps most importantly, 
resistance to their use by functional leaders would diminish, giving 
the teams a much better chance to succeed. In short, there is no need 
for a trade-off between great leaders and great organizations. We need 
great leaders and modern structures, healthy cultures, and other 
organizational practices and attributes conducive to high-performance. 
Section 941 gives the next Secretary a necessary tool for running a 
21st century Pentagon, and if he or she are determined to make the most 
of it, so much the better.
                   overall assessment of section 941
    Organizations normally cannot reform themselves. Businesses 
typically have to look to outside consulting firms to help overcome 
internal inertia and denial. The Pentagon has repeatedly demonstrated 
its inability to undertake organizational change even when evidence of 
the need for change is compelling. It opposed the two largest 
transformations in the last 70 years: the Goldwater-Nichols Act and 
creation of U.S. Special Operations Command. It is now opposing the 
Senate's encouragement to take teaming and collaboration seriously. 
Perry, White, England, and Gates discovered they could occasionally 
override bureaucratic norms, but they could not reform the institution 
for lasting improvements in performance.
    Given the Pentagon's long-standing inability to correct its 
organizational defects, Congress would be fully justified--even 
obligated, just as it was in the Goldwater-Nichols Act--to use its 
Constitutional powers ``to make rules for the government and regulation 
of the land and naval forces.'' Congress has a right to demand that the 
Department of Defense adopt 21st century organizational practices--that 
it have an organizational strategy; that it employ cross-functional 
teams for cross-functional missions and work; that it have an 
organizational culture aligned with operating requirements; that it 
provide proper training and incentives; and that it employ simplified 
structures and processes.
    Section 941 contains the right ideas to launch the Pentagon on the 
use of cross-boundary collaboration. It provides better and faster ways 
of integrating expertise and making decisions that are imperative in 
today's complex, fast-paced security environment.
    Section 941 finds the right balance between congressional mandate 
and freedom of action for the Secretary of Defense. It does not 
prescribe matters better left to the Secretary. The Secretary would 
determine (1) DOD's organizational strategy; (2) the missions and other 
priority outcomes to be addressed by cross-functional teams; (3) the 
role, authorities, reporting relationships, resourcing, manning, and 
operation of the teams; (4) when teams are established and who will 
lead them; (5) the charter and strategy of the teams; (6) how OSD would 
operate, would build a more collaborative culture, and would train and 
incentivize its personnel; and finally, (7) how OSD would be 
streamlined in the future. Section 941 gives the Secretary a tool to 
use at his or her discretion and provides legitimacy for its use in the 
face of certain bureaucratic resistance.
                               conclusion
    I congratulate the committee on this historic initiative. This is 
precisely the sort of well-researched, well-grounded, empirically-
justified intervention by Congress that is needed from time-to-time, 
and in due time, it will be widely admired for its impact.
    I urge the committee to remain steadfast in enacting this 
provision. Safeguarding national security must become a more 
collaborative enterprise. New Pentagon leaders would be wise to embrace 
and use to good effect the tools provided by section 941. Cross-
boundary collaboration should then spread throughout the Department of 
Defense and into the interagency, where it is desperately needed.
    Once enacted, the two Armed Services Committees will need to 
carefully oversee the implementation of section 941, just like they did 
the Goldwater-Nichols Act. In this regard, the Senate Armed Services 
Committee should refuse to confirm presidential appointees who do not 
show a deep knowledge of collaboration and cross-functional teams and a 
commitment to their effective use.
    The Goldwater-Nichols Act, profoundly shaped by this committee, has 
served the nation well. It is time now to enlarge upon that historic 
success by expanding cross-functional collaboration to the Pentagon 
headquarters, where strategy, plans, operational support, and 
acquisition decisions for U.S. forces are made. Our servicemen and 
women need and will benefit from a Pentagon headquarters capable of 
making the best possible decisions and risk tradeoffs while keeping 
pace with the complexity and turbulence of 21st century security 
threats. They currently do not have such a Pentagon.
    In section 941, the committee mandates the use of exactly the type 
of decision-making mechanism the Pentagon needs to overcome its 
institutional shortcomings and better execute its missions. The 
transformational changes envisioned in section 941 would require 
inspired and committed leadership by senior Pentagon officials and 
vigorous oversight by Congress. However, once instituted, pursued, and 
perfected, the use of cross-functional teams can have a positive impact 
every bit as great as the original Goldwater-Nichols legislation. In 
good time, the benefits of section 941 will be abundantly manifest, 
just as the benefits of empowered joint warfighting commanders are now 
clear. All the committee has to do to take another historic step 
forward is stay undeterred on its current course. I encourage you to do 
so, and thank you for your visionary leadership on this critical issue.

    Chairman McCain. Thank you very much, Jim, and thank you 
for your many years of service.
    Dr. Edmondson, listening to your testimony reminds me of 
several visits I've met--I've made to Silicon Valley and other 
high-tech organizations, where they're basically working in 
open spaces. No longer are there cubicles separating, but 
they're all out there in the open, which provides, then, for 
the environment, really, of a collaborative effort. Have you 
ever seen any office in the Pentagon that looked like that?
    Dr. Edmondson. No. I don't want to imply that it's 
architecture. I think it's mindset more than architecture.
    Chairman McCain. Yeah.
    Dr. Edmondson. Structure and leadership.
    Chairman McCain. Right.
    Dr. Edmondson. And----
    Chairman McCain. But, doesn't the architecture somehow 
provide the atmospherics?
    Dr. Edmondson. It can. It can. It's important, and this is, 
of course, a detail. But, it's important to get the acoustics 
right. I know people working in these office--and I've studied 
some of these open offices, where people are going crazy. Then 
there are others where the acoustics are so well designed that, 
in fact, they say it's fantastic. They can do their own 
thinking, they can do their own work, but they just poke their 
heads up and they see someone over here they need to coordinate 
with on some complex time-dependent issue, and off they go. So, 
it certainly can work. Architecture can shape the mindset, 
shape the behavior, and it, too, is not a panacea.
    Chairman McCain. But, the mindset shapes the architecture.
    Dr. Edmondson. You bet. Absolutely.
    Chairman McCain. General, one of the famous stories, of 
course, is the story of the MRAP [Mine-Resistant Ambush 
Protected Vehicle], where Secretary Gates talks about--he had 
to personally take charge--once-a-week meetings. In other 
words, the issue was of the transcendent importance, saving the 
lives of our men and women in the military who were so 
vulnerable to IEDs [improvised explosive devices]. But, 
obviously, as he stated before this committee, you can't do 
that with everything that comes along. It's just a physical 
impossibility, and we also have had Secretary Panetta, who 
feels, basically, of the same mindset, and Secretary Hagel.
    Now we're getting this reaction from the Pentagon as if it 
were the end of Western civilization as we know it. There are 
smart and good people over there. There are people who 
understand that the system is not working. We had a hearing on 
the F-35. The first time the F-35 was recommended was 2002, and 
it's still not operationally capable. I mean--and yet, I have 
to get one of these every 18 months, and then 18 months--I 
understand it, then I have to--anyway. That's a personal issue.
    But, the--why is it? Why is it that we are getting this 
near-hysterical response to what former Secretaries of Defense, 
leaders such as yourself--I've not met a leader with your 
background and experience that doesn't say that this kind of 
change has to take place. It--help me out.
    General McChrystal. It does have to take place, Mr. 
Chairman. I think you're exactly right.
    I think that----
    Chairman McCain. Why the--why such a visceral, emotional 
reaction?
    General McChrystal. I think all big organizations, people 
get set into their equities at different levels in the 
organization. They get used to things. They learn the rules, 
and when you start to----
    Chairman McCain. But, haven't they learned--yeah, I'm not--
don't mean to interrupt, but every time there's a crisis, we 
have a Joint Task Force, right?
    General McChrystal. That's correct. Every time that I can 
think of, you have a very complex, difficult problem, you form 
some form of a cross-functional team, you put them in, 
typically, open architecture. You work the problem, and then, 
interestingly enough, once the problem is solved, we sort of 
go, ``Whew, glad that's over,'' and then we go back to our 
offices. I think the new normal is, we're living in that 
complex world, so I'm--that's why I'm so supportive of 941.
    Chairman McCain. Well, let me ask one more question, then, 
that is not directly related to this particular issue. You were 
commander of the only organization that literally transcends 
and crosses geographic boundaries. Do you think we ought to be 
looking at the entire COCOM [Combatant Command] structure, 
given the nature of the challenges we face today?
    General McChrystal. I would argue, I--and I haven't studied 
that and given it deep thought--I would argue, everything ought 
to be looked at on a constant basis. Anything that was locked 
into rules ought to be considered movable.
    Chairman McCain. We have a--for example, we have a NORTHCOM 
[United States Northern Command] and a SOUTHCOM [United States 
Southern Command], with the boundary line being the Guatemala/
Mexico border. Does that make any sense?
    General McChrystal. Mr. Chairman, I'm not prepared to 
really opine on that today. I would say, though, I'd--all 
things like that have got to be looked at, organizationally and 
culturally, just constantly.
    Chairman McCain. The decisionmaking process--let me just 
give you an example. You know, we know the issue of force 
levels in Afghanistan is one that has to be decided between 
what has already been announced, beginning next year, would be 
a reduction from 9,800 to, basically, a very small force at two 
bases. Yet, there is no decision. Senator Reed and I have 
written to the Secretary of Defense, asking for a decision. Are 
we harming our ability and our relationship with our allies by 
delaying a fundamental question like that? Does that have any 
relation to the bureaucracy?
    General McChrystal. I think it probably has a relationship 
to the bureaucracy, but I also think it just--it brings 
uncertainty. Markets don't like uncertainty. Diplomacy doesn't 
like uncertainty. Security doesn't like uncertainty. So, I 
think the more we can make that transparent and less uncertain 
to people, I think, the better response we'll get from our 
allies and our enemies.
    Chairman McCain. Senator Reed.
    Senator Reed. Well, thank you very much, Mr. Chairman.
    Thank you all for very insightful, excellent testimony. 
Thank you.
    Just to clarify this--I think you've made the point, but--
Dr. Edmondson--that one of the pushbacks we get is, ``Well, we 
do this all the time anyway. We have crosscutting teams here, 
there, and everywhere.'' But, there's a difference between the 
cross-functional teams that we're talking about and working 
groups that share information, seek consensus, and never seem 
to get either. Is that--I mean, is that your impression?
    Dr. Edmondson. There is a universe of difference. Right? 
So, it's--a team--a cross---an effective cross-functional team 
is not simply a group of people from different units or 
functions. It's a group of people from different units or 
functions who are charged with a clear directive, a clear, 
meaningful directive on behalf of the organization. Specific 
deliverables that they, of course, have a very important role 
in defining at the level of detail, and a timeframe, and 
resources, and support, and empowerment. Right? So, they are 
given the license to get things done. That doesn't mean they're 
going to go rogue. Right? They still are under the directive of 
senior leadership, and they know they are, and they are, doing 
meaningful work on behalf of the organization that has to get 
done in a timely way.
    Senator Reed. One of the aspects of section 941 that Mr. 
Locher referred to is a training component, too, and a 
preparation component. We have a--this can't be launched 
immediately. There has to be a--you know, one, an 
identification of the appropriate individuals in the 
appropriate organizations, the training of how to do this. 
That's all part of this process, the foundation, if you will. 
Is that correct?
    Mr. Locher. Senator Reed, it is. I should say that the 
training part is quite important. Even in business, creating 
effective cross-functional teams is difficult. The training is 
important. Both of the team members, they need to be trained in 
the functioning of a team, conflict resolution approaches. But, 
their supervisors have to be trained, as well. They need to 
create that safety net for those team members to go off. They 
don't have to be accountable to the ideology of their 
functional area; they're designed to solve the problem of the 
mission team. So, those supervisors need to be trained, as 
well.
    As I mentioned, there's--has not been enough attention, in 
the Pentagon, to leadership, so we're talking about leadership 
training, some training on modern organizational practice, and 
on collaboration, as well as cross-functional teams.
    Senator Reed. One of the other aspects, I think, of making 
this work goes to the reward structure. On--General McChrystal, 
I think you've been in the--in this atmosphere for a long time, 
but that--my impression now is that, when they put together 
these teams of different organizations, the reward is back 
home. It's either in the Army or SOCOM [United States Special 
Operations Command] or the Navy or the Marine Corps, et cetera. 
You're there protecting that--you know, that ethic, because 
that's where you'll get your----
    So, how do we work this reward structure, basically, in 
terms of these joint teams, so that you get the proper 
commendation and the proper whatever?
    General McChrystal. I think if you use Goldwater-Nichols as 
one example of where we adjusted a--reward structures, and it 
had a very significant cultural effect--I think the same thing 
needs to happen here, because there's still a tendency to keep 
your talent close to home and reward it because they're around. 
As a consequence, I think what we need to do is, first, reward 
participation on cross-functional teams, maybe make it 
required, like joint duty, but also seek a way in our 
evaluation systems, efficiency report systems, to measure who 
makes a difference in the effectiveness of a cross-functional 
team. When we work with civilian companies, it's always this 
tension between individual incentives, ``Did I make my 
number?''
    Senator Reed. Right.
    General McChrystal. Or, ``Does the organization do better 
because I helped the organization do better?'' It's challenging 
to measure, but it's possible. Those people who the team scores 
more goals when they're on the ice are the kinds of people that 
we need to recognize and help grow. It's got to do with 
leadership training, and it's got to be support of those cross-
functional teams.
    Senator Reed. Just a final point, and I--it echos what the 
Chairman said and what many have said. I have, you know, a 
feeling that we have to do this, because the other guys are 
doing it. My impression--again, your leadership in Iraq was 
superb, but one of the reasons why your opponents had to be 
horizontal is because we had every tool in the book to take out 
a hierarchical structure. We just couldn't find it for a while, 
and then you started getting horizontal, also. Then, of course, 
the communications revolution has made all this much more 
feasible.
    I'm looking, though, across the globe, in places like 
Russia. They seem to be much more adaptive of this horizontal, 
cross-functional intelligence offices, tactical offices, 
political offices, et cetera. Is that your impression, General? 
Because in----
    General McChrystal. Sir, it is. The person that had the 
biggest effect on changing Joint Special Operations Command was 
a guy named Abu Musab al-Zarqawi.
    Senator Reed. Yeah.
    General McChrystal. Because he put us in a position against 
a challenge that we couldn't deal with without changing. So, it 
wasn't an optional thing we did.
    I think what we see with our opponents is, nobody is going 
to take on a disproportionately powerful organization like the 
United States where we are best. They are, by definition, going 
to go against asymmetrical areas, and they're going to 
constantly adapt. Because you no longer have to be a nation-
state to challenge us anymore, you can be as small as--a very 
small group, because of technology--they can all be trying from 
different angles. The vast majority can fail, but some will 
continue to adapt to a Darwinistic process, and so, the big 
mechanical beast cannot, almost by definition--it'll be like 
Gulliver and the Lilliputians--we'll just be tied down by 
people who figure parts of it out.
    Senator Reed. Well, I appreciate that, as a Lilliputian. 
So, thank you.
    [Laughter.]
    Chairman McCain. Senator Inhofe.
    Senator Inhofe. Let's ease off the intellectual plane of 
cross-functional teams and cultural obstacles just for a moment 
here, and let me ask two questions. It's based on something 
everyone does agree with right now. One is the threat that 
we're facing.
    Mr. Locher, last November you said--and this is your 
quote--you said, ``The world in which the DOD must operate has 
changed dramatically over the last 30 years. Threats and 
opportunities are more numerous, more varied, more complex, and 
more rapidly changing.''
    Then we had four professors before this committee, and the 
professors talked about the challenges and they--United States 
national security, and were in agreement that the threats 
against the United States and its interests are unlike any time 
in history. Heard the same thing from John Brennan, heard the 
same thing from James Clapper. You know, I think that people 
realize we are in that threatened of a position.
    Now, the question I would ask--because Secretary Gates was 
here, and he talked about the funding. I mean, he said that 
we're now spending one-third of the percentage on defense, of 
our total budget, that we did in 1964. He said--which is kind 
of counter to what we're talking about here--he said, quote, 
``Without proper and predictable funding, no amount of reform 
or clever reorganization will provide America with a military 
capable of accomplishing the missions it's assigned to.''
    So, it's--first of all, do the three of you think that 
we're not spending enough, to start with?
    Mr. Locher?
    Mr. Locher. Senator, this is not my area of expertise at 
the current time. I cannot--I've not analyzed the defense 
budget.
    Senator Inhofe. Okay.
    General McChrystal?
    General McChrystal. I'm pretty much the same place, 
Senator.
    Senator Inhofe. Well, but, you know, in--Dr. Edmondson, I 
know you'll--probably the same thing. But, this is what 
Secretary Gates said. He said a lot of reorganization, all 
these things that we're--unless you're spending enough money on 
defense, is--they're not going to work. Do you agree or 
disagree with his statement? This is Secretary Gates.
    Mr. Locher. What I might be able to add to the question 
that you're asking is, we can spend more and more money, but if 
we don't have an organization that can effectively employ the 
resources that are available to us, much of that spending will 
be wasted. I think that's a point at which we are today. I 
would give more emphasis to these organizational changes than 
Secretary Gates did.
    Senator Inhofe. Yeah.
    Mr. Locher. You know, we have a huge bureaucracy that's 
working as hard as it possibly can, but it is in Industrial Age 
functional stovepipes----
    Senator Inhofe. Okay, but--time is passing here. Let me 
just do this, and, Dr. Edmondson, perhaps--kind of take the 
statement that was made by Secretary Gates, and just say, for 
the record--send it to us after this is over--what you're 
thinking about. All right? Whether you agree with that, or not?
    [The information referred to follows:]

    Mr. Locher. I am unable to make an informed judgment on the 
adequacy of the current budget levels for the Department of Defense. 
From my current position, it is not possible to assess the best, 
integrated options for solving our most pressing security problems and 
their associated resource requirements. DOD is currently not performing 
well in some key mission areas, and the Pentagon wastes too much of its 
resources on poorly managed programs and missions for reasons 
identified in my previous answers. One great disadvantage of current 
organizational problems is that it makes it difficult to ask the 
American people to fund a greater security effort. However, if DOD had 
a modern organization that pursued missions efficiently and greatly 
reduced waste, making the case for greater resources would be easier. 
In short, we should not be forced to choose between allocating 
resources to a poorly performing organization or improving the 
organization but starving it of needed resources. The United States 
needs a high-performing Pentagon headquarters capable of integrated, 
timely, innovative, and forward-looking decision-making and sufficient 
levels of resources to protect the nation's security.
    Dr. Edmondson. I have no basis from which to draw to make an 
assessment as to whether the Department of Defense's budget or spending 
are sufficient. However, my expertise does allow me to claim that well-
designed, well-led cross functional teams typically prove efficient 
structures, which help ensure that available funds are well-spent.

    Senator Inhofe. I think it's really significant, because 
that's exactly what we're talking about doing right now. He's 
saying it doesn't make any difference, because, unless we're 
spending more, more resources is not going to work.
    The other thing where everyone agrees, and that is, we're 
too heavy at the top. The OSD military and civilian staff 
increased 20 percent from 2001 to 2013. Military and civilian 
staff at Army Headquarters increased 60 percent over that same 
period. From 2001 to 2012, the defense civilian workforce grew 
5 times the rate of the Active Duty military.
    Now, in--to address this, Deputy Secretary of Defense 
Robert Work sent all services a memo entitled ``Cost Reduction 
Targets for Major Headquarters,'' ordering preparation for a 
25-percent cut in appropriations from 2017--that's next year--
to 2020, for all major defense headquarters. This is what we 
used to call ``the meat ax approach.'' Frankly, I kind of like 
it. What do you all think about it?
    General McChrystal. Senator, I think it's sometimes 
necessary, but I think you've got to make the changes. You 
don't know how head--how big your headquarters need to be until 
you get them operating----
    Senator Inhofe. In----
    General McChrystal.--the correct way.
    Senator Inhofe. Okay. You're all convinced that, by making 
these changes, that we're going to be able to do that. The 
result is going to be less at the top, more Active military. Is 
that--do you all agree with that?
    General McChrystal. I'm not sure those decisions are being 
made, but I can tell you it will enable the opportunity to make 
better decisions in that.
    Senator Inhofe. Yeah.
    Any comment?
    Dr. Edmondson. Senator, I would have to agree with that. It 
is--what we're talking about here is the use--the best use of 
the human resources that the Department has. The experience of 
working in these kinds of cross-functional purpose-focused 
teams is one that not only gets the job done, generally with 
fewer resources than in prior approaches, but also that 
develops the people into far more capable and--people with a 
greater perspective on the whole system. So, it's a kind of 
free education for the people actually doing this important 
work----
    Senator Inhofe. Okay. Well, I appreciate that, and you will 
follow through with sending the----
    Dr. Edmondson. I can certainly opine in a general sense----
    Senator Inhofe. Very good.
    Dr. Edmondson.--that money is not the answer, in general.
    Senator Inhofe. Thank you.
    Dr. Edmondson. You bet.
    Senator Inhofe. Thank you, Mr. Chairman.
    Chairman McCain. But, when you don't have enough money for 
our pilots to fly--they're now flying less than Russian pilots 
and Chinese pilots, and they're robbing aircraft to--for other 
aircraft to fly, which are facts, then money does matter, at 
some point. Right now, readiness and training are the ones 
that--aspects of our military that are suffering the most. I 
think that General McChrystal would amply testify, when we stop 
training people and making them ready, then you put them in 
greater danger. That's what our military leadership has 
testified.
    Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Thank all of you for your statements this morning.
    This is to the entire panel, but recently--I think you all 
have heard about the horrific flooding we've had in West 
Virginia, devastating as it's been to our State. The joint 
interagency responses include the U.S. Army Corps of Engineers, 
FEMA [Federal Emergency Management Agency], and National Guard. 
They're all responding as we speak. During previous natural 
disasters, such as Hurricane Katrina, much criticism was 
directed to how the agencies coordinated among themselves, or 
didn't coordinate among themselves, especially with regard to 
the command-control use of DOD and State National Guard assets. 
Your statements focused on DOD utilization of cross-functional 
teams.
    So, I guess I could ask how these teams take the next step 
and improve the emergency management planning and coordination 
between DOD and other Federal agencies. We're having that lack 
of coordination right now going on, and everyone's intentions 
are good, but, for some reason, we just can't get our act 
together to where we have a clear direction of who's in charge, 
of how the assets will be disbursed, and how we can help people 
in the greatest need. So, whoever wants to respond to that, and 
then----
    Mr. Locher. Senator, if I might. I spent 6 years studying 
the national security system of the United States, the 
interagency system. These cross-functional teams are required 
at the national security level, as well, and there's actually a 
hope that, if these teams are instituted in the Department of 
Defense--section 941 only requires the Secretary to create six 
teams. But what----
    Senator Manchin. DOD and FEMA is already cross-functional?
    Mr. Locher. No, no. I'm saying--this is just inside the 
Department of Defense, but I'm saying that, at the next level 
up, at the interagency level, we need the same sorts of cross-
functional teams to be created, across the departments and 
agencies, pulling them together so that they can be effective, 
that we can do effective planning and we can do effective 
execution. We do not have that today. The only way we can 
integrate that is at the National Security Council. So, there 
is a requirement for something very similar to these cross-
functional teams at the next level up.
    Senator Manchin. The only thing I can say--you know, the 
DOD and FEMA establish a permanent cross-functional team is 
something that you would recommend? Because right now we don't 
have that. If we have FEMA coming in, FEMA's coming in, who 
we're looking for, for support. Then we have all of our 
National Guard out. We're looking for our Federal assistance, 
and no one seems to be able to, basically, pull the trigger and 
get things done quickly as they need done.
    Mr. Locher. Senator, every issue that we handle in the 
national security arena requires more than one department, and 
so, you have to work it across--and many times, we need seven 
or eight departments working together. You're talking about the 
Department of Defense and FEMA, but there are lots of other 
players----
    Senator Manchin. Sure.
    Mr. Locher.--there, as well, that could be brought together 
in an effective teaming approach, and so, I'm hopeful that, 
once the committee is successful in section 941, this will 
spread and move up to the national security level, where it is 
desperately needed.
    Senator Manchin. General, if you--on another--I'm a firm 
believer in fixed-price--fixed-price contracting, I think, as 
our Chairman is, also, and the concept that services should 
state what they are looking for in buying a weapon system, and 
then pay us that price. Basically, knowing what you need and 
what you want, and making sure that the price reflects that. 
Can you provide an example to how utilization of cross-
functional teams has improved contracting? Do you think that 
use of cross-functional teams would improve the development of 
weapon systems acquisition requirements and lead to less use of 
cost-plus contracting?
    General McChrystal. I'm not an expert in acquisition, but I 
will give you my personal experiences and my beliefs.
    The first is, the acquisition process, where you have to 
identify your requirements many, many years out, and nail those 
down, doesn't reflect the march of technology anymore. It is 
not what civilian corporations are doing. They have to be much 
more flexible and adaptable. Which means, in my view, you have 
to form cross-functional teams that are not just the users of 
the end piece of equipment, but also those scientists who 
create it, all the different people who can help produce that, 
because it's going to be an iterative process that's going to 
change tremendously from the time someone came up with the 
idea.
    Senator Manchin. Dr. Edmondson, just finally, Six Sigma was 
a big--you know, it's been bantered around for quite some time. 
Do you find that morphing into this cross-functional? Is it 
part of it?
    Dr. Edmondson. Not exactly, Senator. Six Sigma applies well 
to work that is extremely well understood and highly routine, 
because it allows us to get sufficient data to know exactly how 
something should be done repeatedly and effectively and 
efficiently every single time. We're look--Six Sigma is 
essentially an extraordinarily low error rate, a one-in-a-
million error rate. That's not the case for the kinds of work 
we're talking about here, that's fast-paced, unpredictable, 
innovating on the fly, and so forth. So, cross-functional teams 
are not the perfect tool for Six Sigma-like work activities.
    Senator Manchin. The----
    Dr. Edmondson. They are a good tool--excuse me--for 
innovation and responding to unprecedented issues and 
challenges.
    Senator Manchin. I guess I would just ask, in followup--I'm 
so sorry----
    Dr. Edmondson. Yeah.
    Senator Manchin.--Mr. Chairman--but cross-functional--why 
are we having such a hard time for the cross-functional to 
really grab hold and do what it's supposed to do?
    Dr. Edmondson. Now, that is one of the puzzles for the 
ages. I suppose that the best answer is that organizations do 
resist change. Organizations--and General McChrystal did talk 
about this--there's a comfort level in what I know, what I know 
well----
    Senator Manchin. Everybody's fighting back and hunkering 
down, covering their own, right?
    Dr. Edmondson. We need to learn to change. I think 
critical--the critical issues, the critical competencies that 
organizations today have is the competency to keep learning.
    Senator Manchin. Well, I'll throw this back----
    Dr. Edmondson. Yeah.
    Senator Manchin.--to the Chairman right now. I'm sure he 
has a comment on that.
    Chairman McCain. I think an important comment was just 
made, ``They need to learn to change.'' I think that that's a 
fundamental, here, that we're grappling with, that----
    Thank you, Doctor.
    Senator Ernst.
    Senator Ernst. Thank you, Mr. Chair.
    Thank you, to the witnesses today. This has been a very 
interesting conversation.
    General McChrystal, I want to thank you, especially, for 
your leadership at the 75th Ranger Regiment. Fantastic 
organization.
    General, I'll start with you. As you may know, the DOD, 
under its Force of the Future Plan, is looking at directly 
commissioning more civilians at the O6 grade. Do you believe 
the Department needs more direct commissioned officers at the 
O6 level? Yes or no, sir.
    General McChrystal. I do, and I think not just at the O6 
level. I actually think lateral entry into the military 
services--right now, the military services, by definition, are 
a guild. You start at entry, and you work your way up. You get 
some great competence, but the reality is, by the time you 
reach a certain level, you are a product of that organization, 
good and bad. I think fresh air coming in laterally is doable, 
and I think it would be very beneficial.
    Senator Ernst. Is there something, then, that we're 
missing, as a uniformed military, where we cannot fill those 
positions with DOD contractors or others that serve in the 
civilian force, rather than commissioning them into the 
military?
    General McChrystal. I think commissioning them in has an 
advantage. I think you bring people in, they become part of the 
organization; they're not external, like a contractor. I also 
think they go back out again, and if you think about America, 
what we need is more people in America who have served in 
uniform. Maybe they don't do it when they're age 18, maybe they 
do it when they're age 45, but they go back out into business 
or politics or whatever they do. I think they go out richer, 
and I think America's military becomes more integrated with our 
society again.
    Senator Ernst. Do you think that that should be limited to 
specific areas within the military, then? Maybe the CYBERCOMs 
or--of course, we do it with doctors, lawyers. Or do you think 
an infantry officer could----
    General McChrystal. I am not----
    Senator Ernst.--get in as an O6?
    General McChrystal.--reflecting the opinion of anybody but 
me. I think we can bring people in. I've run into competent 
executives out in the world who could come in, and they could 
be infantry officers. I tell them, ``In 6 months, we could 
teach you enough to do what you have to do, and your leadership 
skills and your wisdom, and you'd be able to perform.'' Think 
of what has happened in our big wars, the Civil War, 
Revolution. People came out of the civilian world and did 
wonderful service. I think that there's a backbone of 
professional military who spend a whole life there, but I think 
I--a breathing, a moving in and out of fresh air would be 
positive for everyone.
    Senator Ernst. I would tend to agree, in certain 
circumstances, as well, sir.
    I know this is a different topic for another day, but I 
know that there have been some challenges with moving females 
into infantry leadership roles immediately. But, I think there 
are some certain advantages there, as well, and we can talk 
about that another time.
    But, in your experience, how challenging--and we've talked 
a little bit about this. Dr. Edmondson, you said, ``Learn to 
change.'' If I could get, from the whole panel, how challenging 
it is for the DOD to reform itself.
    General, when you, maybe, were a platoon leader, years ago, 
and for--to the time you retired, we have become increasingly 
complex around the globe with what our military is facing. 
Understanding that we have those challenges, why is it so hard 
for the DOD to reform itself?
    I'd just like all of you to discuss that. Yeah, thank you.
    Mr. Locher. Senator, I've had lots of experience trying to 
change the Department of Defense. I should say that it objected 
to the two biggest transformations in the last 70 years, the 
first being the Goldwater-Nichols Act, and the second being the 
Cohen-Nunn Amendment that created the U.S. Special Operations 
Command.
    Today, why is it that the Pentagon leadership has not 
looked at what's going on in modern organizations and brought 
these concepts into the Department? The first problem is, 
they're too busy. They've inherited a Department that's 
antiquated. They have all of these problems around the world.
    I was there in the transition at the beginning of the 
Clinton administration, when Secretary Aspin came in. After he 
had been on the job for a few days, he said, ``Mr. Locher, 
where do all of these problems come from?''
    They are just completely overwhelmed. They have a 
bureaucracy that's not working, but they have all of these 
demands. They are not able to take their time and attention to 
try to fix the bureaucracy. That's one of the great benefits of 
section 941. The Congress is going to mandate these changes.
    You also have the cultural issues. We have a very 
entrenched culture in the Pentagon that grew up consensus-
driven. Things get watered down. We're in the functional 
stovepipes. We've never been brought together in teams. But, I 
think there's also a tendency that they don't understand the 
modern organizational practice. They understand what they're 
doing, and how hard they are working. As you may know, people 
in the Pentagon are working incredibly hard. They're just 
working in a very ineffective system.
    So, there are lots of reasons, and I think it's imperative 
that the committee press ahead and help the Department of 
Defense with this particular issue.
    Senator Ernst. Very good. Thank you.
    Yes, General.
    General McChrystal. Senator, I arrived in the Pentagon, for 
my first tour, as a brand new major general coming out of 
Afghanistan. To get to Jim's point, I was running hard to 
figure out how the Pentagon worked. This was the ramp-up to the 
entry into Iraq, and so, the reality is, I'm so busy trying to 
figure that out--and I was only there 14 months, to the day, 
before I moved out. So, the reality is, I think I'm not really 
uncommon of a lot of the military leaders that come through. 
Then there is a bureaucracy that gets stuck.
    So, I think it needed help from the outside to make the 
kind of changes that were recommended.
    Senator Ernst. Very good.
    Thank you.
    Chairman McCain. Do you know of many people of your grade 
at that time who sought to work in the Pentagon?
    General McChrystal. No, Mr. Chairman, I do not.
    [Laughter.]
    Chairman McCain. Senator King.
    Senator King. Thank you, Mr. Chairman.
    I'm very supportive of this concept, as a general 
principle. I have some specific questions about execution in 
section 941.
    I guess I want to begin--Dr. Edmondson, you cited a bunch 
of cases from business. Here's my fundamental question. Are 
cross-functional team usually an ad hoc response to a problem 
or a series of problems, or are cross-functional teams, 
themselves, institutionalized within the organization of Nissan 
or Cisco or whatever other cases you've cited?
    Dr. Edmondson. Yes, Senator.
    Senator King. Both.
    Dr. Edmondson. Both. So, it depends. So, in Nissan, the 
CEO--first of all, you know--and it relates to Senator Ernst's 
point, as well, or question--for every successful 
transformation, there is a company that dies along the wayside. 
For every IBM, there's a DEC. For every Ford, there's an 
American Motors. To make it happen--so, Nissan, Carlos Ghosn 
said, ``We will have nine cross-functional teams.'' It was his 
idea.
    Senator King. But, do they still exist? That--my question--
--
    Dr. Edmondson. No. So, I'll--so, the--his idea, ``These are 
the nine issues''----
    Senator King. I have only 5 minutes, so please----
    Dr. Edmondson. They do not--they do not still exist. They 
do not still exist. They were there to put in--to make some 
necessary changes, save the company. Then they ceased to exist. 
From their point of view, thank goodness. They had their day 
job still to go back and----
    Senator King. Well, that's my----
    Dr. Edmondson. Yeah.
    Senator King. Mr. Locher, that's my----
    Dr. Edmondson. But, there are some organizations that 
institute cross-functional mechanisms to stay all the time if 
there's a recurring set of similar issues.
    Senator King. Well, Mr. Locher, that's my question, is, 
the--all for our cross-functional teams, but, by writing them 
in and requiring that they be established, isn't that almost a 
contradiction in terms, that you're creating a new bureaucratic 
structure on top of the old bureaucratic structure? When I 
think of cross-functional teams as more ad hoc and responsive 
to problems as they arise.
    Mr. Locher. Senator King, the--as it turns out, a cross-
functional team could exist for 3 days, for 3 weeks, 3 months, 
3 years----
    Senator King. But, this statute talks----
    Mr. Locher.--or 3 decades.
    Senator King.--about them being established as an ongoing 
part of the organization of the Pentagon.
    Mr. Locher. Yes, but it only--it does not say what teams 
are to be created. The Secretary of Defense could decide--he 
only has to create six teams. That's a minimum beginning. 
Eventually, when this gets established in the Department of 
Defense, it's going to be used everywhere. The Joint Staff, 
where General McChrystal was the Director, will turn and will 
employ cross-functional teams. As it--it's saying that this is 
a concept that the Pentagon should employ. The Secretary gets 
to decide what teams they are. He can change those teams. He 
can terminate them when they've served their purpose.
    Senator King. So, you feel that this particular legislative 
language, which is what we're talking about, is not too 
prescriptive, in terms of essentially setting up an alternative 
bureaucracy.
    Mr. Locher. It is not. It gives a broad mandate from the 
Congress, but then leaves it to the Secretary of Defense to 
identify which areas he's going to create mission teams in, or 
whether there are other priority outputs that he wants to focus 
on. He can disestablish those teams when they've served their 
purpose. He could create others. He could create many more 
teams than the six that are mandated here.
    Senator King. Well, it seems to me that what we're really 
talking about here is Goldwater-Nichols 2.0, applying the 
Goldwater-Nichols principles to the joint commands, which was a 
kind of forced integration of the forces, to a forced 
integration of the bureaucracy. Is that a fair statement----
    Mr. Locher. Well, it's correct. You know, in Goldwater-
Nichols, we sort of did cross-service collaboration.
    Senator King. Exactly.
    Mr. Locher. Here we're talking about cross-functional 
collaboration, primarily at the headquarters level, but it can 
be applied in the field, as well. You know, out in the field, 
we've done better with leaders who put together--collaborating 
across the services. But, our headquarters is 30 years out of 
date, and it can be improved considerably by these 
collaboration concepts.
    Senator King. A friend of mine once observed that Freud 
said, ``Anatomy is destiny,'' and Napoleon said, ``War is 
history.'' My friend said, ``Structure is policy.'' I think 
that may be what we're talking about here, is, if you have a 
structure that is overly bureaucratic and rigid, the policy 
will be slow, cumbersome, and itself not responsive to 
immediate problems. Is that a fair----
    Mr. Locher. I think that's absolutely on target. Dr. 
Edmondson was talking about a different mindset. We need to get 
out of thinking inwardly. In the functional silos, people are 
looking inwardly. They're looking to the responsibility of 
their office. What we need them to do is think about: What is 
the mission of the Department of Defense in this particular 
area? How do I collaborate with others who have expertise here 
and pull together all of that expertise to solve the problem of 
the Department of Defense?
    Senator King. Well, I think the Chairman made an 
interesting observation about architecture. It's no accident 
that the most creative companies--and I go through them--very 
rarely do they have walls. It's not because they can't afford 
cubicles, but because they found that people having a free flow 
of collaboration and ideas, sitting around in a ``living room'' 
kind of setting is effective. They're--these are very smart 
companies that make a lot of money, and they know what they're 
doing. The idea of everybody in a little closed box with a door 
is not the way modern business is done.
    So, I appreciate your testimony very much.
    Mr. Chairman, thank you for calling this important hearing.
    Chairman McCain. Well, we have a ways to go before the 
President signs the defense authorization bill, for a lot of 
reasons. But, one of the reasons that was stated in the 
statement of administration policy was that they did not--that 
they strongly disapproved of this section of the defense 
authorization bill. The reaction that we've gotten to it has 
been overwhelmingly positive.
    This hearing has been very helpful, I think, and we'll see 
whether we are able to restructure--I think, frankly, it's a 
matter of ``time'' rather than ``whether.'' If this effort 
fails, sooner or later the Pentagon is going to have to catch 
up with the 21st century. And----
    Go ahead, Jim.
    Mr. Locher. Mr. Chairman, one thing I should mention. I 
don't know how the National Defense Authorization Act is going 
to work out this year, but one thing that the committee can 
absolutely do is, when it has confirmation hearings next year 
for presidential appointed officials in the Department of 
Defense, I would insist that every person that comes is 
schooled on collaboration, cross-functional teams, modern 
organizational practice, and committed to their effective use 
in the Department of Defense. That's an area in which I would 
question them, and I'd make certain that they're committed. 
Hopefully, they'll have this mandate in law to assist them. 
But, you do also have that hammer at the beginning of the next 
administration.
    Chairman McCain. That would be a good way to make America 
great again.
    [Laughter.]
    Chairman McCain. Do you want----
    Senator Reed. I can't follow that.
    [Laughter.]
    Senator Reed. I simply want to thank the witnesses. I--and 
we are engaged in a--I think, because of the Chairman's 
leadership, we've got this issue in play. It's critical. I 
think we have to do it. We can--I think we--with a productive 
dialogue with everyone--and you're--have been particularly 
productive--but, with DOD, with the administration, we can get 
a better product than even we think we have now. I hope so.
    Thank you, Mr. Chairman.
    Chairman McCain. Thank you.
    Hearing is adjourned.
    [Whereupon, at 11:03 a.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]
              Questions Submitted by Senator Kelly Ayotte
                         cross-functional teams
    1. Senator Ayotte. Mr. Locher, section 941 of the Senate passed 
fiscal year 2017 National Defense Authorization Act, would require the 
Secretary of Defense to identify the most important missions and other 
organizational outputs that cross functional teams would focus on. What 
do you believe are the most important missions and outputs that these 
cross-functional teams should focus on?
    Mr. Locher. The Secretary of Defense should consider the following 
missions and priority outputs for cross-functional teams:

    i. Missions
        1. Combating terrorism
        2. Defeating the Islamic State of Iraq and Levant (ISIL)
        3. Stabilizing Afghanistan
        4. Deterring Russian aggression
        5. Managing the competition with China
        6. Deterring North Korea
        7. Countering Iran's influence
        8. Defending cyberspace
        9. Ensuring access to space

    ii. Priority Outputs
        1. Formulating an organizational strategy for DOD
        2. Formulating the Third Offset Strategy
        3. Supporting the fighting force
        4. Building the future force
        5. Reforming the defense institution
        6. Reducing excess infrastructure
        7. Improving acquisition
                         dod acquisition reform
    2. Senator Ayotte. Mr. Locher, former Secretary Gates said in his 
October 2015 testimony, ``I soon learned that the only way I could get 
significant new or additional equipment to commanders in the field in 
weeks or months, not years, was to take control of the problem myself 
through special task forces and ad hoc processes . . . '' He cited the 
examples of the MRAP vehicles, additional intelligence, surveillance 
and reconnaissance capabilities, and shortened medevac times. Yet, as 
he recognized, the Secretary does not have the ability to devote this 
much personal time and attention to more than a few projects at a time. 
Doesn't this consistent need to bypass traditional acquisition 
processes and offices--and instead utilize rapid equipping and fielding 
offices to get our warfighters what they need on time--demonstrate the 
need to reform the Pentagon's acquisition processes?
    Mr. Locher. Absolutely! The use of special task forces (cross-
functional teams by another name) and ad hoc processes clearly 
demonstrates that the existing structure and processes are not working.

    3. Senator Ayotte. Mr. Locher, how can the organizational reform 
envisioned by Section 941 and cross-functional teams improve the 
current acquisition system that produces too many programs that are 
over-cost and over-schedule and fail to be responsive to the 
warfighters?
    Mr. Locher. The potential for cross-functional teams to improve the 
performance of the DOD acquisition system was identified more than 
twenty years ago. In 1995, Secretary of Defense William Perry created 
cross-functional teams, which he called Integrated Product Teams, to 
handle individual acquisition programs. As I noted in my testimony, at 
the time, Secretary Perry argued that DOD ``must move away from a 
pattern of hierarchical decision-making to a process where decisions 
are made across organizational structures by integrated product teams. 
It means we are breaking down institutional barriers.'' Unfortunately, 
Secretary Perry's mandate for multidisciplinary teamwork bore little 
fruit. It contained a fatal flaw: It permitted the heads of functional 
silos to carefully control their Integrated Product Team members. This 
forced each team member to protect the prerogatives of their parent 
organization rather than working to provide the best solution to the 
product team's acquisition task.
    Currently, groups managing acquisition programs are prone to begin 
with optimistic assessments of program capabilities and costs. As they 
build the program and determine more accurately the technology and 
performance options available if the program is to remain on time and 
budget, they are faced by difficult choices. They must accept lesser 
performance in some marginal areas in order to obtain the most 
important program capabilities. However, a group that can only move 
forward on the basis of consensus cannot do that. Thus, our programs 
tend to be gold-plated and over-budget and take much longer to execute 
than desirable. An empowered program manager (team leader) and team of 
specialists could make these critical decisions much better. This is 
one reason classified programs tend to do better. They are shielded 
from the layers of consensus-building groups that normally guide our 
acquisition process.
    Section 941 prescribes requirements for cross-functional teams that 
would enable them to overcome this fatal flaw and successfully fulfill 
their missions. It would carefully protect the teams from interference 
by leaders of functional organizations and enable the program manager/
team leader and his or her team to deliver a product faster and closer 
to original cost estimates and with the most important capabilities 
rather than all the capabilities desired by participating 
organizations.
                  offices within pentagon bureaucracy
    4. Senator Ayotte. Mr. Locher, if we create new cross-functional 
teams, what parts of the Pentagon bureaucracy should be eliminated to 
ensure we are not simply adding additional layers of bureaucracy 
without eliminating unnecessary or redundant layers?
    Mr. Locher. The natural response of an organization failing to 
perform well is to increase effort. Some functional leaders in the 
Pentagon can see the need for cross-functional solutions, but they 
cannot get other functional elements to cooperate. If they attempt to 
collaborate, those organizations thwart their efforts. Everyone can say 
``no'' and derail a solution, but no one other than the Secretary of 
Defense has the authority to integrate a cross-functional solution. So, 
functional elements compensate by expanding their offices to include 
functional experts from other disciplines, adding people with budget, 
technology, or policy expertise. As the office staff expands in size, 
more management is needed. These middle managers zealously guard their 
prerogatives and naturally compete with other offices vying for similar 
functional knowledge. Each office hoards their information rather than 
sharing it. Consequently, the overall organization increases in size 
and management levels but remains unable to accomplish cross-functional 
missions well.
    This describes the Pentagon today. In an effort to use the outdated 
functional bureaucracy to solve today's complex, cross-functional 
defense challenges, the Pentagon has added more personnel and 
management levels. These additional managers and personnel work 
incredibly hard but to little avail. No amount of hard work can 
overcome the obstacles created by a rigid functional structure, non-
collaborative culture, and the wrong organizational and individual 
incentives.
    Cross-functional teams have been shown to be much more efficient in 
formulating effective solutions to complex problems. If the Secretary 
of Defense were successful in establishing and empowering cross-
functional teams, it would be possible to identify and eliminate excess 
management layers and personnel. Section 941 mandates these actions. 
Within a year of the next Secretary of Defense's appointment, he or she 
would be required under the subsection (e) of Section 941 to ``take 
such actions as the Secretary considers appropriate to streamline the 
organizational structure and processes of the Office of the Secretary 
of Defense in order to reduce spans of control, achieve a reduction in 
layers of management, eliminate unnecessary duplication between the 
Office and the Joint Staff, and reduce the time required to complete 
standard processes and activities.''
                               __________
             Questions Submitted by Senator Mazie K. Hirono
                  formation of cross-functional teams
    5. Senator Hirono. Mr. Locher, you mentioned in your testimony that 
the Secretary of Defense has control over what cross-functional teams 
will be formed and also has control over how long these teams will be 
implemented, depending on their purpose. What areas would benefit the 
most from the implementation of cross-functional teams? How would 
cross-functional teams succeed in the combatant commands compared to 
the OSD environment?
    Mr. Locher. In an earlier question for the record from Senator 
Ayotte, I suggested nine missions and seven priority outputs that would 
immensely benefit from using cross-functional teams.
    Cross-functional teams could also be successfully employed in 
combatant commands. At present, the headquarters staff of each 
combatant command is organized around a traditional military staff 
structure, such as: J-1 (Personnel), J-2 (Intelligence), J-3 
(Operations), J-4 (Logistics), J-5 (Policy), J-6 (Communications), J-7 
(Exercises and Assessments), J-8 (Resources), and J-9 (Interagency 
Partnering). This is the same type of functional structure that is 
hampering the ability of OSD offices to address missions and priority 
outputs that cross multiple functional boundaries. For example, the 
U.S. Pacific Command's Posture Statement, presented to the committee in 
March 2016, prioritized the following six mission areas: North Korea, 
natural disasters, territorial disputes, cyber, violent extremism, and 
Chinese military modernization and intent. One J-directorate cannot 
comprehensively address any of these missions. On the contrary, each 
mission will involve many J-directorates. The best organization 
approach for comprehensively and rapidly integrating these diverse 
functional perspectives is a cross-functional team.
    The U.S. Northern Command successfully employed cross-functional 
teams under the leadership of Admiral James A. Winnefeld Jr., during 
his command tour from May 2010 to August 2011. He created eight teams, 
called Focus Area Synchronization Teams, for the following missions: 
(1) Counter-Terrorism and Force Protection; (2) Transnational Criminal 
Organizations; (3) Defense Support to Civil Authorities; (4) CBRNE 
Consequence Management; (5) Aerospace Warning and Control; (6) The 
Arctic; (7) Missile Defense; and (8) Maritime Warning and Control. 
These teams were directed by a general officer or civilian equivalent 
and synchronized efforts across the command and its J-directorates. 
Admiral Winnefeld assigned each team clear tasks and made them directly 
accountable to him. Some staff observed that headquarters-wide 
engagement and conflict resolution were better with the eight cross-
directorate teams than at any other time in Northern Command's history. 
After Admiral Winnefeld's departure, the new commander--bowing to 
pressure from the J-directorates--disbanded the teams despite their 
utility. Nevertheless, this experiment at the U.S. Northern Command 
demonstrates that cross-functional teams would enable combatant 
commands to more effectively address their missions.
    Although Section 941 only mandates cross-functional teams centered 
on the Office of the Secretary of Defense, it can be expected that this 
advanced organizational practice will quickly spread to the Joint 
Staff, military department headquarters, and combatant command 
headquarters.
                   goldwater-nichols lessons learned
    6. Senator Hirono. Mr. Locher, you were heavily involved in the 
Goldwater-Nichols Defense Reorganization Act of 1986 and helped to 
shape the Department of
Defense as we know it today. Looking back over 30 years, what are some 
of your lessons learned from the policies you helped to implement? Is 
there anything you wish had been done differently?
    Mr. Locher. There are three important lessons that I learned from 
the enactment and implementation of the Goldwater-Nichols Act. First, 
in formulating reforms, it is imperative to have a precise 
understanding of the problem to be fixed and its causes. It is not 
possible to devise effective reforms without a full appreciation of the 
problem and its causes, because it is the causes that reforms must 
target. One Goldwater-Nichols provision where the necessary 
understanding of problems and causes was not achieved was the 
requirement for the president to submit annually a national security 
strategy. The president does occasionally submit a document with that 
title, but it falls far short of being a strategy. In Goldwater-
Nichols, the two Armed Services Committees did not understand the 
obstacles to the formulation of a genuine national security strategy.
    A second lesson is the need for rigorous congressional oversight of 
reform implementation. At the time of Goldwater-Nichols, the two 
committees understood that 50 percent of the reform battle would be 
implementation. Accordingly, the committees wrote reporting 
requirements into the law, requested reports from the U.S. Government 
Accountability Office, and conducted oversight hearings. All of these 
actions were needed in an effort to achieve a high degree of compliance 
with congressional intent. In some instances, however, Pentagon 
implementation was poor. This was the case for the joint officer 
management provisions. The two Armed Services Committees planned to 
rely on senior joint officers--the Chairman and Vice Chairman of the 
Joint Chiefs of Staff and combatant commanders--to ensure rigorous 
implementation. This expectation did not materialize. Senior joint 
officers showed no interest in joint officer management. On the other 
hand, the four services did, but they had different objectives. They 
wanted to advance the interests of their service not the interest of 
the joint world. In this case, congressional oversight was not vigilant 
enough.
    A third lesson is the great difficulty of the Department of Defense 
to reform itself. All organizations--business, government, and 
nonprofit--are challenged to reorganize themselves when performance is 
disappointing. As one of the world's largest and most complex 
organizations, the Department of Defense has proven to be especially 
challenged. It bitterly opposed the two greatest defense 
transformations of the last 70 years: the Goldwater-Nichols Act and 
Cohen-Nunn Amendment that created the U.S. Special Operations Command 
and forced the Pentagon to begin addressing the irregular warfare that 
dominates conflict today. Similarly, the Pentagon is staunchly 
resisting the provisions of section 941, which would bring about the 
next revolution in defense organization.
    As to what I would have done differently, I should note that there 
were very few issues that could have been addressed differently. 
Goldwater-Nichols was a bitter battle between pro-reform members of the 
two Armed Services Committees and the Pentagon and their anti-reform 
allies on the two committees. This battle lasted for four years and 241 
days. The final bill pushed the reform envelope in 1986 about as far as 
it could be pushed.
    Beyond political constraints, some organizational concepts had not 
yet been developed. It has been noted that the cross-functional-team 
concepts that underpin section 941 were unknown in the mid-1980s. Thus, 
there was no definitive solution to the Senate Armed Services 
Committee's concern about the lack of mission integration in DOD 
headquarters.
    Recognizing that political and conceptual constraints would have 
made it difficult to do things differently, let me identify several 
topics that I wish could have been addressed better: (1) development of 
solutions to the Pentagon's mission integration problem; (2) civilian 
education on leadership, management, and organization, especially for 
senior DOD leaders; (3) merging the service secretariats and military 
headquarters staffs; (4) better promoting strategic needs in the use of 
resources, which are still dominated by service perspectives; (5) 
formulation of strategy; and (6) management and oversight of defense 
agencies, whose total budget is now as big as a military department 
budget.

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