Secretary of Defense Fellows Program 1 Secretary of Defense Fellows Program 1997- 1998.
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Transcript of Secretary of Defense Fellows Program 1 Secretary of Defense Fellows Program 1997- 1998.
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Secretary of Defense Fellows Program
Secretary of DefenseFellows Program
1997- 1998
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Secretary of Defense Fellows Program
SDFP BackgroundSDFP Background
Infrastructure 2/3 of Defense Budget– Business practices reform generates savings– Savings applicable to shortfalls
Businesses outside DoD successful in:– Adapting to changing global environment– Exploiting information revolution– Structural reshaping/reorganizing– Developing innovative processes
DoD needs effective access to best business practices
Secretary of Defense Fellows Program
SDFP OrganizationSDFP Organization
Permanent Staff- SDSSG Director, Deputy, Admin Staff
Two officers from each Service (USMC one)- High flag/general officer potential
- O-6 or O-5
- Senior Service College credit
Ten months at Sponsoring Company Group Education
- Seminars
- Wargames
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Secretary of Defense Fellows Program
SDFP ObjectivesSDFP Objectives
Final Report and Briefing to SecDef/Services– Business insights relevant to DoD culture/operations– Recommended process/organization changes
Build a cadre of future leaders who:– Understand more than the profession of arms – Understand adaptive and innovative business culture– Recognize organizational and operational opportunities– Understand skills required to implement change– Will motivate innovative changes throughout career
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Secretary of Defense Fellows Program
SDFP SponsorsSDFP Sponsors
96- Prior– American Management Systems, CNN, CITICORP
Hewlett-Packard, Lockheed Martin, Loral, McDonnell Douglas, Microsoft, Oracle, Northrop Grumman, Sarnoff Labs
97- 98– Andersen Consulting, DIRECTV, Mobil,
Northrop Grumman, Sears, Southern Company
98- 99– Boeing, Caterpillar, Cisco Systems, Netscape,
Coopers & Lybrand, Raytheon Systems
Secretary of Defense Fellows Program
SDFP ResultsSDFP Results
Program objectives fulfilled- Education, education, education
- More sponsors than fellows
- Inter/intra-group experience sharing
Unique corporate experiences
- Strong corporate support
- Executive/operational level mix
- Mergers/restructuring
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Secretary of Defense Fellows Program
SDFP FellowsSDFP Fellows
CAPT Mark Adrick Andersen Consulting
Col Mike Marro DIRECTV COL Larry Matthews Mobil Corporation Col(Sel) Janet Therianos Northrop Grumman Col(Sel) Andy Frick Sears Roebuck CAPT Linda Nagel Southern Company
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Secretary of Defense Fellows Program
Andersen Consulting
Global Consulting Firm– 46 countries; over 53K Employees – 1997 growth 20+%; revenue $6.6B
Organization– Core Competencies
• Strategy• Process• Change Management• Technology
– 16 Global Market Units• Aligned with specific industries (e.g. Communications)
– Cross-functional/ Industry Solution Centers
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
Andersen Consulting
Business integration approach– People + Process + Technology = Capability
• Changes in one factor affects all others
– Focus on aligning capability with strategy
Change Management– It’s a Journey
• What is the destination?
• Are we ready to embark?
• Chart the course
• Reassess along the way- change course if needed
• Identify potential obstacles; manage the journey
– “Rule of the Road” #1: Change is Painful!
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
Andersen Consulting Observations/Recommendations
Infrastructure– Extensive intranet/ Mobile Computing
• World-wide access- work anywhere• Flexibility minimizes lost productivity
– Virtualization• All admin/personnel mgt... functions “Paperless”
– Knowledge Xchange• 6000+ databases• Access to firm’s knowledge capital• Provides forum for communities of practice
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
Andersen Consulting Observations/Recommendations
– Develop a clear technology vision/strategy
– Ensure organization has requisite skills or • Partner/Outsource
– Common standards/ protocols• A must for eCommerce
– Emerging tech support solutions • eCommerce
– Electronic procurement
• Business training simulation tools– Human performance improvement
• Networked collaboration– Workplace-of-Future
Secretary of Defense Fellows Program
Andersen Consulting Observations/Recommendations
Technology Integration
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Secretary of Defense Fellows Program
SDFP FellowsSDFP Fellows
CAPT Mark Adrick Andersen Consulting
Col Mike Marro DIRECTV COL Larry Matthews Mobil Corporation Col(Sel) Janet Therianos Northrop Grumman Col(Sel) Andy Frick Sears Roebuck CAPT Linda Nagel Southern Company
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Secretary of Defense Fellows Program
DIRECTVDIRECTV
Fastest growing consumer electronics product in history – 3.5+ Million subscribers in 3.5 years– >1200 employees; 1997 revenue $1.1B
Direct Broadcast Satellite television– 175+ channels, all digital, 24h x 7d operations– Three geosynchronos satellites
Information Technology Department– Critical Business Systems
Data Center construction Billing operations
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Secretary of Defense Fellows Program
DIRECTV ObservationsDIRECTV Observations
“Virtual” business -- Mostly outsourced– Customer service– Hardware/retail sales– Billing/remittance
Outsourcing– Rationale:
Have agility Gain capability Avoid costs
– Don’t outsource core competencies– Understand risks
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Secretary of Defense Fellows Program
DIRECTV ObservationsDIRECTV Observations
Y2K Problem– Business & government behind– Planning focus too narrow
Best case (things will work) assumed v. worst case
– Systems-level effects Electric power & utilities Embedded processors Rail systems Global financial system Local, state & Federal governments
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Secretary of Defense Fellows Program
DIRECTV RecommendationsDIRECTV Recommendations
Have realistic expectations for outsourcing– Know what you need & want– Contract carefully -- Be vigilant– Be prepared to pay -- Outsourcing is not cheap
Y2K Problem– Begin scenario based planning– Look at macro systems level impacts– Assume worst case scenarios
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Secretary of Defense Fellows Program
SDFP FellowsSDFP Fellows
CAPT Mark Adrick Andersen Consulting
Col Mike Marro DIRECTV COL Larry Matthews Mobil Corporation Col(Sel) Janet Therianos Northrop Grumman Col(Sel) Andy Frick Sears Roebuck CAPT Linda Nagel Southern Company
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Secretary of Defense Fellows Program
Mobil CorporationMobil Corporation
Global petroleum company– 125 countries; 43K employees– 1997 revenue $3.3B
Core competencies– Exploration/production– Marketing/refining– Chemicals
Major issues– Low margins/increased competition– Environment/geo-political risks– Diminishing technical skills– Aging US-centric workforce
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Secretary of Defense Fellows Program
Mobil CorporationMobil CorporationObservations/RecommendationsObservations/Recommendations
Standard Managed Info Tech Environment – Common operating systems– Standardized hardware/software– Organizations share “best practice” processes
and improvements– Single point for problem resolution– Platform for growth– Significant cost reduction
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Secretary of Defense Fellows Program
Mobil CorporationMobil CorporationObservations/RecommendationsObservations/Recommendations
Knowledge Management – Maximizes return on intellectual capital– Levels
Deriving value from knowledge (mining) Generating new knowledge (creation) Continuous learning (updating)
– Key components People networks Supporting computer technologies
– Why Limited resources Experts leveraged
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Secretary of Defense Fellows Program
Mobil CorporationMobil CorporationObservations/RecommendationsObservations/Recommendations
Outsourcing– No “Silver Bullet”– Enhance core competencies -- Don’t replace– Commitment and buy-in is key– Fully understand
Current status -- Don’t outsource a “mess” Current in-house costs Does vendor provide more effective service
– Know when to say “No!”– Do what is best for organization
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Secretary of Defense Fellows Program
SDFP FellowsSDFP Fellows
CAPT Mark Adrick Andersen Consulting
Col Mike Marro DIRECTV COL Larry Matthews Mobil Corporation Col(Sel) Janet Therianos Northrop Grumman Col(Sel) Andy Frick Sears Roebuck CAPT Linda Nagel Southern Company
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Secretary of Defense Fellows Program
Northrop Grumman ESSDESSD
One of five NG major divisions– Formerly Westinghouse Defense & Electronics
Electronic Sensors & Systems Division – 11,000 employees– 200 key programs; 3500 contracts
Radar expertise forte Corporate “Crown Jewel”
– Cutting edge technology– Key components of advanced weapon systems
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Secretary of Defense Fellows Program
Northrop Grumman ESSD ESSD Observations/RecommendationsObservations/Recommendations
Post acquisition restructuring goals– Eliminate excess infrastructure – More efficient use of resources– Capitalize on embedded resources and
disciplines “Homeroom” model for achieving goals
– Centralized base of operations for personnel Develops functional skills/tools/services/processes Administers training, career development Manages talent pool
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Secretary of Defense Fellows Program
“Homeroom” Benefits– Standardized processes– Leveraged use of tools– Effective use of personnel– No added overhead
DoD application– Joint warfighting CINC development– Benefits
Develop/track future commanders DoD-wide view of talent Centralized quality control/standardized processes Common joint commander perspective
Northrop Grumman ESSD Observations/Recommendations
Northrop Grumman ESSD ESSD Observations/RecommendationsObservations/Recommendations
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Secretary of Defense Fellows Program
Northrop Grumman ESSD ESSD RecommendationsRecommendations
Acquisition Reform– Progress -- Huge thumbs up– Market Pricing next step
Move from Contract Cost Pricing Cost Pricing = rigorous, detailed accounting After development, Pre-production, LRIP
Market Pricing = Commercial Practice Saves $$$
Eliminates excessive infrastructure Government and industry
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Secretary of Defense Fellows Program
SDFP FellowsSDFP Fellows
CAPT Mark Adrick Andersen Consulting
Col Mike Marro DIRECTV COL Larry Matthews Mobil Corporation Col(Sel) Janet Therianos Northrop Grumman Col(Sel) Andy Frick Sears Roebuck CAPT Linda Nagel Southern Company
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Secretary of Defense Fellows Program
SEARS ROEBUCK & CO.
Large, complex, full service retailer– 3,200+ stores; 300K associates nationwide– 60+M households
Retail Industry Leader– Customer database management innovator
Sears Logistics Group– Tailored logistics solutions– Paradigm: Flow -- Don’t store– Total logistics chain visibility– Sears horizontal strengths leveraged
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
SEARS ROEBUCK & CO. Observations/Recommendations
Build a winning culture– Employee ownership the key!
Relate pay/benefits to business strategy– Goal sharing/performance bonuses
Admit mistakes & handle quickly– Reputation built on trust & integrity
Foster climate of innovation– Manage for long term w/ short term goals
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
SEARS ROEBUCK & CO. Observations/Recommendations
Strategic vision– Top-down adaptive planning
• Clear concise guidance
– Multiple, interwoven plans– Balanced objectives– Information systems the “glue”
Focus on meeting changing customer needs
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
SEARS ROEBUCK & CO. Observations/Recommendations
People– Military cannot compete w/ compensation– New paradigm needed
Vendors– Strategic partnerships, cooperative solutions– Expand outsourcing
• Non-core capabilities
Technology– Apply, integrate -- Don’t chase
Secretary of Defense Fellows Program
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Secretary of Defense Fellows Program
SDFP FellowsSDFP Fellows
CAPT Mark Adrick Andersen Consulting
Col Mike Marro DIRECTV COL Larry Matthews Mobil Corporation Col(Sel) Janet Therianos Northrop Grumman Col(Sel) Andy Frick Sears Roebuck CAPT Linda Nagel Southern Company
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Secretary of Defense Fellows Program
Southern CompanySouthern Company
Vertically integrated holding company– Five Southeast US electric utility companies
Largest US electricity producer; most profitable
– Diversified, unregulated companies (e.g. gas)– 29,000 employees
Preparation for re-regulation & competition– Acquiring generating capacity/commercial
customers throughout US.– Global presence in six countries
#4 in worldwide generating capacity
– Marketing and trading energy as a commodity
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Secretary of Defense Fellows Program
Southern Company Southern Company ObservationsObservations
Massive, top-down driven culture change– Shift from managing assets to satisfying
customers– Attempting to quantify impact on revenue from
increasing customer satisfaction Streamlining business planning
– Tighten link of company goals to budget process– Five year budget, three year emphasis
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Secretary of Defense Fellows Program
Southern Company Southern Company ObservationsObservations
High emphasis on shared goals tied to pay– Tighten link of company goals to individual
performance, evaluation and compensation Link improvement in customer satisfaction to pay via
incentives
Implied contract with employees re-written– No longer “job for life” – Must be flexible
job description location hours
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Secretary of Defense Fellows Program
Southern CompanySouthern CompanyRecommendationsRecommendations
Reward TEAMWORK, not just individual performance
“Family of performers,” not “family for life” Review processes, don’t just automate “Shared services” for common processes
– Travel, personnel, C4I– Don’t duplicate management at both Services
and DoD level Outsource very carefully
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Secretary of Defense Fellows Program
SDFP Common SDFP Common Observations/RecommendationsObservations/Recommendations
Y2K Problem– Primes OK; Subs and Overseas way behind– Legal liability a growing roadblock– Major disruptions likely; contingencies required
R & D– Critical to longevity– $$$ fenced
Innovation– Risks taken– Failed experiments expected
Not career threatening
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Secretary of Defense Fellows Program
SDFP Common SDFP Common Observations/RecommendationsObservations/Recommendations
Change management plan a must– Determine actual processes first– Educate and empower employees in changes– Multi-year process; leadership continuity critical
Incentives– An absolute for change– Fear not enough; benefits must be shared
Internal Organization– Flexible/dynamic structure– Collaboration/Teaming
Info tech the enabler
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Secretary of Defense Fellows Program
SDFP Common SDFP Common Observations/RecommendationsObservations/Recommendations
Information Technology– Lease to maintain state of the art– Enterprise-wide architectures/protocols a must– Enabler for common admin function processes– Paperless/deskless/virtual when sensible
Strategic Planning/Vision– Topdown, not bottom up
Fiscal Planning– 18-36 months max
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Secretary of Defense Fellows Program
SDFP Common SDFP Common Observations/RecommendationsObservations/Recommendations
Outsourcing– Determine core business key - don’t outsource
Demographic imperatives– Workforce shortage– Industry increasingly forced to educate– Growing competition with military for skills
Partnerships/Teaming– Trust, sharing -- Not adversarial
Culture– High employee value compensated