Transforming resource management to support an Army at war: the Army's chief financial officer examines three priorities for best use of the nation's money

Public Manager, The, Winter, 2007 by Nelson M. Ford

The problem comes into clearer focus when we add the annual cost of the doctrinal Army to the picture. If the war were to end tomorrow and the Army's budget returned immediately to the FY08 base budget level, the resulting strategy-resourcing mismatch would be approximately $25 billion. Even without an immediate end to the war, we expect that the usual political pressures will push for significant reductions in supplemental funding.

With this prospect in sight, we can choose between two courses of action. If we stand back and do nothing, supplemental funding will dry up with no restoration of the base, the Army's capabilities will atrophy, and the risk that the Army will not be ready for its next mission will increase. Instead, we can make a persuasive case to migrate crucial activities back into the base.

Adopting a Cost Culture

The implementation of all three priorities will be enhanced if the Army adopts a "cost culture." Before defining a cost culture, let's examine how the Army's culture works and how we can achieve cultural change. In any organization, large or small, culture refers to how the group behaves and what it believes. For example, the military culture values mission accomplishment, selfless service, valor, and dedication--concepts that serve as foundations for how the members of America's armed forces go about their duties. These are concepts and aspects of the military culture that we can all understand. What does adopting a cost culture in the Army mean? One way to think about it is to imagine what the world will look like when the initiative is successful. We expect Army leaders and managers to exhibit certain types of behavior once a cost culture has taken root (see box). The essence of these behaviors is incorporating cost considerations into all decision making; it must become second nature and not take a back seat to operational, political, and other considerations.

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How should we go about implementing this idea in the Army? Because cultural change is not easy, we are starting with a three-pronged approach.

First, we plan to get the Army's senior leaders actively engaged in effective cost management. Top-down support and buy-in is essential to the success of any management initiative, especially changes that challenge our assumptions about how the world works. Fortunately, in a hierarchical organization like the Army, members quickly learn to emulate the behavior of the boss. If a leader gives lip service to cost management issues (but his behavior demonstrates that cost considerations are unimportant), subordinates follow suit. If, on the other hand, resource stewardship and tradeoffs between cost and performance are part of every conversation that subordinates have with the boss, they quickly get the message and alter their behavior. Therefore, we plan to educate the Army's leaders in cost management, beginning with our most senior leaders.

Second, a cost culture requires robust analytical tools and systems that furnish accurate, timely information to support decision making. Although we have some systems today that provide good decision-support information, we need enterprise solutions that support the more rigorous analysis necessary to understand today's complex, interconnected Army. This is why the development and fielding of GFEBS--the General Fund Enterprise Business System--continues to be our number one system priority.