{"id":35987,"date":"2018-05-22T16:47:03","date_gmt":"2018-05-22T16:47:03","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/05\/22\/how-the-dods-first-ever-chief-management-officer-plans-to-turn-cash-into-military-capabilities\/"},"modified":"2026-08-07T22:55:31","modified_gmt":"2026-08-07T22:55:31","slug":"how-the-dods-first-ever-chief-management-officer-plans-to-turn-cash-into-military-capabilities","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/interviews\/2018\/05\/22\/how-the-dods-first-ever-chief-management-officer-plans-to-turn-cash-into-military-capabilities\/","title":{"rendered":"How the DoD\u2019s first-ever chief management officer plans to turn cash into military capabilities"},"content":{"rendered":"\n

WASHINGTON \u2015 A frequent refrain from U.S. Defense Secretary Jim Mattis is the need to reform the internal workings of the Pentagon to find efficiencies<\/a> that can be reinvested toward war-fighting capabilities. Helping to guide that project is John H. \u201cJay\u201d Gibson II, the Pentagon\u2019s first-ever chief management officer.<\/p>\n\n\n\n

In his first interview since taking office, Gibson \u2015 a former U.S. Air Force financial official who has spent significant time in industry \u2015 laid out his plan for tackling the traditionally thorny issue of internal management reforms.<\/p>\n\n\n\n

We hear so often that the Pentagon bureaucracy resists change. You\u2019ve essentially been in place for six months. Have you felt that resistance?<\/b><\/p>\n\n\n\n

It doesn\u2019t really matter whether it\u2019s the government or whether it\u2019s a large corporate entity \u2015 any time you look at change, you\u2019re going to see a bit of hesitation, bit of resistance. I mean, we\u2019re all human beings. Change is something that we are always a bit hesitant about. So I wouldn\u2019t characterize it that really here is anymore unique than industry. I think that we\u2019re addressing that heads up. We\u2019re getting the buy-in.<\/p>\n\n\n\n

The other thing I\u2019d say that\u2019s perhaps different now in addition to the support from the leadership in alignment is, historically, many times we\u2019ve tried to find efficiencies has been because there\u2019s been a budget cut. The process we have the benefit of now, thanks to both the Congress and the leadership, is that the services and the department has a good feel of what\u2019s available to it over the next period of time. So we can start planning and instituting this type of behavior on a very rational, thoughtful process. That gives it the best opportunity for success.<\/p>\n\n\n\n

You have nine priority areas: information technology, human resources, community services, contracts, real property, testing and evaluation, medical services, logistics and supply, and financial management. How do you prioritize or balance out those areas? What were your first steps?<\/b><\/p>\n\n\n\n

We said: \u201cAll right, let\u2019s take what we know are corporate or common type of services that we can benchmark against the private sector and say, \u2018We know there\u2019s opportunity here to find efficiencies and optimization.\u2019 \u201c Then now that we\u2019ve got [those areas], then you can say: \u201cLet\u2019s take people that are subject matter experts from the enterprise, have them lead the team and then populate the team with stakeholders.\u201d Let them go out and say: \u201cI see these opportunities. I know this world. Let me pick projects that I think that we can see benefit from still aligning to the common goal of creating efficiencies enterprisewide.\u201d Then that\u2019s vetted through a governance structure, which is the Reform Management Group. That also includes stakeholders at a higher level.<\/p>\n\n\n\n

So there\u2019s a feedback loop there. We want you to be aware of what we\u2019re going to do, so that way you\u2019re buying in. Then we\u2019re going to come back and report to you to let you know how we\u2019re doing. Then the final piece is the reward cycle, and that\u2019s why it\u2019s different. In this year we can tell you that we found this amount of savings. Now Army, this belongs to you. Air Force, this belongs to you. The reward cycle is incredibly valuable. That goes back to why it\u2019s perhaps a little bit different this time.<\/p>\n\n\n\n

Can you throw out an example of a project where you\u2019re seeing this reward cycle funnel back to the services?<\/b><\/p>\n\n\n\n

Sure, this one just came up and it\u2019s great. In the medical world, we\u2019re contracting for professional services across each of the services, independent contracts. [Now] we can simply say: \u201cLook, we found the best contract. Let\u2019s go to that one, everyone.\u201d I know it\u2019s a simple concept, but we can start to phase that in. Just in the early stage this next year, we\u2019ll save about $20 million [per year] and then $75 million [per] when we\u2019ve reached full-run rate in a couple years. If you look at just in year one, that\u2019s about 400 flight hours of an F-35A. At run rate, that\u2019s about 1,500 hours. It supports lethality. That brings those resources back to the services to use.<\/p>\n\n\n\n

Is there a figure you\u2019re aiming for, in terms of savings, over the next five years?<\/b><\/p>\n\n\n\n

We have a baseline, which is the Office of Management and Budget targets that they are expecting of us, and that begins with $6 billion in \u201919 and goes through $46 billion over the Future Years Defense Program. So that\u2019s in the aggregate. We use that as a baseline. But the way we\u2019re looking at this is, organically, we\u2019re bringing up these projects. They have a readiness and a financial benefit. We\u2019re tracking those, and then we\u2019re measuring those. We\u2019re constantly refining it. Then we begin to track those. Ultimately, this will translate to how we return those resources because the accounting has to all stack up. We used to spend $100 on something; now we are spending $72. That\u2019s $18 per month in savings, but we have to validate that, make sure it\u2019s real, be consistent and then say: \u201cOK, at some point, potentially in the year of execution, we want to reprogram those funds back to wherever.\u201d<\/p>\n\n\n\n

I would tell you that we\u2019re very sensitive because part of our changing of a culture here is leaning forward. We\u2019re willing to what I\u2019d say: flight, test, fly. So instead of trying to analyze forever for perfect, we\u2019re saying everybody thinks it\u2019s a good idea, let\u2019s go ahead and begin phase one of this. Let\u2019s go. Let\u2019s go. Then we\u2019ll refine our numbers and get more fidelity. [For] a good idea, we\u2019re willing to accept some risk of implementation of a good idea. Any time you go out after a reform or a change effort in any organization, part of the component of success is establishing the ability of the credibility of what you\u2019re doing. Get some quick wins. Say: \u201cThat process works.\u201d Then you can continue to grow it from there.<\/p>\n\n\n\n

One thing I don\u2019t want to overlook is we\u2019re looking for operational efficiencies. Sometimes that simply yields financial benefit. Sometimes that yields what I\u2019ll call an operational readiness benefit, but not financial. But it\u2019s still good and still incredibly important. If we\u2019re able to simplify the process, reduce the number of man hours, sometimes that\u2019s hard to quantify, but there is still a tremendous benefit to readiness. Then sometimes we find the projects that have a nice blend of both. So it\u2019s not just money.<\/p>\n\n\n\n

How confident are you that your office can help get to those OMB-targeted savings levels?<\/b><\/p>\n\n\n\n

We\u2019re very comfortable. We\u2019re probably going to pleasantly surprise people. I\u2019m not going to start throwing out numbers yet. But I think this is a complement to the teams we have, as well as everybody else that\u2019s involved in this process. They say: \u201cWe\u2019re in, we\u2019re willing, we\u2019re willing to give this a shot.\u201d I think, again, that starts at the top. The fact that the secretary is willing to make this a priority and he lives it every day \u2015 that\u2019s just invaluable.<\/p>\n\n\n\n

House Armed Services Committee Chariman Rep. Mac Thornberry has put forth a plan that would involve large cuts to the civilian workforce, including eliminating seven offices<\/a>. Is that something you support? <\/b><\/p>\n\n\n\n

In general, I would say that we\u2019re aligned with the spirit of where he\u2019s going. Because if we\u2019re going to reform the business, you can\u2019t cherry pick what part of the business you\u2019re going to look at. You\u2019re going to get the most value and the most synergies from true enterprisewide reform. Let\u2019s look horizontally and make sure we\u2019re not duplicating efforts where we could consolidate those and make a center of excellence and leverage it across the enterprise. So in the spirit of where the chairman\u2019s going, I\u2019d say we\u2019re totally aligned. Once it comes out and we look at the details, we can probably get into that more. But at the high level, I think we support it. That\u2019s aggressive. But I think that we\u2019re going to start with doing this right. Given how we operate, I think there\u2019s significant opportunity. What the number ends up being, I think we\u2019ll know more as we get into it. But again, we\u2019re aligned with the spirit of where he\u2019s going with this.<\/p>\n\n\n\n

What would you say to a workforce who might be nervous about such cuts?<\/b><\/p>\n\n\n\n

Part of what makes up the cost is people. But our goal is we need to operate this business in the most efficient and effective manner. Those resources going back to make us the most lethal we can be [for] our men and women in uniform. The other is to be the best stewards of the taxpayer money. Any time you take on projects of this nature, you may have those situations where you have to rearrange the resources. But we\u2019re going to do what\u2019s best on behalf of the taxpayer and the department.<\/p>\n\n\n\n

Along those lines, are you on track for the congressionally mandated 25 percent headquarters reduction?<\/b><\/p>\n\n\n\n

I think we\u2019re on target and trajectory. That\u2019s one of the things I think that we would want to balance with anything that comes out of the upcoming bill, whatever the end result would be, to make sure that there\u2019s potentially no disruption between the two. But I think that\u2019s very doable because at the end of the day, the ultimate goal is the best and most efficient operation to the enterprise. I think the Congress will work with us whatever that may end up being.<\/p>\n","protected":false},"excerpt":{"rendered":"

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