Having inherited the defense structure that won the Cold War and Desert Storm, the Clinton Administration intends to leave as its legacy a defense strategy, a military, and a Defense Department that have been transformed to meet the new challenges of a new century.
Our strategy will ensure that America continues to lead a world of accelerating change shaping the emerging security environment and responding to crises that threaten our interests. We will execute the strategy with superior military forces that fully exploit advances in technology by employing new operational concepts and organizational structures. And we will support our forces with a department that is as lean, agile, and focused as our warfighters.
The Defense Reform Initiative addresses the third element of this DoD corporate vision: igniting a revolution in business affairs within DoD that will bring to the Department management techniques and business practices that have restored American corporations to leadership in the marketplace. For 18 years as the chairman/ranking member of the Senate Oversight of Government Management Subcommittee and a member of the Armed Services Committee, I devoted myself to bringing competition and best commercial practices into the business of government and, especially, defense. During my confirmation hearing ten months ago, I pledged to make this a priority as Secretary.
To understand the importance and imperative of succeeding in this task, it is necessary to review the first two elements of our departmental corporate vision: our new defense strategy and the transformation of our military forces.
Defense Strategy
In May, the Department of Defense completed perhaps the most fundamental and comprehensive review ever conducted of our defense posture, policy, and programs. The Quadrennial Defense Review (QDR) examined the national security threats, risks, and opportunities facing the United States today and out to 2015. Based on this analysis, we designed a defense strategy to implement the defense requirements of the President's National Security Strategy for a New Century. Our defense strategy has three central elements:
- Shape the international security environment in ways favorable to US interests by promoting regional stability, reducing threats, preventing conflicts, and deterring aggression and coercion on a day-to-day basis.
- Respond to the full spectrum of crises that threaten US interests by deterring aggression and coercion in a crisis, conducting small-scale contingency operations, and fighting and winning major theater wars.
- Prepare now for an uncertain future through a focused modernization effort, development of new operational concepts and organizations to fully exploit new technologies, and efforts to hedge against threats that are unlikely but which would have disproportionate security implications such as the emergence of a regional great power before 2015.
This is not mere rhetoric. It is the basis for what our defense policy planners and military forces do every day. Since the QDR was undertaken:
- We have shaped the international security environment by moving to enlarge NATO, enhancing the Partnership for Peace, establishing the NATO-Russia Founding Act and the NATO-Ukraine Charter, revising the US-Japan Guidelines for Defense Cooperation, initiating a trilateral US-Japanese-South Korean security dialogue, establishing a defense dimension to the ASEAN Regional Forum, and normalizing defense cooperation with Latin American democracies.
- We have responded to crises around the globe, participating in the Stabilization Force in Bosnia, evacuating noncombatants from western Africa and Albania, fighting fires in Indonesia, and containing Saddam Hussein.
- We have accelerated preparations for the future by enhancing our efforts to defend against asymmetric threats, such as chemical or information attacks, and by conducting warfighting experiments to test new systems and operational concepts.
- But executing this strategy requires a defense posture that balances the demands of meeting present requirements around the globe with the imperative to invest for the future. This balance can be achieved only if resources are reallocated from overhead and support activities to our fighting forces.
Transforming our Military
The programs we are pursuing to exploit the potential of information and other advanced technologies will transform warfighting and lead to forces that are different in character. Quality people, ready forces, and superior doctrine and technology will continue to be hallmarks of our military. But new ways of organizing and employing joint military forces will make possible new levels of effectiveness across the range of conflict scenarios.
The conceptual framework for how US forces will fight in the future is Joint Vision 2010, which charts a path to ensure that US forces will be able to conduct decisive operations in any environment. Joint Vision 2010 describes this goal as "full spectrum dominance."
At the heart of Joint Vision 2010 is the ability to collect, process, and disseminate a steady flow of information to US forces throughout the battlespace, while denying the enemy ability to gain and use battle-relevant information. This Revolution in Military Affairs promises to enable our forces to attack enemy weaknesses directly throughout the battlefield with great precision (and therefore with fewer munitions, less lift, and less collateral damage); to better protect themselves from enemy attack during deployment, maneuver and combat; and to receive the right supplies in the right place at the right time, thereby reducing support requirements. The result will be forces that are more deployable, agile, and lethal.
These capabilities for transforming our military forces are attainable but the extent and pace of this transformation depends upon the availability of resources to invest in the necessary research, development, testing and procurement. Reducing overhead and support structures by bringing the Revolution in Business Affairs to DoD will be critical to achieving the Revolution in Military Affairs.
This is not just a matter of freeing up resources, however. Robust support has long been one of the great advantages of US forces in combat, but it has tended to succeed on the strength of its overwhelming mass. To be effective in the future, support operations will rely increasingly on speed and agility. Absent a concomitant revolution in the support activities of defense, the Revolution in Military Affairs will quickly outrun the ability of logistics, personnel, medical and other systems to support it.
Defense Reform Initiative
To carry out our defense strategy into the 21st century with military forces able to meet the challenges of the new era, there is no alternative to achieving fundamental reform in how the Defense Department conducts business.
DoD's current organization, infrastructure, legal and regulatory structure, and business practices were developed over the course of the Cold War, often through accretion. The Cold War was an era of great danger but relative stability. In contrast, the new era is one of rapid change and unpredictability. Our military forces and our private sector defense industry have made great strides in adjusting to this dynamic new world, becoming more agile and responsive. But much of the rest of our defense establishment remains frozen in Cold War structures and practices.
DoD has labored under support systems and business practices that are at least a generation out of step with modern corporate America. DoD support systems and practices that were once state-of-the-art are now antiquated compared with the systems and practices in place in the corporate world, while other systems were developed in their own defense-unique culture and have never corresponded with the best business practices of the private sector. This cannot and will not continue.
This Defense Reform Initiative reflects the insights of numerous business leaders who have restructured and downsized their corporations and not only survived but thrived in a rapidly changing marketplace. One major corporation whose top leadership team generously spent an afternoon with Deputy Secretary Hamre and our defense reform task force has adopted the motto "Strength with Speed," emphasizing that winning in the new era depends as much on the ability to respond quickly to new threats and opportunities as on the ability to overpower competitors head-on. US military forces have learned the same lessons, but they will not reach their full and necessary potential unless the business side of DoD marches in lock-step.
The collective experience shared by these corporate executives can be distilled into a common set of principles for reform:
- focus the enterprise on a unifying vision
- commit the leadership team to change
- focus on core competencies
- streamline organizations for agility
- invest in people
- exploit information technology
- break down barriers between organizations
These are the principles that have guided us in shaping this Defense Reform Initiative, and in applying these principles we have defined a series of initiatives in four major areas. We will:
- Reengineer: Adopt modern business practices to achieve world-class standards of performance.
- Consolidate: Streamline organizations to remove redundancy and maximize synergy.
- Compete: Apply market mechanisms to improve quality, reduce costs, and respond to customer needs.
- Eliminate: Reduce excess support structures to free resources and focus on core competencies
Maintaining the Reform Momentum
The Defense Reform Initiative will require continuous and sometimes difficult effort. At the time the QDR report was released, I noted that DoD needed to slough off excess pounds built up during the long winter of the Cold War. Losing weight successfully requires not a one-time diet, but a permanent change in lifestyle.
To ensure that the initiatives detailed in this report are faithfully and expeditiously carried out, and to maintain the momentum of change, I am establishing the Defense Management Council. Chaired by Deputy Secretary Hamre and consisting of the Vice Chairman of the Joint Chiefs of Staff, the four Under Secretaries of Defense, the three Service Under Secretaries and the four Service Vice Chiefs, the Defense Management Council will serve as my internal board of directors for management. In addition to charging the Council to ensure implementation of the reform decisions announced today, I am also directing the Council to examine similar reforms for each of the Services and to negotiate an annual performance contract with the director of each defense agency.
I will also be turning to my external board of directors the Congress for support in implementing these reform initiatives. Some will require legislation, others will require political support. Given the strong encouragement Congress has given to this effort in the abstract, I trust that it will continue to receive support now that concrete decisions have been made.
America begins the new millennium as the world's sole superpower, the indispensable nation. The responsibilities are heavy and the choices difficult. But with those responsibilities and choices come enormous opportunities and benefits for our Nation and our people.
Our defense strategy and the National Security Strategy it supports will enable us to seize those opportunities and reap those benefits if we have the right assets to execute our strategy. This Defense Reform Initiative, and a commitment to continual reform, are essential to ensuring that our defense enterprise and military forces are fully modern, in every sense, and fully capable of executing their elements of the strategy.
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