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Proceedings of a Workshop IN BRIEF August 2018 Creating Capability for Future Air Force Innovation Proceedings of a Workshopâin Brief The Air Force Studies Board (AFSB) of the National Academies of Science, Engineering, and Medicine convened a workshop on March 12-14, 2018 at the behest of the U.S. Air Force Vice Chief of Staff (VCSAF). The goal of the workshop was to address the challenge of innovation adoption within the organization with a focus on understanding how complex organizations envision their future state, embrace innovation, and overcome impediments to change. Against this backdrop, workshop partici- pants explored high-impact actions that the Air Force could quickly adopt that would unleash a culture of innovation. Following welcoming remarks and introductions, Workshop Co-Chair Deborah Westphal (managing director at Toffler Associates) summarized for the workshop participants a series of discussions that took place leading up to the workshop that included members of the AFSB and VCSAF General Ste- phen Wilson. Her remarks highlighted that many senior leaders within the Air Force have realized that the challenges facing the Air Forceâs discovery or adoption of new and disruptive technology are not technical in nature, but instead revolve around leadership, culture, and organizational structure. Workshop Co-Chair Ray Johns (Gen., USAF, Ret., and executive vice president at FlightSafety Interna- tional) followed up by saying that when Lt. General Arnold Bunch (military deputy to the Office of the Assistant Secretary of the Air Force for Acquisition) last spoke to the AFSB, he was concerned about transforming the Air Force organization to allow for greater flexibility and agility. AFSB Chair Doug Fraser (Gen., USAF, Ret.) expanded on this point by offering that in his subsequent discussions with General Wilson, the emphasis was on how the Air Force could become more agile by speeding up the product-development cycle. He suggested that the Air Force does not have an innovation problem; it has an innovation adoption problem. Of particular interest, Fraser noted, is the âhowâ of navigating a bureaucratically encumbered organization to its ideal destination stateâovercoming impediments along the way and innovating and inventing to outpace adversaries. General Bunch began by thanking the participants for supporting this critically important effort. He explained that, looking ahead, the Air Force is striving to compete, deter, and win as it focuses on higher-end conflicts in non-permissive environments. He described an extensive list of initiatives under way to improve Air Force acquisition, including a resurgence in experimentation and prototyping; re- vitalizing development planning; exploring options to process data at an enterprise level; delegating authorities to lower levels; reducing bureaucracies, reviews, and redundant regulations; challenging and empowering smaller teams to explore more risky ventures; seeking rapid capability development and agile software development; âpushingâ innovation out to the field (e.g., innovation hubs such as
AFWERX1); and re-examining the Air Forceâs re- LESSONS LEARNED FROM PRIOR AFSB search and development portfolio to accommo- STUDIES AND WORKSHOPS date the needs of operations in the 2030 time- AFSB Chair Doug Fraser facilitated Session 1, frame and beyond. In response to a question which was aimed at highlighting common about the destination of such initiatives, General themesâleadership, culture, strategic planning, Bunch outlined a vision in which authorities and and workforceâfrom past AFSB studies and resources aligned at the appropriate program workshops that had focused on acquisition and levels so the Air Force can be more timely and how these observations might help to envision a responsive to fielding new capabilities to estab- different path forward for the Air Force. Former lish an environment in which the rapid injection chairs of these past efforts participated.2 of new technologies and capabilities for warf- ighters occurs with greater regularity. While he The Honorable Paul Kaminski (president and believes the current initiatives support this vi- CEO, Technovation Inc.) opened by discussing sion, he noted the challenge posed by âinitia- the âDevelopment Planning (DP)â3 study and tive exhaustionâ as the workforce is pushing noted that many of the reportâs recommenda- aggressively to implement all of the new ideas. tions are currently being implemented by the This initiated a discussion on the diversity of the Air Force. He noted that to be successful, the Air workforceâspecifically the challenge posed by Force must focus on people (the best and bright- several generations working together who think est, given every chance to succeed) and partner- and work differentlyâand how this diversity will ships (working together toward a common ob- shape the future of the Air Force. During this dis- jective). He suggested starting the DP process cussion, the topic of risk-taking was brought up by thinking about what the Air Force wants to by one participant, and General Bunch acknowl- do, then evaluating what capability gaps need- edged that this is a challenge for the Air Force. ed to be filled, and then what new opportuni- He said the first question he often receives is, ties from the science and technology base could Who are you holding accountable? He observed be brought to bear on the problem to accelerate that this question is not reflective of a culture its adoption. However, he stressed not to forget that embraces data-informed risk-taking and is about the other inputs necessary for effective illustrative of the challenge facing the Air Force DP, including long-term strategy, assessment of as it tries to adapt to an accelerating technology the threat, current programs of record, concepts environment that will necessitate some level of âsmart riskâ if the United States is to keep pace with its adversaries. 1 From the AFWERX website on August 13, 2018: âEstab- lished in 2017 by the SECAF and reporting to the Vice Chief of Staff of the Air Force, AFWERX is a catalyst for agile Air Force engagement across industry, academia, and non- traditional contributors to create transformative oppor- tunities and foster an Air Force culture of innovation.â See http://afwerxdc.org/. 2 The studies chosen to be represented on the panel were selected because of their inclusion in âOpportunities to Excel: Collected Advice and Dialogues on U.S. Air Force Acquisition," a derivative product of the Air Force Studies Board which is a collection of the key messages of a selection of past reports related to the Air Force acquisition system and highlights the cross-cutting themes among them. The key messages of these reports are directly applicable to the chal- FIGURE 1 The definition of âinnovationâ that work- lenges discussed during the workshop (available at shop participants accepted was that âinnovationsâ http://www.nationalacademies.org/afsb). can be both incremental and disruptive depending 3 National Research Council, Development Planning: A on their level of impact. SOURCE: Matt Whiat, Barry- Strategic Approach to Future Air Force Capabilities, The Wehmiller Leadership Institute, presentation to the National Academies Press, Washington, DC, 2014, workshop, March 14, 2018. https://doi.org/10.17226/18971. 2
ALCOAâs Approach to Matrix Alignment Misaligned Matrix in USAF Fix Plants Programs This! Staff Evaluated on Scrap, Safety or Sales Functionals Evaluated on: ??? Functional Organizations Scrap CO Across All Plants Staff Centers FM Safety Sales ACE Plant Manager Evaluated on Cost, Schedule, Performance in Plant Program Manager Evaluated on Cost, Schedule, Performance in Program 1 2 FIGURE 2 Program Manager Evaluated on Cost, Schedule, and Performance in Program. SOURCE: Alex Miller, Univer- sity of Tennessee, presentation to workshop, March 12, 2018. of operation, and cost over the life cycle of the ly Chair of Management, University of Tennes- system. He stated that he believes the Air Force see) described the results of a survey conducted needs the DP process perhaps now more than in his class, comprised of program managers ever because it will foster innovation with the and contracting officers. He said program man- right people and with the right incentives. agers listed cost, schedule, and performance among their career-success factors, but con- Trey Obering (Lt. Gen., USAF, Ret.; executive tracting officers instead listed compliance with vice president, Booz Allen Hamilton), chair of acquisition regulations, professional military ed- the AFSB âOwning the Technical Baselineâ4 ucation coursework, and resume building activi- study, highlighted that the bottom line of the ties. Miller showed charts (see Figure 2) depict- study was that program offices needed to have ing differences in how functionals are evaluated the data and technical knowledge to manage in an Air Force acquisition-organization matrix programs effectively. However, rather than the versus a similar matrix in the private sector. The Air Force being a âgold standardâ of technical charts showed mission-oriented criteria being excellence in acquisition (a reputation it previ- used to evaluate private-sector functionals com- ously held), the study committee discovered pared to unknown criteria being used to evalu- that the Air Force had lost the capability to assess ate Air Force functionals, thus demonstrating the technical baseline of its programs. This loss an acquisition-organization structure in which stemmed from a devaluing of the acquisition appraisals for the functionals are not tied to the staff and rotating experienced personnel out, program managerâs mission. When he asked the a loss of STEM (science, technology, engineer- question, as part of the aforementioned sur- ing, and mathematics)-educated personnel who vey, If you could only change one thing?, the used to hold program manager positions, and a response was to change how the functionals vacancy rate in the Air Force Senior Acquisition are evaluated by assessing their performance Executive position of nearly half from 2000 to against the same criteria as the program man- 2016. Obering said his committee believed the ager so as to build the sense that everyone is on Air Force would benefit by transitioning people the same team. with both technical backgrounds and opera- tions experience at the midcareer point into the acquisition programs. 4 National Academies of Sciences, Engineering, and Instead of discussing his study on experimenta- Medicine, Owning the Technical Baseline for Acquisi- tion, which was subsequently covered by Lester tion Programs in the U.S. Air Force, The National Acad- emies Press, Washington, DC, 2016, https://doi. Lyles, Alex Miller (professor and William B. Stoke- org/10.17226/23631. 3
Lester Lyles (Gen., USAF Ret.), chair of the AFSB tor firms also struggle with workforce issues and study on âExperimentation Campaigns in the resistant bureaucracies suffering from too many Air Force Innovation Life Cycleâ5 and the work- initiatives. Industry is constantly searching for shop on âAssessment to Enhance Air Force and more effective organizational structures and Department of Defense Prototyping for the methods of communication. The Air Force is not New Defense Strategy,â6 indicated that the cur- unique in its predicament, but joins a commu- rent program environment is different from nity of organizations experimenting with how the pastâprogram directors previously had the to envision change for the future. Elizabeth Alt- funding to support learning via prototyping and man (assistant professor at the Manning School experimentation. Now, there are few opportuni- of Business) added that during General Bunchâs ties and a lack of funding for experiments that remarks she heard the urgent need for speed to might provide a disruptive innovation to the sta- be able to respond to the world outside of the tus quo. The experimentation study was broad- Air Force. She also observed that many of the er than the prototyping workshop and covered initiatives that were highlighted were very much the role of experimentation campaigns in the Air internal process activities and suggested there Force life cycle along with the Air Forceâs need are lots of opportunities to expand boundaries for driving innovation. After receiving industry outside the organization for innovation. perspectives on stoking innovation, the commit- tee favored the adoption of an Air Force âinnova- LAYING THE FOUNDATION tion catalystââan advocate for innovation who Workshop Co-Chair Ray Johns, facilitating Ses- holds the ear of top-level leadership who can sion 2, opened Day 2 by introducing VCSAF âmake something happenâ in the Air Force and General Wilson, the keynote speaker. General exhibit the right âtone from the top.â7 Wilson began by referring to the U.S. National Security Strategyâs renewed emphasis on great- Rand Fisher (RADM, U.S. Navy, Ret.), chair of power competition. He described a formula in the AFSB study on âOptimizing U.S. Air Force which âTOO x TWO does not equal one.â The and Department of Defense Review of Air Force first TOO refers to the fact that the Air Force has Acquisitions Programs,â8 finished the panel dis- become too complex, too bureaucratic, too cussion by sharing his committeeâs realization regulated, too risk averse, too stove-piped, and that program managers often had 50 separate too analog for a digital world. The other TWO reviews, which did not include informal review refers to the fact that the United States is no lon- methods and were not used to inform any level ger number one in all capability areas and the- of the decision process, but rather were simply compliance-based reviews. His team believed the Air Force could accelerate innovation by 5 National Academies of Sciences, Engineering, eliminating unnecessary reviews by ensuring and Medicine, The Role of Experimentation Cam- those with proper authority to make program paigns in the Air Force Innovation Life Cycle, The Na- decisions attended reviews and follow-up re- tional Academies Press, Washington, DC, 2016, views were based on the findings of previous https://doi.org/10.17226/23676. reviews. He noted that the acquisition goal is to 6 National Research Council, Assessment to Enhance deliver effective weapon systems, but specified Air Force and Department of Defense Prototyping for some troubled programs try to recover by ac- the New Defense Strategy: A Workshop Summary, The quiring funding and staff from other programs. National Academies Press, Washington, DC, 2013, He advocated the adoption of a holistic view of https://doi.org/10.17226/18580. acquisition with a systems-engineering perspec- 7 The study committee refrained from identifying a tive, where all steps in the process are optimized specific individual or position that might fill the role of as a system to create a more agile enterprise. âinnovation catalyst.â Instead they suggest that the Air Force determine this and to allow for multiple âinnova- tion catalystâ positions across the organization. After these presentations, Todd Jick (professor of management, Columbia University) made 8 National Research Council, Optimizing U.S. Air Force and Department of Defense Review of Air Force Acquisition the point that the Air Force is not alone in fac- Programs, The National Academies Press, Washington, ing the aforementioned problems. Private sec- DC, 2009, https://doi.org/10.17226/12673. 4
atres of operations. He said the nation needs to away from the fight of the last 27 years and to- fix the equation if it wants to be number one ward the fight ahead. He discussed ways to insti- again. Noting DPâs importance, he once again tutionalize organizational change so it becomes returned to the TOOs conceptâthe front-end re- permanent (emphasizing urgency to change quirement takes too long, acquisition takes too and common vision, removing roadblocks, etc.) longâcombined with the budget-cycle reality, and dealing with the âfrozenâ middle. He closed which leads to the delivery of obsolete technolo- by noting that ISIS, a technologically unsophisti- gy. Instead, he wants the Air Force to build some- cated adversary, is adopting drone technologies thing quickly and put it into the hands of an and rapidly innovating new concepts of opera- operator. He gave examples of the United States tion as the technology advances, and thus one rapidly developing, acquiring, and producing can only imagine what a sophisticated adversary military systems for World War II and the sub- may be doing in this area. sequent space race, which required only 8 years to get to the Moon. Using China as a current Richard Joseph (Air Force Chief Scientist) com- data point, he said Eric Schmidt, CEO of Google, mented that he believed the choices are as fol- thought the United States had a 6- to 12-month lows: Do nothing, speed up our development, advantage in artificial intelligence (AI), but even or slow down our adversary. The first isnât an this gap was closing. General Wilson and other option, so we must go with the others (e.g., workshop participants believed that Chinaâ give our adversaries a bad day, every day). He working on AI as a nation with huge resource said the Air Forceâs technologies are tools, not investmentsâwill eventually surpass the United ends in themselves. Joseph posed the issues as States with devastating results. In contrast to follows: How do we plan to effectively use these the layers of bureaucracy and budget instabili- tools, how do we strip our adversaries of the ties the Air Force must contend with, he pointed advantages, what are our advantages, and how to Chinaâs defined âmega projectsâ (the ones we do we construct a program to exploit them? know about)âspace, AI, and hypersonicsâand Joseph believed the research and development their large and direct resource investments. So, organizations should pay more attention to the he asked rhetorically, âWhere do we focus and operators. In earlier jobs, he preferred to talk to how do we build a process that accelerates the operators; they are clear about the capabilities adoption of new technology?â necessary to achieve their mission. He then de- scribed a program years ago that was on a 5-year General Wilson continued with a discussion on plan, but after being challenged by an Air Force the difficulties he faced pulling a small group leader to do it in a few weeks, managed to deliv- of junior level officers free from the bureau- er on the new schedule despite resistance from cracy and risk aversion in the organization so the âfrozen middleâ. Joseph used this episode they could work on an innovative project that to bolster his point that it is all about people and otherwise would have been crushed. He also leaders challenging people to overcome and ac- discussed the prospect of expanding AFWERX; complish. He asserted that we, the Air Force, do about trying things fast to see if they work and, not need a great deal of innovation in organi- if not, discarding them and moving on; about zations, and we do not need a chief innovation looking across the Air Force enterprise as op- officer. Instead, we need leaders who say, âCan posed to looking at individual commands (e.g., you do it in 30 days, and what do you need to do the air-superiority-2030 effortâgreat, but imple- it?â His view of the teams was that they should mentation is lacking); about shifting from a plat- not all be highly innovative people; rather, a mix form business to a network form of business as of innovators and meticulous implementers pro- the Internet of Things explodes and connecting vides appropriate diversity. With respect to âfear that with cloud computing, machine learning, of failureâ, a major driver at times in Air Force ac- AI; and about the overall digital transformation quisition, Joseph believed the leadership needs moving forward, connecting Air Force assets to provide top cover for risk takers. Regarding widely across domains to increase the speed of plans, he argued that they should start simple operations. He said the Air Force organizational and later, after buy-in, then add the details spe- structure and presentation is the next big move, cific to the program. On the issue of the âfrozen 5
middle,â the middle layers of a bureaucracy of- ganizational and personnel methodologies from ten stuck in the morass of procedure and policy, their previous place of employment. The trans- Joseph suggested relying on the flexibility pro- formation was rushed, ill-informed, and did not vided by reassignment waivers. cater to JC Penneyâs specific condition which ultimately precipitated the transformationâs de- Turning from the Air Force to the private sector, mise. Loretta Penn (president, Penn Executive Coach- ing and Consulting LLC) said she engaged with Penn mentioned GEâs Fast Works, which uses some of her clients to validate her thinking start-up methodologies to get an idea out quick- against their experiences as they looked at trans- ly and avoid bureaucratic red tape. She then forming their own organizations (e.g., Coca spoke on more topics important to transforma- Cola, CVS, Time Warner, Microsoft, Nike, United tion. On communication, she said one cannot Healthcare Group, and Wells Fargo). Referring transform without extraordinary communica- to Microsoftâs new CEO and their firmâs transfor- tion; on clarity, she warned of problems when mation, she said the following were important goals and expected outcomes are not clear and leadership lessons: Putting passion behind your people are not accountable; on core values, she initiatives, making employees like a real part of said they should either be changed or left alone, the change, communicating leadershipâs cog- not tweaked. She also summarized additional nizance of what is happening, and expressing key leadership characteristics: leading from the concern for your employees and the outcome top (the âmajor championâ); permission to fail; of the organizationâs mission. Also, she noted understanding what comes out of failure (con- that there needs to be energy and excitement sider that âFAILâ means âFrom All I Learnedâ); among personnel, pointing to the example of courage (e.g., to speak up); the need to ques- Microsoftâs acquisition of LinkedIn and the fo- tion everything; empowerment (trust erodes if cus on the âcloud,â which led to a new sense of power is taken back); curiosity; and inspiring excitement, collaboration, and purpose among your personnel (not just a cheerleader, encour- their employees. age ideas). On Wells Fargo, Penn relayed the story of an ex- Finally, she noted talent management must in- ecutive who rigorously assessed the structures clude arranging incentives and organizational and challenges of their organization. This is cru- structures to attract a multi-generational work- cial, she noted, because there is a tendency to force. She noted millennials are highly confi- avoid reforming specific elements in an orga- dent, smart, and ready to save the world. Gen- nization if there is a perception they have per- erally, they want to be empowered and hold formed well in the past. Previous managers may companies accountable to their mission state- feel inclined to protect the program, even if it ments. She said they will not stay with the mili- does not integrate into the transformation pro- tary if they donât feel they are being heard; they cess. With Time Warner, an executive identified want their ideas to be accepted, opportunities three important pitfalls of transformation: fail- to be creative, someone listening to them, and ure to anticipate the end game (i.e., fixing the their ideas that make sense implemented. Not now instead of the years-ahead end), being un- only will they leave, the military will stop getting able to pivot in case of changes, and failing to them at all if they believe the Air Force will not remain nimble. value their contributions. Next, she used JC Penney as a company exem- STAYING COMPETITIVE: SUCCESSFUL plifying how one should not approach a trans- BEHAVIORS OF LARGE AND COMPLEX formation. JC Penneyâs stock tumbled after they ORGANIZATIONS brought in a new leader but mishandled the transformation of the organization. The new ex- Elizabeth Altman opened Session 3 by noting ecutive did not demonstrate empathy or gain a that the world is becoming more interdepen- holistic understanding of the specific challenges dent and complex, and thus networked and facing JC Penney, but instead blindly applied or- platform-based organizations are becoming 6
more importantâespecially in connection with pulling in external resources make it worth the innovation and organizational change. She said new challenges. there are many definitions of âplatformsâ and âplatform organizations,â9 but all platform or- Simon Sinek (author and independent consul- ganizations connect to others, facilitate trans- tant) argued that the Air Force has done itself a actions, and create and manage ecosystems. Il- disservice by concentrating on a sphere of influ- lustrative platform businesses include Uber and ence (e.g., the word air, which he later termed Airbnb. For example, many top 50 Fortune com- a âliabilityâ) rather than a mentality of out- panies (e.g., GE, Intuit) are adopting platform thinking the enemy with creativity. The way to models to leverage external resources. Altman acquire change is to invite it in and name every stated that since the smartest people are not airman as an innovatorâreferencing the Marine isolated to any one organization, it is impera- motto of âevery man, a rifleman.â On sustain- tive that the Air Force take advantage of external ing cultural change beyond current leadership, resources through platform-based ecosystems. he urged a focus on evolutionary over revolu- She suggested that AFWERX may be a good tionary change, starting with a small group of example, although she observed that operat- innovators (early adopters). He views the âfro- ing platforms require different approaches and zen middleâ as the most complicated part of managing ecosystems is not the same as man- the Air Force because it deals with both strate- aging alliances or partnerships. Furthermore, gic and tactical matters simultaneously; thus, while based on the successful SOFWERX model, the Air Force should make sure to communicate AFWERX has not been in operation long enough the underlying purpose, cause, and belief of a for a full assessment of its effectiveness to be de- changeâthe strategic importance, not just tac- termined. tics. Given the Air Forceâs past culture of push- ing the envelope, he applauded the âability of Altman highlighted that younger members of airmen to question,â which is important for the workforce inherently understand operating innovation. Noting the Air Forceâs high level of in a networked, open-source organization. She technical education, he cautioned against ignor- next discussed attributes of network-based and ing the marketing component. He returned to platform businesses, challenges for those tran- the Air Forceâs historic culture of being about the sitioning to such businesses, and challenges of ânewâ and its role in reshaping the battlefield, managing hybrid organizations. She described a but emphasized this is not about planes or a range of challenges, including moving to a more simple slogan (âfly, fight, and winâ); it is about external focus, greater openness by enabling in- people. He highlighted that innovation can be teractions, adopting interaction-centric metrics, wasteful, inefficient, and risky, yet the Air Force shifting organizational identities, and managing needs to accept those conditions and look at novel dependencies. In particular, firms must them as opportunities for rewards and promo- create incentives for developers to develop on tions rather than as career destroyers. their platform. This creates an opportunity to mobilize external resources to accomplish your Mark Johnson (co-founder and senior partner organizationâs objectives; however, balancing at Innosight) discussed how to make transfor- legacy structures with new, platform-based ac- mation happen, the necessity of recognizing tivities will become a key challenge. trends, and the vital importance of the CEO and leadership team to drive innovation. He In summary, Altman proposed that network- described two types of innovationâsustaining based platforms are essential for innovation. The (which strengthens the core) and destructive Air Force must understand its role and depen- (which creates the new, different)âthat require dencies in the greater national security ecosys- tem. This will require constant flexibility as the Air Force shifts roles and priorities within this 9 A platform-based organization can be defined here as ecosystem, but Altman cautioned that the chal- any organization whose business model is built around lenges are not the same as with traditional hi- the utilization and reliance on a specific technology erarchical organizations. Overall, the benefits of platform (hardware or software). 7
investing in the core while determining the new time was spent discussing what it takes to gain destination. He emphasized the importance of commitment based on what audiences require being able to articulate the future visionânot to be motivated. the current state extrapolated forward. To un- derstand the future, he suggested that, even Kinthi Sturtevant (former vice president of trans- though we cannot create a photo quality image formation, IBM) addressed corporate experi- of it, we can create something like an impres- ence with innovation and culture change. She sionist painting to provide a sense of that un- began by discussing ideas learned from a con- certain future. This image can guide transforma- ference with companies focused on innovation. tion toward the future state as the organization She relayed that the adage, âItâs the culture, deals with specifics of the near term. To propel stupid,â is applicable. Regarding the structures and control this journey, he believes executive of various companies involved in change, she leadership must continue refining the painting noted that some were centralized and others and delegate ârunning the trains on timeâ (core were decentralized. She next described IBMâs business processes) to lower levels. âculture refreshââa program on preparing for new business challenges and new ways of work- THE âHOWâ OF MANAGING ingâin which innovation was a key element. INNOVATION AND CHANGE These examples led to descriptions of the tools Todd Jick opened Session 4 by discussing re- and techniques used to drive and guide culture search and best practices in change manage- change, such as a values refresh, change-lead- ment. His key theme was âVision is 10%, Imple- ership training, and translating lofty values into mentation the Rest.â There was some push-back behavioral actions. She highlighted a thoughtful from participants noting the importance of process, which engaged the entire IBM organi- vision, and he agreed that a beautifully imple- zation, was not directed from the top, and pro- mented but ill-conceived vision would not work. vided ample time for the workforce members to Nevertheless, his experience has been that ma- voice their opinions on the values and behaviors jor innovations break down on the implementa- deemed necessary by IBM. She also discussed tion side. Assuming a thoughtful starting vision, impediments to realizing those values and be- many companies stumble in implementing that haviors. image because they have not managed the nec- essary changes well. He pointed out that suc- George Casey (Gen., US Army, Ret.; former Chief cessful implementation occurs when resistance of Staff of the Army) focused his presentation on is overcome and there is commitment to change his experience with transformational change in lieu of compliance. He also noted that imple- as the senior coalition commander in Iraq and mentation requires an arsenal of tools and tech- later as Army Chief of Staff in Washington, DC. niques to align and gain the commitment of key Regarding Iraq, he noted that leading in what stakeholders to change behaviors. Pointing out he termed a âVUCAâ (volatile, uncertain, com- that research has shown that only about 25% to plex, and ambiguous) world is very different 30%, of companies succeed in major changes, from leading in a more stable environment. He he identified several reasons for failureânot discovered that prior training had prepared the communicating well, a frozen layer of middle Army for one type of war (a near-peer conflict management that resists change, and failure to with the Soviet Union), but it was fighting a very identify a complete list of stakeholders. Despite different type of conflict (a counter-insurgency the relatively low success rate, he indicated that operation against a non-state actor). Retraining there is merit to examining why some companies his generals and other key personnel became succeed, and he described a seven-step concep- critical. He also learned that his forces had to tual model with variables that need to be man- work more collaboratively with Iraqâs personnel. aged, starting with delineation of the urgency He indicated that leadership in a world defined to change and ending with the ability to sustain by VUCA at times involves constant re-emphasis change. These variables are threaded with the on what needs to be accomplished, focusing on importance of mobilizing commitment, and a few important matters while not over-reacting 8
to on-going turbulence, and multiple conversa- ing promoted to the higher ranks. His last slide tions at organizational levels below his immedi- asked, Worthy of further study? ate subordinates to gain better understanding of what is really happening. At the Pentagon, Noting that adults learn primarily through expe- he had to confront an internal silo-based mind- rience, Matt Whiat (Barry-Wehmiller Leadership set, which constrained his ability to formulate Institute) next examined the definition of the an Army-wide budget plan, while contending verb innovate (see Figure 1). He described his with an external federal bureaucracy. He had to capital goods company as an acquisition com- retrain his people to work as part of the Army pany that does not change out people or lead- as an enterprise rather than in their individual ership, but builds culture. To change mindsets silosâchanging processes and culture and rec- and behaviors, he described a four-quadrant ognizing that innovation does not occur readily template: a compelling story, reinforcement in silos but rather in a more collaborative envi- mechanisms, skills required for change, and role ronment. modeling. Looking further at culture, which is local and impacted disproportionally by leader- SPECIFIC CHALLENGES AIR FORCE ship, he discussed building a cultureâthe total LEADERSHIP MUST ADDRESS of behaviorsâthat would feed strategy. Instead Ray Johns, facilitating Session 5, opened Day 3 of imposing corporate values through vague with a video about retired Major General Ben- mission statements, Barry-Wehmiller would jamin Foulois, one of the Armyâs first aviators. learn to listen by providing a forum for collab- While learning to fly, he crashed his plane and orative engagement. Using the lessons gained was reprimanded by a commanding general from these listening events, they would assess who told him his flying machine was worthless the health of the organization and its culture. Ul- and served no military purpose. Against the timately, reform efforts would be implemented backdrop of how an innovative officer like this and tailored to the specific issues affecting the might progress in todayâs Air Force, Johns intro- newly acquired organization. The demonstra- duced Danny Miller (managing director, CLR tive process of responding to suggestions and Leadership Development) to talk about Air Force inquires, even simple procedural adjustments in promotion profiles. Miller indicated there would administration, can build trust and align behav- be no chance of someone like Foulois being pro- iors with your corporate values. moted today by the Air Force, unless there was a sponsor in leadership to protect him. Despite Whiat discussed the downsides to innovation much talk about innovation, he questioned and he factors that inhibit innovation (e.g., risk, whether the Air Force has the leadership and failure, funding, time, tradition, hierarchy). He culture to make it happen. His experienced ob- focused on hierarchy with some examples: This servation was that true innovators and out-of- workshop room is not setup for innovation; the-box thinkers will not fit the profile required packets include bios to let everyone know how to succeed in large numbers in the Air Force. He important some people are; those not around turned to a large data set, which in summary, the table are excluded. He noted that listening showed Air Force leadership dominance in the and building trust are top behaviors of great characteristics of sensing, thinking, and judging leaders, and he re-emphasized that all culture is (versus intuition, feeling, and perceiving) and local and feeds strategy, which is grounded and skewed (left) toward pragmatists and conserv- linked by values. He said trust only occurs when ers versus originators. Additional charts, which there is a vulnerability, and trust is the one qual- considered four profiles (implementer, support- ity that will overcome risk aversion. According er, innovator, and visualizer), showed a prefer- to Whiat, leaders build trust by displaying the ence for implementers among Air Force leaders. following four attributes in order of importance: Miller raised questions about the implications compassion, character, consistency, and compe- of these results for the future Air Force includ- tence. At the end, Johns emphasized that trust is ing what kinds of future leaders are needed and one thing that can overcome risk aversion, and it who is leaving (and why and when) before be- must be demonstrated time and again. 9
SOME HIGH-IMPACT ACTIONS FOR a second being geese flying in the traditional V AIR FORCE CONSIDERATION formation (a team in which the leader rotates), Kevin Bowcutt (chief scientist of hypersonics at and a third the actions of a swarm of birds being Boeing) opened Session 6 by noting that Boe- attacked by a predator. The swarm is a complex ing is undergoing a transformation that seeks system in which everyone leads instead of an to make the organization thrive for another 100 individual leader. The complex behavior of the years. He described some of Boeingâs current swarm, trying to avoid an attack, follows simple competition (e.g., Chinaâs less-expensive ver- rules like stick together, move to the center, fol- sion of the 737) and foreshadowed additional low neighbors, and do not collide. elementsof Boeingâ transformationâspecifically Boeingâs Horizon X effortâthat would be dis- Bonchek said the job of an exponential leader cussed after the next presentation, an explana- is to build a system such that the âeveryone- tion of moving companies from incremental to and-no-oneâ leadership can happen to create exponential advancement. a better network effect. He illustrated gaps (in vision, expectations, accountability, resources) Mark Bonchek (chief epiphany officer, Shift between the incremental curve and the expo- Thinking) opened his presentation by arguing nential curve, which slows before accelerating that the shift to a new mental model requires above the incremental line. To confront these unlearning, which is important in times of gaps, the exponential leader requires vision and transformation, and that people hang onto old courage, patience and unlearning, and the abil- models until new ones appear within reach. He ity to empower and connect. He used a 1997 discussed exponential technologiesâdescribed quote from Jeff Bezos, âBecause of our emphasis as accelerating, disruptive, non-linear, â10Xâ on the long term, we may make decisions and growthâas opposed to stable and comfortable weigh trade-offs differently than some compa- incremental (linear) growth. The compounding nies,â to emphasize the importance of correct effect of 10X growth creates a network effect, metrics to measure what is happening. At this and he gave several examples (e.g., platforms point, there was a long interchange among par- prompt 10X growth by connecting supply and ticipants about operating in both incremental demand; networks prompt 10X speed by con- and exponential modes, the types of innovators necting resources and intelligence). He contrast- in these modes, how to keep things on the edge, ed the exponential mindset with an incremental and bringing things into the core. Bonchek mindset (e.g., maximize learning replaces mini- closed with an observation on how to manage mize risk). He argued that exponential leader- all of thisâshifting from managing people and ship and technology would produce exponen- processes to managing purpose and principles tial thinking and results. He offered some mental (the master designer, incentivized by chain reac- models of leadership (see Figure 3), one being tion and network effects). an eagle (illustrating quality of an individual), MENTAL MODELS OF LEADERSHIP FIGURE 3 Mental models of lead- INDIVIDUAL TEAM SYSTEM ership. SOURCE: Mark Bonchek, Shift Thinking, presentation to the workshop, March 14, 2018. Photo by Luca Huter Photo by Dana Critchlow Photo by James Wainscoat 10
Michael Hauser (disruptive innovation lead, need for evaluating how the promotion and Boeing HorizonX) presented on Boeingâs Hori- personnel system could be adapted to focus on zonX effort, what the company is trying to ac- retaining and promoting with an eye to future complish with it, and what the company has leadership skill sets; how personnel should be learned. He explained that Boeingâs global ser- evaluated as they grow; and most importantly, vices were carved out of Boeingâs traditional how the Air Force should define and measure commercial and defense sectors, and HorizonX the cultural values it desires for the future. Sec- exists to bring in disruptive capability, focus on ond, they explained that the future Air Force growth, and unlock Boeingâs innovation poten- organization is likely to be a networked orga- tial. He then discussed a multi-year evolutionâ nization of some form, but until the Air Force from venture capital investments, to events and defines its future destination, the details of how competitions, to Phantom Works,10 to emerging the network should be developed (to empower business opportunitiesâand now HorizonX, a future organizational structure that embraces which has the specific task of doing things that the attributes stated in General Wilsonâs open- the core company cannot do, can serve as an ing comments) are not easily defined. engine to unlock the exponential, and outside- in innovations can act as a disruptive-innova- In closing, one participant commented on the tion shop. Describing the organization in more complexity of the Air Forceâs culture and high- depth, he showed a graphic depicting Boeing lighted that a multifaceted approach, and not HorizonX Ventures linked with Disruptive Hori- a single solution, is necessary for cultural and zons and New Business Horizons, which posi- organizational change. Another participant pos- tioned strategy and operations at the center. He ited that the Air Force is at a real inflection point. also highlighted a dozen investment focus areas, Traditional models of organizational systems including autonomy, AI and machine learning, and change management theories are outdated. and space, and he noted that Boeing made in- The Air Force is pioneering the creation of a new, vestments in these areas rather than acquiring agile culture that necessitates adaptive organi- the capabilities through mergers or acquisitions. zational structures and accompanying behavior- al norms. This observation was shared by several CLOSING THOUGHTS other participants and serves as a key framing Co-chairs Westphal and Johns led a final recap of concept to understand the uniqueness of the or- the workshop. The floor was opened to partici- ganization, its mission, and its challenges. pants to share their final observations from the workshop. The common themes that emerged among participants included trusting and em- powering people; persevering against the re- sistance to change and pivoting strategically as necessary; challenging and enabling people within the organization; proactively attacking the causes of risk aversion; acknowledging that there is much work to be done; holding opti- mism about the future of the Air Force; main- taining âoutside-inâ innovations and nurturing the right kind of âinside-outâ innovations; ac- cepting that simplifying and executing are the hard parts; being open to starting small; and re- alizing that a lot is already happening (AFWERX, for instance). Johns and Fraser, based on their observations from the workshop, also suggested some areas that the Air Force may wish to examine further 10 Phantom Works is Boeingâs advanced technology and in an appropriate venue. First, they noted the prototyping division. 11
DISCLAIMER: This Proceedings of a WorkshopâIn Brief has been prepared by Norman Haller as a factual summary of what occurred at the meeting. He was assisted by Steven Darbes and Kevin Suchernick. The committeeâs role was lim- ited to planning the event. The statements made are those of the individual workshop participants and do not neces- sarily represent the views of all participants, the planning committee, or the National Academies. This Proceedings of a WorkshopâIn Brief was reviewed in draft form by Arnaud Gary, Col., FAF; Douglas M. Fraser, Gen., USAF, Ret.; Lester L. Lyles (NAE), Gen., USAF, Ret.; and Rebecca Winston, Winston Strategic Management Consulting, to ensure that it meets institutional standards for quality and objectivity. The review comments and draft manuscript remain confidential to protect the integrity of the process. All images are courtesy of workshop participants. PLANNING COMMITTEE: Raymond E. Johns, Gen., USAF, Ret., FlightSafety International, Co-Chair; Deborah Westphal, Toffler Associates, Co-Chair; Kevin Bowcutt (NAE), Boeing Company; David Hardy, Retired Senior Executive, Air Force and Department of Defense; Todd Jick, Columbia Business School; and Elizabeth Altman, University of Massachusetts, Lowell. STAFF: Steven Darbes, Research Associate; Kevin Suchernick, Research Assistant; Marguerite Schneider, Program Coor- dinator; Joan Fuller, Director, Air Force Studies Board. SPONSORS: This workshop was supported by the U.S. Air Force. Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2018. Creating Capability for Future Air Force Innovation: Proceedings of a Workshopâin Brief. Washington, DC: The National Academies Press. doi: https://doi.org/10.17226/25220. Division on Engineering and Physical Sciences Copyright 2018 by the National Academy of Sciences. All rights reserved.