Monday, April 29, 2013

DOD needs an "Outcomes-based" approach to its budget

Throughout the US Department of Defense (DOD), military and civilian leaders see uncertainty and change. We need to find new ways to deliver results. 

 Spending on the defense base budget increased roughly 30 percent in real terms since 2001, not accounting for the primary cost of war in Iraq and Afghanistan. For the foreseeable future, DOD investment choices will be driven by the end of more than a decade of war, a rapidly changing threat landscape and a national imperative to reduce our deficit. Given this dilemma, how can our nation thrive during a period of austerity?  We need to realign thinking to an outcome-based mindset.

Until recently, the performance of defense programs has been judged largely on a series of inputs, activities, outputs and meeting budgetary benchmarks. This approach has come into question due to Deputy Defense Secretary Ashton Carter’s Better Buying Power initiative. One of the limiting factors behind many reform initiatives has been the preoccupation with a maze of processes and guidebooks developed to simply follow rules, while lacking clarity about benefits.

Recent defense posture reviews recognize the importance of an outcome approach because it requires a strategic focus on what matters to the war fighter. Outcome orientation represents a fundamentally different way of thinking and managing programs across the acquisition system. Change of this nature will require direct support from legislators and program executives. However, without support throughout the defense acquisition system, from policy formulation to operational execution, and outcome focus could become just another administrative reporting exercise. 

Outcomes are longer term in nature than outputs and are influenced by many factors. Given that achievement of outcomes may in part depend upon factors beyond the direct control of a program, a different approach may be required than simply measuring inputs or outputs. Outputs are important products and artifacts because output metrics are inwardly focused to assess the effectiveness of activities within a given program. Outcomes, on the other hand, create direct value for the war fighter.

Outcome-based measures gauge effectiveness and determine success from the war fighter’s perspective. So, how do we move from a traditional input-activities-output model to a results-based approach focusing on outcomes?

Start at the end. To know that you are working toward the right outcomes, start with the end in mind. Beginning with outcomes, reverse-engineer the model and identify what outputs are required to affect the desired end-state. Continue backward to identify the activities needed to produce those outputs and finally, the inputs required by the activities. Through this exercise, a program will be able to identify what is needed to produce the desired outcomes.

Strike a balance. Outputs play an important role in helping measure progress toward an outcome; however, if not balanced, the outcome can get lost amid a myriad of outputs. Determine what outputs add value to the desired outcome. Start by identifying war-fighter needs and specifying value from their standpoint. Construct a value-stream map that tracks the information produced by your processes and activities. This will enable you to determine what outputs are not contributing value to the desired outcome.

Tailor smartly. Shorten the concept-to-deployment life cycle by developing a less monolithic strategy. There is no best model that can be applied to all programs.

An outcomes-based approach offers the government an objective, unbiased perspective to rethink, realign and then resolve to break down barriers. Ultimately, joint Pentagon-Capitol Hill leadership will need to challenge the status quo and adopt new ways of thinking to thrive during a period of uncertainty.

No comments: