Overview
The pressure has been mounting in recent years to reduce the personnel costs within the Department of Defense. Even apart from the challenges of sequestration and the new normal of budget uncertainty, the downsizing of our fighting force has created calls to see commensurate reductions in civilian and contracted personnel. Censeo experience with several acquisition organizations highlights that a significant portion of time, typically more than 50 percent, is consumed on non-core activities. Analyzing the non-core operations can identify opportunities to achieve personnel reduction goals with minimal impact to the organizations mission.
Background
Over the past several years, there has been significant pressure on DoD headquarters organizations to decrease their personnel headcount and cost. Several examples include: Budget Control Acts, NDAAs, and Leadership memoranda. And the targets keep going up. Key examples span several years; highlighting the continued and increasing focus on achieving results in civilian workforces:
- 2011: Budget Control Act introduced a sequestration, in which Defense spending would be cut from FY13 to FY21, starting by 10 percent, in FY13, to 8.5 percent in FY21 accounting for ~$454B across these FYs.
- 2013 NDAA: Secretary of Defense was required to achieve savings for FY12-FY15 across the civilian personnel and service contractor workforces not less than the savings from military personnel based on reductions in military end strength over the same period, estimated to be ~7 percent.
- December 2013: Secretary of Defense issued a memo to senior DoD leadership announcing new funding and personnel cuts for OSD which included a 20 percent reduction in operating budget and 8 percent reduction in total workforce to be achieved by January 2015. Early in 2013, he had dictated combatant commands, services, and other headquarters to meet a 20 percent budget reduction after the SCMR organizational review.
- July 2015: Deputy Defense Secretary directed the DCMO to lead an effort to rationalize and delayer the management structure of OSD and associated Defense Agencies and Field Activities.
- August 2015: Deputy Defense Secretary sent a memo to all Major Department of Defense Headquarters Activities directing a 25 percent reduction across all appropriations funding for Major Headquarter Activities, OSD, the Joint Staff, Defense Agencies, and Field Activities.
- February 2016: Deputy Defense Secretary sent a memo to the Defense Agencies, Field Activities, and OSD leadership instituting a civilian hiring freeze, effective March 20, 2016, until their delayering plans are developed, coded, and approved.
- 2016 NDAA: Included reductions for DoD Headquarters, Administrative, and Support activities and required the Secretary of Defense to implement a plan to achieve $10B in savings from headquarters, administrative, and support activities during the period from FY15-FY19, not including military savings.
Findings
Censeo teams have been engaged in several workforce planning, organizational assessment, and workforce modeling engagements across DoD acquisition organizations. Through these efforts, we have analyzed incurred workload down to the individual task and associated driver level. This has allowed us to see how hours have been consumed across multiple organizations.
Through these engagements, we found more than 50 percent of hours are consumed on non-core mission activities. This includes activities such as: developing, adjusting, and presenting reports, reviewing colleagues’ work product and/or engaging in output review meetings, performing general overhead tasks or ‘managing’ the organization’s business, and managing contract status of other organizations.
The hours associated with developing, adjusting, and presenting reports and reviewing colleagues’ work products alone accounted for more than 20 percent of consumed hours. Several of the organizations’ personnel identified these as pain points by noting that much of the reporting hours are to ‘restructure reports for different audiences with limited or no changes in the incumbent material.’ Many also complain about having their work product undergo multiple layers of review and the drain on their time this causes. In several efforts, Better Buying Power one of them, DoD leadership is intent on reducing unproductive processes and bureaucracy in the flow of information and work product.
Digging deeper beneath the more than 50 percent of time consumed by non-core mission activities, we find several interesting characteristics that are contrary to your typical expectation of scale. First, the impact of the size of a headquarters organization overtop of several programs. Second, the degree of variation across analyzed organizations.
Contrary to the typical result of operations at-scale, we found that as the headquarters organization above a group of programs got larger, the proportion of non-core workload increases rather than decreases. A typical expectation would be that as a headquarter organization increases in size, they are able to assist the subordinate organizations by pulling lower-value, administrative, business operation, reporting, or reviewing work out of their scope, increasing the proportion of their hours spent on core activities. However, we found the subordinate organizations below smaller headquarters organizations had a higher proportion of hours spent on core activities. This suggests that a larger headquarters does not help pull this less-valuable or administrative work out of programs, but may actually increase the burden of activities such as review cycles and reporting requirements.
Also, we found significant variation across different organizations. Across Program Management Offices, even for programs in the same phase and with the same ACAT categorization the portion of time consumed by non-core activities can vary widely. This suggests that there is an opportunity for programs to manage their portion down, which could lead to significant time savings for several of the largest programs.
With the amount of senior leadership and legislative branch focus on this topic; it would be sensible for all organizational leadership to focus efforts on streamlining and increasing efficiencies of their organizations. Identifying the non-core activity hours and focusing on them will allow organizations to achieve budget reduction expectations with a less limited impact on their core activities.
There are several opportunities that leadership can pursue to achieve savings or free up resources to re-align to higher priority investments:
- Identify Efficiency Gains: How do we get current workload done with less effort?
- Streamline business processes; Reduce redundancy and complexity; Identify and reduce variation in repetitive activities
- Reduce Workload: How can we remove some of the current workload?
- Identify and eliminate non- and low-value added work; Reduce overhead and administrative requirements and demands by higher layers
- Increase Productivity: How can we get more done with today’s resources?
- Re-allocate workload to optimize resource utilization; Introduce flexible resourcing / shared service models; Assess and address organizational effectiveness opportunities
- Reform Operating Model: How can the objective be achieved more efficiently?
- Re-scope role and responsibilities of positions within the organization; Identify policy, regulation, and reporting adjustments that may be mutually beneficial; Optimize organizational design and talent allocation
Opportunities to reduce personnel cost and/or improve outcomes can be exploited through systematic improvement of organizational effectiveness. Additionally, employee satisfaction, engagement, and effectiveness typically increase when people can focus more of their time on the activities they view as most critical to support their organization’s mission.