Thank you Mr. Chairman.  I, too, would like to welcome our distinguished witnesses and thank them for their willingness to testify at this important hearing. We have a uniquely qualified panel before us today to discuss a Committee proposal that has the potential to significantly change the way that the Department of Defense organizes and makes decisions.

Jim Locher is a former Committee staff member and was the principal author of the Goldwater-Nichols Act, as well as the legislation that created Special Operations Command.  In the period since those seminal achievements, he has continued to study and document management issues and reform opportunities for the Department of Defense and the national security interagency process.

General McChrystal has significant knowledge and experience in Defense Department management and decision making processes from his service as the Director of the Joint Staff, the Commander of Joint Special Operations Command in the battle against Al Qaeda in Iraq, and the commander of coalition forces in Afghanistan.  Since his retirement from active duty, he has applied the lessons he learned from his daring and successful experiment in cross-boundary teaming in the private sector.

Finally, we are indebted to Professor Edmondson for agreeing to share with us her insights about the power of teams and what it takes to build and sustain them – insights gained over years of academic research at Harvard, and reflected in many publications.   

This is a very important hearing.  The Office of the Secretary of Defense, and the Department of Defense as a whole, is organized around differentiated functions, just like most other enterprises.  Large-scale organizations have struggled since the industrial revolution to find ways to effectively integrate across these “silos” of functional expertise.  DoD’s burden in this regard is heavy -- its ability to integrate horizontally to create sound strategies and effectively execute missions acutely affects the national security.

During the same time as the Goldwater Nichols Act was passed in an effort to create jointness in the U.S. military, businesses around the world began to implement effective new methods for horizontal integration – methods that produced better outcomes in less time at lower levels of management.  A principal innovation took the form of small, empowered teams of experts from the functional components of an enterprise, whose members were incentivized and rewarded for collaborative behavior in the interest of the whole enterprise.  These cross-functional teams, ideally, are the antithesis of committees or working groups whose members staunchly defend the narrow interests of their parent organizations.  This teaming mechanism, and the cultural changes necessary to support it, has become highly developed in many organizations, and has been widely adopted in the private sector.

Despite this long and broad experience, it still isn’t easy.  Even accomplished businesses that purposefully pursue cross-boundary teaming often fail to do it right.  But when it is done correctly, the results can be remarkable.

DoD, and the government generally, has not yet implemented such innovations.  There are notable exceptions:  General McCrystal has had success with cross functional teams which has enabled agility and integrated operations across a large scale enterprise.  Also, Secretary Gates himself created a series of special task forces to address critical issues when the Pentagon’s standard processes failed him – task forces that closely align with classic cross-functional teams.   Furthermore, the Directors of both the CIA and the National Security Agency, with the guidance of the consultant group McKinsey, have undertaken major organizational reforms at their agencies that have cross-functional teams at their core.

At this time, Defense Department leadership has concerns with the Committee’s proposal, which is set forth in Section 941 of the FY17 NDAA.  They have stated that the Department already uses cross functional teams routinely and that the Committee proposal constitutes micromanagement.  I understand the Department is going to have concerns over any external directive for changing its management and decision making processes.  However, I think that many of the concerns may be from a misunderstanding of the intent and scope of the Committee’s provision 941.   I believe that the Committee and the Department have a shared goal, and the Committee wishes to see the Department push the envelope of the teams it already uses, building upon successful models of cross functional teams that have been used in and outside of government.   I would hope that the Committee and the Department can have a dialogue to find common ground and ways to maximize the effect of this proposal so that national security benefits from an efficient management tool. 

I believe this hearing is an excellent first step in that dialogue.  I look forward to the testimony of our witnesses.