John F. Lehman Interview: Conversations with History; Institute of International Studies, UC Berkeley
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We're in a world now in which the Cold War is over; we're trying to define a new world order. What's going to be the key to managing the Pentagon in this totally different environment that we're confronting in the world?
I'm always tempted to answer the question either the way it should be: "How should we organize to deal with the new world order?" And then the more realistic, "How will we?" The two, unfortunately, are very different, primarily because, as I said, there is an illusion of the Pentagon. The worst thing that probably happened to our defense establishment was the building of the Pentagon itself, the five-sided building, because it has created the image in people's mind, from war protestors to congressmen, of a coherent, symmetric, five-sided organization with one center -- you put a strong manager in there, and the services are all organized in each side. It's not like that at all.
The way it should be run is considerably more decentralized, [with] very firm centralized policy-making, as Dick Cheney is doing, in terms of advising the president on overall strategy and what our defense policy should be. But there are just too many enterprises in there that need to be run, and nobody is running them. They're all on auto-pilot, because the Secretary of Defense does not have time, nor does he have the power, the basic administrative tools to run the Defense Logistics Agency, Nav Air Systems Command, the Air Force Systems Command, all of the buyers of goods and services, the operators of Air Lift and Sea Lift. These are organizations that are essentially being run by bureaucracy. It is being run just the way the Soviet economy is being run, and with just as much efficiency.
So is the key to bring the market in?
Well, the key is ... again, there are so many aspects and dimensions to the Pentagon that it's very difficult to simplify it into a neat set of principles. The first thing is in centralizing the policy. You should decentralize the execution, and break it up into more manageable pieces. As Secretary of the Navy, at least I had a much more manageable set of responsibilities, and most importantly, unlike almost anybody else in the Pentagon, I had the basic management tools, because thanks to [former Secretary of Defense] James Forrestal and the reorganization [of the military services] of 1947, the Secretary of the Navy kept responsibility for promotions and assignments, and kept control of the purse through the comptroller. The other services didn't have that, and, certainly, the Secretary of Defense doesn't have it.
So I was able to see that when a new policy -- for instance, to complete the Tomahawk cruise missile was clearly the thing to do, and when I gave that order, that it wasn't just given the slow roll by the bureaucracy, as it normally would have been, because if the program manager did not do what I said to do, I fired him. That is the way that you get people's attention in the bureaucracy. There are unfortunately very, very few people that have that authority. The Secretary of the Navy had responsibility for choosing the three-star admirals, four-star admirals, fleet commanders, in consultation with other people, but it was his signature that went on the line. So that enabled me to second-source Aegis cruisers and Tomahawk missiles -- bring the price down from $4 million a Tomahawk missile to $1 million, bring the price of an Aegis cruiser down from a billion-and-a-half to $800 million, because people realized after about a year that I wasn't going to be leaving very soon, and that there were people that were out of a job because they had gone about the business the way they always had in the bureaucracy, paying no attention to higher authority. So you need to find a way to put that kind of accountability back into the system.
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