Power Play: Government Goals with Industry Assists

June 24, 2009 — Speech given by Ralph Shrader (Booz Allen Chairman & CEO) at the Washington Technology Top 100 Conference.

I appreciate the opportunity to be here and talk with you this morning.  I always find the “talk with” part to be the most engaging.  So, I’ll start by sharing my view—a rather strong view—on a call to action for the government contracting community, but then I’d like to hear your ideas and take questions—on this or other subjects.

From the title of my remarks, you probably gathered I’m a hockey fan.  No question that game seven between the Caps and Penguins was a heartbreaker, but I thought John Feinstein in the Post captured it well when he wrote, “The Caps Lost, but They Won.” It’s great to see the excitement around the Caps these days—and I don’t think it’s just because they’re our only DC team that’s a playoff-contender.  There’s something about hockey.

I’ll never forget the first game I ever saw way back when. Having grown up in Florida, hockey was not a sport I played or followed. But, I was in Philadelphia for a vacation break from grad school, and the Flyers were playing their first season and it seemed like a fun idea for a date. Walking into the old Spectrum and looking down at that glowing white ice was amazing.  From that height, you could see the speed, the intensity, the action and flying colors—and the strategy of how the players moved and worked together and skated to where the puck was going to be.  

I was hooked right then, and started following the Caps when I moved to Washington, and I’ve had season tickets far longer than they’ve been a contender.

So what does hockey have to do with government contracting?  To me, the intensity, complexity, and strategy of a winning hockey team– where goals are made with great assists—is a perfect metaphor for government-industry teamwork.

The most important challenges of the 21st century are the business of government—from national defense and economic security—to health, citizen services, and international development.  While government officials clearly need to set policy, be in command, and carry out inherently governmental functions, the biggest challenges can’t be solved by government alone.  And, in fact, they never have been.  Public-private partnerships built the Erie Canal and the interstate highway system, and took men to the moon in the Apollo program.

Industry teammates bring innovation, specialized expertise, and value that helps win the peace and prosperity that citizens want and expect from government.  Unfortunately, the current debate over what the government should do and what industry should do is putting public and private sectors on opposing teams.  Industry has fallen down at times, which has provided more fuel for an opposition mindset.

I firmly believe that it's time—and it's imperative—that we take teaming to a new level across government and industry.  With a new mindset focused more on goals and less on the penalty box, we can gain the power of collaboration, deep expertise, and broad understanding—while maintaining integrity in the procurement process.

There’s no question the business of government is important to everyone.  It’s certainly important to my firm, Booz Allen Hamilton.  When we separated into two companies last summer, we focused our 95-year-old firm on the government business—and we spun off our commercial business.

I’ve been with Booz Allen for more than 35 years, and for most of that time, the government business was something of a step-child.  For a long time, the “real excitement” was considered to be commercial consulting.  But, something happened along the way.  Our government business became very successful and highly regarded, and our people working in that sector grew to have great institutional pride, strong cultural ties, and real passion about the work which has a true excitement factor.  

The excitement is about much more than economics—it’s about the mission. When I compare the work Booz Allen does for the government, with the work we were doing for corporations, the difference in impact and importance is striking.  Defending our homeland, safeguarding the environment, and securing the cyber systems on which our way of life depends, are clearly more important and rewarding than improving a company’s balance sheet.  And, there’s a strong patriotic aspect to government work.

Booz Allen lost three people who were working with our Army client at the Pentagon on September 11.  Every year, we put candles and photographs next to the memorial to Geep Fischer, Terry Lynch, and Ernie Willcher in our McLean headquarters, and I send a letter to all of our employees to remember the ultimate sacrifice for our client and country.  We will not forget. 

Patriotism means a lot to us at Booz Allen.  I know many of you here. And I know patriotism means a lot to you as well.  We recognize that helping the government meet its mission is a sacred trust. In this, we are all on the same side.

So, how do we take this deep commitment to the mission and our shared goals across government and industry to a new level?  I’m not naïve enough to think there’s a simple answer.  But I do strongly believe the hard answer is worth pursuing.

And for me, it comes down to three dimensions—people, process, and attitude.  In keeping with the hockey analogy—it’s about the best athletes who understand multiple positions… it’s about improving the rules of the game… and it’s about having spirited and well-behaved fans on the sidelines.

People, first. It’s time to challenge the misperception and pejorative term of “revolving door.” Certainly, there needs to be oversight in place to avoid conflicts, but the most insightful and committed leaders I know in this community have worked in both industry and government.

Mike McConnell served in the Navy for nearly 30 years, and in his last position in uniform, he headed the National Security Agency.  He joined Booz Allen after retirement, and helped us build strong capabilities and businesses in information assurance, information operations, and critical infrastructure protection.  On New Years Day 2007, President Bush asked Mike to return to government service as a member of his Cabinet as Director of National Intelligence.  As DNI, he led the intelligence community in the war on terrorism and sensitized the President, Congress, industry, and the media to the critical need to improve cyber security. Mike returned to Booz Allen this past February. He has been asked to serve by President Obama on the President’s Intelligence Advisory Board.  He’s on Booz Allen’s Leadership Team—and Mike’s insight and expansive thinking from his Cabinet role bring immense value to us—on everything from understanding the severity of the cyber threat to thinking out-of-the-box in redeploying our senior talent. 

Mike is convinced that the collaborative leadership skills he learned as a senior partner at Booz Allen were invaluable to him in his DNI role, and that he was much better prepared for the Cabinet-level job having worked with our firm for a decade than if he had moved directly to the role from his military service.

Charles Rossotti today serves on the Boards of several major companies including ours.  He was the CEO and co-founder of AMS Corporation and then served as Commissioner of the Internal Revenue Service for five years beginning in 1997. 

Charles brought to government service the perspective of being in a competitive industry environment that forces you to look outside at what’s happening in the marketplace and at how your competitors are moving for advantage.  His industry background also helped him see synergies and dispel misperceptions common at the IRS and other agencies that “we’re unique.”  No question that agencies’ missions are unique, but a lot of other business matters aren’t.  Charles notes that organizations everywhere have to collect money, audit people and processes, and answer phones – and there are best practices government can learn from industry.

Charles Rossotti also emphasized how much he learned in government, especially about the demands of public scrutiny, and the value of deeply understanding opposing points of view. Charles said, “I testified before Congress 48 times, and had a senior government employee who set up sessions to grill me and ask all the difficult questions.  I was ready to strangle him at times—it was worse than the actual hearings—but it really prepared me.”

Today, Charles brings what he learned in government service to his work on corporate boards, and as Chair of Booz Allen’s Board Audit Committee, I can tell you he’s extremely focused on ethics and compliance.

We are all well served by the Mike McConnells, Charles Rossottis, and thousands of other committed professionals who have gained experience in both government and industry.

While people is the first dimension of better teaming, process is the second.  There’s unanimous agreement that we need to improve the acquisition process for government procurement.

To reiterate what I said earlier, working on the mission of government is a sacred trust.  The work is critically important and is funded by taxpayer dollars.  So, integrity in the procurement process must be paramount. Unfortunately, in an effort to regulate behavior and avoid conflicts of interest, the pendulum has swung too far to the point where it creates an overly complex and adversarial acquisition process. 

We need more dialog and more opportunity for productive, beneficial collaboration at both the strategy and implementation levels.  We should not have a rigid system of rules and interpretations that hamstring the field commanders on the ground—our contracting officers and acquisition executives—with prescriptive rules that reduce their ability to exercise their best business judgment where it matters the most.  If we in industry can spend more time with the government working together to better understand the problem and desired outcome (not  just a set of detailed requirements) — then industry can come up with more innovative and effective solutions.  A good example of this is collaborative work with our Army client in New Jersey. The project is a novel defense against Improvised Explosive Devices that was fast-tracked from prototype to field deployment, and is already saving lives for allied troops.

In short, the government needs to work in partnership to better determine and articulate up front what they want and how they will measure success. They also need to allow for and embrace innovation in the marketplace. By definition, both government and industry need to accept some of the risk that goes along with innovation.  It would benefit everyone to be paid for performance and value rather than simply level of effort. To achieve government’s critical objectives, we must create a more effective way to ensure industry’s goals are aligned so we can unleash our best talent and resources against the toughest problems.

The third dimension, along with people and process, is attitude.  We in industry and government—and the interest groups and politicians on the sidelines—need to stop drawing lines and politicizing the process, and instead seek and continually pursue common ground.

Whether at work or in our personal lives, one of the most important keys to success is to give the other person the benefit of the doubt, and accept the validity of their position—even if it differs significantly from our own.  For too long, pre-emptive attacks, escalation and distortion have dominated the scene here in Washington. 

We in Washington represent the center of government and a key force in the economy, so it’s high time we clean up our act and improve our attitudes.   A move in the right direction has been the recent outreach by the Professional Services Council to work with the Dept. of Defense rather than criticize Secretary Gates’ proposal to bring acquisition support contract positions in-house.  The National Journal praised the PSC’s measured approach, and Pentagon officials responded by saying their goal is to “create a better balance between our government and contractor support workforce”,¹ — not to bring all of the work in-house.

Industry appreciates the need for more transparency, but the government needs to do a better job of defining acquisition strategies, requirements, and reporting, so companies know what’s expected and can effectively respond.

A collaborative approach to talent management is necessary as well.  Booz Allen is working with its clients at NSA and other agencies to help attract and develop the next-generation of cyber experts to protect our critical infrastructure.  This isn’t about competition or in-sourcing vs. out-sourcing. There isn’t enough trained talent anywhere.  We don’t want to compete with our clients for this scarce resource. We’re working together to build a deeper capability.  Specifically, Booz Allen has created a “cyber university” within our firm to train qualified IT professionals to be cyber experts with all the required certifications. We’re working closely with our clients to help attract talent to Ft. Meade and other critical places—and to find new ways of working such as remote delivery via computer, video, and teleconference that appeal to Generation Y. 

It takes a new attitude and openness on the part of all of us to look at these less-traditional models like telework to expand our talent channels and ability to deliver 24 x 7. 

Industry and government are on the same team, facing the same challenges,  working toward the same goals. 

Two weeks ago, I sat down with Col. Dave Zorzi, our Secretary of Defense Corporate Fellow, who was finishing his year in residence at Booz Allen.  He was debriefing me on what he learned and making recommendations on what we can do better.  During his time at Booz Allen, Dave was a fully-functioning principal – working on project teams and review teams from cyber to finance reform to international defense.  He served on appraisal committees and used Booz Allen’s 360-degree peer-review process as the basis for his recommendations back to the Department of Defense.  Dave broadened our perspective, added new insight into what the Pentagon is looking for in terms of cost and value, and even led an effort to improve the fitness center in our McLean office—he cared that much about our business and quality of work life.

We hated to see Dave leave, but are confident that what he taught us and what we were able to share with him will serve the Dept. of Defense and our nation for decades to come.

Colleagues, I know you agree the benefits of improved government-industry teamwork are too important for us to sit passively on the sidelines.

To borrow from a well-known saying…

The puck stops here.

1 CongressDaily, April 29, 2009, “Balancing Acts” by Megan Scully.