Published December 2002

New challenges force Army to rethink structure

In “My Fair Lady,” Professor Henry Higgins brags that he can tell everything about a person just from his or her speech patterns. Obviously, he didn’t suffer from self-esteem deficit, but he has a point. The words and phrases we choose reveal a lot about what we are thinking and how we are approaching a situation.

There is a sentence written in a recent memo by Secretary of the Army Thomas E. White that reveals his thinking in just this way.

In just a few phrases it says a lot about the Army’s view of its current situation and the strategy it is taking. The sentence reads: “The Army must focus its energies and talents on our core competencies — functions we perform better than anyone else — and seek to obtain other needed products or services from the private sector where it makes sense.”

The phrase “core competencies” was created some years ago as part of the jargon of management consultants. They used it to make the cold and dry statistics and cost accounting reports more approachable. This helped top management form a mental image of what the organization should “look like” and put together the steps necessary to get there.

Core competencies are the things that are important, even essential, to an organization. In a good organization, the core competencies are also the things that it does best. In “less good” organizations (in the management consulting business, all paying clients are “good” by definition), where profitability has declined, the cause is often that resources and management attention were distracted from core competencies. In “seriously less good” companies, it is not unusual to find that the core competencies have languished while the company has lost its way and, almost literally, its identity.

The use of the phrase “core competencies” by Secretary White, then, is an unmistakable sign that the Army has bought into the modern business management model of how an organization should be shaped and how it should be run. This will have a profound effect on the Army. In a relatively short period of time it will reshape and change it so dramatically that even today’s recent veterans might not recognize it.

The secretary’s memo has stirred up a storm of controversy, but not about core competencies. The current dissent is focused on privatizing the jobs of some, perhaps most, of the Army’s 214,000 civilian workers. Understandably, the union representing these workers views privatization as a strategy to reduce workers’ pay and benefits.

But the “core competencies” management approach has implications that go beyond the civilian work force. As the strategy develops, much of the work now done by Army civilians will, sooner or later, be contracted out. What some may not realize, though, is that many of the tasks performed by uniformed soldiers will also end up being privatized, too. It will be a very different U.S. Army.

If the Army’s core competencies center on the deployment of combat-ready soldiers, equipment and systems — and certainly that would be reasonable — then it will be concentrating on that and contracting out as much as possible of the logistics tail that combat units drag behind them.

This issue was brought to a head by the Special Operations units, which achieved so much success, and visibility, in the Afghanistan campaign.

The recent decision to reorganize Special Operations into its own command means that it will have to create its own logistics and support groups — and this is a lot simpler if dealing with the private sector rather than with an entrenched bureaucracy, even if it is your own.

The logistics nightmare of setting up this new command, which the Army obviously needs in order to pursue today’s anti-terrorism strategy, undoubtedly prompted Secretary White to rethink the overall Army structure.

Just as the Boeing Co. discovered a few years back that its hierarchical organization was no longer an effective way to produce airplanes, the Army realized that the effectiveness of its lower-profile combat force depends on a smaller organizational footprint. Hierarchical organizations are very demanding of managerial energy, and the projections of needed force structures must have been as alarming to the Army as projected production schedules and costs were to Boeing.

Both organizations decided, in the midst of their success — Boeing’s profitability and the Army’s remarkably successful campaigns — that they needed a different structure to meet the coming challenges. But reshaping an organization is not easy, and the new Army structure will make new and different demands on its leadership and management.

But any organization, large or small, public or private, military or civilian, must be effective if it is to survive. The difference, of course, is that in the case of the U.S. Army, it must be effective if we all are to survive.

James McCusker, a Bothell economist, educator and small-business consultant, writes “Your Business” in The Herald each Sunday. He can be reached by sending e-mail to otisrep@aol.com.

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