Cross-Functional Teams in Defense Reform: Help or Hindrance?

Pentagon Experience with CFTs

The SASC wants the Secretary of Defense to employ CFTs rather than cross-functional committees when the mission at hand, its complexity, and the level of task interdependence make a CFT appropriate. Anecdotally, there is evidence that the Pentagon has used empowered CFTs to achieve cross-cutting objectives on rare occasions, and the results have been notable (table 1). For example, this past year the Pentagon created a cross-functional group to examine and respond to recommendations of the Military Compensation and Retirement Modernization Commission. Under tight time constraints the group distilled inputs from across DOD, the White House, and four Federal agencies (Office of Management and Budget and the Departments of Labor, Agriculture, and Veterans Affairs) to create a well-integrated product that went well beyond least-common-denominator consensus output. The results were well received in the Pentagon, White House, and Congress.

However, earlier attempts to institutionalize CFTs in the Pentagon have not gone well. A case in point cited by the SASC is Secretary of Defense William Perry’s 1995 creation of Integrated Product Teams (IPTs) to improve decisionmaking for acquisition programs. Although there were early reports of IPT success, over time most observers agree that IPTs function more like cross-functional committees than CFTs. Another attempt to institutionalize CFTs occurred during the 2005 Quadrennial Defense Review. A working group recommended empowered CFTs, and the final report language suggested leaders wanted to move in that direction:

The Department is continuing to shift from stovepiped vertical structures to more transparent and horizontally-integrated structures. Just as the U.S. forces operate jointly, so too must horizontal integration become an organizing principle for the Department’s investment and enterprise-wide functions. These reforms will not occur overnight, and care must be taken not to weaken what works effectively during the transition to a more cross-cutting approach. However, the complex strategic environment of the 21st century demands greater integration of forces, organizations and processes, and closer synchronization of actions.

Despite this hopeful assessment, the under secretaries who lead major DOD functional organizations objected, and nothing came of the recommendations.

Not long thereafter, Secretary Gates  arrived  on the scene and began creating authentic CFTs. Gates is “widely considered the best defense secretary of the post–World War II era,” and sometimes referred to as a “master of bureaucracy” because he worked his way up from an entry-level position to the highest echelons of the national security system. In A Passion for Leadership, Gates recounts how he “made extensive use of task forces to develop options, recommendations, and specific plans for implementation.” According to Gates, he created his first task force—the Wounded Warrior Task Force— “because so many different elements of the Pentagon were involved.” More task forces followed, and they became “an essential instrument” for not only “matters relating to the wars” but also “other problems in the department as well,” including saving billions of dollars in cost-cutting efficiencies.

The cross-cutting task forces that Gates used equate to the CFTs Congress wants to institutionalize via Section 941 (see table 2). Gates claims his CFTs were necessary to overcome the bureaucracy’s tendency to make consensus decisionmaking its priority, which invariably produces “pap.” To overcome this tendency Gates states that he carefully structured his task forces. He chose the right leaders, prepared strong charters for the groups, and monitored their work to protect and empower them. Gates states that the task forces needed protection “to keep the bureaucracy from smothering their efforts.” They also had to be empowered to “carry out the task” and allowed “space to show what they can do.”

Properly configured and employed, Gates argues the CFTs promote accountability. When a subordinate leader and/or group are empowered, they can be held accountable for results. According to Gates, a Secretary must “empower individuals to complete specific tasks” and “establish milestones to measure progress” but then “hold those individuals accountable.” Gates did this. For example, he notes he had to change the leadership of his intelligence, surveillance, and reconnaissance task force “several times” in order to get results.

Overall, Gates claims the CFTs were enormously productive for not only directing the war effort but also aiding other headquarters decisionmaking challenges. He notes, “With only a couple of exceptions, virtually every task force I appointed improved on and enriched my ideas and often expanded the scope of the change.” Gates is emphatic about the value of the CFTs, stating, “I want to emphasize one last time that I found task forces and other ad hoc groups immensely useful, indeed crucial, for developing specific proposals for implementation of reforms and for tracking progress.” He insists that “any leader can use them effectively.”

Secretary Carter acknowledges that under Gates, “task forces became the model of choice,” they were successful, and they “injected badly needed agility into the Pentagon’s notoriously slow bureaucracy.” Among other things, according to the Government Accountability Office, task forces “decreased the median time needed to locate funding for projects from nine months to one month.” In reviewing whether Gates’s task force approach should be continued, Secretary Carter states he decided upon a “hybrid approach that draws on the advantages of both models.” Off the record, others close to the process state that when Gates left the Pentagon, his way of doing business with empowered CFTs came to a screeching halt. The Pentagon reverted to its normal practice of using cross-functional committees.

Table 2. Excerpts from Robert Gates's A Passion for Leadership and Section 941 on CFTs

Whether Section 941 and its institutionalization of CFTs will help or hinder future Secretaries wanting to overcome the Pentagon’s tendency to produce least-common-denominator consensus decisions remains a contentious issue. The Senate believes Section 941 will help, but to date the Pentagon argues the opposite, predicting dire consequences if Section 941 becomes law.

Key Points of Contention

The sheer range of direction provided in the more than 1,600-page draft National Defense Authorization Act for 2017 was sure to raise Pentagon hackles given the normal organizational preference for autonomy.

 However, the Pentagon has criticized Section 941 for several specific reasons that deserve careful scrutiny. A key objection concerns whether Section 941 will assist or undermine the Secretary’s control over DOD.

Does Section 941 Undermine or Empower the Secretary? The Pentagon argues that “Section 941 would undermine the Secretary’s ability to create effective cross-functional teams, which are already an extremely common feature of the way the Department is organized today.” It also argued that Section 941’s mandate to establish at least six CFTs by October 20, 2017, is an “inflexible legislative schedule” that would “limit the Secretary’s ability to use teams.” The distinction between CFTs and committees made above is key to understanding how the Pentagon can argue it already commonly uses effective CFTs and that the six mandated by Section 941 would limit the Secretary’s flexibility and undermine his ability to create effective CFTs.

If the Pentagon were already using the kind of empowered CFTs envisioned in Section 941, it would not find the requirement for six teams problematic. However, by citing the Joint Requirements Oversight Council as an example of an effective CFT, the Pentagon indicates that it means cross-functional committees rather than teams. Having to employ six empowered CFTs as mandated by Section 941 would supplant ineffective cross-functional committees with real CFTs. The Pentagon is profoundly uncomfortable with the type of empowered CFTs envisioned in Section 941 and used by Secretary Gates. Secretary Carter’s “heartburn” letter to the SASC argues that “Enacting the [Section 941] requirements would . . . weaken a critical tool that senior leadership utilizes on a regular basis to make effective policy decisions by separating cross-functional teams from the leadership structure and positioning them to purposely create conflict, rather than solutions, for the defense enterprise.” What this means is that DOD prefers the consensus-driven cross-functional committees that are controlled by the leaders of functional bodies and do not “create conflict.” It does not want empowered CFTs, believing their ability to direct functional entities would be conflictual and separate the CFTs from “the leadership structure.”

A Section 941 CFT would create friction with functional leaders as it pursues its cross-cutting mission, but it would not conflict with or be separated from the Secretary. The major CFTs called for in Section 941 report to, and derive all their authority from, the Secretary, who chooses their missions, approves their charters, and specifies the scope of their authorities. The Secretary can approve or reject or modify team decisions. Section 941 CFTs would impinge upon the prerogatives of functional leaders in the Pentagon, but they would not produce the kind of consensus outputs that former Secretary Gates warns are meaningless (that is, outcomes where “everyone agrees to say collectively what no one believes individually”). In that regard Section 941 CFTs are a tool the Secretary could use for overcoming the Pentagon’s “tyranny of consensus.” If for some purposes Secretaries prefer cross-functional committees, they could simply limit the CFT charter and authority accordingly (for example, by clarifying the CFT would be limited to making recommendations rather than taking any action). Thus Section 941 would not undermine but rather empower the Secretary.

Does Section 941 Clarify or Confuse Lines of Responsibility? Closely related to the issue of whether CFTs empower or complicate the Secretary’s management of the Pentagon is the question of whether they confuse lines of authority. The Pentagon has objected that Section 941 “would give [CFTs] directive authority over other elements of the Department and authorize them to requisition personnel and resources from other parts of the Department without regard to competing mission requirements.” In Secretary Carter’s letter to Senator McCain, he adds that Section 941 “appears to assign extensive duties to lower-level officers [that] exceed the assigned responsibilities of the senior officials to whom they report.” Continuing, Secretary Carter argues:

Mandating that these teams have unchecked directive and resourcing authority would undermine the Department’s senior leadership and create confusion regarding lines of responsibility, a particularly dangerous scenario in an institution where the chain of command is a central element, where the stakes related to national security decision making are extraordinarily high, and where accountability for actions is meted out by Congress and the American people.

The Pentagon made the same authority and accountability argument when it tried to defeat the original Gold-water-Nichols reforms. It argued empowered combatant commanders would undermine the Service chiefs and sow confusion about the lines of authority from chiefs to their forces in the field. But what Congress did was create a new chain of command with new authorities for the purpose of joint operations. The issue here is not confused lines of authority but decisionmaking legitimacy.

For functional missions, the lines of authority remain clear: from the Secretary to the functional leaders. For cross-functional missions, they are equally clear: from the Secretary to the CFTs to the functional leaders. Lines of authority are not being confused by Section 941 but rather clarified. The language in the current version of Section 941 invites the Secretary to truly empower the CFTs. It specifies the Secretary “shall delegate to the team such decision-making authority as the Secretary considers appropriate in order to permit the team to execute the strategy;” that within that delegated authority, “the leader of a mission team shall have authority to draw upon the resources of the functional components of the Department and make decisions affecting such functional components”; and that “the leaders of functional components may not interfere in the activities of the mission team.”

This language clarifies rather than confuses responsibility. Currently it is not clear who is in charge of cross-functional missions other than the Secretary, who does not have the time to personally manage the details of all cross-functional missions. If the Secretary chose to form the type of CFT specified in Section 941 it would be crystal clear who had the responsibility and accountability for executing that mission. Currently the Pentagon prefers to use consensus-based committees and processes for cross-functional missions. They are not empowered to get results, so they cannot be held accountable for results. Functional leaders prefer this approach because it typically gives them an effective veto over any decision they do not like, but that deference to functional equities undermines the Secretary’s ability to manage cross-functional missions.

What really is in dispute is not whether CFTs would confuse lines of responsibility, but rather who has a legitimate right to decide how to integrate functional capabilities to accomplish cross-functional missions. There is always a cross-functional integrator at the next level of a hierarchical organization. For example, the Under Secretary of Defense for Policy is the cross-functional integrator of expertise in his or her organization on a range of functions: special operations, regional expertise, security assistance, and so forth. The authorities of the functional entities are always impinged on or constrained by whoever performs integration duties at the next level up. In the case of the Pentagon as a whole, everyone agrees that the Secretary has the legitimacy and authority to integrate the efforts of his or her under secretaries for cross-cutting missions. No one accuses the Secretary of “eroding lines of authority and accountability” when he or she manages an overall war effort. In fact, they say just the opposite: that the Secretary making the fi decisions facilitates clear lines of authority over the functional entities and sustains accountability.

Thus the real question is whether CFTs, acting on the delegated authority of the Secretary, are “legitimate” integrators. Put differently, should the Secretary be able to delegate his or her integration authorities to a CFT? There are only three choices. The Secretary can appoint a functional leader as the integrator of a cross-functional mission, but that person would be biased by his or her current duties and experience and not trusted by other functional leaders. Alternatively, the Secretary can give the mission to a cross-functional committee, but then the mission would not be managed well for the reasons already explained. Or finally, the Secretary can give the cross-cutting mission to a CFT and its leader, someone he or she has chosen and trusts and who would pursue the mission undistracted by other duties and knowing the Secretary will hold the team accountable for actual results. The Pentagon position seems to suggest the Secretary ought to be limited to the first two options, whereas the SASC wants the Secretary to also have and exercise the third option.

It is important to note that regardless of which option a Secretary chooses, the authority of functional leaders over their functional domains ostensibly is circumscribed by the need to accomplish the cross-cutting mission. So the issue is not erosion of clear lines of authority. The issue is the legitimacy of the integrator. The SASC and Section 941 encourage, but do not compel, the Secretary to delegate integration authority to empowered CFTs so the department can get better results in cross-cutting missions. It also should be noted that the authority of the empowered CFTs is not “unchecked” or exercised “without regard” to competing requirements; CFT authorities are always limited to whatever the Secretary chooses to delegate. Moreover, Section 941 currently has a specific provision that allows the head of a functional component to ask the Secretary to review and modify decisions made by CFTs.

Couldn’t CFTs Be Delegated Advisory Duties Instead of Decision Authority? Informally it has been suggested by senior Pentagon leaders that CFTs would be less objectionable if they were merely making recommendations. It might seem like reducing the scope of the CFTs to generating good advice would be a minor issue. After all, the CFTs work for the Secretary and can only exercise whatever authority the Secretary delegates to them. If the essential value of a CFT is integrating functional expertise, could that not be done in the form of advice to the Secretary without the risk that the CFT would impose unreasonable decisions on the Pentagon? Many wonder what the harm would be in just mandating that the CFTs are advisory only and have no directive authority.

One advantage of CFTs is that they can be effective against a wide range of missions, ranging from hypothetical competitive strategy exercises to real-world fi missions. In the case of the former, the desired output from the CFT would be advice. For example, in the famous case of President Dwight D. Eisenhower’s Project Solarium, he used three CFTs to devise alternative strategies for dealing with the Soviet menace. The President was directly involved in each team’s creation, including the selection of members, and ensured each had access to all government information. Yet the teams had no directive authority, and after they briefed their strategies as advised courses of action, they played no role in strategy implementation.

However, a CFT would need directive authority for most missions and particularly those that require real “operational” outcomes such as improving care for wounded warriors or rushing better armor or theater intelligence, surveillance, and reconnaissance to deployed forces. When groups know they will be judged on the quality of their advice rather than actual outcomes, they try to take all views into account and anticipate what leaders are willing to accept in the way of complaints or friction. Thus advisory groups often err in concentrating on what might be received well and inadvertently default to what is politically acceptable rather than rigorously identifying the problem and exactly what it would take to solve or manage it well. Groups that actually have to make progress and would be held accountable for doing so care far less about the popularity of their decisions and far more about whether they make sense.

The current Section 941 language states that the Secretary will decide what decisionmaking authority to delegate to the CFTs so they can execute their missions, which acknowledges the wide range of missions a Secretary might want to assign to CFTs. The more authority the Secretary retains, the more he or she would have to be involved in the team’s ongoing activities. In many cases the Secretary should be willing to delegate authority to the teams to make decisions both with regard to drawing on the resources and information of functional components and making substantive decisions regarding the formulation and execution of their strategies.

Does Section 941 Add or Reduce Bureaucracy? The Pentagon also complains that Section 941 would result “in increased bureaucracy and a larger, less efficient, and less responsive DOD organization.” Anyone who has worked on the Secretary of Defense’s staff knows the work load is crushing, and all the more so given recent staff reductions. If the CFTs were a major bureaucratic burden, it would be a serious disadvantage. That is not likely, however. The number of teams (six) required by Section 941 is small, and the specified number of people on each team (eight to ten) is also small. Fifty to sixty staff members employed on CFTs full time should not be a major burden given the overall size of the Pentagon, numbering in the tens of thousands.

More to the point, it is important to understand the origins of the current staff workload. Much staff time is expended in the time-consuming consensus-building processes that exhaust staff but yield scant results. Consensus processes enervate not only the rank and file but also senior leaders, including the Secretary. Section 941 would obviate the need for activities that masquerade as horizontal integration but in reality waste precious time and expensive human capital. The Section 941 CFTs are empowered to cut through that kind of wasted effort and thus would reduce rather than increase the bureaucracy’s workload.

In fact, CFTs could make it easier for the Pentagon to absorb previously mandated staff cuts. As has been argued in another context, if the Secretary’s staff is cut by 20 percent “he will get 20 percent less of what he does not want—narrow, stove piped advice—but not one iota more of what he truly needs, which is well-integrated, multifunctional problem assessments and solutions.” Put differently, if the Secretary wants a staff that is less expensive and also more effective, he must reengineer it for collaboration,” which is exactly what Section 941 is designed to assist the Secretary in doing. As the Pentagon acknowledges, it currently creates numerous cross-functional committees and working groups, but because they are not empowered they are typically ineffective and waste personnel and time. Fewer of these and more of the empowered Section 941 CFTs would make DOD leaner and substantially more productive.

Micromanagement or Oversight? Informally, senior Pentagon officials cite the level of detail in Section 941 as egregious micromanagement. Some experienced observers agree. With respect to Section 941 one former senior official testified to the House Armed Services Committee that it was “profoundly wrong for the Congress to dictate the operational activities within the department” and to “say how the secretary of defense should organize the internal activity of the department.”

The distinction between effective oversight and micromanagement is subtle and situation-dependent. Congress is leery of engineering solutions in organizational structure and usually contents itself with requiring reports to draw attention to performance problems. However, there are historic exceptions such as the Goldwater-Nichols Act with its many prescriptions on operational and internal Pentagon activities. If, 30 years ago, Congress had just given guidance to the Secretary of Defense on the need for better joint operations and let him figure out how to achieve it, we would still be fighting wars by dividing the operational space among the Services so they could operate independently of one another. To get better joint operations, Congress had to direct specifically how DOD would operate to achieve that goal.

The question now is whether Section 941 is another justifiable historic exception. The SASC believes the mandate for effective CFTs is long overdue. Given the Pentagon’s history of limited team use and its response to Section 941, which suggests confusion about the difference between the teams and cross-functional committees, it is not likely the Pentagon will employ empowered CFTs without intervention by Congress. Yet even if it appeared that Pentagon leaders understood and were willing to embrace CFTs, it would be helpful for Congress to codify the use of empowered teams in law for reasons explained in the next section.

Do CFTs Require Great Leaders or Great Organizations? Critics of Section 941 argue that even if there is some value to CFTs, their use and management ought to be left entirely to the discretion of the Secretary of Defense. The argument is that it takes a good or even great person to make CFTs work well, and they need as much discretion as possible in deciding exactly how they should be configured and employed.

The response to this argument is that few Secretaries understand the importance of cross-functional teams, much less how to create and manage them well. Secretary Gates learned by trial and error the critical importance of such groups over the many years of his distinguished career, but otherwise senior DOD leaders have largely ignored their potential. Legislating the use of CFTs would ensure the department pays close attention to their productivity. It would also reinforce the legitimacy of the teams and increase the willingness of career civil servants to support them. Resistance to their use by functional leaders would diminish, giving the teams a much better chance to succeed.

In short, there is no need to pit great leaders against modern organizational structure. Both are needed, along with collaborative cultures and other organizational practices and attributes that are conducive to achieving consistently high performance.

Requirements for Success and Common Reasons for Failure

Whether or not Section 941 becomes law, it is important to understand CFT requirements for success. Creating and maintaining an effective CFT is not easy. They often fail. As both opponents and proponents of CFTs note, they are a more sophisticated decision mechanism that requires diligent management. If the Pentagon wants to use CFTs effectively, it needs to understand their requirements for success. Put simply, for a cross-functional team to perform its mission well the members must transfer their loyalty from protecting their parent organizations (and themselves) to accomplishing the common mission assigned to the CFT even though the best way forward requires sacrificing organizational and/or personal preferences. Precisely how a small group achieves this transfer of loyalty is much debated and situation dependent, but a few key points stand out.

First, in most large hierarchical organizations with structures divided according to major functional areas of expertise, it is critical that the CFTs be strongly supported, protected, and encouraged by the senior leader. CFTs cannot succeed in the Pentagon without strong support and careful oversight from the Secretary. If the Secretary’s attention is directed elsewhere, the functional leaders will attempt to exert control over their personnel on the CFTs and reduce them to consensus decisionmaking bodies. This was Secretary Gates’s experience, and it is a general rule that applies to CFTs in government and the private sector.

Another way CFTs can fail is if the CFT leader is perceived as being more loyal to his or her parent organization’s preferences than to accomplishing the team’s mission. In such cases the team members will respond in kind and work to protect their parent organizations’ interests. Enterprises that hope to create effective CFTs must ensure that team members are rewarded rather than punished for focusing on the interests of the organization as a whole and the mission of the CFT instead of the narrower interests of their functional groups.

The opposite extreme is also a problem. The CFT leader and team must be willing to make risk tradeoffs to advance mission success. However, if they run roughshod over functional organizations creating unnecessarily high levels of conflict, the team’s performance would be compromised. In this regard it helps to have a disciplined, transparent appeal mechanism that ensures functional leaders have the opportunity to make their best case to the Secretary when the CFT makes an especially controversial decision (which Section 941 provides).

Beyond these general issues of empowerment, a number of other best practices ought to be observed. For example, most effective CFTs require collocation and dedicated personnel working full time. Beyond that, the maintenance of trust among the members is generally accorded highest priority on effective CFTs. Given the fast-evolving problems typically assigned to CFTs, it is also important that they are open to learning. To assist this process, Section 941 has provisions for learning from the CFT experience.

Given the limited space available in this article, it is not possible to examine CFT performance factors in greater depth. However, it is possible to illustrate the types of performance factors that CFT leaders should consider by comparing five successful team attributes identified by Google with five major dysfunctional attributes of poorly performing teams identified by Patrick Lencioni (see table 3).

The first positive attribute cited by Google is psychological safety. Dr. Amy Edmondson, who testified to the SASC on Section 941, is well known for coining this term. Edmondson studied medical teams at hospitals to find out what distinguished the best performing groups. She assumed top teams made the fewest medication errors but discovered they appeared to make more errors. Eventually she realized the best teams simply admitted their errors whereas others attempted to cover them up. By forthrightly acknowledging mistakes, the teams could more easily correct them. Edmondson labeled this team attribute psychological safety and observed that it facilitated a climate of openness conducive to high performance.

Table 3. Five Key Issues in CFT Performance