EXCLUSIVE INTERVIEW — Does the United States military have an innovation problem? For all its smart leaders and money and obvious edge in many areas, some experts believe that at a moment replete with global crises and potential threats, the U.S. military is at risk of falling behind major adversaries when it comes to change and innovation.
Certainly that’s the view of Steve Blank, an American entrepreneur and creator of the so-called lean startup movement. Blank is a deeply respected voice in the world of organizational management – particularly the crucial work of disruption in large organizations that often resist such change. He has founded four technology startups, worked with several others, and is the co-creator of the Department of Defense’s Hacking for Defense program, and the Gordian Knot Center for National Security Innovation at Stanford University.
Blank spoke recently with Cipher Brief CEO Suzanne Kelly, a conversation that made clear the sort of disruptive thinking Blank brings to the table, much of which he believes is sorely needed in the DOD and other national security institutions. Among other things, Blank had some provocative answers to Kelly’s question: What three things would you do if the next president made you secretary of defense?
This interview has been edited for length and clarity.
The Cipher Brief: You wrote a blog recently called, “Why Large Organizations Struggle with Disruption and What to Do About It.” You didn't call out the Pentagon, but what you bring out is very timely given the recent report by the Commission on National Defense Strategy, which essentially said the United States is not ready to fight multiple wars. What are some of your thoughts about how unprepared we actually are?
Blank: If you're not worried, you're not paying attention. For the majority of the population, ignorance may be bliss – until it's not. At the end of the day, I think it comes down, unfortunately, to senior leadership. The types of changes that are needed are not minor changes when we're in a crisis.
You mentioned the Pentagon. If you go out to the combatant commands, whether you're in CENTCOM dodging Houthi missiles or you're in INDO-PACOM worrying about the future, it's pretty clear that there's a feeling of crisis. But the closer you get to that five-sided building, paperwork still moves at the same speed that it normally moves. And it's not that there are smart people who don't understand that, but the organizations writ large have not declared that it's not business as usual. And that affects the entire organization.
It's not just the Pentagon. It's commercial companies that I work with as well. They typically have world-class organizations and world-class people, but in a crisis, it's for a world that no longer exists.
If they're still appointing the same people that they would have appointed 5 or 10 years ago, or hiring the same people in a commercial company, or have the same orgs and the same processes, then it's just innovation theater. It's not really innovation. And it's certainly not dealing with the disruption around you.
The problem, whether you're CEO of a commercial company or a service chief or somewhere else, boils down to, Do you actually understand the threat? Do you understand the magnitude of the threat? Do you understand the timing of the threat? And do you have your arms around the types of responses that are needed? If they don't understand those things and haven't processed them, then you get the behaviors you get because the rest of the organization has a set of behaviors which absolutely guarantee no change.
Just to pick on the Defense Department. There’ve been two secretaries of defense that operated in disruption that understood how to do that. The innovators tend to point to either Bill Perry or Ash Carter as ones that understood the nature of disruption. And it's not that the others have not been effective. But again, disruption requires “not business as usual.”
Typically the innovators understand disruptive tech or, more importantly, they've actually run experiments and real operating concepts, but they lack access to those senior leaders. Those folks have no direct access on a regular basis to Secretary X or Admiral or General Y. They cut off those senior leaders from truly understanding those changes that are not only possible, but have been experimented with.
The Cipher Brief Threat Conference is happening October 5-8 in Sea Island, GA. The world’s leading minds on national security from both the public and private sectors will be there. Will you? Apply for a seat at the table today.
The Cipher Brief: How do you think differently about incorporating the process components of an organization so that they're more adaptable, and can respond more quickly and be sure those innovative ideas are reaching the top faster?
Blank: I will answer that question, but bear with me – there are two or three important things that stop these suggestions that I'm about to give from happening.
The biggest one is all the legacy investments that companies and, more importantly, the government makes. If I've been building aircraft carriers for 75 years and training people and my goal in the culture is to be an admiral in charge, or a captain in charge of a carrier strike group, the idea of having a drone fleet, whether it's surface or underwater or even if it's an adjunct to that fleet, it's just counter to everything.
And number two is the revolving door in leadership. Program managers and heads of state, maybe two to three years. Political appointees last as long as the White House or the party in power. But that is the antithesis of what happens in commercial companies.
Now let me answer your questions. The good news and bad news is, we know how to do this in the commercial world and we certainly know how to do this in Silicon Valley. And the Defense Department and others operated like this in World War II and in the Cold War. It’s just amazing what we created not only in times of war but during the Cold War. Just pick the Navy. We developed nuclear subs, Polaris and Poseidon and then eventually Trident. Air Force? Five generations of fighter planes, three generations of manned bombers, two generations of carriers, including nuclear carriers.
But we no longer own all the technology needed to deter or win a war. We used to own all of it in the defense department. We had the most advanced technology, period. That's just simply no longer true. And it's hard to get your head around. We still own nukes. We own hypersonics. We own exquisite sensors and the exquisite ability to integrate complex systems that no startups or scale-ups are going to figure out for the next decade or two.
But whether it's AI or machine learning or cyber, take the whole list of autonomy, biotech – that stuff is in commercial technology, it's in startups and it's changing at a rate that literally would blow your mind. The problem is we're disconnected from that in the DoD.
While we give great lip service and we run great experiments, all you have to do is look at the MDAP list, the Major Defense Acquisition Program list, and say, OK, where's all the money going to the new entrants? And they're not on this list. They're barely on any list.
The acquisition system has not embraced the notion that commercial technology needs to be an integral part of DoD. And second, as much as I do love the primes (top U.S. government contractors), they cannot be the contractor of first resort for things that need to be delivered with speed and urgency that are based on software. In the 20th century, we essentially built sheet metal and put software on top of it. In the 21st century, most of our platforms are software with sheet metal on top of it. That's a very different mindset, very different culture, very different engineering.
And unless you've been born in software, it's very hard to slap a software division onto a hardware company. It's not impossible, but ask Boeing how that's going. I'm not just picking on them, but they're a pretty visible example. The DoD needs to actively work to create a whole new set of contractors to create new capabilities.
I would have thought that when Russia appointed an economist as their secretary of defense, it would have kind of sunk in to the DoD and the rest of the National Security Council that both China and Russia are operating on a whole-of-nation approach. The biggest problem the DoD has isn’t money; it’s a lack of imagination of where to get the money. Because in fact, if we actually engage the rest of the country — not just venture capitalists and startups and whatever, but hedge funds and the rest — SpaceX is one example, but why aren't we encouraging people to build shipyards at scale or drone factories at scale and figuring out how to give them tax breaks to figure out how to drop a hundred billion dollars of virtual money into the DoD budget?
And then you ask, How many economists does the DoD have working on that problem? I'm talking about creative things, thinking about how we engage past the DoD, and having conversations with Congress and the National Security Council about how we're competing with one hand tied behind our back. In China and Russia, getting commercial entities is done by coercion; we could just do it by profit. How do we make it profitable for all these entities to actually contribute to national defense and national security?
But inside these organizations, right now we have essentially one track of execution. That is, we execute programs, we start with the requirements – here it is, it goes through a JCDIS (Joint Capabilities Integration and Development System) process, it goes through budgeting, then acquisition, and that's a two-to-three-year process. That's insane.
The Cipher Brief: I'm not sure I understand why the Department of Defense has a money problem. Why is it a money problem?
Blank: It’s a money problem because the other alternative is to go to Congress, which is coin-operated by the primes. It's a zero-sum game. If a Ford-class carrier is $13 billion, and you believe you can't even put them in the first island chain and maybe not even the second, then you would say, Why don't we reallocate $13 billion and buy a couple of thousand autonomous systems, or start a couple more factories for 155-millimeter shells? Well, guess what Huntington Ingalls (maker of the Ford-class carrier) is going to do? They'd say, and rightly so, We're going to have to lay off people because we're going to slow down the production facility where we build it. Or, picking on the Navy, the Minuteman II replacement. That's a 110-billion-dollar program. If you say, OK, let's just move that money to here, do you understand what that's going to do to Congress? That's going to be a food fight for 5 or 10 years. It’s possible to get more money from there, but that really requires a political fight that I'm not sure is winnable within the time necessary to make it happen in a democratic government.
And so where I go is, Let's get some more money that doesn't impinge on the boys with their toys. And I'm not using that as a pejorative. I'm just using it to say, OK, one could make the case that we need those systems, and that amount. But to try to grab the money from there is a different fight, rather than figuring out where to get some new dollars.
Everyone needs a good nightcap. Ours happens to come in the form of a M-F newsletter that provides the best way to unwind while staying up to speed on national security. (And this Nightcap promises no hangover or weight gain.) Sign up today.
The Cipher Brief: Lieutenant General Mike Groen, whose last role at DOD was head of the Joint Artificial Intelligence Center, always likes to say that the Pentagon doesn't have an innovation problem, it has an integration problem.
So I think we're talking about two big things here. One, finding funds that will make it easier to almost hack the system, but then also how to integrate some of these ideas and systems and get them funded so that we can start moving forward.
Blank: Yes. And let's be clear: You can't just buy a bunch of shiny objects and throw them out to a fleet or armored division and say, Now push the button. You have to run virtual experiments, you have to run physical war games, you need to be coming up with integrated operating concepts and you need to do a bunch of training.
It's not just, Hey, look at this drone and see, it does X. It’s how does that integrate with the operating picture of a carrier strike group, or how does that integrate with the software we have, or how does it plug into whatever we have for long-range fires, et cetera? These things take time, take integration and also take senior leadership communicating to the existing components that we're buying that these are going to be adjuncts, and you will be integrating them. And then, Calm down, they're not going to replace you. That solves at least part of the food fight, but you will work like there's no tomorrow to start integrating these as an adjunct to the fleet.
I now send around a copy of the New York Times front page of December 7th, 1941, which was printed before they knew about the attack on Pearl Harbor. Do you know what was on the front page? An article about the Secretary of Navy, Frank Knox, with the headline saying, “The Navy is prepared to take on any two nations at a time.”
What happened, of course, was that we had an operating concept on December 6th, 1941 that said battleships were going to be the primary way we were going to project power. And yes, we had six carriers at the time, maybe seven, but they were there as an integrated part of a scouting function for the fleet. While others had run part of the Navy War Games for 20 years, using carriers as a way to project power, the battleship guys got all the budget.
On the morning of December 7th, we understood the new operating concept was, You project power with a carrier strike group.
I hope we don't have to wait that long to be reading some blog on some date that announces a new operating concept.
In World War II, just before the war started, the Provost of MIT went to President Roosevelt and said World War II is coming, and it's going to be a technology war. And he believed that the armed services were ill-equipped to deal with advanced technology. It's going to be a physics war, he said, it's going to be an electronics war, and we should have civilians build those advanced weapons systems. The service chiefs all laughed hysterically.
And you know what Roosevelt did? He agreed with the provost. And we stood up something called the Office of Scientific Research and Development. We hired 10,000 civilians, professors, and ran weapons labs in every major university in the country. We built radar, electronic warfare, rockets, and we also started a small physics program that ended up over Hiroshima and Nagasaki, all done by civilians outside of the military.
The equivalent today would be – and I'm not suggesting this – giving these problem sets to startups instead of civilian professors and saying, Here's the problem sets we have. Can you guys put together a consortium and actually solve these problems while we continue to build our existing weapons systems? That would be a bridge too far, but that’s the equivalent to what the U.S. government did. And one could contend that while it didn't win the war, it certainly shortened it by several years. And that was a case where the military just did not appreciate the advances in technology. We are at that point again.
The Cipher Brief: We're going to have a new president in a couple of months. Let's just say, whoever it is, this new president decides, I listen a lot to Steve Blank, I think he's absolutely right. I'd like Steve to come in and be the Secretary of Defense. What are the first three things that you're going to do to move from the great ideas and understanding that you have of the strength of Silicon Valley and the private sector? What are the first three things you're going to do to help start to steer this ship?
Blank: The first thing I would do is declare that we're in a crisis — that the DOD is no longer the leader in either region X or technology Y. And I would want everyone in the DOD to understand that we need to operate like it's not business as usual.
Number two, I need to brief Congress about how serious this is and the types of things I'm going to need their cooperation for. And I would make that as public as possible. If we want to protect the nation, the DOD is dependent on Congress and their staffers not to be logs in the middle of the railroad tracks that we are going to make.
In fact, the best model is you could think about what General (David) Berger, (Comanndant of the Marine Corps), attempted to do with Force Design 2030. He said, Here's the status of the world, here's the experiments we've been running, and here's the results. And therefore, here's why we need these changes.
The last thing you want is someone to come in and start making a ton of changes without prepping the battlefield – meaning the DOD and Congress and the primes – to say we can't afford for you guys to go out of business, but your business model needs to change. We need you to be engaged with these early-stage ventures.
And then the third thing I would do, looking at all the services, is say to them, You hand me another force design that looks just like last year's force design, you're going to be retired. Obviously the world has changed, and if we're still buying and specing the same things, then obviously you've not understood the world we're living in. Not to be advocates of a particular force design, but advocating that you guys need to wake up to the threat, to the magnitude of the threat and more importantly, the timing that change needs to happen.
I don't think that message has come down clearly to the service heads, that says the next time you put a force budget into Congress for Force 2045 or whatever, if it looks like the one we would have submitted five years ago, I'm going to change the entire staff, including you. Because obviously you have not understood my first memo which said we're in a crisis.
Who’s Reading this? More than 500K of the most influential national security experts in the world. Need full access to what the Experts are reading?
It’s not just for the President anymore. Cipher Brief Subscriber+Members have access to their own Open Source Daily Brief, keeping you up to date on global events impacting national security. It pays to be a Subscriber+Member.
