Bob Bradford and Jeffrey E. Baker
The Department of Defense (DoD) must make important strategic choices about the future. This requires understanding the future environment, determining future objectives, and shaping the department’s capabilities to meet future challenges. Each of these steps are difficult, but changing the allocation of resources is particularly challenging. For new/reprioritized capabilities to come into being, the Pentagon’s Planning, Programming, Budgeting, and Execution (PPBE) system will need to operate. McNamara’s whiz kids developed PPBE 60 years ago.[1] If it were an automobile, today the process would qualify for antique license plates.[2] However, PPBE endures not just for its stated purpose of helping leaders make informed strategic choices between requirements and ensuring those choices are resourced, but because it is embedded in DoD process and it is aligned with military culture.[3] While players in the budget game may not like the process, they have learned the game, and use it to support and defend parochial interests. PPBE reform has been a frequent point of discussion within the DoD, but any changes have been slow to materialize, on the margins, and incremental in nature.[4]
Uncertainty about the future and the penalty for being wrong help to make the status quo sticky.
It has been noted that PPBE is efficient in theory, but inefficient in practice.[5] While its design logically aligns resources to strategic goals, many obstacles make this aspiration hard to reach. Senior leader time is limited, and the pull of current events keeps leaders focused on today at the expense of tomorrow, which incentivizes a present bias.[6] Rarely will a senior leader be blamed for a failure of the force in the future, but if that same leader fails now, they will undoubtedly get blamed. Leaders tend to prioritize current readiness over modernization.[7] Uncertainty about the future and the penalty for being wrong help to make the status quo sticky.
Because choices include tensions between the present and the future, the prioritization of certain capabilities over others, and can advantage one favored program over another, these choices are hard and senior leader attention is stressed. Most choices devolve from the Secretary and the Office of the Secretary of Defense (OSD) to the services where they build their resource plan to meet their service’s own bureaucratic interests.[8] OSD only looks at small fractions of the service programs in any detail each year and scrutiny of individual items is limited. DoD’s Cost Assessment and Program Evaluation directorate is not resourced to do thorough analysis of every option.[9]
The tyranny of the calendar also stresses the system. Every summer, each service owes its resource plan to OSD. Each fall, OSD leads the program and budget review process to make sure programs are coherent. The defense budget gets consolidated with the rest of the President’s budget in December and January, and the President delivers a final budget to Congress by the first Monday in February of each year. While this calendar-driven process provides predictability, it fails to allow for emerging requirements that do not fall neatly into its timelines.
While the Joint Staff might help OSD focus the process and reduce parochialism, it has limited power and authority over resourcing. The bulk of DoD resources are in the military departments. The joint staff’s lack of control over the check book makes its role in PPBE one of advising and recommending changes and not directing or delivering results.
Beyond the challenges of timing and organization, the PPBE process itself has real limitations that make the status quo sticky.
Others argue for a larger role for the combatant commands.[10] Some feel the force employers should have a larger role in building the force. Currently, DoD work is split between Geographic Combatant Commands (GCCs) who fight the force, and military departments and services who build and prepare the force. GCCs are not staffed to develop requirements, organize, man, train, and equip units, or to acquire materiel solutions. Giving these tasks to them will necessarily distract from their warfighting focus in the near term.
Beyond the challenges of timing and organization, the PPBE process itself has real limitations that make the status quo sticky. Each phase of PPBE contains obstacles to aligning resources to strategy, and changes to strategic priorities are hard to make and implement.
PPBE insiders sometimes quip that the first P, Planning, is silent.[11] Because of the tyranny of the calendar and the expiration date of Congressionally appropriated funds, planners who want to be relevant must finalize a plan early and with enough detail to drive the programming and budgeting phases that follow. This is difficult, as choices about the future are hard and do not have an immediate impact. Additionally, different analysts foresee different futures, and different constituencies make different planning assumptions. All could be valid, and all imply different resource decisions. This push and pull can confound the assessment of options and make decisions messy. Because of these challenges, the military departments and services use the planning process to support their narrow interests and favorite programs.[12] Additionally, planners do not actually have to fit requirements within means. Generous assumptions and overly optimistic thinking result in problems later in the process.
Secretary of Defense Lloyd J. Austin III and Chairman of the Joint Chiefs of Staff Army Gen. Mark A. Milley testify before the House Appropriations Committee-Defense on the Fiscal 2022 Department of Defense Budget in the Pentagon Press Briefing Room, Washington, D.C., May 27, 2021. (SSgt Brittany A. Chase/DoD Photo)
The second P, Programming, is fundamentally a knapsack problem. The defense budget is the knapsack that contains all the capabilities needed now and in the future. The DoD must decide how to pack it with programs in a way that builds a force ready for current and future environments. For historical reasons, and because of its large size, the DoD decentralizes program development. The services and defense agencies each fill their portion of the knapsack based on their assumptions and priorities. These assumptions should be nested with OSD, but gaps and overlaps happen without close and consistent oversight. In the knapsack analogy, the knapsack might end up with two sleeping bags and no tent. Misalignments tend to arise when one service will have to depend on another service for a certain capability.
Once the budget is with Congress, many structural factors can defeat a coherent strategic logic.
The Budgeting phase aligns resources to actual budget activities, further hiding the connection between dollars and strategy. In the last months of formulating DoD’s portion of the budget, the department must deal with passback of requirements from the Office of Management and Budget and account for updates to economic assumptions. Increases in the labor rate or energy prices frequently require DoD to cut things at the last minute from a coherent and well-developed program that is aligned to strategy. A program developed over two years can be modified over a weekend to meet the deadline to submit to Congress.
Once the budget is with Congress, many structural factors can defeat a coherent strategic logic.[13] Members of Congress are elected locally, and local priorities can dominate strategic objectives. Congress has the budget for most of a year so as they deliberate both the domestic and strategic environment may continue to evolve; without updates to planning assumptions, the budget can become misaligned.
Finally, the execution phase of PPBE is very decentralized. Money is appropriated by service and component, and executed by local commands, Program Executive Officers, and others. Comptrollers at OSD and the military departments track expenditures, but this is more about whether funds were spent, rather than if allocations supported the plan and program. The lack of a formal feedback loop makes things difficult.
…organizations must develop a forward-looking orientation to scan the environment for weak signals that may provide insights into the future environment.
U.S. Army Chief of Staff Gen. Ray Odierno join troops from the Program Executive Office (PEO) Soldier during his visit to Fort Belvoir, Va., Nov 1, 2013. (SSG Steve Cortez/U.S. Army Photo)
The challenges of PPBE are daunting. The obstacles can arise to the level of wicked problems.[14] While it is not possible to solve wicked problems, John C. Camillus offered a framework for tackling them that DoD might consider. The first step is to involve the stakeholders, document opinions, and communicate. Next, the organization must define its identity. This identity consists of what is fundamentally important to the organization—its values, what the organization does better than others—its competencies, and how the organization envisions and measures success. Third, organizations must focus on action. Organizations should consider strategies that are feasible and look for robust actions that are likely to deliver results across multiple strategies. Lastly, organizations must develop a forward-looking orientation to scan the environment for weak signals that may provide insights into the future environment.[15]
The DoD needs a better and more responsive PPBE process.
The 2022 National Defense Authorization Act establishes a commission to examine PPBE, consider alternatives, and make policy recommendations.[16] Camillus’s framework might help the commission as it examines PPBE and alternatives. In addition to Camillus’s imperatives, the commission might also consider these items as it develops policy recommendations.
Designate a champion responsible for both strategy development and resource allocation within DoD. Under the current structure, the Secretary of Defense cannot always focus on PPBE. The division of labor between Deputy Secretary of Defense, the Under Secretary of Defense for Policy, the Under Secretary of Defense Comptroller and Director of Cost Assessment and Program Evaluation can lead to misalignment between strategy and resource allocation. Leader attention is required during all phases.
Build a shared understanding about the future environment. This vision should be shared across OSD, the Joint Staff, the services, and Combatant Commands. Work should also be done to address Congressional concerns and to help them share the Executive’s vision. A shared understanding should include a picture of the future environment, how the military will engage it, and the roles of each subordinate organization in achieving that mission. This shared vision should be the starting point for the PPBE process instead of starting from the previous year’s output. Without shared understanding, the path to the future will be disjointed and dominated by bureaucratic and parochial interests.
Enable OSD oversight and continual coordination throughout the process. In the current process, services and defense agencies are well into their program development by the time the Secretary issues the defense planning guidance. OSD has little visibility of what subordinate organizations are doing until the services present them in the summer. More frequent coordination will be a lot of work but can ensure visibility of hard choices and get them elevated for discussion and decision earlier in the process.
Build in adaptability. The PPBE process builds a five-year resource allocation plan that starts in two years. DoD rewrites this plan every year. But in the best case, there are two years between service program builds and Congressional appropriation. Much can change in these two years, and the system needs simpler and more flexible ways to reallocate resources when facts of life change.
As Strategy Bridge readers ponder important strategic choices about the future, they must also consider how to implement these choices in the real world. The DoD needs a better and more responsive PPBE process. Otherwise, the future force may lack its most important capabilities because they failed to compete favorably with a near-term requirement.
Bob Bradford and Jeffrey E. Baker are professors at the U.S. Army War College in the Department of Command, Leadership, and Management. They have both served many years within the U.S. defense enterprise. The views expressed are the author’s alone and do not reflect those of the U.S. Army, the Department of Defense, or the U.S. Government.
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Header Image: The Pentagon, United States Department of Defense. January, 2008 (David B. Gleason).
Notes:
[1] See for example, Alain C. Enthoven and K.V. Smith, “How Much is Enough? Shaping the Defense Program 1961-1969” (Santa Monica, CA: RAND, 1971).
[2] Arun Seraphin, “The Future of Defense Acquisition Reform Panel of the Defense Reform Symposium” (remarks, Institute for Defense Analysis, Alexandria, VA, September 2021) https://dmr-symposium.ida.org/index.html
[3] Carl H. Builder, The Masks of War: American Military Styles in Strategy and Analysis, (Baltimore: Johns Hopkins University Press, 1989).
[4] Robert F. Hale, “Financing the Fight: A History and Assessment of Department of Defense Budget Formulation Process,” (Washington DC: Brookings Institute, April 2021) https://www.brookings.edu/wp-content/uploads/2021/04/FP_20210429_financing_the_fight_hale.pdf 6-20.
[5] Michelle Shevin-Coetzee, “The Labyrinth Within: Reforming the Pentagon’s Budgeting Process,” (Washington DC: Center for a New American Security, February 2016), https://www.cnas.org/publications/reports/the-labyrinth-within-reforming-the-pentagons-budgeting-process 2-5.
[6] T. Donaghue and M. Rabin, “Doing it now or later,” American Economic Review 89 (1), 1999.
[7] Mark Milley, Chief of Staff, U.S. Army, “Statement before the Senate Committee on Armed Services,” April 7, 2016. https://www.armed-services.senate.gov/imo/media/doc/16-40_4-07-16.pdf
[8] Shevin-Coetzee, 7-8.
[9] Jordana Mishory, “CAPE Director Nominee Eyes Detailed Study of Office’s Workforce,” Inside Defense, (October 16, 2013) https://insidedefense.com/inside-pentagon/cape-director-nominee-eyes-detailed-study-offices-workforce
[10] William Greenwalt and Dan Patt,” Competing in Time: Ensuring Capability Advantage and Mission Success through Adaptable Resource Allocation,” (Hudson Institute: Washington, DC, February 2021)
[11] John Whitley and Gregory Pejic, “Senate Commission to Fix Defense Budgeting Is Right on the Mark,” War on the Rocks, September 24, 2021, https://warontherocks.com/2021/09/senate-commission-to-fix-defense-budgeting-is-right-on-the-mark/
[12] Thomas-Durell Young, “Stripping the Altars of Long-Term Defense Planning,” War on the Rocks, January 11, 2018, https://warontherocks.com/2018/01/stripping-altars-long-term-defense-planning/
[13] Mackubin T. Owens, “Military Force Planning and National Security,” The Oxford Handbook of U.S. National Security, eds. Derek S. Reveron et al. (Oxford: Oxford University Press, July 2018)
[14] Horst W. J. Rittel and Melvin M. Webber, “Dilemmas in a General Theory of Planning,” Policy Sciences, 4, No. 2 (Jun., 1973),155-169.
[15] Camillus, John C, "Strategy as a wicked problem," Harvard Business Review 86, no. 5 (2008): 98.
[16] National Defense Authorization Act 2022, Public Law 117-81, 117th Cong., 1st sess. (December 27, 2021), Section 1004, https://www.congress.gov/bill/117th-congress/senate-bill/1605/text?r=27&s=1