WASHINGTON ― The U.S. Defense Department, a mammoth federal agency long criticized even from within as inefficient and overly complex, is embarking on a new step toward improving how it conducts its affairs.
The department on Tuesday launched the Defense Management Institute, an independent research entity aimed at advancing the Pentagon’s management, organization, performance improvement and enterprise business operations. Proponents said the entity, part of the nonprofit Institute for Defense Analyses, will have a far-reaching impact as it pools experts and past research for officials and lawmakers to solve problems or retool the department.
“It’s groundbreaking because never before has there been an institute dedicated solely to performance improvement,” Deputy Defense Secretary Kathleen Hicks said at the launch event. “Management reform advances the entire department, including acquisition, technology ― all of which are essential to the department’s mission and to directly support the warfighter.”
The new launch comes amid fresh calls in Congress to cut the Pentagon’s budget. House Speaker Kevin McCarthy, R-Calif., has signaled his support for some cuts in defense spending amid growing tension within the House GOP ranks over the party’s approach to a coming fight over the debt limit.
The $858 billion national defense budget makes up half of all discretionary federal spending, but cutting it could mean unwinding some of the world’s most complex bureaucracies. The Defense Department not only employs a massive array of troops and civilians, but it operates around the globe with a medical system, a school system, an internal intelligence agency and grocery chain.
Officials say the Defense Management Institute, or DMI, will not only conduct studies and analyses on behalf of the department but also build a public library of past management reform studies and reports spanning the Pentagon’s own boards and commissions, as well as academic institutions and think tanks.
“Future generations of the department should not have to start from scratch. This institute will help them solve problems more quickly and efficiently,” Hicks said.
DMI would also bring together and link defense officials to the loose community of experts in the field, which includes former Pentagon employees, congressional staffers and private sector management consultants.
DMI plans to tackle a major job, right off the bat, when it conducts a review of the effectiveness of defense agencies and field activities, which Congress mandated in the 2023 defense policy bill. These components, among the most complex parts of the department, have periodically been targeted for cuts by lawmakers.
Defense budget expert Todd Harrison said the new organization could fast become a go-to source of ideas and analysis to identify waste and inefficiency in defense, or potentially reassure fiscal conservatives that investments in defense are well spent.
But a key factor in its success will be how well it can establish its intellectual independence from the Institute for Defense Analyses and Pentagon leadership, he added.
“I think it is a significant step in terms of creating the institutional momentum for sustaining a focus on better management and performance across the defense enterprise,” said Harrison, the managing director at Metrea Strategic insights. “This creates an organization and a body of people whose full-time job will be building the intellectual basis for better decision making, [but it] must be willing to speak truth to power to be credible.”
The DMI launch is arguably the most public step in the realm of defense management reform since Congress in 2020 eliminated the Pentagon’s chief management officer job, four years after establishing it as DoD’s No. 3 position.
The department has since dispersed the CMO’s duties and responsibilities among different officials. Hicks is the DoD’s management chief, while the lead for department reform is former Air Force Secretary Michael Donley, who is both the department’s current director of administration and management as well as its performance improvement officer.
Donley, who spearheaded the launch of DMI, said one of the key goals is to translate private sector practices and experience to the Pentagon.
Among performance improvement efforts under the Biden administration, Hicks said she and Defense Secretary Lloyd Austin have expanded the role of the Defense Business Council and pushed the broader use of data analytics to inform decision-making.
To harness big data, the DoD developed an internal application, called Pulse, in less than five months, which Hicks said would set the pace for similar efforts.
“The secretary will have a far better view of implementation of the [National Defense Strategy] than our predecessors were ever afforded,” she said. “This dashboard approach will give us data-driven insights into what’s working and what stuck and what we can do about it.”
Joe Gould is the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He served previously as Congress reporter.