Defense Management: DOD Needs to Take Additional Actions to Promote Department-Wide Collaboration

DOD continues to confront organizational challenges that hinder collaboration. To address these challenges, section 911 of the NDAA for Fiscal Year 2017 directed the Secretary of Defense to issue an organizational strategy that identifies critical objectives which span multiple functional boundaries and that would benefit from the use of cross-functional teams. Additionally, DOD is to establish cross-functional teams to support this strategy.

The NDAA also included a provision for GAO to assess DOD's actions in response to section 911. This report evaluates the extent to which DOD, in accordance with statutory requirements and leading practices, has (1) developed and issued an organizational strategy, (2) established Secretary of Defense-empowered cross-functional teams, and (3) provided associated training for Office of the Secretary of Defense leaders. GAO analyzed DOD's draft organizational strategy, draft guidance on establishing cross-functional teams, and draft training curriculum. GAO also interviewed DOD officials and subject-matter experts and identified leading practices for effective cross-functional teams.

The Department of Defense (DOD) has implemented some of the statutory requirements outlined in section 911 of the National Defense Authorization Act (NDAA) for Fiscal Year 2017 to address organizational challenges, but could do more to promote department-wide collaboration, as required under the NDAA. Specifically, DOD:

Drafted an organizational strategy that includes the two required statutory elements, but does not outline how DOD will advance a more collaborative culture, as required by statute. Incorporating GAO's leading practices on mergers and organizational transformations, such as setting goals, would help DOD better advance a collaborative culture.

Plans to coordinate review of the organizational strategy with some DOD offices, but has not followed GAO's leading practices for collaboration—to coordinate with key stakeholders, such as the Secretary of Defense and the military departments—in drafting the strategy. Without obtaining key stakeholder input, DOD may not be well positioned to improve collaboration across the department.

Established one cross-functional team to address the backlog on security clearances and developed draft guidance for cross-functional teams that addresses six of seven required statutory elements and incorporates five of eight leading practices that GAO has identified for effective cross-functional teams (see figure). Fully incorporating all statutory elements and leading practices will help the teams consistently and effectively address DOD's strategic objectives.

Developed a draft training curriculum for Presidential appointees in the Office of the Secretary of Defense. However, the curriculum addresses only one of four required statutory elements, and has not been provided to appointees. In addition, although the statute allows a waiver for this training, DOD has not developed criteria for such a waiver. Providing training for these officials or ensuring that appropriate criteria are used to waive training will improve DOD's ability to implement its new organizational strategy.

GAO is making four recommendations to DOD, including revising its organizational strategy, collaborating with key stakeholders on the development of its organizational strategy, revising cross-functional team guidance, and providing training. DOD concurred with GAO's recommendations.

Although the Department of Defense (DOD) maintains military forces with  unparalleled capabilities, it continues to confront organizational and  management challenges that hinder collaboration and integration across  the department. In particular, DOD’s military departments and functional  organizations have not always worked well together to accomplish  departmental objectives. For example, in August 2017, we found that  DOD’s efforts to implement a hierarchical, portfolio-based approach to  strategically acquire contracted services had not been successful. In part,  we found that cultural barriers and military commanders’ reluctance to  give up certain responsibilities for determining how and which services  were needed to meet their missions hindered DOD’s efforts. We have  highlighted these challenges in numerous additional products, including  our High-Risk List, which calls attention to agencies and program areas  that are high risk because of their vulnerabilities to fraud, waste, abuse,  and mismanagement or are most in need of transformation. In an  October 2017 memorandum, Secretary of Defense Mattis emphasized  the need for DOD personnel to collaborate across components in order to  maintain the department’s capabilities.

Section 911 of the National Defense Authorization Act (NDAA) for Fiscal  Year 2017 directed the Secretary of Defense to, among other things,  formulate and issue an organizational strategy for DOD. The  organizational strategy should identify the critical objectives and other  outputs that span multiple functional boundaries and would benefit from  the use of cross-functional teams to ensure collaboration and integration  across the department. The act also required DOD to establish cross- functional teams whose leaders report directly to the Secretary of  Defense and that, among other things, address the critical objectives and  outputs outlined in the department’s organizational strategy. DOD refers  to these teams as “Secretary of Defense-empowered cross-functional  teams.” The act further required DOD to provide training on (1)  leadership, modern organizational practice, collaboration, and the  operation of cross-functional teams to individuals who have been  appointed by the President and confirmed by the Senate to a position  within the Office of the Secretary of Defense within 3 months of their  appointment, and (2) elements of successful cross-functional teams to  members of those established teams and their supervisors.

Prior to February 2018, the Deputy Chief Management Officer (DCMO)  led the department’s efforts to implement section 911 of the NDAA for  Fiscal Year 2017. However, section 910 of the NDAA for Fiscal Year  2018 disestablished the position of DCMO on February 1, 2018 and  established the position of Chief Management Officer (CMO). The CMO  will lead the department’s future efforts to implement section 911.  Because we conducted this work prior to February 2018, we primarily  refer throughout this report to Office of the DCMO (ODCMO) officials.  However, as of February 1, 2018, the ODCMO became the Office of the  CMO (OCMO).

Section 911 of the NDAA for Fiscal Year 2017 also included a provision  for us, not later than 6 months after the date of enactment on December  23, 2016, and every 6 months thereafter through December 31, 2019, to  submit to the Committees on Armed Services of the Senate and the  House of Representatives a report setting forth a comprehensive  assessment of the actions that DOD has taken pursuant to section 911  during each 6-month period and cumulatively since the NDAA’s  enactment. In June 2017, we issued our first report and found that DOD  had taken steps in several areas to begin implementing the requirements  of section 911 of the NDAA for Fiscal Year 2017. In this report, we  evaluate the extent to which DOD has (1) developed and issued an  organizational strategy in collaboration with relevant stakeholders that  addresses required statutory elements and advances a collaborative  culture; (2) established Secretary of Defense-empowered cross-functional  teams and guidance for those teams that addresses required statutory  elements and leading practices for effective cross-functional teams; and  (3) provided training that addresses required statutory elements on cross- functional teams and related concepts for leaders in the Office of the  Secretary of Defense and members of cross-functional teams. Appendix I  lists the requirements of section 911 of the NDAA for Fiscal Year 2017,  the corresponding due date, and the date completed for each  requirement.

For objective one, we reviewed the most recent version of DOD’s draft  organizational strategy, dated August 2017. In addition, we interviewed  ODCMO officials on their efforts to collaborate with key stakeholders,  such as the Secretary of Defense, military departments, and defense  agencies, during the development of the organizational strategy. We  evaluated DOD’s efforts to develop and issue an organizational strategy  against the required elements in section 911 of the NDAA for Fiscal Year  2017. Further, we reviewed leading practices from our prior work on  mergers and organizational transformations and on collaboration to  identify practices and implementation steps DOD could incorporate as it  develops and issues its final organizational strategy.

For objective two, we reviewed documentation, including DOD’s internal  and external studies on cross-functional teams, and interviewed ODCMO  officials on DOD’s steps to establish cross-functional teams. To identify  leading practices for effective cross-functional teams, we reviewed  literature from January 1990 through September 2017 that covered the  use of these teams in both the private and public sectors as well as five  case studies of cross-functional teams. In addition, we selected six  academic and practitioner experts to interview based on their publications  or research, prior testimony before the Senate Armed Services  Committee on the implementation of cross-functional teams at DOD, and  recommendations from DOD officials. Through this research, we  identified eight broad categories of leading practices associated with  effective cross-functional teams: (1) open and regular communication, (2)  well-defined team goals, (3) inclusive team environment, (4) senior  management support, (5) well-defined team structure, (6) autonomy, (7)  committed cross-functional team members, and (8) an empowered cross- functional team leader. In appendix II, we describe in more detail how we  identified these leading practices for effective cross-functional teams.

For objective three, we reviewed documentation on the number of  individuals appointed by the President and confirmed by the Senate to a  position within the Office of the Secretary of Defense as of February 2018  (the latest month available at the time of our review). We also reviewed  documentation from and interviewed ODCMO officials on DOD’s efforts to provide training for these officials as well as cross-functional team  members. We compared DOD’s efforts against the requirements in  section 911 of the NDAA for Fiscal Year 2017 and the attributes of a well- designed training program.

We conducted this performance audit from June 2017 to February 2018  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Congressional Actions Related to DOD’s Organizational and Management Challenges

DOD has historically faced organizational and management challenges  that can limit effective and efficient coordination across the department to  fulfill its mission, and Congress has taken steps to address these  challenges through, among other things, legislation. For example, in the  early 1980s, Congress expressed concern that DOD’s structure primarily  served the needs of the services and encouraged interservice rivalries  that led to operational failures. In response, Congress passed the  Goldwater-Nichols Department of Defense Reorganization Act of 1986 to  improve the management and administration of the department, among  other purposes. One of the changes emanating from this act included  specifying the military department secretaries’ responsibility for training  and equipping forces, while making clear that the military service chiefs  were not in the chain of command for military operations. The act also  required that military personnel selected for promotion to brigadier  general or rear admiral (lower half) to have joint duty experience unless  waived by the Secretary of Defense or an authorized official. However,  shortfalls in strategic integration at DOD—how DOD and the military  services align their efforts and resources across different regions,  functions, and domains—continue. Congress intended that section 911 of  the NDAA for Fiscal Year 2017 improve strategic integration across the  organizational and functional boundaries of DOD by, among other things,  requiring the Secretary of Defense to develop an organizational strategy  to advance a collaborative culture across DOD and create cross- functional teams to address critical objectives and outputs.

DOD’s External and Internal Cross-Functional Team Studies

As required by section 911 of the NDAA for Fiscal Year 2017, DOD  awarded a contract to study how best to implement effective cross- functional teams in DOD. The study, conducted by McKinsey & Company  and completed in August 2017, presented findings on leading practices  for implementing cross-functional teams that were drawn from a literature  review, DOD and non-DOD case studies, and interviews. It identified  seven critical factors for cross-functional team success: (1) mission; (2)  objective; (3) delegated authorities; (4) team membership; (5) ways of  working; (6) collaborative environment; and (7) an implementation plan.  While not required by the contract, the study also contained a checklist for  implementing cross-functional teams, which includes recommendations to  assist DOD in assembling, initiating, and operating a team. The checklist  distinguished action items by implementation phases: prelaunch, at  launch, throughout the project, and at the project’s close. For example,  the checklist suggested that, at launch, DOD should onboard the team  and tailor training to the team experience and timeframe. DOD  transmitted the report to Congress in September 2017.

ODCMO officials also began collecting information in March 2017 to  conduct their own internal study of cross-functional teams within DOD to  help inform their implementation of section 911. This internal study,  completed in August 2017, evaluated four case studies of prior DOD  cross-functional teams, including their structure, returns, and  implementation costs. From the case studies, ODCMO officials  identified lessons learned to inform establishing and monitoring cross- functional teams. The ODCMO’s internal study found that cross-functional  teams require significant senior leader attention. For example, the  Secretary of Defense was directly involved in the sampled cross- functional teams, and he publicly stated his support for the teams, gave  the teams precedence over other programs, and endorsed non-standard  funding practices to accelerate their work. Further, the Secretary of  Defense regularly engaged with teams. The study also found that DOD  should provide team members with background information and the  context behind the team’s mission and goals. Finally, the internal study  found that cross-functional teams had the most robust decision-making  authority when it came to integration and implementation of the Secretary  of Defense’s priority initiatives.

Leading Practices for Effective Cross-Functional Teams

Through a review of literature and case studies as well as interviews with  subject-matter experts, we identified eight leading practices for effective  cross-functional teams, as shown in figure 1. These leading practices are  similar to those identified by the McKinsey & Company contracted study  and the ODCMO’s internal study as well as leading practices for  interagency collaboration that we previously identified.

Further, we found that leading practices for implementing effective cross- functional teams include the key characteristics shown in table 1.

DOD’s Draft Organizational Strategy Addresses Statutory Elements, but DOD Has Not Outlined How It Will Advance a Collaborative Culture or Collaborated with Stakeholders

The ODCMO developed a draft organizational strategy that addresses the  two statutory elements required under section 911 of the NDAA for Fiscal  Year 2017—identifying critical objectives and outputs that would benefit  from the use of cross-functional teams, and providing for the appropriate  use of these teams—but DOD has not issued that strategy as required by  September 1, 2017. In addition, while the draft strategy contains the two  required elements, it does not outline how DOD will achieve several  future outcomes required under section 911 of the NDAA for Fiscal Year  2017 that are designed to advance a collaborative culture within the  department. Further, ODCMO officials did not coordinate with key  stakeholders, such as the Secretary of Defense, military departments,  and defense agencies, in developing the organizational strategy. Our  leading practices for collaboration highlight the value of agencies  including stakeholders when defining and articulating a common  outcome.

DOD Has Developed, but Not Issued, a Draft Organizational Strategy That Includes Required Statutory Elements, but Has Not Outlined Its Approach for Advancing a Collaborative Culture

The ODCMO developed a draft organizational strategy, but DOD did not  issue the organizational strategy as required by September 1, 2017, and  as of February 2018 has not issued the strategy. The August 2017 draft  organizational strategy we reviewed is intended to be an organizational  design that focuses on the responsibilities, functions, and authorities of— and relationships between—the leaders of DOD components and those of  cross-functional teams. It describes DOD’s current organizational  structure and processes and how they will change as a result of recent  legislation and reform initiatives, and it describes best practices and  lessons learned for implementing cross-functional teams, as well as areas  that may benefit from the use of such teams. Although the act required  the Secretary of Defense to issue the strategy by September 1, 2017, the  Acting DCMO told us that other reform initiatives and organizational  changes have a higher priority and that therefore he did not take steps to  finalize the strategy. ODCMO officials told us that they plan to align the  strategy with the revised National Defense Strategy, which was released  in January 2018, and the Agency Strategic Plan, which was expected to  be issued in February 2018.

We found that DOD’s draft organizational strategy contains the two  elements required under section 911 of the NDAA for Fiscal Year 2017.  According to the act, among other things, the organizational strategy must  (1) identify the critical objectives and other organizational outputs for the  department that span multiple functional boundaries and would benefit  from the use of cross-functional teams to ensure collaboration and  integration across organizations within the department; and (2) provide for  the appropriate use of cross-functional teams to manage such objectives  and outputs. To address the first statutory element, the draft  organizational strategy identifies several mission-focused and business- operations areas that would benefit from the use of cross-functional  teams. For example, the strategy identifies three primary candidates for  business operations, including Military Health Systems reforms, financial  auditability, and security clearance backlog mitigation. To address the  second statutory element, the draft organizational strategy identifies  considerations for the appropriate use of cross-functional teams. For  example, the strategy states that cross-functional teams should be used  only for the Secretary of Defense’s highest-priority issues and that cross- functional teams require significant engagement with the Secretary of  Defense and other top leadership.

Section 911 of the NDAA for Fiscal Year 2017 also identifies several  outcomes that DOD should achieve to advance a collaborative culture  within the department; however, we found that DOD’s draft organizational  strategy does not clearly articulate how the department will achieve these  outcomes. The act states that DOD’s organizational strategy should,  among other things: provide for the furtherance and advancement of a collaborative, team- oriented, results-driven, and innovative culture within the department  that fosters an open debate of ideas and alternative courses of action,  and supports cross-functional teaming and integration;  improve the manner in which the department integrates the expertise  and capacities of the functional components of the department for  effective and efficient achievement of critical objectives and other  organizational outputs that span multiple functional boundaries and  would benefit from the use of cross-functional teams;  improve the management of relationships and processes involving the  Office of the Secretary of Defense, the Joint Staff, the combatant  commands, the military departments, and the defense agencies with  regard to such objectives and outputs;  improve the ability of the department to work effectively in interagency  processes with regard to such objectives and outputs in order to  better serve the President; and achieve an organizational structure that enhances performance with  regard to such objectives and outputs.

We found that the draft strategy does not outline how the department will  achieve these outcomes. For example, the draft organizational strategy  notes that DOD leaders recognize the department must fully embrace and  operationalize the cultural attributes set forth in section 911, including a  more collaborative, team-oriented, results-driven, and innovative culture;  however, it does not identify actions the department will take to help  ensure that leaders embrace these attributes, such as through guidance  or training. When we asked how the draft organizational strategy will help  achieve these outcomes, ODCMO officials stated that the strategy  contains references to cultural attributes for the department. For example,  the draft organizational strategy describes cultural attributes of the  department’s management and business operations, such as visibility  across components and collaboration. However, ODCMO officials stated  that they agree that the strategy could do more to address collaboration.  The ODCMO officials said they originally interpreted section 911 to mean  that the organizational strategy should focus on DOD’s organizational  structure, processes, and leading practices for implementing cross- functional teams, rather than on how to transform the department’s  culture more broadly. Nonetheless, the outcomes called for under the act  refer to the need to advance a collaborative culture across the  department. These officials also stated that they plan to revise the draft  organizational strategy to include additional information on collaboration  and information-sharing processes and systems, among other things.

While not required to do so, OCMO, which will now lead the department’s  efforts to implement section 911, could utilize our leading practices for  mergers and organizational transformations to revise the organizational  strategy to address how the department will advance a culture that is  collaborative, team-oriented, results-driven, and innovative. We  previously reported on leading practices and implementation steps for  mergers and organizational transformations that can help agencies  transform their cultures so that they are more results-oriented, customer- focused, and collaborative. The leading practices and implementation  steps listed in table 2 were built on the lessons learned from large private  and public sector organizational mergers, acquisitions, and  transformations.

These leading practices state that organizations should ensure that top  leadership drives the transformation by defining and articulating a  succinct and compelling reason for change. Doing so helps employees  and stakeholders understand the expected outcomes of the  transformation and engender not only their cooperation, but also their  ownership of the outcomes. In addition, our leading practices state that  organizations should establish a coherent mission and integrated  strategic goals by adopting our leading practices for results-oriented  strategic planning. Lastly, our leading practices state the organizations  should include implementation goals and a timeline for achieving the  transformation. By demonstrating progress toward these goals, the  organization builds momentum and keeps employees excited about the  opportunities change brings and helps to ensure the transformation’s  successful completion. The incorporation of these leading practices in its  organizational strategy to better articulate how the department will  achieve the outcomes that generally advance a collaborative culture  across DOD—as section 911 of the NDAA required—would better  position DOD to transform and meet its mission.

ODCMO Did Not Collaborate with Key Stakeholders, Including the Secretary of Defense, on Its Organizational Strategy

ODCMO did not collaborate with key stakeholders on the development of  the organizational strategy. Specifically, as of November 2017, ODCMO  officials had not collaborated with or obtained input from the Secretary of  Defense on the development of DOD’s organizational strategy. The  Acting DCMO noted that the Secretary of Defense has multiple competing  priorities related to reorganizing the department, such as creating a  separate CMO position required in the NDAA for Fiscal Year 2017, as  well as other reform initiatives.

In addition, ODCMO officials told us that they did not collaborate with  other stakeholders, such as the military departments and defense  agencies, on the development of the organizational strategy. According to  a draft memorandum from the Acting DCMO to the Deputy Secretary of  Defense, the Acting DCMO plans to recommend that the Deputy  Secretary of Defense coordinate the review and approval of the  organizational strategy with stakeholders such as the Chairman of the  Joint Chiefs of Staff, the Director of Cost Assessment and Program  Evaluation, and DOD’s General Counsel. However, the memorandum did  not specify other stakeholders, such as the military departments, the  combatant commands, and defense agencies. ODCMO officials stated  that their office plans to coordinate the review and approval of the  strategy with other stakeholders, such as the military departments and  defense agencies. However, as of November 2017, the officials had not  provided documentation, such as a revised memorandum, showing  specific plans to do so.

Section 911 of the NDAA for Fiscal Year 2017 states that the Secretary of  Defense should formulate and issue an organizational strategy that  identifies the critical objectives and other organizational outputs for the  department that span multiple functional boundaries and would benefit  from the use of cross-functional teams. In addition, the act states that the  organizational strategy should, among other things, improve the  management of relationships and processes involving the Office of the  Secretary of Defense, the Joint Staff, the combatant commands, the  military departments, and the defense agencies with regard to such  objectives and outputs. Our leading practices for collaboration state that  when defining and articulating a common outcome, where appropriate,  agencies should include stakeholders. In doing so, agencies can better  address their interests and expectations and gain their support in  achieving the objectives of the collaboration. Without obtaining key  stakeholder input on the development of the organizational strategy, such  as from the Secretary of Defense, military departments, the combatant  commands, and defense agencies, DOD may not be well positioned to  issue an organizational strategy that reflects the Secretary of Defense’s  objectives and improves collaboration across the department.

DOD Has Established One Secretary of Defense-Empowered Cross-Functional Team, and Draft Team Guidance Addresses Most Statutory Elements and Leading Practices

DOD Established One Secretary of Defense- Empowered Cross- Functional Team

In August 2017, the Secretary of Defense issued a memorandum  authorizing a cross-functional team to address challenges with personnel  vetting and background investigation programs within DOD. Although  the memorandum refers to section 951 of the NDAA for Fiscal Year 2017,  which requires DOD to develop a plan to transfer responsibility for  conducting DOD personnel background investigations to the Defense  Security Service, ODCMO officials told us that the cross-functional team  reviewing personnel vetting was established pursuant to section 911  requirements, as the team will report directly to the Secretary’s office,  among other things. Therefore, this team is considered a Secretary of  Defense-empowered cross-functional team. The memorandum notes that  a backlog of background investigations affects DOD’s mission readiness,  critical programs, and operations. According to the memorandum, this  cross-functional team will conduct a full review of current personnel  vetting processes to identify a redesigned process for DOD’s security,  suitability and fitness, and credential vetting. The cross-functional team’s  objectives are to develop options and recommendations to mitigate  shortcomings, ensure necessary resourcing, and transform the personnel  vetting enterprise. An ODCMO official told us that DOD had selected an  interim leader for the team.

DOD’s Draft Guidance for Cross-Functional Teams Addresses Most Required Statutory Elements, but Could More Fully Incorporate Leading Practices

ODCMO officials developed draft guidance for Secretary of Defense- empowered cross-functional teams. The draft guidance fully addresses  six and partially addresses one of the section 911 required statutory  elements. We also found that the draft guidance fully addresses five  leading practices, partially addresses two leading practices, and does not  address one leading practice for effective cross-functional teams.

Table 3 shows our assessment of the extent to which DOD’s draft  guidance meets required statutory elements.

The draft cross-functional team guidance briefly describes the  characteristics of a cross-functional team and highlights the team’s direct  reporting line to the Secretary of Defense, the team’s delegated  authorities, and team leader and member selection. The guidance also  states expectations for cross-functional team members’ dedication to the  team and for leaders of functional components to support their  participating staff. Further, DOD’s draft guidance discusses the role of the  teams in addressing complex, enterprise-wide issues, and discusses  training for and operations of the cross-functional teams. The guidance  additionally describes DOD’s commitment to collaboration and integration  across the department. Finally, we found that the draft guidance partially  addresses the required statutory element of identifying key practices on  leadership, organizational practice, collaboration or functioning of cross- functional teams. The draft guidance discusses key practices for senior  leaders on the functioning of cross-functional teams, but we found that it  does not identify any practices on leadership, organizational practice, or  collaboration.

We also found that DOD’s draft guidance for cross-functional teams could  more fully incorporate leading practices for cross-functional teams, which  are similar to those identified by the McKinsey & Company contracted  study and the ODCMO’s internal study as well as leading practices for  interagency collaboration that we previously identified. Figure 2 shows  our assessment of the extent to which DOD’s draft cross-functional team  guidance incorporates our leading practices for effective cross-functional  teams.

We found that the draft guidance fully incorporates five of the leading  practices for effective cross-functional teams: well-defined team structure,  autonomy, senior management support, committed cross-functional team  members, and well-defined team goals. In addition, the draft guidance  partially addresses the leading practice for open and regular  communication, as it discusses that teams will update the Secretary of  Defense and senior staff at regular staff meetings to reflect on progress  and seek feedback. The draft guidance, however, does not address  information sharing and communication within the cross-functional team.  Also, the draft guidance partially addresses the leading practice for  empowered cross-functional team leaders by indicating that team leaders  should report directly to the Secretary of Defense, select team members,  and seek feedback from other federal agencies. Further, the guidance  states that cross-functional team leaders will contribute to the  performance evaluations of their team members. The guidance states  that the Secretary of Defense will select the team leaders, but does not  elaborate on what qualities the team leader should possess. Finally, the  draft guidance does not address the leading practice for an inclusive team  environment. For example, the draft guidance does not contain any  reference to developing a unified team culture and trust among team  members.

ODCMO officials told us that they anticipate the Secretary of Defense  reviewing and approving this guidance, including a detailed terms of  reference that addresses information on mechanics of team operations  and guidance for each team. However, without initial guidance that fully  addresses the required statutory elements in section 911 of the NDAA for  Fiscal Year 2017 and incorporates leading practices, DOD’s cross- functional teams may not be able to consistently and effectively approach  the Secretary of Defense’s strategic objectives or further promote a  collaborative culture within the department.

DOD Has Developed, but Not Provided, Training for Its Presidential Appointees and Cross-Functional Team Members, and It Does Not Address All Statutory Requirements

DOD Developed a Draft Training Curriculum for Presidential Appointees, but It Does Not Address All Required Statutory Elements and Has Not Been Provided to Appointees

As of October 2017, the ODCMO developed a draft training curriculum on  cross-functional teams for presidential appointees, but this curriculum  does not address all statutory requirements. Furthermore, as of February  2018, 22 individuals have been nominated by the President, confirmed by  the Senate, and appointed to positions within the Office of the Secretary  of Defense, but none have received training required by section 911.  Section 911 of the NDAA for Fiscal Year 2017 requires that, within 3  months of the appointment of an individual to a position in the Office of  the Secretary of Defense appointable by and with the advice and consent  of the Senate, the individual complete a course of instruction in  leadership, modern organizational practice, collaboration, and the  operation of cross-functional teams. The training requirement may be  waived by the President upon a request by the Secretary of Defense if the  Secretary of Defense determines in writing that the individual possesses,  through training and experience, the skill and knowledge otherwise to be  provided through a course of instruction. ODCMO officials stated that they  intend to recommend that the Secretary of Defense seek such a waiver;  however, this requirement had not been waived for any appointees as of  November 2017. In addition, according to an ODCMO official, DOD has  not developed criteria for determining who would be eligible for such a  waiver and on what basis.

We found that the draft curriculum addresses only one of four required  elements in section 911 of the NDAA for Fiscal Year 2017. Specifically,  the draft curriculum addresses the required statutory element for training  on the operation of cross-functional teams by including information on  elements of successful teams and when to use them. It does not,  however, incorporate the required statutory elements for leadership,  modern organizational practice, or collaboration. According to the Acting  DCMO, these appointees do not need this type of training because they  are already experts in their field, have considerable leadership  experience, and have likely already received this type of training.  However, our leading practices of a well-designed training program note  that it is important for agencies to consider the need for continuous and  lifelong learning, recognizing that learning is an investment in success  rather than a cost to be minimized. In addition, our leading practices state  that a core characteristic of a strategic training and development process  is leadership commitment, meaning that agency leaders consistently  demonstrate that they support and value continuous learning and set the  expectation that effective training and development will improve individual  and organizational performance. Further, as organizations are typically  resistant to change and need top leadership to drive a successful  organizational transformation, ensuring that senior officials receive this  training will be important for DOD’s overall organizational transformation  to succeed in driving a more collaborative culture.

Without the provision of training for top leadership within the Office of the  Secretary of Defense that includes the required elements in section 911  of the NDAA for Fiscal Year 2017 or developing criteria for obtaining a  waiver from providing the training, DOD may have difficulty implementing  its new organizational strategy as top leadership commitment is a key  element of an organizational transformation.

DOD Developed Training for Team Members That Addresses Statutory Requirements and Plans to Provide the Training Once Team Members Are Announced

We found that DOD has developed a draft training curriculum for cross- functional team members and their supervisors that addresses required  statutory elements, including the element focused on collaboration. This  training has not been provided since no team members have been named  for the one Secretary of Defense-empowered cross-functional team to  address challenges with personnel vetting and background investigation  programs within DOD. Section 911 of the NDAA for Fiscal Year 2017  requires that team members and their supervisors of Secretary- empowered cross-functional teams receive training in elements of  successful cross-functional teams, including teamwork, collaboration,  conflict resolution, and in appropriately representing the views and  expertise of their functional components. Table 4 summarizes the  requirements of section 911 of the NDAA for Fiscal Year 2017 and shows  our assessment of the draft training curriculum against these required  statutory elements.

According to ODCMO officials, this training should take place soon after  team members have been announced. In addition, ODCMO officials  stated that they considered having an expert from another federal agency  lead the training, but were prepared to conduct the training themselves if  that expert was unavailable.

Congress has been encouraging DOD to undertake transformative  organizational change and improve collaboration and more effectively  accomplish its missions across its military departments and functional  organizations. While ODCMO officials drafted an organizational strategy  that includes the two required statutory elements, the strategy does not  address how the department will achieve several outcomes that advance  a collaborative culture in the department, as required under section 911 of  the NDAA for Fiscal Year 2017. A revised strategy that addresses how  the department will achieve these outcomes and is consistent with our  leading practices for mergers and organizational transformations would  better position DOD to further a culture within the department that is  collaborative, team oriented, results driven, and innovative.

DOD could also address three other areas to improve the department’s  collaborative efforts. First, OCMO officials need to collaborate with key  stakeholders across the department—such as the Secretary of Defense,  military departments, the combatant commands, and defense agencies— to strengthen the organizational strategy and ensure a more successful  implementation. Without this stakeholder input, the organizational  strategy may meet resistance and not result in the desired organizational  change. Second, DOD’s guidance for cross-functional teams is critical to  their consistent and effective implementation across the department. This  guidance would also help ensure that such teams are provided with the  leadership support and resources, among other things, to address the  Secretary of Defense’s strategic objectives and further promote  collaboration across the department. Third, without training for  presidential appointees to positions within the Office of the Secretary of  Defense that includes leadership, modern organizational practice,  collaboration, and the operation of cross-functional teams or developing  criteria for who could receive a waiver for this training and on what basis,  DOD may have difficulty aligning the perspective of these leaders to most  effectively bring about change when implementing its new organizational  strategy.

We are making a total of four recommendations to the Secretary of  Defense and the Chief Management Officer (CMO).

The Secretary of Defense should ensure that:  The CMO, in its revisions to the draft organizational strategy, address  how the department will promote and achieve a collaborative culture, as  required under section 911 of the NDAA for Fiscal Year 2017. The CMO  could accomplish this by incorporating our leading practices on mergers  and organizational transformations. (Recommendation 1)

The CMO obtain stakeholder input on the development of the  organizational strategy from key stakeholders, including the Secretary of  Defense, the military departments, the combatant commands, and  defense agencies. (Recommendation 2)

The CMO fully address all requirements in section 911 of the NDAA for  Fiscal Year 2017 and incorporate leading practices for effective cross- functional teams in guidance on Secretary of Defense-empowered cross- functional teams. (Recommendation 3)

The CMO either: (a) provide training for presidentially-appointed, Senate- confirmed individuals in the Office of the Secretary of Defense that  includes the required elements—leadership, modern organizational  practice, and collaboration—in section 911 of the NDAA for Fiscal Year  2017, or (b) develop criteria for obtaining a waiver and have the Secretary  of Defense request such a waiver from the President for these required  elements if the individual possesses—through training and experience— the skill and knowledge otherwise to be provided through a course of  instruction. (Recommendation 4)

We provided a draft of this report to DOD for review and comment. In  written comments, DOD concurred with our recommendations. DOD also  provided technical comments, which we incorporated where appropriate.  DOD’s comments are reprinted in their entirety in appendix III.

We initially made our recommendations to the DCMO; however, because  section 910 of the NDAA for Fiscal Year 2018 disestablished the position  of DCMO on February 1, 2018 and established the position of CMO, we  have updated our recommendations to be directed to the CMO.

In response to our first recommendation, DOD emphasized the  importance of collaboration across the department in pursuing DOD’s  goals. In response to our second recommendation, DOD stated that  finalizing the organizational strategy has been dependent on finalizing the  National Defense Strategy and the Agency Strategic Plan. DOD also  mentioned the reform teams established by the Deputy Secretary of  Defense being aligned with strategic guidance. While DOD’s efforts to  establish these reform teams are notable, as we discussed in our report,  these reform teams do not meet the requirements for cross-functional  teams established pursuant to section 911 of the NDAA for Fiscal Year  2017.  Finally, DOD concurred with our third and fourth recommendations  and stated that criteria for waiving training for presidentially-appointed,  Senate-confirmed individuals will be completed and appropriate waivers  submitted to the President for key personnel by March 30, 2018.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, and DOD’s Chief Management  Officer. In addition, the report is available at no charge on our website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2775 or FieldE1@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IV.

Appendix I: Summary of Requirements in Section 911 of the National Defense Authorization Act for Fiscal Year 2017

Section 911 of the National Defense Authorization Act for Fiscal Year  2017 requires the Secretary of Defense to take several actions. Table 5  below summarizes some of these requirements, the due date, and the  date completed.

Appendix II: Identification of Leading Practices for Effective Cross-Functional Teams

We identified leading practices for effective cross-functional teams and  compared the Department of Defense’s (DOD) steps to establish cross- functional teams against these leading practices. To identify the leading  practices, we reviewed literature as well as five case studies of cross- functional teams. In addition, we selected six academic and practitioner  experts to interview based on their publications or research, prior  testimony before the Senate Armed Services Committee on the  implementation of cross-functional teams at DOD, and recommendations  from DOD officials. We identified eight broad categories of leading  practices associated with effective cross-functional teams: (1) open and  regular communication, (2) well-defined team goals, (3) inclusive team  environment, (4) senior management support, (5) well-defined team  structure, (6) autonomy, (7) committed cross-functional team members,  and (8) an empowered cross-functional team leader.

To identify what is known from published research about factors  contributing to effective cross-functional teams, we conducted a literature  search among relevant articles published from January 1990 through  September 2017. We conducted a search for relevant peer-reviewed  articles in 19 databases, including JSTOR, Academic OneFile, and  ProQuest. Key terms included various combinations of “cross-functional  team,” “best practice,” “characteristics,” “effective,” and “success.” From  all database sources, we identified 46 relevant articles. We first reviewed  the abstracts for each of these articles for relevancy in identifying  contributing factors related to effective cross-functional teams. For the 17  articles that we found relevant and based on empirical research, we  reviewed the full article for methodological rigor. GAO social scientists  read and assessed each study, using a standardized data collection  instrument. The assessment focused on information such as the  population examined, the research design and data sources used, and  methods of data analysis. The assessment also focused on the quality of  the data used in the studies as reported by the researchers, any  limitations of data sources for the purposes for which they were used, and  inconsistencies in reporting study results. A second GAO social scientist  reviewed each completed data collection instrument to verify the accuracy  of the information included. We determined that the studies were  sufficiently sound to support their results and conclusions. We excluded  articles that lacked enough information about their methodologies for us  to evaluate them. We then reviewed the citations and literature reviews of  the relevant articles for additional sources. After including these articles  and excluding others, 14 articles remained, covering cross-functional  teams in both the private and public sectors.

We took several additional steps to identify leading practices. First, we  reviewed five case studies developed by subject-matter experts on cross- functional teams and interagency task forces employing similar  collaboration tactics for national security issues. We reviewed these  studies for academic rigor and determined that we could use them to  inform our leading practice development. Second, we reviewed three  relevant congressional testimonies from a Senate Armed Services  Committee hearing in June 2016 about the use of cross-functional teams  for improving strategic integration within DOD and incorporated them as  well into the identification of leading practices. Third, we interviewed six  subject-matter experts on cross-functional teams, utilizing a semi- structured set of questions, and used their responses to inform our cross- functional team leading practices. These experts include current and  former government officials involved with cross-functional teams and  academic researchers, who are listed below.

Honorable Michael B. Donley—Former Secretary of the Air Force from  2008 to 2013,  Dr. Amy Edmondson—Novartis Professor of Leadership and  Management, Harvard Business School,  Chris Fussell—Managing Partner at the McChrystal Group, former Navy  SEAL and aide-de-camp to General Stanley McChrystal,  Dr. Christopher J. Lamb—Distinguished Research Fellow, Center for  Strategic Research in the Institute of National Strategic Studies, National  Defense University,  Honorable James R. Locher III—Former President and CEO, Project on  National Security Reform, and  Dr. Jeffrey Polzer—UPS Foundation Professor of Human Resource  Administration, Harvard Business School.

We documented our interviews with the selected subject-matter experts in  a record of interview. To determine appropriate subject-matter experts to  interview, we received recommendations from the Senate Armed  Services committee and DOD officials, and identified subject-matter  experts who testified before Congress on the topic of cross-functional  teams. We also solicited names of other cross-functional team experts  during our initial subject-matter expert interviews. Additionally, we  examined the top business programs and research institutes at  universities in the country identified in the top five rankings by U.S. News  & World Report and identified researchers with expertise in cross- functional teams. Finally, we identified subject-matter experts through  reviewing the Academy of Management’s Annual Meeting program from  2014 to 2016. The experts identified from this search were based in the  United States and had papers in the program relating to cross-functional  teams.

We conducted a content analysis of cross-functional team practices  identified in our literature review, the case studies, the congressional  testimonies, and the subject-matter expert interviews. To do so, team  members first reviewed: the results sections from the scholarly articles,  the texts of the case studies, the transcripts of the testimonies, and the  records of interview from the subject-matter interviews in order to identify  characteristics of effective cross-functional teams. Then the team  members independently reviewed the characteristics to identify themes.  They subsequently compared the themes and developed a series of  conceptual categories to be used as a coding structure for the content  analysis. To conduct the content analysis of all identified characteristics,  two analysts independently assigned each identified characteristic from  the sources to one or more categories and sub-categories. Then, the  team members met to compare their categorization decisions and to  discuss the differences. Any disagreements regarding the categorizations  of the characteristics were discussed and reconciled. The team members  then tabulated the number of characteristics in each category and sub- category and reached agreement on the final set of categories and sub- categories. We assessed the outcome of our content analysis by  comparing leading practices we identified to the contractor and internal  DOD studies, as well as to our key considerations for implementing  interagency collaborative mechanisms.

Appendix III: Comments from the Department of Defense

Appendix IV: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Tina Won Sherman (Assistant  Director), Tracy Barnes, Leslie Bharadwaja, Arkelga Braxton, Adelle  Dantzler, David Dornisch, Jessica Du, Michael Holland, Amie Lesser, Ned  Malone, Judy McCloskey, Sheila Miller, Richard Powelson, Terry  Richardson, Ron Schwenn, Jared Sippel, Pam Snedden, Sarah Veale,  and Richard Zarrella made key contributions to this report.