Pentagon Should Take Downsizing Lessons From Private SectorJuly 29, 2011

 

The Defense Business Board, a Defense Department (DoD) advisory committee made up of private sector executives, has laid out some ways that the Pentagon could start downsizing, much like the approaches used by major companies to cut overhead, according to an article in the Federal Times.

This influential panel noted that the strategy for cutting operating costs is critical as the DoD readies for budget cuts. The panel was led by Joseph Wright, the senior advisor to The Chart Group, a commercial banking firm. The panel interviewed several current and former executives at major companies who have reduced their workforces, including IBM, General Motors and Citibank.

The overarching advice: Cuts must be driven by the Defense Secretary, and his team must buy in on common goals and strategy, and carry clear metrics and milestones. Here are a few suggestions from the panel, according to the article:

  • When it comes to staff reductions, the Pentagon should focus on reducing the “least critical activities” and not simply cut across the board.
  • The DoD must simplify its employee structure by cutting out various levels and unnecessary support staff.
  • The Defense Department should consolidate facilities and close unneeded offices.
  • Despite the cuts, the Pentagon must continue to conduct research and development that leads to “critical enabling technology.”
  • As it cuts workers, the department must institute compensation systems to attract and retain talent.